MGX Resources has completed its acquisition of a 50% stake in the Central Tanami Gold Project in the Northern Territory, marking a major milestone for the company following the $50 million cash outlay. The project has moved beyond acquisition into execution, with Macmahon Underground selected as the preferred mining contractor for the Groundrush Gold Deposit exploration decline. This selection brings tangible momentum to the development timeline, with construction targeted to commence in the September 2026 quarter, subject to finalisation of a binding agreement.
The acquisition positions MGX to benefit from gold exploration and development in one of Australia’s most prospective mining regions. The 2026 work program reflects a focused approach, concentrating on site infrastructure improvements, commencing the Groundrush exploration decline, securing regulatory approvals and permits, resource definition drilling, and engineering reviews of processing plant options. Initial meetings with Northern Territory Government representatives, regulators, and the Central Land Council have been positive, indicating a supportive environment for project development. This regulatory consensus reduces execution risk and suggests the pathway forward is clear.
MGX’s financial position remains robust despite the significant capital commitment. Quarter-end cash and investment reserves totalled $414.7 million after the $50 million CTPJV acquisition payment and a reduction in the market value of equity investments. Interest income continues to substantially offset corporate and administration costs, providing a financial buffer as the company invests in project development. This financial strength is critical given the capital intensity of gold project development and gives management flexibility to fund operations without immediate pressure to generate mining cash flows.
At Koolan Island, the company’s iron ore operation is transitioning from production to rehabilitation. Low-grade stockpile sales totalled 0.39 million wet metric tonnes in the quarter at 44.2% Fe, with shipment rates now increasing to achieve the 1.0 million tonnes target for the June 2026 half-year. The quarter incurred a cash outflow of $15.3 million after $6.6 million in rehabilitation costs, but management expects a positive operating cash flow result in the June quarter as shipping frequency increases following the end of the wet season. Cargoes have been sold on fixed price terms with the objective of substantially offsetting rehabilitation costs, effectively converting a production asset into a cash-generative operation during the run-down phase.
Investors should focus on several key developments ahead. The finalisation and execution of the binding agreement with Macmahon Underground is critical to maintaining the September 2026 construction timeline. Regulatory approvals and permitting progress will signal the viability of the development pathway. At Koolan Island, the June quarter operating cash flow outcome will validate whether the low-grade sales strategy is successfully offsetting rehabilitation costs. The company’s ability to execute on this dual strategy, developing the gold project while managing the iron ore operation’s wind-down, will be central to value creation. This announcement is price sensitive and has been designated as a material announcement by the ASX.
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About MGX Resources Limited (ASX: MGX)
MGX Resources Limited is an Australian mining company that primarily operates the Koolan Island hematite iron ore mine in Western Australia’s Kimberley region, with over 40 million tonnes of export history. The company is diversifying into precious and base metals exploration, including a 50% stake in the Central Tanami Gold Project in the Northern Territory, while maintaining exploration activities across Western Australia’s Mid-West and Gascoyne regions.
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