What Does the Groundrush Underground Decline Agreement Involve for the Central Tanami Project JV at MGX Resources (ASX:MGX)?

Sonal Goyal

09 October 2026 12:12 AM AEDT

What Does the Groundrush Underground Decline Agreement Involve for the Central Tanami Project JV at MGX Resources (ASX:MGX)?

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Underground declines give access for infill drilling that can upgrade resources. MGX Resources Limited (ASX:MGX) announced on 31 August 2026 that the Central Tanami Project Joint Venture had signed an agreement to build one at Groundrush.

Company overview

MGX Resources Limited (ASX:MGX) is a West Perth company that holds 50% of the Central Tanami Project Joint Venture in the Northern Territory with Tanami Gold NL, which is seeking a development decision in 2027.

The decline agreement

The joint venture signed a A$38 million agreement with Macmahon Underground Pty Ltd for portal and vent establishment and an initial 3.5 kilometre decline to about 350 metres depth over 14 months. Surface works are under way and portal construction in the historic pit starts in September.

Infill drilling and resources

The decline will provide platforms for about 33,000 metres of infill drilling, aiming to convert more than 400,000 ounces of Inferred resource to Indicated. The joint venture resource is 31.0 million tonnes at 2.8 g/t for 2.8 million ounces, including 11.0 million tonnes at 3.3 g/t for 1.2 million ounces at Groundrush. Resource drilling at Jims, accommodation repairs and recruitment are also under way.

Resource base and development objective

The joint venture’s JORC 2012 resource totals 31.0 million tonnes at 2.8 g/t gold for 2.8 million ounces, including 11.0 million tonnes at 3.3 g/t for 1.2 million ounces at the Groundrush deposit. The planned infill drilling aims to convert more than 400,000 ounces of Inferred resource to the Indicated category for mine design and development purposes.

The Central Tanami Project Joint Venture is 50% owned by MGX and 50% by Tanami Gold NL, and is seeking to advance the project to a development decision in 2027. Macmahon Underground is a Subsidiary of Macmahon Holdings, which is also listed on the ASX.

Practical considerations

Remote Northern Territory sites need Investment in accommodation, power and water infrastructure, and the release says repairs and improvements to existing accommodation and utilities are being made. Recruitment of key site and project roles is continuing, and the timing of infill drilling at the end of a 14-month construction schedule means resource upgrade results are some time away.

Scope of the decline contract

The Macmahon Underground agreement covers portal and vent establishment and the initial 3.5 kilometre decline to a depth of about 350 metres over 14 months. On-surface works are already underway, and portal construction in the historic open pit is scheduled to commence in September.

Underground drilling from the decline platforms will allow resource definition drilling of Groundrush to a depth of about 650 metres.

Other site activities

Elsewhere on the joint venture site, activities focus on resource definition drilling at the Jims deposit, repairs and improvements to accommodation and utilities, and recruitment of key site and project roles. The joint venture is working toward a development decision in 2027.

Sector backdrop

Underground development of Tanami deposits needs access, infrastructure and Capital before production decisions.

Tanami hosts several long-life gold mines, and underground developments in the region require remote accommodation, power and water infrastructure. Declines also double as access for later mining, so early-stage investment may be used again if the project proceeds.

Converting Inferred resources to Indicated is typically needed before a Mining study can be supported.

Risks shareholders should weigh

Conversion of Inferred resources is not assured, and drilling starts late in the 14-month period.

A development decision in 2027 is a target.

MGX holds 50% and joint venture decisions are shared.

The declared A$38 million relates to the contract and not the total cost of development. Infill drilling will begin only toward the end of the construction period.

MGX shares decision-making with Tanami Gold, and funding contributions follow joint venture terms.

What’s next

Portal construction starts in September, and infill drilling begins near the end of the decline schedule. Shareholders may wish to watch for progress.

Shareholders may wish to watch for portal construction, Jims drilling results and progress toward a 2027 development decision.

FAQs

Q: What is the contract value?

A:About A$38 million with Macmahon Underground.

Q: How long is the decline?

A:3.5 kilometres to about 350 metres depth over 14 months.

Q: What is the aim?

A:Convert more than 400,000 ounces of Inferred resource to Indicated.

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