Macmahon Locks in $38M Decline Contract to Unlock 400Koz Gold at Groundrush
Key Takeaways
- MGX Resources has executed a $38 million contract with Macmahon Underground (ASX: MAH) to construct a 3.5km underground decline at the Groundrush Gold Deposit, with Macmahon mobilising in September 2026.
- The 14-month decline program targets approximately 33,000 metres of resource definition drilling to convert 400,000+ ounces from Inferred to Indicated classification — the confidence level required for mine design and project financing.
- The Groundrush deposit hosts 11.0 Mt at 3.3 g/t Au for 1.2 Moz gold, sitting within a broader CTPJV Mineral Resource of 2.8 Moz at 2.8 g/t Au across 31.0 Mt.
- Surface preparation works are already underway, with laydown areas operational and pit access ramp re-establishment progressing — the project is moving, not waiting.
- The CTPJV is targeting a formal development decision in 2027, with the Macmahon agreement representing a contracted, scoped, and funded step on that pathway.
MGX Resources has signed a $38 million underground decline construction agreement with Macmahon Underground, advancing the Central Tanami Project Joint Venture (CTPJV) toward a development decision in 2027. The contract, executed between CTP JV Pty Ltd (the CTPJV management entity) and Macmahon Underground Pty Ltd (a subsidiary of Macmahon Holdings Limited, ASX:MAH), marks a concrete step in converting the Groundrush Gold Deposit from an exploration asset into a production-ready mine.
What the $38 million decline delivers
The agreement covers construction of a 3.5km underground decline extending to a depth of approximately 350 metres over a 14-month period. Scope includes portal and vent establishment, with surface preparation works already underway — laydown areas are operational and pit access ramp re-establishment is progressing. Macmahon mobilises in September to begin in-pit portal construction.
The strategic purpose of the decline is to provide underground drilling platforms that enable approximately 33,000 metres of resource definition and infill drilling. The program targets the Groundrush deposit to a depth of around 650 metres, with drilling expected to commence toward the end of the construction period. The key objective: convert over 400,000 ounces of Inferred Resources to the higher-confidence Indicated category required for mine design and development.
| Component | Detail |
|---|---|
| Decline length | 3.5km |
| Depth | ~350 metres |
| Construction period | 14 months |
| Contract value | ~$38 million |
| Drilling program | ~33,000 metres |
| Resource conversion target | 400,000+ oz Inferred → Indicated |
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Why resource conversion matters for investors
Under the JORC (Joint Ore Reserves Committee) classification system, mineral resources sit on a confidence spectrum. Inferred Resources represent the lowest level of geological confidence — you know mineralisation exists, but the data density is insufficient for detailed mine planning. Indicated Resources carry materially higher confidence, backed by enough drilling to support mine design, feasibility studies, and ultimately a development decision.
Converting ounces from Inferred to Indicated is not administrative. It is the pathway to production. You cannot build a bankable feasibility study or secure project financing on Inferred Resources alone. The 400,000+ ounce conversion target at Groundrush directly de-risks the timeline to a 2027 development decision and positions the CTPJV to establish a new Northern Territory gold business.
An underground decline is the vehicle for this conversion because it provides drilling platforms close to the target mineralisation. Surface drilling becomes prohibitively expensive and technically constrained at depth. Underground platforms allow you to drill the deposit systematically, tighten the spacing, and build the geological confidence required to move ounces up the classification ladder.
Context the scale:
- CTPJV total Mineral Resource (JORC 2012): 31.0 Mt at 2.8 g/t Au for 2.8 Moz contained gold.
- Groundrush Gold Deposit: 11.0 Mt at 3.3 g/t Au for 1.2 Moz gold.
- Source: MRE per ASX release “Central Tanami Gold Project Mineral Resource Update” dated 11 November 2025.
Progress across the broader Central Tanami site
Momentum is building across multiple fronts. Resource definition drilling recommenced in June at the Jims Gold Deposit, which was previously mined 25 years ago and offers potential as an expanded open pit ore source to supplement Groundrush feed. Jims currently holds a Mineral Resource Estimate of 2.6 Mt at 2.7 g/t Au for 220,000 oz contained gold.
Parallel to drilling and decline works, the site team is advancing repairs and improvements to the accommodation camp, utilities infrastructure, and other site assets. Key site and project roles are being recruited to support the ramp-up in activity.
Peter Kerr, Chief Executive Officer
“The commencement of the Groundrush decline represents a key milestone in the CTPJV’s efforts to advance the project to a development decision and ultimate production. We and our joint venture partner, Tanami Gold, look forward to sharing regular updates as we build momentum towards establishing a major new gold business in the Northern Territory.”
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The road to a 2027 development decision
What happens next follows a methodical sequence:
- September — Macmahon mobilises; in-pit portal construction begins.
- Over 14 months — Decline development to 3.5km / ~350m depth.
- Latter stages — Underground drilling platforms established; ~33,000m infill drilling commences.
- Target — Convert 400,000+ oz to Indicated to support a development decision in 2027.
The investment thesis is straightforward. The CTPJV is executing a funded, staged plan to de-risk Groundrush and advance it toward production. The Macmahon agreement is not speculative. It is contracted, scoped, and on the ground. Each metre of decline extends the drilling reach. Each drill hole converts Inferred ounces to Indicated. Each converted ounce tightens the pathway to a development decision and a potential major new Northern Territory gold business.
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