Tanami Gold Secures $38M Underground Contract to Upgrade 400,000oz Resource Status
Key Takeaways
- Tanami Gold (ASX:TAM) has awarded a $38 million contract to Macmahon Underground Pty Ltd to construct the 3.5km Groundrush decline to approximately 350 metres depth, with portal construction scheduled to begin in September 2026.
- The decline's primary purpose is to enable approximately 33,000 metres of infill drilling targeting conversion of over 400,000 ounces from Inferred to Indicated Resources — the classification required for mine design and feasibility studies.
- The Central Tanami Project Joint Venture holds a total Mineral Resource of 31.0 million tonnes at 2.8g/t Au for 2.8 million ounces, with the Groundrush deposit alone accounting for 1.2 million ounces at 3.3g/t Au.
- The CTPJV — equally owned by Tanami Gold and MGX Resources (ASX:MGX) — is targeting a development decision in 2027, with the 14-month decline construction period and subsequent infill drilling forming the critical path.
- Parallel workstreams are active across the site, including resource definition drilling at the Jims Gold Deposit (220,000 ounces at 2.7g/t Au) and infrastructure upgrades at the accommodation camp and central plant site.
Tanami Gold has locked in a $38 million underground development contract at its Central Tanami Project in the Northern Territory. The agreement with Macmahon Underground Pty Ltd (a subsidiary of Macmahon Holdings, ASX:MAH) will construct the Groundrush decline — a physical step toward a development decision the joint venture is targeting for 2027. Tanami (ASX:TAM) and MGX Resources (ASX:MGX) each hold 50% of the Central Tanami Project Joint Venture (CTPJV), and this contract represents a key milestone in advancing what is now a 2.8 million ounce gold project.
What the $38m Macmahon contract delivers
The agreement covers construction of the initial 3.5km decline to a depth of approximately 350 metres, with portal and vent establishment included in the scope. The construction period is scheduled for 14 months, and on-surface preparatory works — including laydown area establishment and re-establishment of in-pit ramp access — are already underway. Macmahon is scheduled to mobilise for in-pit portal construction in September 2026.
| Element | Detail |
|---|---|
| Contract Value | $38 million |
| Contractor | Macmahon Underground Pty Ltd (subsidiary of ASX:MAH) |
| Decline Length | 3.5km |
| Depth | ~350 metres |
| Construction Period | 14 months |
| Portal Construction Start | September 2026 |
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The drilling prize — converting 400,000+ ounces to Indicated
The decline is not an end in itself. Its purpose is to create underground drilling platforms that will enable the CTPJV to execute approximately 33,000 metres of resource definition and infill drilling. The objective is to convert over 400,000 ounces of Inferred Resources into the higher-confidence Indicated category, which is the classification required for mine design and development purposes. Drilling will test the Groundrush deposit to a depth of approximately 650 metres and is expected to commence towards the end of the 14-month decline construction period.
What this means for your portfolio: Indicated status is the confidence tier that underpins mine planning and feasibility work. Converting ounces up the classification ladder de-risks the project and positions it for a financeable development decision. This drilling programme is where the value unlock occurs.
The resource behind the project
The CTPJV’s total Mineral Resource Estimate (JORC 2012) stands at 31.0 million tonnes at 2.8g/t Au for 2.8 million ounces of contained gold. The Groundrush portion of that resource accounts for 11.0 million tonnes at 3.3g/t Au for 1.2 million ounces of gold. These figures are sourced from the Mineral Resource Estimate dated 11 November 2025.
Why resource classification matters
Under the JORC Code, Inferred Resources represent lower geological confidence. They cannot be used for mine design or feasibility studies. Indicated Resources, by contrast, represent higher confidence — sufficient for mine planning and development decisions.
For investors, this distinction is material. Converting ounces from Inferred to Indicated moves a project from exploration promise to development readiness. The infill drilling programme enabled by the Groundrush decline is the mechanism that transitions the resource into a tier that financiers and development partners can assess with confidence.
Activity building across the wider CTPJV site
Parallel workstreams across the Central Tanami site demonstrate momentum beyond the Groundrush decline:
- Resource definition drilling recommenced in June at the Jims Gold Deposit, which was previously mined approximately 25 years ago and offers potential as an expanded open-pit ore source. The current Mineral Resource Estimate for Jims totals 2.6 million tonnes at 2.7g/t Au for 220,000 ounces of contained gold.
- Repairs and improvements are underway at the accommodation camp and utilities infrastructure adjacent to the central plant site.
- The CTPJV is recruiting key site and project roles to support upcoming activities.
Brett Smith, Tanami Executive Director
“The commencement of the Groundrush decline represents a key milestone in the CTPJV’s efforts in advancing the project .Working with our JV Partner, MGX, both companies continue to progress the project and the establishment of a major new gold operation in the Northern Territory.”
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What’s next for Tanami Gold investors
Portal construction begins in September 2026. The 14-month decline construction period follows, with infill drilling commencing in the latter stages. The joint venture is advancing toward a development decision in 2027. The decline converts a large but partly low-confidence resource into a drill-ready platform, positioning the CTPJV for what could become a significant new gold operation in the Northern Territory. For investors, the next 18 months represent the transition from project advancement to development readiness.
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