Mount Gibson Iron (ASX:MGX) outlined a December 2025 half-year result shaped by an October rockfall at its Koolan Island operation, while emphasizing a strong cash position and a growing strategic focus on the Central Tanami Gold Project in the Northern Territory.
Chief Executive Officer Peter Kerr said the call would be brief because key outcomes had been flagged in prior quarterly reporting and the company’s financial position was now “relatively simple and obviously robust.” Kerr was joined by Chief Financial Officer Gillian Dobson and External Relations Manager John Phaceas.
Half-year earnings impacted by Koolan Island rockfall and impairments
For the half, MGX reported profit before tax and impairments of AUD 39.9 million, up 113%, on sales revenue of AUD 147.2 million and “interest and other income” of just over AUD 10 million. The result included substantial non-cash impairments totaling just over AUD 60 million, which Kerr said effectively cleared the remaining carrying value of the Koolan Island operation and simplified the balance sheet. After those impairments, MGX recorded a net loss after tax of AUD 20.8 million for the half.
On a cash basis, Kerr said cash and investment reserves increased to AUD 496.2 million at period end from AUD 484.6 million at the end of June 2025. He attributed a meaningful contribution to “strong growth” in the value of MGX’s equity investments, specifically citing positions in Fenix Resources, AIC Mines, and Musgrave Minerals.
Koolan Island shifts to low-grade sales and reduced cost base
While mining and sales were largely in line with plans during the September quarter, Kerr said MGX shifted after the rockfall to processing and shipping low-grade stockpiles and accelerating rehabilitation activities on the island. He said those stockpiles had previously been held for potential future blending.
The company also reduced its workforce. Kerr reported 140 employee redundancies and the loss of about 130 contractor roles during the period, with additional departures since then.
MGX had initially expected the net cost of the operating changes—covering redundancies and rehabilitation spending—to be about AUD 30 million to AUD 40 million, consistent with its initial announcement in October. However, Kerr said the low-grade sales program had performed better than anticipated and was tracking to “substantially reduce” the cost of the rockfall to the business.
Total sales volumes were 1.35 million wet metric tons, slightly above the prior corresponding half. Kerr said the mix included:
- ~870,000 tons of high-grade fines averaging 63.7% Fe
- Just under 500,000 tons of lower-grade fines averaging 49.6% Fe
Sales revenue of just over AUD 147 million was 9% lower than the prior corresponding half, Kerr said. He also noted a significant reduction in unit cash operating costs due to reduced material movement after open-pit mining was suspended. Unit cash operating costs fell to AUD 79 per ton sold (FOB, after shipping freight and before capital projects and royalties), compared with AUD 96 per ton in the prior corresponding half.
MGX is now targeting sales of approximately 1 million tons of remaining low-grade material grading around 42% to 45% Fe, with the company aiming to ship those tons to customers during the June half-year period. Kerr said the low-grade material sold in the first half averaged a higher grade than what remains.
On pricing, Kerr said MGX realized an FOB price of AUD 89 per dry metric ton for its sales versus AUD 85 previously, while low-grade sales averaged AUD 42 FOB per dry metric ton.
Mine cash flow and rehabilitation provision updates
Kerr said Koolan Island generated cash flow of AUD 10.4 million during the half. He outlined major cash outflows as AUD 106 million in cash operating costs, AUD 11 million in capital costs, AUD 14 million in government and third-party mineral royalties, and AUD 4.6 million in rehabilitation costs, plus AUD 0.4 million in other costs.
On an accounting basis, the operation generated earnings before interest, impairments, and tax of AUD 5.6 million, down from AUD 26 million in the prior corresponding half year.
MGX has advanced rehabilitation earthworks and expects the remainder of those activities to be completed by the middle of 2026. Kerr said the company reduced its Koolan Island rehabilitation provision by about AUD 11 million over the last six months to around AUD 48.4 million, reflecting completed work and lower-than-forecast costs. He said further reductions are expected as work is completed in the current half.
After upcoming work, Kerr said most of the remaining provision would relate to key infrastructure assets, including the airstrip, port facility, and camp. He added that these assets may have uses beyond mining, potentially allowing MGX to avoid associated removal costs. Kerr said discussions were underway with various parties on potential post-mining uses, including the Dambimangari people as traditional owners.
He also said MGX would continue engaging with insurers on a potential claim related to the rockfall and would provide updates when able.
Central Tanami acquisition and capital management actions
Kerr highlighted the company’s recent completion of a AUD 50 million acquisition of a 50% interest in the Central Tanami Gold Project from Northern Star Resources. He said that since the deal was announced in July, the joint venture had delivered significant drilling results and increased the project’s mineral resource estimate to 31 million tons at an average grade of 2.8 grams per ton gold, containing 2.8 million ounces of gold.
MGX said it is in the early stages of actively working with its joint venture partner to define development activities and expects to provide more detail on work streams, costs, and schedule in coming months.
In capital management, Kerr said MGX decided to discontinue its on-market share buyback after purchasing and canceling about 3% of issued capital since late 2024. He said the buyback price was roughly 30% below current market levels and described it as accretive. The board may reconsider reinstating the buyback in the future, he added.
Kerr also noted the company’s name change to MGX Resources, effective in early December, aligning with its move into precious metals.
No questions were taken during the call due to a lack of participants entering the queue, though management invited follow-up queries directly.
About Mount Gibson Iron (ASX:MGX)
Mount Gibson Iron Limited, together with its subsidiaries, engages in the mining, crushing, processing, transportation, and sale of hematite iron ore in Australia. The company primarily holds interests in the Extension Hill mine and Shine mine deposit in the Mid-West region of Western Australia, as well as operates haulage of the ore through road and rail for export from the Geraldton Port. It is also involved in the mining and direct shipment of hematite iron ore at the Koolan Island mine site in the Kimberley region of Western Australia; and the treasury management activities.
