Spare a thought for Mt Gibson (ASX:MGX) which has today confirmed it needs to shut down its Koolan Island project a year early, given that the cost of remediating a rockfall incident doesn’t make much financial sense in the face of a looming September 2026 shutdown.
Listen to the HotCopper podcast for in-depth discussions and insights on all the biggest headlines from throughout the week. On Spotify, Apple, and more.
But the fact the project was already winding up hasn’t been enough to convince shareholders to remain investors with stocks plummeting on Friday. Talk about a bad end to the week.
Not helping matters is that the company will be cutting 250 jobs, swallowing a hit of up to $40M due to the rockfall incident, and now focusing its attention on a 50% stake in a gold project it (hopes) to finalise acquisition of in March next year. Some staff retained will be transferred to that project next year, all cards in order.
Overall remediation costs at Koolan Island were calculated to reflect $60M, largely due to to removing infrastructure including airstrips, maritime loading hardware, a worker village and roads – with Mt Gibson stating on Friday that it’s in talks to just leave that stuff there given it could be used in the future of Koolan Island, sans a mining operation.
“Various items of plant and equipment from Koolan Island are also proposed to be retained for future use at the Central Tanami Gold Project,” MGX elaborated on Friday.
Presumably, the question of what to do with the impacted open pit remains ongoing, too. While the company noted it’s got $473M in cash, enough to absorb the costs of this debacle, the company’s still lost a quarter of its value down -25% on Friday to 35cps.
MGX last traded at 35cps.
Join the discussion: See what HotCopper users are saying about MGX and be part of the conversations that move the markets.