Thank you for joining today's teleconference for the release of MGX Resources Financial Results for December 2025 Half Year. MGX Chief Executive Officer, Peter Kerr, will be leading the discussion and is joined by Chief Financial Officer, Gillian Dobson, and External Relations Manager, John Phaceas. Mr. Kerr will provide a brief overview, after which there will be an opportunity to ask questions. Due to time constraints, only institutional participants will be invited to ask questions at that time. A recording of the call will also be available via the MGX website shortly after completion of today's teleconference. Thank you, and go ahead, Peter.
Thanks, Lisa. Good morning, everyone, and thanks for joining us to discuss about MGX Resources earnings results for the December 2025 half year. As usual, I'll give a brief overview before handing back to Lisa, should there be any questions you may have. And also, as usual, any dollar references are to Australian dollars unless otherwise indicated. It's a fairly brief call this morning, as our results have been previously flagged in our quarterly report, and the financial position of the company is now relatively simple and obviously robust. MGX recorded a steady underlying financial performance in the half year period, notwithstanding the impact of the October rockfall at Koolan Island, and I'll talk about that a bit more shortly. And the resultant non-cash impairments of the accounting carrying values of the operation, which we had flagged some time ago.
Importantly, the low-grade sales program at Koolan Island has been extended and continues to exceed our initial expectations, and it's tracking to substantially reduce the cost of the rockfall to the business. Having also recently completed our $50 million acquisition of a half interest in the Central Tanami Gold Project in the Northern Territory, MGX's balance sheet obviously gives the company an outstanding opportunity to accelerate work on that project towards a development decision. Excuse me. In turning to the financial results, although the October rockfall at Koolan Island was obviously very disappointing and has prevented us from generating the operating cash flows that we'd planned to achieve over the mine's final year, the team's response to minimizing the impact of the rockfall and making sure the operation is safe has already delivered positive results.
The combination of improved mine production in the September quarter, careful cost control, and then a switch to low-grade sales after the rockfall, contributed to a 113% increase in profit before tax and impairments to AUD 39.9 million, on sales revenue of AUD 147.2 million, and interest in other income of just over AUD 10 million. Unfortunately, substantial non-cash impairments totaling just over AUD 60 million were unavoidable, but this effectively has cleared the remaining carrying value of the Koolan Island operation and simplified the company's balance sheet. This impairment resulted in a net loss after tax of AUD 20.8 million for the half year period.
On a cash basis, the business's cash and investment reserves increased from AUD 484.6 million at the end of June 2025 to AUD 496.2 million at period end. Strong growth in the values of our various equity investments, notably our positions in iron ore producer, Fenix Resources, copper producer, AIC Mines, and polymetallic mine developer, Musgrave Minerals, was a significant contributor to our period-end balance. I won't go into too much detail regarding Koolan Island, given most of the relevant data was released in our quarterly report a few weeks ago, but it's obvious that the rockfall was a defining event for the half year, and that has significantly reshaped our business plan.
Mining and sales were largely in line with planned in the September quarter, as I mentioned, but after the rockfall, we necessarily switched our focus to the processing and shipping of low-grade stockpiles, which had previously been held for potential future blending and to the rehabilitation activities on the island. Substantial workforce reductions were made in the period, totaling 140 employee redundancies and the loss of about 130 contractor roles, and since that time, some further personnel have also departed. We initially expected the net cost of these operating changes, including redundancies and rehabilitation spending, to be about AUD 30-40 million, which was in our initial announcement back in October last year. However, the success of the low-grade sales has so far delivered a better-than-anticipated financial result, and the team is working hard to substantially reduce this impact.
Total sales for the half year came in at 1.35 million wet metric tons, slightly more than the prior corresponding half, and that total comprised 870-odd thousand high-grade fines, averaging 63.7% Fe, and just under 500,000 lower grade fines material, averaging 49.6% Fe. The sales revenue, as I mentioned, was just over AUD 147 million, and that was only 9% less than the prior corresponding half. At the same time, because of the reduced total material movement arising from the suspension of mining in the open pit, there was a significant reduction in unit cash operating costs, down to AUD 79 per ton that we sold, and that's FOB, so that's after shipping freight, and before the capital projects and royalties.
That was down from $96 per ton in the prior corresponding half. We're now targeting the sale of approximately 1 million tons of the remaining low-grade material, and that's grading a bit lower than what we've been selling in the first half. It's around 42%-45% Fe, and after that, those stockpiles will be depleted. We're trying to get that 1 million tons shipped to customers in the current June half year period. In relation to revenues, the sales were obviously split between high and low-grade material, and we realized an FOB price of $89 per dry metric ton versus $85 previously, and the low-grade sales averaged $42 FOB per dry metric ton. The operation consequently generated a cash flow of AUD 10.4 million in the half year period.
Sales revenue, I stated earlier, at AUD 147 million, and then the key outflows were cash operating costs of AUD 106 million, capital costs of AUD 11 million, the government and third-party mineral royalties of AUD 14 million, and rehabilitation costs were AUD 4.6 million, plus some other costs of AUD 0.4 million. So the mine, on an accounting basis, generated earnings before interest, impairments, and tax of AUD 5.6 million in the half year period, which was obviously down on the AUD 26 million generated in the prior corresponding half year. We've also advanced the on-site rehabilitation earthworks and expect the remainder of those activities to be completed by the middle of 2026.
As disclosed in our financials today, we have reduced the Koolan Island rehabilitation provision by about AUD 11 million over the last six months, so it now sits at around AUD 48.4 million, and we will further reduce this provision as rehabilitation work is completed in the current half. We're obviously trying to do this for a cost-effective way while we have activities and people on the island. The reduction achieved in the provision to date reflects the actual works completed and the lower than forecast costs incurred. After the upcoming work is completed, the majority of the remaining rehabilitation provision will relate to key infrastructure assets, and by that I mean the airstrip, the port facility, and the camp.
The majority of that provision will probably remain for some time because those assets will have uses beyond mining, and we will thereby eventually, hopefully, potentially avoid the associated removal costs of those assets. Now, discussions are underway with a number of parties regarding potential post-mining uses, and the island's traditional owners, the Dambimangari people, are a key party involved in those discussions. So we hope to have more on that in the coming six months. Meanwhile, we will continue to engage with our insurers regarding a potential claim for the rockfall incident, and we'll provide updates as and when we're able. From a business development perspective, the December half year period was obviously significant for us.
In addition to the growing value of our equity investment portfolio, which lifted to approximately AUD 80 million by year-end, and that was mostly via the holdings in Fenix Resources, AIC Mines, and Musgrave Minerals, and our expanding precious and base metals exploration portfolio in the Mid-West and Gascoyne regions of WA. The standout item was obviously the acquisition of our 50% interest in the Central Tanami Gold Project in the Northern Territory, which was acquired for AUD 50 million from Northern Star Resources. Since we announced the transaction in July, the joint venture has achieved some significant drilling results and importantly, has increased the project's mineral resource estimate to 31 million tons at an average gold grade of 2.8 grams per ton, which means that the resource contains 2.8 million ounces of gold.
So it's quite a substantial project, and the grade is certainly up there in terms of heights for comparison with many other development projects in the country. And as you'd be aware, we recently completed that transaction, and so we're now in the early days of working actively in the joint venture with our JV partner to define the development activities ahead. We'll be providing much more detail on the work streams, the costs, and development schedule in the coming months, and that will be a key focus for our business. Which brings me on to a couple of final items to mention before we finish. Firstly, we've decided to discontinue the on-market share buyback, having purchased and canceled about 3% of our issued capital since it commenced in late 2024.
The purchase cost of those shares was roughly 30% below current market levels, and the buyback has proven to be an accretive capital management initiative for shareholders. The board has also confirmed that it will be monitoring the situation and may reconsider reinstating the buyback at some point in the future, but at this point in time, it's come to an end. And secondly, in line with our move into the precious metals sector, we note the company's name change to MGX Resources, and that took effect in early December. So we look forward to updating the market regarding the development and operating plans for the Central Tanami Project JV and are working to see the substantial value of our interest much better reflected in Mount Gibson, Mount Gibson, MGX's share price from what is currently a low enterprise value base.
So in summary, as we enter the second half of the fiscal 2026 financial year, MGX finds itself in a strong financial position to advance the Central Tanami project and to work on getting a good end result for Koolan Island. So that means we can move ahead and generate meaningful growth and value for shareholders. We're excited by this journey that we now have ahead of us and look forward to sharing our project progress on this as 2026 progresses. So with that, I'll now hand back to you, Lisa, for any questions that anyone may have.
Thank you, Peter. If anybody would like to ask a question, please press star one on your phone now. Thanks, Peter. We don't have any questions.
That's fine, Lisa. Look, I know that there are people on the call who will have queries, so feel free to contact us directly, and we trust you have a good day. Thank you for listening in.