Thank you for joining today's teleconference for the release of MGX Resources financial results for FY 2026. MGX Chief Executive Officer, Peter Kerr, will be leading the discussion, and he's joined by Chief Financial Officer, Gill 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 I will now hand you over to Peter. Thank you, Peter.
Thanks, Lisa. Morning, everyone, and thank you for joining us to discuss MGX's financial results for the 2026 financial year. As usual, I will give a brief overview before handing back to Lisa for any questions. As usual, any dollar references that we state are in Australian dollars unless we say otherwise. It is a brief webcast call this morning, as our results have already been well flagged in the recent June quarter activities report, and the financial position of the company is robust and relatively simple. MGX recorded a reasonable underlying financial performance in fiscal 2026 in the context of the October 2025 main pit rockfall that we had at Koolan Island, and the resultant non-cash impairments on the accounting carrying values of the operation.
Importantly, the low-grade sales program at Koolan exceeded our initial expectations and effectively funded the rockfall response, subsequent accelerated site rehabilitation work, and the recent ramp-down activities. On top of this, we announced in June an agreement to divest the Koolan Island entities, which hold the site, to logistics and infrastructure proponent Crestlink in a transaction worth just over AUD 50 million to MGX. The low-grade program and the Crestlink transaction have been critical to preserving the company's strong balance sheet. Having also completed the AUD 50 million acquisition of our half interest in the Central Tanami Gold Project in February, now gives the company an outstanding opportunity to accelerate work towards a development decision to create a new Australian gold business. Turning to the financial results.
Although the October 2025 rockfall at Koolan was obviously disappointing and prevented us from generating the anticipated operating cash flows over the mine's final year, the site team's response and the Perth team's response to minimizing the impacts of the rockfall delivered positive results. While high-grade ore sales were limited to 0.87 Mwmt for the year, we reclaimed and sold 1.81 Mwmt of low-grade iron ore from our site stockpiles, and that resulted in total sales of 2.68 Mwmt. That related to revenue of AUD 204 million free on board. Just remember we disclose our revenues without shipping freight in them, so free on board. That compares with 2.61 million tons of high-grade iron ore sold in the prior year. Profit before tax and impairments improved to AUD 29.1 million, which was up from AUD 20.2 million in the prior year.
After accounting for AUD 58.9 million in impairments, which effectively cleared the remaining carrying value of the Koolan Island operation, MGX reported a net loss after tax of AUD 30.2 million. On a cash basis, the success of the post-rockfall recovery plan resulted in MGX ending the period with total cash and investment reserves of AUD 412.1 million. The reduction from AUD 484.6 million in the prior year predominantly relates to the payment of the purchase price of AUD 50 million and associated costs for the acquisition of a half interest in the Tanami joint venture and the expenditure in that joint venture since that time. I will not go into too much detail regarding Koolan, given most of the relevant data was released in our June quarterly report. The rockfall obviously significantly reshaped our business plan for what was always going to be the final year of the operation.
With mining no longer possible in the main pit, we focused on the monetization of existing stockpiles of remnant low-grade material whilst we accelerated the site rehabilitation work, thereby minimizing the financial cost to MGX. Initially, we thought the low-grade sales might run for three or four months. But given the market conditions, the program ran twice as long as that, and the sales totaled 1.81 million tons. Including the final four cargoes which were sold after the end of the year, so that is in July, total sales from the low-grade program were 2.1 million tons. Rather than being a cash drain, Koolan generated positive operating cash flow of AUD 27.6 million for the year, and that comprised sales of AUD 204 million, less operating and capital costs of AUD 156.6 million and royalties of just under AUD 20 million.
What that cash flow enabled us to do was effectively fully fund the rehabilitation expenditure of AUD 26.6 million. So the net number for the total year was AUD 1 million. The mine generated a profit before interest, impairments, and tax of AUD 7.2 million in the year, and that compared with AUD 29.3 million in fiscal 2025. Obviously back then we were selling only high-grade material. Meanwhile, we continued to engage with our insurers regarding a potential claim for the rockfall incident. Subsequent to year-end, a confidential settlement was reached with one of those insurance companies. Discussions and exchanges of information are now advancing with the balance of the insurers with a view to further progressing a claim. The claim is excluded from the Crestlink transaction, and MGX retains management of the claim and rights to any potential proceeds.
However, at this stage, it is still too early to comment whether the claim will be accepted by the remaining insurers. From a business acquisition perspective, fiscal 2026 was important given the successful completion of our AUD 50 million acquisition of a half interest in the Central Tanami Gold Project in the Northern Territory, and that was from Northern Star Resources, and we settled it in February 2026. Our 50% joint venture partner is ASX-listed Tanami Gold NL, with whom we share a common major shareholder. With a total resource base of 2.8 million ounces of gold, and that includes 1.2 million ounces at 3.3 g per ton in the core Groundrush gold deposit. This represents an outstanding opportunity to bring one of the country's best undeveloped gold projects into production in the next few years.
The transaction we have done was struck at a compelling acquisition cost of AUD 36 per resource ounce. Since we completed the acquisition, we have been working closely with Tanami Gold, our joint venture partner, to identify the path for achieving a development decision. Initial activities are focused on the commencement of an exploration decline at Groundrush, which is imminent, a resource definition drilling at the Jims deposit, and a range of site infrastructure repairs and improvements while we progress mining and processing engineering reviews, resource updates, permitting activities, and traditional owner and stakeholder engagement. We are excited to advance this project, and we look forward to providing progress updates to our shareholders in coming months. Just as important as the Central Tanami Project transaction, in June 26 , we announced an agreement to divest Koolan Island to logistics and infrastructure proponents Crestlink.
Once completed, this divestment will both ensure a positive lasting legacy at Koolan Island for MGX and provide us with a clean and value-accretive exit from iron ore that allows us to fully focus on developing our gold business. Firstly, the Crestlink transaction ensures a positive future for the island, and that includes future business opportunities for the Dambimangari Traditional Owners who have been fully supportive of this transaction. That is by utilizing mining infrastructure that we have installed over the last two decades. Crestlink is backed by major U.S. infrastructure investor Cerberus Capital Management and has been seeking to establish a multipurpose aviation and logistics hub in the region for several years. It already has interests on neighboring Cockatoo Island. Secondly, this transaction provides us with a clean exit for shareholders without the challenges of ongoing monitoring and holding costs.
Under the agreement, Crestlink will make staged payments to MGX of at least AUD 20.2 million, as well as a future revenue share of up to a further AUD 5 million, and that is indexed over time. Crestlink will also assume rehabilitation obligations remaining at the time of settlement, and this is obviously very important for us, and that is expected to be in the order of AUD 30 million. Completion of the sale is subject to various conditions, notably FIRB approval of Crestlink's acquisition, and we hope to complete the transaction by Christmas. Although in our agreement with Crestlink, this timeline can extend through to the end of March next year if needed. MGX also continues to examine and invest in other opportunities within the minerals sector and to assess regional exploration opportunities for precious and base metals deposits focused in Australia.
At period end, our investments in companies where we think there may be future financing or strategic opportunities totaled just over AUD 40 million, and that included 4.9% of Queensland copper miner AIC Mines and 4.4% of Queensland silver and lead developer Maronan Metals. In addition, MGX continues to hold 9.4% plus options in Midwest iron ore producer Fenix Resources, and that holding arose from the sale transaction of the remaining Midwest assets a couple of years ago. Which brings me on to a couple of final items to mention before we close. Firstly, we decided to discontinue our on-market share buyback, having purchased and canceled about 3.2% of our issued shares, since late 2024. The purchase cost of those shares was below current market levels, and the buyback has therefore proven to be an accretive capital management initiative.
And secondly, in line with our move into the precious metal sector, we changed the company's name from Mount Gibson Iron to MGX Resources Limited last December. We look forward to updating the market regarding development and operating plans for the Central Tanami Project Joint Venture and are working to see the substantial value of our interest better reflected in the share price from what is currently a deep value opportunity for our shareholders and incoming investors. In summary, we entered the 2027 financial year in a robust financial position with substantial value to be added by the team as we progressively advance the CTP Joint Venture and continue to pursue our growth ambitions. With that, Lisa, I will now hand back to you for any queries that may come.
Thank you, Peter. Please press star one on your phone now to raise your hand to ask a question. That is star one on your phone. Thanks, Peter. There are no questions.
Thanks, Lisa. Okay. Thank you all for listening. A copy of this recording will obviously be on the website, and if anyone does have queries, then please reach out to us. Thank you. Have a good day.
Call recording is off.