Thank you for joining today's teleconference for the release of MGX Resources' March quarter activities report. MGX Chief Executive Officer, Peter Kerr, will be leading the discussion and is 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 a question at that time. A recording of the call will also be available via the MGX website shortly after completion of today's teleconference. I will now hand you over to Peter. Thank you.
Thanks, Lisa, and good morning, everyone. Thanks for joining us to discuss MGX Resources' March 26 quarterly activities report. As usual, I'll give a brief overview and then hand back to Lisa for any questions anyone may have. The usual reminder, all currency that's mentioned on this call is denominated in Australian dollars unless otherwise stated. The March quarter was obviously a significant one for MGX, being anchored by completion of our acquisition of a 50% interest in the Central Tanami Gold Project in the Northern Territory. Given the transformational nature of that acquisition and the approaching ends to our iron ore operations at Koolan Island this year, the Central Tanami Gold Project will become the key focus going forward.
Firstly, on safety, I'm pleased to say that the business incurred no reportable injuries in the March quarter, which resulted in a reduction to the company's total recordable injury frequency rate from 5.3 to 5.1 injuries per 1 million man-hours worked. Importantly, the lost time injury frequency rate remained at 0. Our safety performance remains favorable when compared with applicable industry standards, and significant focus continues to be applied to achieve the company's long-standing goal of continuous safety improvement. On to our key business activities, firstly with the Central Tanami Gold Project. As mentioned, the most significant event in the quarter was the successful completion of the acquisition of a 50% interest in the joint venture from Northern Star Resources, and that was in early February when we paid the AUD 50 million purchase cash consideration.
The importance of the acquisition cannot be overstated for us, in particular, the attractive entry price into a substantial undeveloped gold project based here in Australia. It's a compelling opportunity, and we're working hard already with joint venture partner, Tanami Gold NL, to leverage our experience in remote site operations and bring one of Australia's highest grade undeveloped projects into production in due course. This will establish MGX as a new Australian gold producer. The CTP joint venture's land position covers over 2,000 sq km of mining and exploration tenements, and it hosts mineral resources totaling 31 million tons at an average grade of 2.8 g/t gold for contained gold of 2.8 million ounces. That's on a 100% basis.
This includes the Groundrush deposit, which contains a current resource of 11 million tons at 3.3 g/t gold for 1.2 million ounces of contained gold. That deposit will form the core of future production. The joint venture assets also include extensive site infrastructure, and that comprises a non-operating CIL gold processing plant, which is very old, and we're looking at whether refurbishment or replacement options exist for that plant. Also the infrastructure on site includes haul roads, accommodation camp, water bore field, and a 1.4 km long gravel airstrip. Much of that infrastructure's aged, most notably the plant, as I mentioned, and that will require work to be fit for purpose for a long-life mining operation. That's a key component of our work this year.
Since completion, we've actively engaged with Tanami Gold and identified the optimal path to achieving a development decision and the key work streams for that, and we're trying to achieve that over the next few years. The new JV management committee, comprising two representatives from each company, has met a number of times to consider the forward work program. Over the next 12 to 18 months, we will focus on the infrastructure improvements, obviously the regulatory approvals and permitting aspects, resource definition drilling, processing plant options, and commencement of a 3.5-kilometer-long exploration decline into the Groundrush deposit. That exploration decline is a critical path activity, and it will enable us to undertake underground infill drilling to a depth of about 500 meters below surface.
With the target there being to upgrade about 400,000 ounces of inferred resources to indicated status, and importantly, to provide advanced access to initial stoping levels. The joint venture parties earlier this week announced the selection of Macmahon underground as the preferred contractor for construction of that Groundrush exploration decline, and that's subject to finalization of a binding agreement. The work on the decline is scheduled to commence in the September 2026 quarter and take approximately 14 months, and the contract is valued at about AUD 38 million.
The decline will extend to a depth of about 350 meters below surface, and as I mentioned, will enable drilling of the deposit to approximately 500 meters deep. The joint venture will also continue resource definition drilling at the Jims deposit to the south of the plant site area and potentially other free milling near mine targets, which have already been identified in the central mine corridor area. In parallel, we'll be progressing the camp and infrastructure upgrades needed to support the on-site activities, as well as the approvals and permitting, as I mentioned, mine optimization and design work, and the engineering studies for the plant. During the quarter, we also conducted a number of positive introductory meetings, and that's with Tanami Gold and MGX and joint venture personnel. Those meetings were with key representatives from the NT government, regulators, and the Central Land Council in Alice Springs and Darwin.
All of those meetings confirmed a very supportive environment for development of this project, which has obviously sat in the Tanami for some time, and now timing and market conditions are putting it in a great position for our development activities to get underway properly. Now that we're in the door of the project, I look forward to reporting MGX's continued progress towards development in the coming months. Turning to Koolan Island. Since the main pit rock fall in October last year, we've focused on the processing and sale of stockpiled low-grade material to substantially cover the costs of the site rehabilitation activities. Sales in the March quarter were a bit lower than initially planned at 0.39 million wet metric tons at an average grade of 44.2% Fe, and that was due to wet season and cyclone-related interruptions, in particular, Cyclone Narelle towards the end of the quarter.
With the end of the wet season, our shipping frequency is now accelerating and we continue to target total low-grade sales in the current half-year period, so that's the January to June 2026 period, of around 1 million tons. Cash flow from these sales is expected to substantially reduce the net cost of rehabilitation and really facilitate an orderly ramp down of activities on the site. Importantly, the site rehabilitation earthworks remain on track for completion in the middle of the year, and the rehabilitation spending totaled AUD 6.6 million in the quarter.
You may remember we reported a gross rehabilitation provision of AUD 48.4 million for Koolan Island at the end of December 2025, and it's important to note that a substantial portion of that relates to the ultimate removal, if that is ever required, of the key site infrastructure items, including the airstrip, the camp, the jetty, and wharf, so the port facilities, and the processing facilities. Positively, we continue to advance discussions with the Dambimangari traditional owners and other third parties interested in post-mining uses of these infrastructure assets, and that's something that we wish to really pursue this year and see if we can't get a good outcome there. In relation to insurance, as previously indicated, discussions and information exchanges are underway with our insurance providers regarding a potential claim relating to the rock fall in October last year.
However, we really do caution the market that at this stage it remains uncertain as to the likelihood or potential quantum of any claim. For shipping in the quarter, 5 shipments grading 44.2% Fe were sold under fixed price agreements, and they realized an average price of $31 per dry metric ton free on board, so in effect, without the shipping freight cost in the price. I note our low-grade contracts incorporate fixed shipping freight rates of between $12-$13 per ton, and that has largely protected the company from recent increases in shipping freight costs. Sales for the 9-month period year to date total 1.74 million tons, and that's equally split between high-grade material that was sold in the first 2 quarters of this financial year and the low-grade material that we're currently selling.
Given the weather impacts on sales, Koolan incurred a cash outflow of AUD 15.3 million in the quarter, and that reflected sales revenue of AUD 18.3 million, and that's free on board basis, less cash operating costs of AUD 25.3 million, and those costs equate to approximately AUD 65 per ton shipped, as well as royalties of AUD 1.7 million and AUD 6.6 million spent on rehabilitation earthworks activities. We're targeting positive operating cash flow in the June quarter based on achieving our low-grade shipment targets, particularly now that the wet season is over.
Overall, the MGX group incurred a cash outflow for the quarter of AUD 11.8 million, and that comprised the Koolan outflow of AUD 15.3 million that I just mentioned, as well as interest income of AUD 3.9 million, realized gains on equity investments, and I'll talk about those in a minute, of AUD 4.9 million, less corporate admin and exploration costs over the quarter of AUD 4.6 million. After paying the AUD 50 million CTP joint venture purchase consideration in February, and as well as working capital movements and fair value movements in the value of our investments, which have obviously reduced given the recent Middle East conflict and the impact on the market, the company's cash and investment reserves totaled AUD 414.7 million at the end of March, which was equivalent to AUD 0.35 per share. MGX has no bank borrowings.
In relation to our equity investments that I was just mentioning, a number of positions were sold during the quarter, and so by the end of March, it was valued at AUD 31 million. This included a near 5% interest in Queensland copper producer AIC Mines, valued at approximately AUD 20 million, and a 5.1% interest in Queensland silver and base metals developer Moreton Metals, valued at approximately AUD 4 million at quarter end. These holdings are in addition to MGX's current 9.5% shareholding, plus an option holding in Mid-West iron ore producer Fenix Resources. Those positions were valued at approximately AUD 25 million at quarter end. With regard to our ongoing regional exploration activities, key projects are currently held in the Northern Territory and Western Australia.
As part of the CTP joint venture acquisition, MGX also acquired approximately 3,600 square kilometers of wholly owned prospective exploration tenure surrounding the Central Tanami project joint venture area. We're currently reviewing that data, it's an extensive land position, with a view to preparing an appropriate regional exploration strategy. MGX also continues to pursue its regional exploration work, targeting areas prospective for precious and base metals in Western Australia. The two key ones at this point in time are firstly, near the former Tallering Peak mine in the Mid-West region, where we're targeting base metals mineralization. However, in this period, wet ground conditions and low contractor availability, which has been exacerbated by some of the fuel supply issues in the last month, hindered efforts to commence access tracks and drill pads for a small planned RC drilling program.
We now expect that program to commence in the middle of this year. Similarly, our second area in WA is in the Edmund Basin and tenements to the north of the Gascoyne region. We have a Falcon airborne gravity survey that was planned in the quarter but has been delayed to this current quarter due to aircraft availability and also the adverse weather that related to Cyclone Narelle. Now, that survey is important because it's expected to proceed shortly, but it will assist us in understanding regional structures and in prospect targeting. In summary, just to wrap things up, the March quarter represented an important inflection point for the company. We obviously completed the Central Tanami Gold Project 50% acquisition and moved closer to the end of operations at Koolan Island.
The Koolan Island low-grade program is running well, and although it was modest in the March quarter, we now have a number of cargoes ready to ship. It will keep MGX in a robust cash and investment position, such that we're very much looking forward to advancing progress for the development of the Central Tanami project as we seek to recast MGX as a new Australian gold producer. With that, I'll hand back to Lisa for any questions there may be.
Thank you, Peter. If anybody would like to ask a question, please press star one on your phone now to raise your hand. Thank you, Peter. We have no questions.
All right. Thanks, Lisa. I know that others are contacting us a bit later this morning, so if anyone would like to speak with us directly, the details are obviously on the release. Otherwise, please have a good day.