Mount Gibson Iron withdrew its fiscal 2026 sales guidance on Friday after determining it was no longer viable to resume mining at its Koolan Island operations in Western Australia, following a major rockfall earlier this month.

The iron-ore miner had estimated sales of 3-million to 3.2-million wet metric tons (WMT) at A$80 to A$85 FOB per WMT shipped in July.

Shares of the firm fell as much as 27.7% to A$0.34 and were set for their weakest trading session since December 2014. The stock hit its lowest level since mid-July.

The company said it decided against remediating the affected pit area due to safety risks, the likelihood of further instability and the mine's limited remaining life. Mining has been suspended since the October 16 rockfall, though no personnel were injured.

"Resuming mining is not viable given the safety risks of potential future instability and the time and investment required to mitigate such risks, especially in the context of the operation's limited remaining mine life," the company said.

Processing will continue using existing ore stockpiles, while about 75 employees will remain on site to handle rehabilitation work.

Roughly 250 staff and 200 contractors will be laid off, with total transition costs estimated at A$30-million to A$40-million ($19.49-million to $25.99-million).

The company also said the incident won't affect its plan to acquire a 50% stake in the Central Tanami Gold Project by March 2026, with some Koolan Island personnel and equipment to be redeployed there.