There are two types of MDL output for Gmax. One is the standard aircraft model (*.mdl) and the other is the scenery model (*.mdl to *.bgl). This is done using a converter known as BGLComp. Its a seperate file that is delivered via the Gmax SDK put out by MS. I would suggest going and finding those SDKs and downloading all that are pertinent to Gmax. There are, I think, three that deal with the aicraft creation, scenery creation and Gmax in general. You can find them
here.
The other part is to go get a tutorial on making Gmax files usable for Rwy12. This is a finicky process, so if everything is not set up EXACTLY as it needs to be, it won't work and you'll keep getting error after error. Every time I do this, I get the tutorial out and re-read it.
Tutorial:
Gmax to Rwy12Found at:
Scenery Hall of Fame Tutorials