Metals X boosted by royalty restructure

Shares in West Perth-based miner Metals X have closed higher after the company announced it had negotiated a restructured royalty agreement at its Higginsville gold operations.

Metals X last month said third-party royalty arrangements at Higginsville were "crippling" future development decisions at the project, which Metals X acquired from Alacer Gold for $44 million last year.

However the company today said it had reached agreement with Morgan Stanley Commodities to restructure the royalty it acquired over the Higginsville project in 2002.

Under the new arrangement, the net smelter return Morgan Stanley receives will be lowered from 4 per cent to 1.75 per cent.

The agreement also includes price participation of 12.5 per cent of the difference between the average spot gold price for each production quarter and $1,340 per ounce.

That figure will escalate from $1,500 to $1,900 per ounce.

Metals X chief executive Peter Cook said both parties had agreed to the deal with the intention of extending the mine life at Higginsville.

"The new and varied royalty structure establishes a sound platform for capital reinvestment within the projects at current prices," he said.

"Metals X look forward to getting the most out of the project and will now commit to significant reinvestment at Higginsville, a restructuring of the operations to maximise efficiency and significant investment in exploration to extend project life."

Metals X shares closed the day's trade 8 per cent higher at 20.5 cents.