14/05/2014 - 15:58

Metals X snaps up Meekatharra assets

14/05/2014 - 15:58

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Metals X has bought the Meekatharra gold operations for $7.7 million less than a year after the holding company – a subsidiary of Reed Resources – was placed into the hands of administrators.

Metals X snaps up Meekatharra assets
The Meekatharra gold operations

Metals X has bought the Meekatharra gold operations for $7.7 million, less than a year after the holding company – a subsidiary of Reed Resources – was placed into the hands of administrators.

As part of the deal, Metals X will acquire the Meekatharra gold mines, a 2.5 million tonnes per year processing plant, a 200-person camp, and associated infrastructure and equipment.

In return, Metals X said it would pay $7.1 million in cash and handover 24 million shares it held in Reed Resources worth about $600,000.

Metals X said it planned to integrate the Meekatharra operations with its Central Murchison gold project with the aim of commencing production in 2015.

Operations at Meekatharra were suspended after the holding company GMK Exploration was placed into the hands of Ferrier Hodgson in August last year.

At the time, Reed said the mine-to-mill ounces reconciliation had been underperforming, placing strain on GMK’s cash flow.

Reed had been expecting output of 80,000 ounces of gold for the year ending June 30, 2014 from the operations.

Metals X said the acquisition of the assets would take its total mineral resource to 8.5 million ounces of gold.

Metals X shares closed more than 11 per cent higher on the news to 24.5 cents per share.

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