Metals X to acquire Meekatharra gold operations

THE BOURSE WHISPERER: Metals X (ASX: MLX) has struck a binding agreement to acquire the assets of the that made up the Meekatharra gold operations of Reed Resources from the administrator of its subsidiary GMK Exploration.

The purchase price has a face value of approximately $7.7 million and is made up of $7.1 million in cash and 24 million shares of Reed Resources (nominally $600,000).

The assets Metals X is set to acquire include:

The fully refurbished Bluebird CIP Process Plant (nominal 2.5 million tonnes per annum);


The 2.5 Mtpa Bluebird plant and associated infrastructure. Source: Company announcement


A 200 person fully refurbished camp;

Infrastructure, service vehicles, equipment and inventory;

A total mineral resource inventory of 3.55 million ounces (63 million tonnes at 1.75 grams per tonne gold) as previously announced by Reed in June 2012; and

A Total Ore Reserve (when operating) of 752,000 ounces (11.1 million tonnes at 2.1g/t gold) also previously announced by Reed in June 2012.

“This is a great acquisition for Metals X and a major step forward for our plans to bring our Central Murchison gold project to fruition,” Metals X CEO Peter Cook said in the company’s announcement to the Australian securities Exchange.

“The metric of just over $2 per ounce of resource with all the plant and infrastructure in place is astounding value when compared with the $117 million in capital expenditure we would require to build a new plant for our own ores.

“More importantly, this acquisition provides a low capital risk solution for us to add to our gold production without debt, without construction risk and without external pressures for delivery.

“It’s also adds 3.5 million ounces to our existing five million ounces of Total Mineral Resource at the CMGP, adding even more value to the already large, long term option on the gold price inherent in
Metals X’s gold business.”

Metals X indicated it plans to finalise a development strategy with the integrated projects and bring the region back into production in early 2015 building on our production at the Higginsville and South Kalgoorlie operations.