Royalty Restructure at Higginsville Gold Operations
Perth, April 22, 2014 AEST (ABN Newswire) - The Board of Metals X Limited ("Metals X") (
ASX:MLX) (MTXXY:OTCMKTS) advises that it has reached agreement with Morgan Stanley Commodities ("Morgan Stanley") to restructure the royalty it holds over the Higginsville Gold Operations ("HGO").
The restructured royalty agreement has been agreed by both parties with the shared primary aims of extending the mine life, encouraging new investment and creating the best conditions for the ongoing employment of HGO's workforce.
The previous royalty structure was put in place in 1991 as part of the sale of the St. Ives Gold Operations by WMC Limited, and was acquired by Morgan Stanley in July 2002. The royalty applied after production of 3.3 million ounces from that operation and its tenure. The royalty struck at that time was unindexed and struck at a 4% Net Smelter Return (NSR) with an additional price participation of 10% of the difference between the average spot gold price for each production quarter and A$600 per ounce.
Metal X acquired the HGO as part of a package whereby it acquired the whole Australian Business unit of Alacer Gold Corporation for A$44 million effective October 1, 2013.
The new royalty structure agreed between the parties is:
- The NSR has been lowered from 4% to 1.75% and its footprint has been expanded to all current tenements at the HGO.
- The starting level for price participation has been lifted from A$600 per ounce to A$1340 per ounce with an initial level of 12.5%, with an escalating participation from A$1500 to A$1900 per ounce.
Metals X's CEO, Peter Cook said:
"We're pleased to have concluded this agreement with Morgan Stanley. The new and varied royalty structure establishes a sound platform for capital reinvestment within the projects at current prices. Further, Metals X looks forward to getting the most out of the project and will now commit to significant reinvestment at HGO, a restructuring of the operations to maximize efficiency and significant investment in exploration to extend project life."
About Metals X Limited
Metals X Limited (
ASX:MLX) (OTCMKTS:MTXXY) is a Diversified Resource Company. Australia's largest tin and one of Australia's top 10 gold producers. Considerable cashflow is generated from its two operating gold mines at South Kalgoorlie and Higginsville in WA and from its 50% owned high grade tin mine in Tasmania which is also one of the largest hard rock tin mines in the world. The company boasts resources of over 14 Moz of gold, 140,000 tonnes of contained tin and over 2 million tonnes of contained nickel. The company also has a considerable portfolio of growth assets, including one production ready and one development ready gold project and one of the world's largest undeveloped nickel and cobalt projects.
The Central Murchison Gold Project consists of a fully refurbished 2.0Mtpa gold plant and resource containing over 8.6 Mozs of gold in a combination of high grade underground mines and lower grade open pits, expected to be in production in early 2015. The Company's Rover 1 iron-oxide-copper-gold discovery contains 1.2Moz of gold equivalence which is targeted for production in 2016.
The 100% owned world class Wingellina Nickel and Cobalt Project hosts a global resource of over 180Mt at 1% nickel that includes 167Mt as a probable reserve. Metals X has joined with one of the World's largest companies, Samsung C and T, to work together to finance and develop the Wingellina project.
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