PERTH (miningweekly.com) – Diversified junior Metals X has restructured the royalty over the Higginsville gold operation, held by Morgon Stanley.
The Higginsville operation was acquired as part of Metals X’s A$44-million takeover of fellow-listed Alacer Gold’s Australian business unit in October last year.
The previous royalty structure was put in place in 1991, as part of the sale of the St Ives gold operation, and was acquired by Morgan Stanley in 2002. The royalty applied after the production of 3.3-million ounces from the operation and its tenure.
Under the new royalty structure, the net smelter royalty had been lowered from the original 4%, to 1.75%, while its footprint has been expanded to include all current tenements at the Higginsville operation.
The starting level for price participation had also been lifted from the original A$600/oz to A$1 340/oz, with an initial level of 12.5%, with an escalating participation from A$1 500/oz to A$1 900/oz.
Metals X CEO Peter Cook said on Tuesday that the new and varied royalty structure established a sound platform for capital reinvestment within the project, at current prices.
“Metals X looks 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,” Cook said.
The Higginsville operation includes a 1.35-million-tonne-a-year gold plant, and has a current mineral resource of 15.9-million tonnes, grading 3 g/t gold for 1.55-million ounces of gold.