UPDATE 2.25pm: Metals X has picked up Reed Resources' idle Meekatharra gold project in a cash and scrip deal worth $7.7 million.
The company plans to combine the project with its existing Central Murchison gold project, utilising Meekatharra's existing plant, camp and associated infrastructure.
Under the terms of the agreement, Metals X will pay $7.1 million in cash and receive $600,000 worth of Reed shares.
The deal is subject to approval by the Foreign Investment Review Board and creditors of Reed's collapsed subsidiary that controlled the mine.
Metals X chief executive Peter Cook described Meekatharra as a great acquisition for the company and a major step forward for its plans to bring the Central Murchison Gold Project to fruition.
"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," he said.
"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 also adds 3.5 million ounces to our existing 5 million ounces of total mineral resource at the Central Murchison gold project, adding even more value to the already large, long term option on the gold price inherent in Metals X's gold business."
Metals X said it planned to finalise a development strategy with the integrated projects and bring the region back into production early next year.
The Meekatharra gold project, under Reed subsidiary GMK Exploration, was placed in the hands of administrators in August last year owing more than $90 million.
Metals X shares closed up 2.5 cents, or 11.36 per cent, to 24.5 cents at the close while Reed shares were up 0.2 cents, or 8 per cent, to 2.7 cents.