The latest offer is a boost from the $7.7 million ($7.1 million in cash and $600,000 in shares) acquisition first announced last month.

Along with $9.4 million in cash this offer includes the transfer of 24 million Reed shares, worth about $500,000, that Metals X owns.

Metals X said the price was upped after administrators of the Meekatharra project revealed a rival bid from a secret party at a creditors meeting yesterday.

Administrators said while they could not disclose the group they were well-funded and the offer was genuine.

Another competing offer, fully disclosed but conditional upon obtaining funding, was also presented at the meeting.

“We were extremely surprised that a conditional offer from an undisclosed party was put forward at the last minute to potentially scuttle a fully funded, disclosed and agreed purchase,” Metals X managing director Peter Cook said.

“The offer only materialised after the announcement to the Australian Securities Exchange of the agreement Metals X reached with the administrator.

“Metals X undertook thorough due diligence before entering into the purchase process with the administrators and finds it scurrilous and unconscionable that an unnamed party decided to take advantage of this work at such a late stage.”

Despite the surprise bid Metals X said the latest deal had been agreed upon and it was happy with the purchase.

“Even at a slightly higher purchase price, this remains a great acquisition for Metals X and a major step forward for our plans to bring our Central Murchison gold project to fruition,” Cook said.

“It also adds 3.5 million ounces to our existing 5Moz of total mineral resource at the CMGP, leaving us a massive long term option on the gold price.

“The purchase price remains astounding value when compared with the $120 million in capital expenditure we would require to build a new plant for our own ores.”

Reed said it expected to receive about $5.1 million in total from the new deal, a $1.1 million increase.

It said if it received shareholder approval it would receive the share transfer and buy back the stake.

If shareholder approval was not received, the company indicated it would sell the shares and keep the proceeds, along with a separate $4.6 million in cash.

Reed said under the new arrangements a pool of funds worth around $4.6 million would be available for the remaining unsecured creditors of GMK Exploration, an increase of $1.1 million.

It is expected the funds will be distributed by administrators in the second half of the year, but exact details on the arrangements are still being worked on.

Reed said after the payments were made the claims of all of GMK’s creditors would be extinguished.

GMK and the Meekatharra project fell into administration late last year after Reed failed to put up further funds for the mine.

Before collapsing, the project battled several performance issues including high cash costs and falling head grades due to the loss of tonnes from the Bluebird deposit, which was mostly depleted.

The operation was originally acquired by Reed in January 2011 for $28 million and after spending substantial funds on refurbishment and pre-development, it was commissioned and poured its first gold in January last year.

Metals X’s acquisition includes the fully refurbished 2.5 million tonne per annum Bluebird plant, a 200-bed camp, other infrastructure, and service vehicles and equipment.

A total resource inventory of 63Mt at 1.75 grams per tonne gold for 3.55 million ounces will also be picked up, including a reserve of 11.1Mt at 2.1gpt for 752,000oz.

A definitive feasibility study on Metals X’s Murchison project had originally estimated a capital cost of $117 million to build a 1.5Mtpa plant and take the project into production.

With the acquisition this expenditure is no longer necessary, although costs from Murchison will be slightly higher due to the need to transport ore to the existing Meekatharra plant.

Murchison is located about 100km south of Reed’s Meekatharra operation.

Along with consolidating the assets, Metals X previously said it planned to aggressively explore and assess options for the Meekatharra tenure.

Reed shares were last trading 5% higher at 2.1c while Metals X was up 0.8% to 25.7c.