Tonkin will take the reins from current MD Chris Reed, who will remain as an executive director focusing on business development and the incubation and optimisation of the company's non-gold assets.

Reed founded the company with his father David in 2001.

David Reed said Tonkin's project development, operational and corporate expertise would benefit the company as it developed its Meekatharra gold project through to first development in the December quarter.

"Building up the executive team will ensure the Meekatharra gold project is adequately resourced and also allow Chris to focus on the development of the non-gold assets and the most appropriate methodology for delivering value to shareholders," he said.

The company has signed Tonkin on a contract which will run until June 30, 2015 with an annual fixed salary of $A599,500.

Subject to shareholder approval, he will be issued with a sign-on award of 833,000 shares and 1.66 million performance rights vesting in equal amount tranches until June 30, 2014.

Tonkin will also be entitled to an annual bonus of up to half of his annual salary, as well as long-term incentives in the form of performance rights.

Tonkin was managing director of Mount Gibson from August 2005 until November last year when he quit over a boardroom stoush relating to Chinese control of the company.

He was meant to stay on for a six-month transition period but left in December after failing to reach agreement with the board over his termination package.

Prior to Mount Gibson, Tonkin was chief executive officer of Sons of Gwalia for several months during its administration process in 2005 after serving as executive general manager - operations for the two years prior.

Shares in Reed remained unchanged at 20.5c.