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Detail from the artwork from Dave Gunning's new album "No More Pennies"CP

A Nova Scotia folksinger can rest easy now that the Royal Canadian Mint won't be picking his pockets over his upcoming album's depiction of the penny.

The mint had told Dave Gunning he faced $1,200 in royalties if he produced more than 2,000 albums because they contained images of the copper-plated coin. But it backed down Thursday.

The Pictou native said he was pleased the mint was no longer penny-pinching.

"Everything's gonna taste better now. I'm gonna sleep better," laughed Mr. Gunning, who said he was overwhelmed by the attention his story had generated across Canada and the United States.

"This all started very simply from the fact that I've got a wife and three kids and just want to be able to make a living, and felt that I had to stand up for that."

The mint did not only waive the fee for Mr. Gunning, but said it would also review its intellectual property policy to ensure that it's fair.

"We recognize our policy as it is today may not consider the individual needs and circumstances of those who request the use of our images," spokeswoman Christine Aquino said from Ottawa.

"We're allowing [Gunning] to do this and we truly wish him well in his career."

Mr. Gunning, who's won multiple awards on the East Coast music scene, made national headlines this week when the mint said his soon-to-be released album infringed copyright.

He said his album, titled No More Pennies, is meant as a tribute to the ubiquitous one-cent piece, which the mint stopped producing in May though it remains legal tender.

Mr. Gunning, 39, said he was impressed at how quickly the mint dealt with the situation.

"They were always nice to deal with," he said. "I think they were honestly just trying to do their jobs and my issue was just one that slipped through the cracks."

Mr. Gunning had asked fans to spare their pennies, which he said would be delivered to the mint as payment for the fee. The Canadian Folk Music Award winner said Thursday he would still accept the donations and forward them to a Halifax children's hospital.

Michael Wrycraft, the album's designer, said waiving the fee was only fair.

"I think they just got caught up in some kind of bureaucracy and weren't really thinking," he said from Toronto. "I'm terribly happy that clearer heads have prevailed."

In a statement, the mint said it would assess its intellectual property policy "to ensure that it is being applied fairly on a case-by-base basis while protecting the interests of Canadians."

Mr. Gunning's album, set for release next Tuesday, was recorded in Pictou and Halifax earlier this year. Its artwork includes a penny, representing the sun, disappearing behind the horizon. In another picture, the copper-plated coins are depicted as wheels on a steam locomotive.

The mint initially agreed to waive the royalty for the first 2,000 albums only. Future batches were expected to set Gunning back 60 cents per CD.

Aquino said the mint will require some changes to the album's artwork when the next round is produced. It can still include depictions of the penny, though the side showing the Queen is not permitted.