Viking pockets up to $5M from asset sale to supercharge US tungsten

Viking Mines, an Australian-based mining company, has announced a strategic move to sell off its non-core First Hit gold project in Western Australia to another ASX-listed explorer named First Au. Under the terms of the agreement, Viking is set to receive up to $5 million as part of this transaction. The deal involves the transfer of 12 tenement blocks that cover the First Hit project, which was deemed non-core to Viking's long-term strategy. This decision reflects a broader shift in the company's focus toward developing critical mineral resources, particularly in the United States.

The financial structure of the deal includes an upfront payment of $2.2 million, split between $1.2 million in cash and $1 million worth of First Au shares. These shares are issued based on the lower of either First Au’s 15-day volume-weighted average price before the deal was executed or a flat rate of one cent per share. In addition to the initial payment, Viking stands to gain an additional $2.8 million in four installments of $700,000 each. Each installment is conditional upon First Au meeting certain exploration milestones within five years of the deal closing. These milestones include achieving a drill intercept of 40 grams per tonne and proving up progressively larger gold reserves at defined thresholds—specifically, 25,000 ounces, 75,000 ounces, and 100,000 ounces of gold using a 0.5 grams per tonne cutoff grade.

First Au has also pledged to conduct a minimum $500,000 drilling program on the tenement area within 12 months of the deal being finalized. This commitment ensures continued exploration efforts without additional costs to Viking. However, the completion of the sale still depends on customary regulatory and third-party approvals, which are anticipated to be finalized in the coming weeks.

Julian Woodcock, Viking Mines' managing director and CEO, emphasized that this transaction aligns with the company's strategic goals. He stated that the sale would allow Viking to sharpen its focus on its flagship Linka tungsten project in Nevada, USA. According to Woodcock, the company is currently fully permitted and has contracts in place for the upcoming drilling operations, which are expected to commence shortly after the July 4th holiday. This timing coincides with a period of heightened interest in domestic mineral production due to geopolitical factors influencing global supply chains.

The Linka project represents a pivotal point for Viking as it transitions into a specialized critical minerals developer. Recent metallurgical testing has yielded promising results, with a recovery rate of 76 percent for tungsten, producing a high-quality 56.9 percent tungsten trioxide concentrate using a low-capital process. Additionally, historical surface stockpiles have returned grades as high as 1.1 percent tungsten trioxide, suggesting viable opportunities for low-cost production in the near term.

The current market conditions are favorable for Viking's expansion plans. Ammonium paratungstate prices have reached near-record levels, hovering around US$3180 per metric tonne. Simultaneously, evolving defense procurement policies in the United States are pushing for greater reliance on domestically sourced materials, reducing dependence on China's dominant role in the global supply chain. These developments create a compelling backdrop for Viking's investment in the U.S. tungsten sector.

With the sale of its Australian gold assets complete, Viking is poised to enter the next phase of its operations at the Linka project. The company has obtained necessary approvals from the United States Bureau of Land Management for a preliminary 63-hole reverse circulation drilling program. This initiative will be carried out by DrilCor, a contracted specialist firm. After final mechanical inspections, the drilling equipment is scheduled to be deployed immediately following the July 4th holiday, with the first subsurface tests expected to begin by mid-July. This marks a crucial step forward in Viking's journey to establish itself as a leading player in the critical minerals industry.