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

Viking Mines has pocketed up to $5 million after signing a binding agreement to divest 12 tenements encompassing its non-core First Hit gold project in Western Australia to ASX-listed explorer First Au.

The deal delivers an immediate balance sheet boost while preserving significant future upside for the company through equity exposure and performance-linked milestones.

The company says the transaction allows it to eliminate the financial and operational burden of a non-core asset, and to redirect its full technical capacity towards its flagship Linka tungsten project in Nevada, USA.

Under the terms of the agreement, Viking will receive an upfront consideration of $2.2 million, which comprises $1.2 million in cash and $1 million in First Au shares.

‘It crystallises value from a quality gold asset, and it does so in a way that keeps our shareholders exposed to its upside.’

Viking Mines managing director and chief executive officer Julian Woodcock

The initial shares will be issued at the lower of First Au’s 15-day volume-weighted average price prior to execution, or one cent per share. A further $2.8 million is payable to the company in four equal tranches of performance rights, valued at $700,000 each.

These contingent equity payments are tied to First Au achieving specific exploration milestones within five years of completion, including a drill intercept of 40 grammetres. The balance of the consideration hinges on First Au proving up increasingly larger gold inventories, with milestone payments triggered at 25,000-ounce, 75,000-ounce and 100,000-ounce resource thresholds using a 0.5g/t cut-off grade.

Notably, First Au has committed to a minimum $500,000 drilling program on the tenements within 12 months of the deal completing, ensuring the gold ground is actively explored at no further cost to Viking.

Completion of the First Hit divestment remains subject to customary regulatory and third-party approvals and is expected to close in the coming weeks.

Viking Mines managing director and chief executive officer Julian Woodcock said: “For Viking, it sharpens our already clear focus. Our priority is Linka, where we are fully permitted, contracted and weeks away from the first drilling in over four decades. This deal strengthens our balance sheet and lets us put our full attention behind a US tungsten project arriving at exactly the right moment in the market.”

The asset cash-out comes at the perfect time for Viking, which is rapidly transforming into a focused critical minerals developer, with a primary focus fixed on its United States tungsten project portfolio.

At its flagship Linka project, the company has already built a highly encouraging end-to-end development narrative. Recent metallurgical test work achieved an impressive 76 per cent tungsten recovery rate, producing a premium-grade 56.9 per cent tungsten trioxide concentrate via a low-capital flowsheet.

The project is also backed by historical surface stockpiles returning grades of up to 1.1 per cent tungsten trioxide, offering potential low-cost options for near-term production.

The macro environment is equally supportive, with ammonium paratungstate prices hovering near record highs of US$3180 per metric tonne. This, along with the tightening of United States defence procurement rules, is driving an urgent push for domestic supply independent of Chinese-dominated supply lines.

Viking is now moving straight into its next operational phase at Linka. The company has secured United States Bureau of Land Management approval for a maiden 63-hole reverse circulation drilling program to be managed by contracted specialist, DrilCor.

Following final mechanical checks, the rig will mobilise immediately after the July 4 holidays, with the drill bits expected to kiss the dirt by mid-July for the first subsurface testing at the historical mine in more than 40 years.

With its pockets filled with fresh cash and the drill rigs about to roll in Nevada, Viking looks well positioned to unlock serious value as America’s urgent push for tungsten independence gathers pace.

Punters will likely be keeping a close eye out for the news flow to start gathering pace as the assays results begin to roll in.

Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au