A Walk-Through Victory Mines' Progress Till Date

Based in Perth, Victory Mines Limited (ASX: VIC) is an exploration company with major projects in Western Australia (WA) and New South Wales (NSW). Its principal activities involve project acquisition, mineral exploration and development.

VIC has four highly prospective tenements including two high-grade cobalt and scandium mineralisation projects covering 244 hectares, namely Malamute and Husky located 150km west of Dubbo in NSW. Whereas two prospective nickel-copper mineralisation projects, namely Galah Well & Peperill Hill projects are situated approximately 100km west of Leonora in WA, covering 244 hectares.

Please read Victory Mines’ Cobalt and Scandium Projects with Market Opportunity to know more about the company’s projects.

Additionally, the company holds the Bonaparte Project located ~ 70km north of Kununurra, WA along with two non-core assets, i.e. Bolivian Tin Project located near Llallagua town of Potosi Department in southwestern Bolivia and Laverton Project located ~20km northeast of Laverton in WA.

Please read Assessing Victory Mines’ Bonaparte, Bolivian Tin and Laverton assets and Global Scenario to know more about other base metal projects of Victory Mines.

The company has kept on reassessing investment options across projects mentioned above, depending on the market condition to maximise the shareholder returns. In the milieu of which, it is quintessential to analyse the company strategy from start to present to comprehend the several logical steps taken to assess outlook.

It all started with the acquisition of Bolivian Tin mining projects in December 2014 when the company acquired South American Tin Limited. The Laverton project was acquired in March 2017 from Empire Resources Ltd (ASX: ERL) under a consideration of $2,000 in cash and 2% royalty payment on all metals produced within the tenement.

These were followed by the acquisition of Bonaparte tenements in July 2017, for a $100,000 cash payment and the issue of 20 million fully paid ordinary shares, with the deal valued at $904,500 and completed in 2018. Additionally, ~ 10 million bonus shares are to be issued on the achievement of the performance milestone, i.e. 50% shares to be released on confirmation of a probable reserve of 10 million pounds and the remaining 50% at a reserve confirmation of 20 million pounds, both grade of 10% Cu or Zn or Pb equivalent.

For the three assets - Bonaparte, Bolivian Tin and Laverton projects, the company is either searching for a strategic investor to sell the asset or to form a JV to develop the project. As per the FY19 annual report, the company is planning to divest the Laverton and Bonaparte assets as well as exploring some other form of commercial arrangement to a third party for its Bolivian Tin Project.

The key progress towards cobalt-scandium and nickel-copper prospective mineralisation is: -

November 2017: VIC acquired the four key project areas after entering a binding agreement to acquire 100% of the issued capital of Cobalt Prospecting Pty Ltd. The consideration terms included issue of ~357 million shares at $0.007 per VIC share, approximately 142.86 million performance shares, 178.57 million options, a 2% net smelter return royalty and a $200,000 cash payment.

May 2018: The geology team designed comprehensive drilling campaigns for the Malamute and Husky projects and progressing work on the Galah Well and Peperill Hill projects.

July 2018: The New South Wales regulator approved plans for drilling campaigns across the Husky and Malamute projects.

April 2019: The company completed planning for an inaugural drill campaign at the Husky and Malamute projects, including 100 aircore drill holes for a total of approximately 5,000m of drilling. The campaign is targeted towards confirming the tenements’ prospectivity for laterite-hosted cobalt, scandium, nickel and/or PGE mineralisation in the mafic/ultramafic source rock.

August 2019: With weaker demand for cobalt and scandium, VIC revised the drilling campaign for the Husky & Malamute project, reducing the activity by 60% to 40 holes and lowering the exploration cost to $100-120k from the previous allocation of $250k. Whereas, improving outlook for nickel moved the focus towards the Galah Well and Peperill Hill projects, assigning geological consultant to assess the areas to estimate priority target areas.

Additionally, VIC launched a placement and underwritten entitlement issue to raise $1.62 million. Of which, $116,000 was raised through the placement of 116 million shares at $0.001 per share to sophisticated investors. The remaining $1.48 million was to be raised through the placement of 175 million options and a non-renounceable entitlement issue of new shares to the existing shareholders at a price of $0.001 per share.

Change in the VIC capital structure after fundraising: -

Source: ASX announcement

Funds raised from the offers were planned: -

o To undertake an exploration program at the Husky & Malamute projects.

o To undertake a site survey at Peperill Hill and Galah Well tenements.

o To explore and evaluate other projects in Western Australia and pursue potential acquisitions to add significant long-term shareholder value.

o To provide working capital and capital costs.

October 2019: After securing funds, the company unveiled that a drilling team at the Malamute project commenced work across the most prospective targets focusing on nickel-cobalt-scandium mineralisation. The campaign was expected to last for ten days, with any expansion to program including drilling targets within the Husky project contingent on assay results.

During mid-October 2019, a field reconnaissance program at the Galah Well and Peperill Hill tenements was commenced to assess access, map geology and rocks within the tenements for the cobalt-copper-nickel prospectively.

The results of the field program were made available at the end of the month. The geology map identified two Proterozoic dykes of the Widgiemooltha Supersuite, intersecting both the Galah Well and Peperill Hill projects and identifying granites and mafic greenstone belts.

The study found both projects to be prospective for nickel-copper sulphide mineralisation.

December 2019: The company achieved exceptional assay results for the Malamute project with a discovery of 28.2% grade of aluminium oxide (Al₂O₃). This finding brings extreme proposition of high purity alumina (HPA) and prospective values for cobalt up to 935ppm and Rare Earth Metal (REE), i.e. scandium up to 380 ppm.

On achieving such an exceptional grade, the exploration milestone was reached, owing to which performance shares granted to the shareholders of Cobalt Prospecting would be converting into ordinary shares, and VICOA Options exercisable at $0.02 for every two shares issued expiring on 28 December 2020.

Moreover, on 4^th December 2019, the company presented results of the field reconnaissance program at the Galah Well and Peperill Hill tenements. The rock chip sampling confirmed the presence of ultramafic dykes along with orogenic gold potential.

The primary company focus remains on developing the Malamute, Husky, Galah Well and Peperill Hill projects. Victory Mines is raising funds through share placement and underwritten entitlement issue as well as through divesting non-core assets or finding a strategic investor to develop these assets via joint ventures.

The commodities (cobalt, scandium, nickel, copper and gold) in the critical assets are well coupled with the commercialisation of the projects. Demand for Ni-Co-Cu commodities is expected to surge with increasing focus on electric vehicles (EV), while uncertainty in the global environment would continue to support Au, the safe-haven investment commodity.

Stock Price Information – The stock of Victory Mines last traded at $0.001 on 30^th December 2019, with a market cap of $3.13 million.

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