Viking Mines (ASX:VKA) negotiates major deal to secure 100% ownership in Canegrass Project

Highlights

• Viking to secure full ownership of the Canegrass Battery Minerals Project through acquisition of Flinders Canegrass.
• The acquisition of the remaining 51% stake follows the successful completion of Stage 2 of the Farm-In Agreement (FIA).
• The transaction involves payment to Red Hawk of AU$175k cash, 33 million shares and 15 million options exercisable at 2 cents each.
• Upon completion, Red Hawk will hold a 3.15% stake in Viking and be among the top 20 shareholders.

Viking Mines Limited (ASX:VKA) is set to secure full ownership of the Canegrass Battery Minerals Project, located in Western Australia by acquiring Flinders Canegrass Pty Ltd, a subsidiary company of ASX-listed Red Hawk Mining. The decision to secure the remaining 51% stake in the project via the Flinders Canegrass acquisition follows the successful completion of Stage 2 of the FIA, which increased the Company’s stake held through subsidiary, Viking Critical Minerals, to 49%.

Details of the transaction

Viking Mines is acquiring Flinders Canegrass through a binding Share Sale Agreement (SSA) with Red Hawk. The transaction includes a cash payment of AU$175,000 and issuance of 33,333,333 VKA shares, half of which will be placed in voluntary escrow for three months, while the other half will be escrowed for six months. Additionally, the transaction includes issuance of 15 million options to Red Hawk, exercisable at 2 cents each, with a three-year expiry period.

Upon completion of the transaction, Red Hawk will become one of the company’s top 20 shareholders with an increased stake of 3.15% in the firm.

Positive results from Stage 2 FIA

A rapid and aggressive period of activity was undertaken during the Stage 2 of the FIA, which delivered promising results, surpassing the company’s expectations. One of the key accomplishments was the conclusion of the 7,500 RC drilling program. This program returned impressive, widespread, thick, high-grade vanadium intersections, including:

Data source: Company update

Mineral Resource estimate (MRE) increased significantly, reaching 146Mt at 0.70% V2O5, 31.8% Fe, with a high-grade subset of 27.5Mt at 0.87% V2O5, 37.3% Fe. The company also concluded POS, which delivered an in pit MRE of 61Mt at 0.81% V2O5, 35.9% Fe, further confirming the project’s intrinsic value. Moreover, ongoing metallurgical test work has continued to derisk the project.

VKA shares traded at AU$0.008 apiece at the time of writing on 5 September 2024.