Viking Mines (ASX:VKA) has entered binding agreements to divest its non-core First Hit Gold Project to First Au (ASX:FAU).
The agreement encompasses the divestment of 12 tenements for a total transaction value of $5 million, including $2.2 million in upfront consideration comprising $1.2 million in cash and $1 million in shares, followed by up to $2.8 million in performance rights.
Performance rights will be payable progressively as First Au achieves defined drilling and resource milestones on the tenure.
First Au will assume a minimum of $500,000 drilling commitment at the project within 12 months of acquisition completion.
Viking CEO Julian Woodcock describes the transaction as beneficial for doing “two things at once”.
“It crystallises value from a quality gold asset that is no longer core to our strategy, and it does so in a way that keeps our shareholders exposed to its upside as First Au takes it forward,” Woodcock says.
“First Hit deserves a dedicated owner, and that owner is now committed to drilling it, at no cost to us.
“For Viking, it sharpens an 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.”
Viking is scheduled to begin a maiden reverse circulation drilling campaign at its flagship Linka Tungsten Project in Nevada in the coming weeks.
The First Hit Project has a historical production of 30,000 ounces @ 7.7 grams per tonne gold.
For First Au, the broader transaction includes the acquisition of the Riverina East Gold Project, comprising 11 separate mineral licences and one exploration licence application from Viking Mines, located 40km west of the sealed Goldfields Highway and the township of Menzies in Western Australia.
Along with the First Hit Project, the acquisition includes the proximal Bifrost Project, which is considered “highly prospective for gold”.
First Au Executive Chairman Daniel Raihani says the acquisition of the Riverina East Gold Project “represents another important step in First Au’s strategy of building a high-quality gold portfolio in Western Australia’s premier gold districts”.
“What attracted us to Riverina East is the combination of historical high-grade production, a commanding land position, and multiple underexplored targets within a proven gold district,” Raihani says.
“These are the characteristics we look for when assessing acquisition opportunities, and we believe the project provides an excellent foundation for future exploration success.
“The addition of Riverina East complements our existing Western Australian gold portfolio and reinforces our commitment to creating shareholder value through disciplined project selection and technically driven exploration.”
Viking Mines is a diversified exploration and development company focused on tungsten, gold, and vanadium projects.
First Au is focused on pursuing gold opportunities in Western Australia, with a focus on the wholly owned Gimlet Gold Project near Kalgoorlie.
Write to Maddison Elliott at Mining.com.au
Images: Viking Mines
