Viking Mines Sells First Hit Gold Project, Targets Linka Tungsten Drilling

Viking Mines Sharpens Its Focus with First Hit Sale Worth up to $5 Million as Linka Tungsten Drilling Nears

Viking Mines Limited (ASX: VKA) has agreed to sell its non-core First Hit Gold Project in Western Australia to First Au Limited (ASX: FAU) in a deal worth up to $5 million, according to the ASX announcement released on 29 June 2026. The transaction delivers $2.2 million upfront, made up of $1.2 million in cash and $1.0 million in FAU shares, with up to $2.8 million more available through milestone-based FAU share payments if exploration success is achieved over the next five years.

The sale matters because it simplifies Viking's portfolio just as the company prepares to start a 63-hole reverse circulation drilling programme at its Linka Tungsten Project in Nevada, USA. According to the announcement, Linka drilling is expected to begin by mid-July 2026, making this divestment both a balance sheet event and a portfolio refocus ahead of a near-term exploration phase.

Managing Director Commentary

"This transaction does 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. First Hit deserves a dedicated owner, and that owner is now committed to drilling it, at no cost to us," said Julian Woodcock, Managing Director and CEO.

"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."

The First Hit Transaction Delivers Upfront Value and Retains Exploration Exposure

According to the ASX announcement, Viking has entered into binding agreements with First Au covering 12 tenements that make up the First Hit Gold Project in Western Australia's Eastern Goldfields. The company stated that the total consideration could reach $5.0 million, although only part of that amount is certain at completion.

The structure is split between immediate consideration and contingent payments linked to exploration outcomes.

How Is the Upfront Consideration Structured?

The issue price for the FAU consideration shares is set at the lower of FAU's 15-day VWAP before execution of the agreements or $0.01 per share, according to Viking.

For investors, this means Viking receives fresh cash without fully severing its exposure to the asset. Furthermore, the FAU scrip component gives Viking an equity interest in the company now responsible for advancing First Hit.

Milestone Payments Could Add a Further $2.8 Million

The larger deferred component of the deal is tied to four defined performance milestones. If First Au achieves any of these within five years of completion, Viking is entitled to receive $700,000 in FAU shares for each milestone met.

This structure means Viking's additional proceeds are dependent on actual exploration or resource outcomes rather than simple work commitments. It gives shareholders continued leverage to First Hit if First Au is able to deliver strong drill results or build a formal Mineral Resource.

In addition, the ASX announcement states that First Au will fund a minimum $500,000 drilling commitment on the tenements within 12 months of completion. That is important because it keeps the project active while removing future funding demands from Viking.

What Do Performance Rights Mean for Investors?

Performance rights can appear technical, but their role in this transaction is relatively straightforward. In this case, they are conditional rights for Viking to receive FAU shares only if specified exploration milestones are achieved.

That makes them different from fixed deferred cash payments. Viking is not guaranteed the full additional $2.8 million, but it does retain potential value if First Hit performs well under new ownership.

For non-specialist investors, the implications are:

• Viking no longer funds exploration at First Hit
• First Au carries the operational and drilling cost burden
• Viking still benefits if strong drill results or resource growth occur
• The company also retains market exposure through its upfront FAU shareholding

This type of structure is common in mining asset sales where the seller sees value in a project but chooses not to allocate further capital to it. It allows an explorer to narrow its corporate focus while maintaining some exposure to future project success.

Viking Is Repositioning Around Linka Tungsten in Nevada

The ASX announcement frames the divestment as part of Viking's transition into a more focused tungsten developer. Management stated that capital and technical resources will now be directed toward the company's USA tungsten project portfolio, led by the Linka Tungsten Project in Nevada.

According to Viking, Linka is now approaching a key operational milestone:

• Bureau of Land Management approval has been secured
• A maiden 63-hole RC drilling programme is planned
• DrilCor has been contracted as the drilling contractor
• Rig mobilisation is anticipated immediately after the 4 July holidays
• Drilling is expected to start by mid-July 2026
• The campaign will test three priority target areas
• It will be the first sub-surface testing at Linka in more than 40 years

For investors, the timing matters considerably. The sale of First Hit arrives just before Viking begins what management describes as its maiden modern drilling campaign at Linka. The $1.2 million cash component may improve funding flexibility as that work progresses.

The company also stated in the announcement that proceeds from the sale strengthen the balance sheet and provide additional flexibility to advance Linka beyond the maiden drilling campaign.

Why This Deal May Matter to ASX Investors Following Junior Miners

Junior resource companies often face a capital allocation challenge. Multiple projects can provide optionality, but they can also spread management attention and exploration spending too thinly. According to Viking's announcement, this deal removes a non-core gold asset from the portfolio while preserving some upside through FAU equity and milestone-linked consideration.

There are three practical investor takeaways.

First, Viking receives near-term value through cash and listed equity rather than waiting solely for a future project outcome.

Second, First Hit remains active under an owner that has committed drilling funds, creating a pathway for Viking to receive more FAU shares without having to fund the work itself.

Third, the company now has a clearer market identity centred on tungsten and the upcoming Linka drilling programme. In small-cap mining, a clearer asset focus can help investors assess project milestones and valuation drivers more easily.

However, the deferred value remains contingent. The additional $2.8 million only becomes payable if First Au achieves the specified drilling and resource milestones within the stated period.

Educational Section: Understanding RC Drilling, Grammetres and Mineral Resources

The Viking announcement includes several technical terms that are relevant to both the First Hit sale and the Linka drilling programme. Understanding them can help investors better interpret future updates.

What Is RC Drilling?

Reverse circulation (RC) drilling is a common exploration method used to collect rock chips from below surface. A drill bit breaks the rock, and the samples are brought to surface through the inside of the drill rods.

RC drilling is widely used because it is generally faster and lower cost than diamond drilling for early to mid-stage exploration. It provides a practical way to test multiple targets and identify whether mineralisation is present. At Linka, Viking's planned 63-hole RC programme is intended to provide the first modern sub-surface test of the project in decades.

What Are Grammetres?

A grammetre combines grade and width into a single number. It is calculated by multiplying the gold grade in grams per tonne (g/t) by the intercept width in metres.

For example:

• 4 g/t over 10 metres = 40 grammetres
• 2 g/t over 20 metres = 40 grammetres

This measure helps investors compare intercept significance more easily. In the First Hit transaction, one of the milestone triggers is a drill intercept of 40 grammetres. That does not automatically mean economic mineralisation has been defined, but it does indicate a threshold for material drilling success as agreed between Viking and First Au.

What Is a Mineral Resource?

A Mineral Resource is a formal estimate of the amount of mineralised material in a deposit that has reasonable prospects for eventual economic extraction. In Australia, such estimates are generally reported under the JORC Code.

A resource estimate is more advanced than a single drill result because it requires a body of geological evidence, data interpretation and formal reporting methods. In the Viking transaction, three milestones are linked to Mineral Resource thresholds of 25,000 ounces, 75,000 ounces and 100,000 ounces at a 0.5 g/t cut-off.

For investors, this matters because a declared resource can become a major valuation reference point for a junior explorer, although economic viability still depends on further technical and commercial studies.

The Tenement Package and Completion Timeline

The announcement states that the sale covers 12 tenements, including mining licences, prospecting licences and exploration licences held by Red Dirt Mining Pty Ltd, Viking Mines Ltd, and Baudin Resources Pty Ltd. One exploration licence, E30/0571, is still under application and is expected to be transferred to First Au after grant.

Completion is still subject to customary conditions, including:

• Regulatory approvals
• Third-party approvals
• Any required ministerial consents

Viking stated that completion is expected in the coming weeks following satisfaction or waiver of those conditions. That places the completion process broadly alongside the expected start of Linka drilling, making the next one to three months a notably busy period for company news flow.

What to Watch Next

The ASX announcement points to several near-term milestones that may shape investor attention:

Viking's latest update presents a clear portfolio reset. The company has moved to monetise a non-core gold asset for up to $5 million, retain shareholder exposure to future gold exploration through FAU shares and milestone rights, and concentrate attention on a near-term tungsten drill programme in Nevada.

For ASX investors, the immediate focus now shifts to two fronts: whether the First Hit transaction completes on the expected timetable, and what the maiden drilling programme at Linka may indicate once field activity begins in July.

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