Viking Mines earns 25% stake in Canegrass battery minerals project
Viking Mines (ASX: VKA) has hit a critical milestone and earned 25% ownership of the rich the Canegrass battery minerals project in the Murchison Region of Western Australia.
The company has been granted the quarter interest in the project after successfully completing the first stage of its farm-in agreement with a subsidiary of Red Hawk Mining (ASX: RHK).
The achievement of the Stage 1 completion highlights Viking’s exploration aggressiveness at Canegrass since signing up to the farm-in agreement in late November 2022.
Staged-farm-in agreement
The company initially entered into the farm-in agreement with Flinders Mines (now Red Hawk) to acquire the Canegrass project under a multi-stage arrangement.
Under the terms of the agreement, Viking had the right to earn up to 99% of the six project tenements for all minerals via a farm-in arrangement, by spending $4 million on exploration over 54 months and making staged cash payments for a total consideration of $1.25 million to Flinders.
Upon Viking earning a 99% interest in the project, Red Hawk has a right to sell the remaining 1% of the project to Viking in return for $0.845M of staged production and milestone related payments due on production.
At the time of the initial farm-in signing, the project was estimated to contain a JORC (2012) inferred resource of 79 million tonnes at 0.64% vanadium oxide, 29.7% iron and 6.0% titanium dioxide.
Moving on to Stage 2
Viking Mines managing director and chief executive officer, Julian Woodcock, said the company has now elected to proceed with Stage 2 of the farm-in after it had satisfied the Stage 1 commitment of providing $1 million in exploration expenditure within 18 months of the commencement of the farm-in agreement.
Viking moved quickly to achieve that target with a range of exploration activity including field mapping, geophysical surveys and modelling, the creation of an exploration target estimate, metallurgical testwork and drilling programmes encompassing 50 Reverse Circulation drillholes for 7,687m.
Mr Woodcock said the results obtained to date from all its work at Canegrass has yielded excellent outcomes which backed the decision to proceed to Stage 2.
“I am very pleased to announce the completion of Stage 1 of the FIA. This achievement marks a significant milestone in our journey towards unlocking the potential of this promising project,” he said.
“The performance of the project has been exceptional, with the discovery of significant additional mineralisation outside the limits of the existing mineral resource estimate areas and excellent metallurgical results on testwork completed by Viking.”
Major upside identified
The company’s recently released exploration target estimate highlighted the significant upside growth potential at Canegrass.
That estimate identified 144 million tonnes to 192 million tonnes at 0.45% to 0.99% vanadium oxide for 1.44 to 4.19 billion pounds of vanadium oxide.
The exploration target estimate was based on six target areas, both extending and linking the two existing mineral resource estimates (MREs) at the Fold Nose and Kinks deposits, for a total of eight focus targets.
Strong metallurgical potential identified
Earlier this month Viking reported that it had achieved strong results from metallurgical testwork completed on samples from the Kinks South target area.
High recoveries of 90.9% were achieved for the main interval of 17m at 0.98% vanadium pentoxide, with the concentrate grading 1.44% vanadium pentoxide, 60.3% iron, 10.6% titanium dioxide, 1.13% silicon dioxide and 1.72% aluminium oxide and a high mass recovery of 59.6%.
Mr Woodcock said mass recoveries for all samples averaged 45.7% by weight which is significantly higher than typical titaniferous magnetite deposits. This is expected to lead to improved economics when processing this ore compared to other ores where the yield is typically 30% by weight.
Testwork on samples collected from the Kinks South area also returned an excellent quality magnetic which consultants believe may be suitable for feed to a kiln to produce a vanadium pentoxide flake product.
Mr Woodcock noted that the high Iron content of 60.3% is also close to the specifications of magnetite concentrates, and with further work has the potential to deliver a product which would be suitable for direct shipping.
He said this opens an alternate value releasing pathway for the project and could lead to adding additional value from other magnetite horizons which have low vanadium values and could be assessed as a direct iron ore product.
Targeting a further level of interest
Under Stage 2 of the farm-in, Viking can earn a further 24% interest by taking the total exploration expenditure to $2 million over the next 12 months.
Mr Woodcock said that with $1.28 million invested to 31 July 2023, Viking is well placed to comfortably achieve this next milestone within the required timeframe.
“I look forward to commencing with the next stage of activity as the assay results are received and QAQC evaluations completed which will then allow us to move to updating the mineral resource estimate for the project,” he said.
“The company is specifically targeting a high-grade component of the resource over 30 million tonnes at approximately 0.8% vanadium oxide which, if achieved, we feel will form the basis for a robust project.”
“The vanadium sector is primed for growth with adoption of vanadium flow batteries (VRB’s) taking place as evidenced by the recent pilot programme announced by Horizon Power to install a VRB in the remote community of Kununurra.”