31-01-17: Quarterly Report for the period ended 31 December 2016

ASX Announcement

31 January 2017

ASX Code: VKA

Quarterly Report for the period ended 31 December 2016

During the quarter ended 31 December, 2016, Perth-based Viking Mines Ltd (Viking or the Company) activity was focussed on concluding the acquisition of technology metals projects in Thailand, and reviewing new mining project opportunities, while progressing Government approval of the sale agreement for the Akoase gold project in Ghana.

1. Thailand Technology Metals Acquisition

   On 18 November 2016 Viking announced that it is has executed a Share Sale and Purchase Agreement (SPA) to acquire 100% of Argo Metals Group Limited (Argo) via a share based transaction. Argo holds a 75% interest in the Reung Kiet lithium project located in southern Thailand.

   The SPA includes an option to acquire West Mandalay Exploration Pty Ltd's (WMX) rights to earn a 75% interest in the Khao Soon tungsten project, also located in southern Thailand.

   The Argo acquisition facilitates Viking's entry into technology based metals with downstream processing opportunities. Viking's initial discussions with the Thai Government indicates a high level of governmental support for downstream processing projects.

   This transaction is subject to shareholder approval. Notice of meeting documents are being prepared and will be dispatched to shareholders shortly.

   Upon completion the Argo Principals will become full time employees of Viking with Paul Lock to be appointed an Executive Director of Viking, while geologist, David Hobby, will be appointed Country Manager, Thailand.

2. Reung Kiet Lithium Project, Thailand (VKA 75% on grant of licenses)

   During the December 2016 quarter the Company continued the application process for the three Reung Kiet prospecting licenses. This application process is well advanced.

   While the license application process is underway the Company is permitted to conduct non ground disturbing activities. As a result the Company has conducted orientation soil sampling, rock chip sampling, and drill planning activities. The Company has also been conducting community liaison activities and is well positioned to commence drilling upon the grant of its prospecting licenses.

   The data obtained during the soil and rock chip sampling programs is currently being reviewed. The Company expects to release these results in February once assays are received.

3. Khao Soon Tungsten Project, Thailand (VKA option to earn 75%)

   During the December 2016 quarter the Company conducted reconnaissance activities on granted prospecting licenses at Khao Soon.

   Activities included traversing several prospects to assess potential drill sites, observe geology, old workings and sample as appropriate. This work identified numerous mineralised outcrops which are generally co-incident with large areas of highly elevated WO3 in soils and rock chips, as identified by previous explorers. The data obtained during this program is currently being processed and the Company expects to release these results in February.

   The Company is in final discussions with drilling contractors and will seek to engage as soon as possible. Drilling rigs will then mobilise to Khao Soon as soon as practicable where a short diamond drilling program will be conducted to test several areas of WO3 anomalism at the Rabbit prospect. The Company has chosen this strategy as it ensures that drilling equipment is secured and ready for transfer to Reung Kiet immediately upon grant of the lithium prospecting licenses.

4. Akoase Gold Project (Ghana, VKA 100% - reducing to 0% upon completion of sale)

   During the December 2016 quarter the Company continued to make significant progress in obtaining the necessary government approvals to transfer the Akoase tenements to Akoase Resources Limited (ARL) such that it can complete the US$10 million sale of these tenements.

   The necessary government approvals, including Ministerial consent, for transfer of the Akoase tenements to purchaser ARL have been received from the Ghana Minerals Commission. Viking's Ghanaian lawyers have confirmed that all Conditions Precedent have been satisfied to allow the Akoase sale to complete.

   Under the terms of the Akoase Sale Agreement, ARL had 5 business days from Viking satisfying all Conditions Precedent to make the final cash payment of USD 6 million to Viking. This did not occur and a Notice of Default will be issued to ARL forthwith.

   Non-payment of this amount may void the sale transaction and the Akoase project ownership would then remain with Viking. In this event there is no obligation upon Viking to refund any portion of the US$2 million deposit already paid by ARL.

   Akoase Sale Transaction Details

   In June 2015 Viking announced the sale of the Akoase gold project for total sales consideration of US$10 million to be received as follows:

   • US$2,000,000 - received by Viking

   • US$6,000,000 to be paid in cash within 5 days after all Conditions Precedent have been satisfied.

     • US$ 2,000,000 to be paid in cash as a gold production royalty

5. Berkh Uul Coal Project (Mongolia, VKA 100%)

   No on-ground activity on the project during the quarter.

   The Berkh Uul financial model presentation outlining the potential benefits of a mining project to the regional and State economy was lodged during a meeting with the senior advisory group within the Ministry for Mines and Heavy Industry (MMHI) in November 2016.

   Viking has received informal advice that all proposals relating to changes to boundaries of protected areas affecting mineral licenses, introduced under Long Name Law in 2010, will be considered by MMHI immediately after the Lunar New Year holiday period which ends in mid-February.

6. Khonkhor Zag Coal Project (Mongolia, VKA 100%)

   No on-ground work was undertaken on the project during the quarter. Joint venture partners are currently being sought to assist with development of the project.

7. Corporate

8. On 25 November 2016 Viking announced that it had completed a Placement to raise $1.27 million via a Placement to professional and sophisticated investors through the issue of 62.7 million new shares at 2.02 cents per share. Leading Perth based broker DJ Carmichael Limited acted as Lead Manager to the Placement and has accepted a mandate to be the Company's corporate adviser for the next 12 months. Funds raised pursuant to the Placement will be used primarily to accelerate exploration of the Company's newly acquired lithium project located in Thailand.

   Jack Gardner Executive Chairman

   For further information please contact: www.vikingmines.com [e-mail]

   Company Jack Gardner Executive Chairman	Corporate Advisor Michael Eidne DJ Carmichael Pty Ltd
   [phone]	[phone]

   Competent Persons Statement: The information in this Public Report that relates to gold Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Peter McMickan, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr McMickan is a full time employee of Viking Mines Limited. Mr McMickan has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr McMickan consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

   The information in this Public Report that relates to technology metals Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr David Hobby, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Hobby is a full time employee of Argo Metals Group Limited. Mr Hobby has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Hobby consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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   Forward Looking Statements: This document may include forward looking statements. Forward looking statements may include, but are not limited to statements concerning Viking Ashanti Limited's planned exploration programs and other statements that are not historical facts. When used in this document, words such as "could", "plan", "estimate", "expect", "intend", "may", "potential", "should", and similar expressions are forward looking statements. Although Viking Ashanti Limited believes that its expectations reflected in these forward looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward looking statements.