PERTH (miningweekly.com) – Mineral developer Viking Mines has signed a share sale and purchase agreement (SSPA) to acquire a 75% interest in the Reung Kiet lithium project, in Thailand.

Under the terms of the SSPA, Viking will acquire Argo Metals Group through a share-based transaction.

The company will issue 35-million shares on the grant of the Reung Kiet tenements, and a further 55-million shares on the start of commercial production of lithium carbonate at the project. A further 80-million Viking shares will be issued on the completion of a prefeasibility study for either a lithium or tungsten project, while 100-million two-year options will be issued at a 20% discount to the company’s 30-day volume-weighted average price on the completion of a positive definitive feasibility study (DFS) for either a lithium or tungsten project.

The study milestone awards require Argo’s project cost of production to be in the bottom half of the cost of production of worldwide comparable operations.

Viking executive chairperson Jack Gardner said on Friday that the acquisition of Argo was in line with the company’s strategy of acquiring and developing minerals projects on “highly favourable terms” where substantial upside was seen and opportunity existed to create shareholder value while minimising risk.

“The acquisition of these potentially low-cost-curve tech metals projects located in a favourable and supportive jurisdiction offers the potential to supply fast-growing markets for these commodities where the supply/demand fundamentals continue to be attractive,” Gardner said.

The Reung Kiet project includes lithium-bearing pegmatites over a 3 km to 4 km strike within a combined prospective trend of more than 10 km. The asset contains two drill ready pegmatites.

Meanwhile, Viking and Argo have entered into an alliance with fellow-listed Platypus Minerals to develop an L-Max plant with feed sourced from the Reung Kiet project.

A memorandum of understanding (MoU) between the companies contemplated the development of a small commercial scale L-Max plant to process lepidolite concentrate sourced from Thailand.

Viking said that the joint venture (JV) provided a pathway to lithium carbonate production, with the Platypus lepidolite process technology using well-understood hydrometallurgical techniques to economically produce high-purity lithium carbonate.

Under the MoU, the two companies will form a 50:50 incorporated JV to build a 2 500 t/y lithium carbonate plant. The JV will jointly fund a DFS for the plant.

“The MoU with Platypus Minerals will allow Viking to advance the Reung Kiet lithium project, knowing it has a valid path to early production of lithium carbonate,” said Gardner.