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Viking Mines Investors Snap Up Shares In Capital Raising

Viking Mines (ASX:VKA) has received a strong show of support from investors with applications for its offer of shares and options having exceeded its minimum level of $2,090,000.

This is expected to swell further before it closes on Friday, 29 August 2014.

Proceeds from the offer will complete the Auminco takeover, fund exploration and development of its gold and coal assets as well as for general working capital.

The company is looking to raise up to $3,040,000 by the issue of up to 80 million shares priced at $0.038 each with 1 free attaching option for every four shares subscribed. These are exercisable at $0.09 at any time on or before 30 April 2017.

Auminco, an unlisted public coal development company that holds the Berkh Uul Bituminous Coal Project in northern Mongolia, is currently the subject of a takeover offer by Viking. To date, more than 97% of Auminco's shareholder base has accepted the offer.

The only remaining defeating condition to the takeover is Viking making this capital raising offer.

Berkh Uul Project

The Berkh Uul bituminous coal project is located in the Orkhon-Selenge coal district in Selenge Province, Northern Mongolia, approximately 40 kilometres from the Russian border.

It has an Inferred and Indicated Resource of 38.3 million tonnes of high quality bituminous thermal coal.

Notably, the project has already signed four non-binding memoranda of understanding with Mongolian industrial users relating to future potential coal supply.

The most recent was signed earlier this month with Khutul Cement and Lime JSC, Mongolia's largest cement manufacturer.

The earlier MOU's are with Darkhan Metallurgical Plant, Darkhan Power Station and Erdenet Power Plant, where it has also established testing of a bulk sample as a basis for technical evaluation of the coal.

Berkh Uul occurs in the Upper Jurassic - Lower Cretaceous age Sharin Gol Formation within the Orkhon-Selenge Coal Basin, which also hosts a number of large hard coal deposits including the Mongoin Gol, Shariin Gol and Ulaan Ovoot deposits.

The two main seams typically average greater than 1.5 metres in thickness, however average seam thicknesses are typically variable, ranging from 0.6 metres to 4.5 metres, with splitting common.

The deposit is a multi-seam deposit lying on the flanks of a broad synclinal structure with NE-SW axis trend. Current exploration has been carried out on the eastern flank of the syncline and coal of exploitable thickness has been identified. Seams dip gently at up to 11 degrees.

Berkh Uul coal is of sales quality without washing. There is potential to further value add to the resource by washing and producing a high quality, high energy thermal coal suitable for export markets.

The project is strategically located; approximately 40km to rail facilities with access to China and Russia, plus a strong local domestic demand.

There is potential for rapid development of the project, with its shallow, flat lying coal seams amenable to open cut mining. Mining studies are planned for 2014 to accompany a Mining Licence Application to be lodged during 2014.

Other Auminco Projects

Auminco also holds:
- The Khonkhor Zag anthracitic coal project in the Trans-Altai Coal Basin in Govi-Altai Province, South West Mongolia;
- The early stage Buduun Project in a proven hard coal region in Khovd Province, Western Mongolia;
- The Dalt and Budargana coal projects in Dundgovi Province, Central Mongolia; and
- The Tsairt Zinc joint venture project in Sukhbaatar province in eastern Mongolia.

Previous Russian and Mongolian technical work on Khonkhor Zag has delineated high quality anthracite coal.

This outcrops at surface and has also been exposed in a small historical open pit.

Significant upside potential is considered to exist as only 30% of the licence has been explored, with 1 strike kilometre of a potential 4 kilometre strike length of the coal deposit tested to date.

Further potential exists for value adding by washing, and producing a premium, low ash anthracitic metallurgical coal.

Further exploration and mining studies are planned for 2014, initially focussed on increasing the resource potential of the project.

Auminco is currently in discussion with several groups in regards to Auminco selling the Tsairt Zinc project or a third party joint venturing into the project.

Ghana Gold Projects

Viking will also use proceeds from the capital raising to fund exploration and development of its gold assets in Ghana.

The company had on 2 July 2014 announced that it had entered into a 3 month Exclusivity Agreement with Ghanaian company Akroma Gold that could lead to Akroma acquiring the Akoase gold project in southern Ghana.

Akoase has an Inferred resource of 790,000 ounces of contained gold and is located 150 kilometres north of Accra, and 25km from Newmont's Akyem gold mine.


That Viking Mines has already exceeded the minimum subscription level of $2,090,000 just a week after launching its capital raising clearly demonstrates the support investors have in the company, its acquisition of Auminco and the cash flow generating capacity of its Berkh Uul project.

Auminco's Berkh Uul project has already drawn considerable interest for its high quality bituminous thermal coal with four Mongolian industrial users having already signed non-binding memoranda of understanding for future potential coal supply.

Proactive Investors continues to value Viking Mines at $0.085 to $0.165 per share. This compares to its current share price of $0.042 per share.