VKA to start drilling for tungsten in the US any day now...?

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 78,666,667 VKA Shares and the company’s staff own 3,500,000 VKA Shares at the time of publishing this article. The Company has been engaged by VKA to share our commentary on the progress of our Investment in VKA over time. This information is general in nature about a speculative investment and does not constitute personal advice. It does not consider your objectives, financial situation, or needs. Any forward-looking statements are uncertain and not a guaranteed outcome.

The US is running out of missiles.

Yep, the world’s strongest military.

This morning the US put in a US$59BN order to “urgently” build thousands more AND significantly ramp up manufacturing capacity over the next 7 years:

(source)

(source)

Tungsten is vital in armour-piercing ammunition, fighter jets, and the warheads of Tomahawk, Patriot and Precision Strike missiles.

The US produces zero tungsten domestically.

On January 1st 2027, a ban on foreign imports of critical minerals for US Military use is coming into effect (source) - uh that’s only five months away...

And 7 days ago US President Trump signed an Executive Order telling the trillion dollar US military industrial complex to source critical minerals from within US borders ...or face legal and financial penalties - we covered this in detail here.

(Read the full Executive Order here)

Quite the pickle for the world’s strongest military.

... and quite the opportunity for the $25M capped Viking Mines (ASX:VKA) and its USA tungsten project.

VKA said this morning “it’s on the cusp of” putting the first drill hole in 40 years into its historically producing tungsten project located in the USA (source).

Permitting is complete, the drill contractor has been engaged, and the drill rig mobilised last week.

We want to see VKA deliver some big tungsten drill hits over the coming weeks, in the USA...

just as the US government has forced the $1TN US military industrial complex to prioritise domestic military metals supply...

AND put in a giant order of tungsten hungry munitions.

All this probably explains why tungsten prices are up ~620% between Jan 2025 and April 2026.

(the past performance of the tungsten price is not an indicator of future performance.)

IF little VKA can even just replicate and extend what’s known at the old mine on its project we think things could get very interesting.

Right now, China controls more than 80% of the world's tungsten supply.

Tungsten is reported as being one of the highest supply-risk materials on earth when it comes to supply concentration, limited substitutability and strategic importance.

AND it’s common public knowledge that US weapons stockpiles are running alarmingly low.

The US even had to call off missile strikes because there weren’t enough missiles to fire off.

(sources)

Wonder what Iran and China are thinking...

VKA wants to revive this asset ASAP given the need for domestic tungsten supply.

Today VKA even released a conceptual processing plant design that VKA’s been working on as part of a Processing Stuy.

(yes, VKA has been thinking about production before drilling)

(source)

And with this next round of drilling we will find out whether or not the project has enough size/scale to warrant bringing it back online.

The US administration needs more tungsten - good time to go drill test a domestic tungsten asset

Over the last 60 days, fixing the US weapons stockpiles has become a top priority for the US administration.

A few weeks ago, President Trump hosted America's biggest weapons makers (RTX, Lockheed Martin, L3Harris and Boeing) at the White House, to work out how to solve the weapons stockpile crisis.

(source)

Trump is even pulling the old car industry into this one...

Trump said “General Motors is all excited about building weapons” - so switching factory lines across to help build Patriot and Tomahawk missiles. (source)

(source)

All of that urgency in the US really kicked up a notch after China blacklisted two US companies - cutting them off from buying Chinese critical minerals and "dual-use" materials.

China then barred exports to eight more US firms and locked 46 US defence contractors out of its market.

(source)

China is allowing exports for civilian and commercial use.

But it’s making life hard wherever the end use is military or defence.

Which makes a reliable, US-based supply of tungsten even more valuable now.

And as we covered above, Lockheed Martin is the first to win a big deal from the Pentagon - US$59BN to triple Patriot missile production over the next seven years:

(source)

So cash is flowing into the hands of the contractors for multi-year missile production contracts, five months before a critical input (tungsten) is going to be banned for importation into the US.

AND (yes we are repeating ourselves) with the US having no current domestic production of that critical mineral.

So how is the US going to get enough tungsten to rebuild its stockpiles - especially after that import ban comes into place?

We think the only way to do it is by bringing a few projects into production within the USA’s sphere of influence.

Like ones within US borders.

That’s where we think VKA really comes into play.

VKA's tungsten project is in Nevada, USA.

VKA's project has a history of tungsten production dating back to the 1950s, when ~123,000 tonnes of ore was mined at an average grade of ~0.54% tungsten from open pits. (source)

It sits a ~275km drive from the brand-new US$12BN US critical minerals stockpile at the Hawthorne Army Depot in Nevada...

...the largest ammunition store in the world.

(yes - the very depot the US is now using to stockpile the exact minerals it's worried about running out of.)

(source)(source)

Despite that production history, VKA's project hasn't been drilled in over 40 years.

Any day now, VKA is due to start the first ever drill program on the project in decades.

Yes, literally any day now - today’s quarterly said the rig has mobilised to site, and that drilling would “commence shortly” (source).

VKA will be drilling ~63-holes into an area covering ~7km of strike AND around the old pits that produced tungsten decades ago.

VKA is relatively well funded for the drilling.

VKA had $3.67M cash in the bank at 30 June 2026 AND has $1.2M in cash coming from the sale of its non-core gold project in September. (source)(source)

VKA is currently capped at $25M.

(source)

So we should soon be about to find out whether a historically PRODUCING tungsten asset - inside the USA has size/scale, enough to be brought back into production when the US desperately needs domestic supply.

Concurrently to the drill testing, VKA is also working toward a rapid restart of production.

Today, VKA announced the results of an independent processing study for its project using a modular plant design that could be in production within three months of on-site assembly (source).

So VKA is already thinking deeply about production (long before drilling any holes into the project).

Take a look at the conceptual processing plant design:

(Source)

When we first Invested in VKA back in December, the project had a history of tungsten mining and just a few modern sample results.

Since then, VKA has 8x'ed the exploration upside, by growing the known strike from ~800m to ~7km by:

1. Acquiring a historical exploration database.
2. Digitising the old drilling data
3. Digitising the project's geological model.
4. Doing more sampling and mapping.
5. Completing geophysical surveys.
6. Pulling all of that data into a 3D geological model to identify the highest-priority drill targets.

VKA turned old pieces of paper like this:

(source)(source)(source)(source)

...into a modern, drill-ready 3D model and target set.

And over the next few months, we get to see how much tungsten VKA's project really has.

8x exploration upside - drilling very very soon

The image below summarises VKA’s exploration model.

Previous tungsten mining on the project was on the edge of that big magnetic anomaly in a small portion of the project (circled on the map in orange).

VKA’s theory is that the entire edge of that magnetic anomaly could host tungsten mineralisation:

The anomaly has a ~7km perimeter - with known tungsten mineralisation across only 800m of it so far.

(source)(source)

With the 63 hole drill programme split across three target areas, we should get a much better understanding of whether or not the exploration theory is validated.

Here are the three targets for the drill programme:

• Linka Main (36 holes): Resource-focused drilling to verify historic high-grade intercepts and chase the mineralisation down-dip beneath the old workings.
  
• Linka SW Extension (16 holes): Testing of the ~800m southwest extension.
  
• Regional Reconnaissance (11 holes): Shallow holes to validate magnetic and gravity geophysical interpretations - basically going for new discoveries.

The main thing we want to see from VKA is whether or not there is scale to VKA’s project AND whether or not the high grades are continuous across the project.

The old Linka mine on VKA’s ground operated at a head grade of ~0.5% tungsten.

Most operating tungsten mines globally run at 0.1–0.2%.

VKA’s more advanced US tungsten peer - and how it grew

One of the biggest known tungsten deposits in the USA is owned by ~$900M Guardian Metals Resources.

This deposit averages ~0.206% grade, and is in the development studies stage. (source).

Back in July last year Guardian Metals received a US$6.2M grant from the US Department of Defense. (source)

IF little VKA can even just replicate and extend what’s known at the old mine on its project we think things could get very interesting.

VKA’s project doesn’t need to be massive - for example Guardian Metals’ project is only based on a ~10Mt resource.

And that project alone has been enough to take Guardian Metals from a small cap listed in London to a ~A$540M market cap - up almost 3,000% in 2.5 years at its peak:

(source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

The most interesting part is that almost all of Guardian’s share price appreciation was driven largely by three key drivers.

Guardian received US$6.2M from the US Department of Defence in July 2025.

Then it completed a technical study in December (incorporating drilling data from 68 old holes).

Then a US listing raising ~US$50M.

We think that after its own 63-hole programme, assuming the drilling is successful, VKA could move itself into a similar position to where Guardian Metals was last year.

VKA is already OTC listed - so a bigger US listing shouldn’t be too difficult to do too.

We just need that drilling to come in now.

No guarantees of course though, the past performance of Guardian is not an indicator of future performance of VKA.

VKA may not hit economic mineralisation of tungsten, this is still early stage exploration.

We also read an International Energy Agency (IEA) critical minerals report a few weeks back.

🎓 See our full take on that report here: 372 Pages of Confirmation Bias (Thanks IEA)

According to the report, the only place where the US (and the rest of the west) have been able to mobilise enough capital allocation to make a dent in the China dominance is... rare earths.

The IEA singled out rare earths as THE exception - the only mineral where refining concentration went DOWN in 2025, thanks to new US projects and Malaysian production.

AND the IEA made a point of underlining that - Targeted policy + Capital = works.

We think the same targeted policy (some sort of US mega push) + capital (funding/investments) has to happen in other critical mineral markets (like tungsten) too.

The US has indirectly supported a ~US$1.1BN tungsten mine in Kazakhstan. (source)

And US defence offtakes were signed with mines in South Korea. (source)

Inside the US, the only company to receive funding has been Guardian Metals.

We think any company that can show a credible pathway to a domestic US tungsten supply - AND show that its project has scale - is in a strong position to attract US government backing.

And for some reason, we can’t shake the feeling that this US critical minerals macro thematic doesn’t end before we see what we saw in the battery metals bull run...

Offtake and equity deals from the downstream guys (for battery metals it was Stellantis, Tesla, Volkswagen) - for US critical minerals it could be the defence contractors we mentioned earlier (RTX, Lockheed Martin, L3Harris and Boeing).

More on VKA’s rapid restart of its project

Another reason we think VKA could end up ‘doing a Guardian Metals’ is because it’s going down the unusual (for ASX small cap explorers) route of planning a rapid restart of its project BEFORE announcing a JORC resource.

IF the drill programme comes in and VKA is able to define a resource.

Then it will already have a lot of the information it needs to start presenting a rapid restart of the project - which is when we think VKA’s case for US funding support strengthens.

VKA’s Managing Director Julian Woodcock ran through the strategy in a lot of detail at his recent RIU Resources conference in Sydney from earlier in the year:

(Viking Mines’ RIU presentation replay)

For those who prefer reading, here is our TLDR:

• 53-fold metallurgical upgrade - VKA has processed 1.2% tungsten feed material into a 63.6% WO3 saleable concentrate through simple gravity separation.
• Flowsheet finalised for a 43t per hour operation (about 300,000 tonnes of material processing a year)
• Modular plant design - VKA’s plan is to build modular structures that are bolt-on and can be scaled to match demand.
• More metwork optimisation is ongoing (flotation cleaning & ore sorting) - these could improve recoveries.
• Potential to reprocess material from the old tailings dam on site AND existing surface stockpiles (material the 1950s miners left over).

We think that with the January 1st 2027 deadline coming up the US will be in a position where it's willing to back domestically sourced and processed tungsten producers.

And with a bit of luck, our Investment VKA can capture some of that US government attention (and fingers crossed funding).

No guarantees of course.

A big part of our VKA Big Bet is seeing its tungsten project being brought back into production with a rapid restart plan which is as follows:

Our VKA Big Bet:

“VKA re-rates to $100M+ market cap with a fast to market tungsten production and downstream strategy, as well as continued interest and capital flows into the USA critical metals thematic”

NOTE: our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is no guarantee that our Big Bet will ever come true. There is a lot of work to be done, many risks involved, including development risk, country risk and commodity price risk - just some of which we list in our VKA Investment Memo.

Success will require a significant amount of luck. Past performance is not an indicator of future performance.

What's next for VKA?

🔄VKA’s first drill programme at US tungsten project

Here are the milestones we are tracking for the drill programme:

• ✅ Earthworks
• ✅ Drill rig mobilisation to site
• 🔄 Drilling starts - (any day now based on recent VKA announcements)
• 🔲 Assay results (should start to land in August/September)

🔄VKA’s rapid restart plan

We also want to see VKA progress its rapid mine restart strategy.

Here are the milestones we are tracking on that front:

• ✅ Assay results from stockpiles + tailings dam
• ✅ Processing study results
• 🔄 Metwork optimisation (Ore sorting + flotation testwork).

🔄 US engagement

This is more of a corporate milestone we want to see VKA hit.

It’s hard to predict when any of these might happen, but we are hoping VKA can attract some sort of US government funding to help finance its project AND/OR attract strategic interest from inside the US.

What could go wrong?

In the short term, the key risks will be from when VKA starts drilling its project.

Exploration risk

There is no guarantee that VKA's upcoming drill programmes will be successful. VKA may fail to find economic deposits of tungsten in which case we would expect the share price to re-rate lower.

Source: “What could go wrong” - VKA Investment Memo 16 December 2025

Other risks

Like any early-stage exploration company, VKA carries significant risk, here we aim to identify a few more risks.

VKA has spent months digitising old paper records and production data from the 1950s to build its current 3D geological model.

However, relying on historical data carries a real risk that the old information is inaccurate or unrepresentative of what is actually left in the ground.

The company is also pursuing an unusual strategy by planning a rapid mine restart before defining a formal JORC resource estimate.

This aggressive timeline increases execution risk, as the team could be designing a processing plant without a modern, independently verified understanding of the entire ore body.

A core pillar of the investment thesis relies on VKA capturing the attention and funding of the US government due to tightening defense regulations.

If federal backing or strategic funding falls through, the company will likely need to raise significant capital through the market, resulting in shareholder dilution.

While early metallurgical work successfully upgraded the tungsten feed through simple gravity separation, implementing modular plant designs at a commercial scale remains unproven.

Any unexpected complexities in the ongoing flotation and ore sorting tests could hurt overall recoveries and increase eventual operating costs.

Investors should consider these risks carefully and seek professional advice tailored to their personal circumstances before investing.

Our VKA Investment Memo

You can read our VKA Investment Memo in the link below.

We use this memo to track the progress of all our Investments over time.

Our VKA Investment Memo covers:

• What does VKA do?
• The macro theme for VKA
• Our VKA Big Bet
• What we want to see VKA achieve
• Why we are Invested in VKA
• The key risks to our Investment Thesis
• Our Investment Plan