Announcement PDF 2024 ANNUAL REPORT 3 0 J U N E 2024 ASX:VK A Contents 3 Corporate Directory 4 Chairman’s Letter 5 Review of Operations 17 Directors' Report 31 Auditor's Independence declaration 32 Consolidated Statement of Profit or Loss and Other Comprehensive Income 33 Consolidated Statement of Financial Position 34 Consolidated Statement of Changes in Equity 35 Consolidated Statement of Cash Flows 36 Notes to the Financial Statements 52 Consolidated Entity Disclosure Statement 53 Director’s Declaration 54 Independent Auditor's Report to the Members of Viking Mines Limited 58 Annual Mineral Resource and Ore Reserves Statement 60 Shareholder Information 63 Tenement Schedule Annual Report Viking Mines Limited Page 2 of 63 Corporate Directory Directors Mr Charles Thomas - Non-Executive Chairman Mr Julian Woodcock - Managing Director and CEO Mr Michael Cox - Non-Executive Director Mr Bevan Tarratt – Non-Executive Director Registered Office and Principal Place of Business 15-17 Old Aberdeen Place, West Perth WA 6005 Telephone: +61 8 6245 0870 Share Register Automic Pty Ltd Level 5, 191 St Georges Terrace, Perth WA 6000 Telephone: 1300 288 664 (within Australia) Telephone: +61 2 9698 5414 (outside Australia) Email: hello@automic.com.au Auditor BDO Audit Pty Ltd Level 9, Mia Yellagonga Tower 2, 5 Spring Street, Perth WA 6000 Solicitors Bennett Level 14, Westralia Square, 141 St Georges Terrace, Perth WA 6000 Stock Exchange Listing Viking Mines Limited shares are listed on the Australian Securities Exchange (ASX: VKA) Website www.vikingmines.com Corporate Governance Statement The Corporate Governance Statement can be found on the Company's website: www.vikingmines.com/corporate-governance Annual Report Viking Mines Limited Page 3 of 63 Chairman’s Letter Dear Shareholders, The 2024 Financial Year marked a pivotal period for our Company, highlighted by significant progress in the Canegrass Battery Mineral Project, located in the Murchison region of Western Australia. This year, we achieved remarkable milestones, reflecting our commitment to advancing our Projects and creating value for our stakeholders. One of the most significant achievements was the substantial enhancement of the Mineral Resource Estimate (MRE) at Canegrass. We successfully increased the contained V2O5 by an impressive 103%, reaching 2.2 billion pounds within the total MRE (>0.5% V2O5) of 146Mt at 0.70% V2O5. This remarkable growth underpins our confidence in the Project's potential. The updated MRE formed the basis for completing the Pit Optimisation Study (POS). The POS confirmed the potential for positive economic viability, resulting in a substantial pit-constrained highgrade low strip-ratio MRE of 61Mt at 0.81% V2O5, 35.9% Fe, 7.6% TiO2. This study reinforces our belief in the Project's long-term economic prospects and positions us well for future development. Our ongoing metallurgical testwork continues to de-risk the Project. This year, we achieved a critical milestone at Canegrass with the delivery of Vanadium Pentoxide flake. This breakthrough unlocks the pathway to a flowsheet for Vanadium production, further advancing our goal of becoming a leading player in the Vanadium Redox Flow Battery sector. In addition to our progress at Canegrass, we recommenced exploration activities at the First Hit Lithium Gold Project, located in the Eastern Goldfields of Western Australia. An extensive auger programme defined nineteen lithium anomalies throughout the area, with eight immediate priority targets identified. This exploration activity underscores our commitment to diversifying our Project portfolio and creating additional growth opportunities. As we look forward to the coming year, we remain focused on advancing our Projects, de-risking our operations, and delivering value to our shareholders. We are confident that our strategic initiatives will position us for continued success. Thank you for your continued support and trust in our Company. We look forward to sharing more updates on our progress in the future. Sincerely, Charles Thomas Non-Executive Chairman Annual Report Viking Mines Limited Page 4 of 63 Review of Operations 30 June 2024 The 2024 Financial Year marked a pivotal period for the Company, highlighted by significant progress in the Canegrass Battery Mineral Project (Canegrass or the Project), located in the Murchison region of Western Australia. This included a substantial enhancement of the Mineral Resource Estimate (MRE), enabling the completion of a Pit Optimisation Study (POS). The Company successfully increased the contained V2O5 at Canegrass by 103%, reaching 2.2 billion pounds within the total MRE (>0.5% V2O5) of 146Mt at 0.70% V2O5, 31.8% Fe, and 6.6% TiO2. Notably, a high-grade subset of the MRE comprises 27.5Mt at 0.87% V2O5,1 forming the basis for completing the POS. The POS confirmed the potential for positive economic viability, resulting in a substantial pit-constrained high-grade low strip-ratio Inferred category JORC (2012) MRE of 61Mt at 0.81% V2O5, 35.9% Fe, 7.6% TiO2, 714ppm Cu, 687ppm Ni, and 177ppm Co.2 Additionally, the Company recommenced exploration activities at its First Hit Lithium Gold Project (First Hit), located in the Eastern Goldfields of Western Australia, with an extensive auger programme defining nineteen lithium anomalies throughout the area with eight immediate priority targets. Figure 1: Viking Mines Project Locations. 1 Viking Mines (ASX:VKA) ASX Announcement 20 November 2023 – VKA Resource Update Delivers Over 100% Growth at Canegrass 2 Viking Mines (ASX:VKA) ASX Announcement 18 March 2024 – VKA Delivers Successful Pit Optimisation 61Mt at 0.81% V O 2 5 Annual Report Viking Mines Limited Page 5 of 63 Review of Operations 30 June 2024 Canegrass Battery Minerals Project In November 2022 the Company signed a binding agreement between Viking Critical Minerals Pty Ltd, a wholly owned subsidiary of Viking Mines Ltd, and Flinders Canegrass Pty Ltd, a wholly owned subsidiary of Red Hawk Mining Ltd (ASX:RHK) (formerly Flinders Mines Ltd (ASX:FMS)).3 Under the terms of the agreement, Viking can earn up to 99% of the Canegrass Battery Minerals Project (“Canegrass Project”) via a Farm-In Arrangement (“FIA“), with the remaining 1% attainable with milestone and production related payments. The Project is located in the Murchison Region, 620km north-east of Perth, Western Australia and 60km SE from the township of Mt Magnet. Mineral Resource Estimate (MRE) Upgrade The Company completed an extensive 7,500m drill programme at Canegrass, with the receipt of the final assays during the September 2023 Quarter, returning significant high-grade intervals of Vanadium Pentoxide (V2O5). Significant results included Fold Nose Deposit: (VCRC0027)4 • 42m at 0.74% V2O5 (>0.5%) from 79m, inc; 17m at 0.80% V2O5 (>0.8%) from 83m & 8m at 0.99% V2O5 (>0.8%) from 108m Kinks Deposit: (VCRC0021)5 • 40m at 0.75% V2O5 (>0.5%) from 202m inc 27m at 0.83% V2O5 (>0.5%) from 203m Kinks South Target: (VCRC0011)6 • 38m at 0.76% V2O5 (>0.5%) from 114m, inc; 15m at 0.95% V2O5 (>0.8%) from 118m & 7m at 0.98% V2O5 (>0.8%) from 145m Following the receipt of final assays from the Canegrass drilling programme, the Company successfully completed an updated Inferred JORC (2012) MRE for the Project totaling 146Mt at 0.70% V2O5, 31.8% Fe & 6.6% TiO2 (>0.5% V2O5 cut-off)1. This represented a 103% increase in the MRE, now containing >2.2 Billion Pounds of Vanadium Pentoxide, with a high-grade subset of the MRE containing 27.5Mt at 0.87% V2O5. The tonnage increased substantially, with improvements in grade for all the target commodities. Further, the grade of the deleterious elements has decreased, which results in a higher quality ore more amenable to processing to produce a magnetic concentrate. With the extensive drilling completed by the Company and the completion of the MRE, opportunities for further growth have been identified at each of the three deposit areas. This provides further upside opportunity to both increase the tonnes and grade of the high-grade subset of the total MRE. 3 ASX Announcement Viking Mines (ASX:VKA) 30 November 2022 – Viking to Farm-in to Substantial Battery Mineral Resource 4 ASX Announcement Viking Mines (ASX:VKA) 4 September 2023 - Viking Drills Massive Vanadium Zone with 42m at 0.75% V O 2 5 5 ASX Announcement Viking Mines (ASX:VKA) 24 August 2023 – Viking Hits High-Grade at Kinks – 40m at 0.75% V O 2 5 6 ASX Announcement Viking Mines (ASX:VKA) 21 August 2023 – Viking Discovers Extensive Vanadium System at Kinks South Annual Report Viking Mines Limited Page 6 of 63 Review of Operations 30 June 2024 Figure 2: Map of the Canegrass Project showing the JORC (2012) MRE for each of the deposit areas and the total combined estimate. Note all Resources are Inferred category reported above a 0.5% V2O5 cut-off. Totals may vary due to rounding. Pit Optimisation Study (POS) The completion of an updated MRE for the Canegrass Project allowed the Company to undertake a POS, which proved highly successful with all scenarios producing pit shells that demonstrated the potential for positive economic viability under the assumptions used.2 The Company selected the Base Case scenario at a 0.7% V2O5 processing cut-off for ongoing further evaluation of the Project. This delivers a substantial pit constrained high grade, low strip-ratio Inferred category JORC (2012) MRE of 61Mt at 0.81% V2O5, 35.9% Fe, 7.6% TiO2, 714ppm Cu, 687ppm Ni & 177ppm Co. Annual Report Viking Mines Limited Page 7 of 63 Review of Operations 30 June 2024 Table 1: Base Case Canegrass Project MRE broken out by deposit and reported within pit constrained mineral resources. Results are reported to JORC (2012) guidelines and are in-situ tonnage and grades. Figure 3: Isometric view to NE showing the pits generated at the Fold Nose, Kinks South, and Kinks Deposits with the pit constrained JORC (2012) MRE’s noted respectively. Note all Mineral Resources are Inferred category reported above a 0.7% V2O5 cut-off. Annual Report Viking Mines Limited Page 8 of 63 Review of Operations 30 June 2024 The Company plans to increase the confidence in the Mineral Resource to Indicated+ category (JORC 2012) with further drilling in the future. The Company will initially focus on the Fold Nose Deposit as the in-pit MRE is of sufficient size (39Mt at 0.81% V2O5) to assess the potential for a 15+ year mine life Project, with optionality remaining for further feed from Kinks and Kinks South. Metallurgical Testwork Throughout the year the Company continued to derisk the Project by progressing metallurgical testwork. Initially 36 samples were collected from hole VCRC0006 and submitted to ALS metallurgy for Davis Tube Wash (DTW) testwork with a target P80 75-micron grind to ascertain recovery of Vanadium by magnetic separation methods. High recoveries of 90.9% were achieved for the main interval of 17m at 0.98% V2O5, with the concentrate grading 1.44% V2O5, 60.3% Fe, 10.6% TiO2, 1.13% SiO2 and 1.72% Al2O3 and a high mass recovery of 59.6%.7 Mass recoveries for all samples averaged 45.7% by weight which is significantly higher than typical titaniferous magnetite deposits (30% Wt/Wt). This will lead to improved economics when processing this ore compared to other ores where the yield is typically 30% by weight. The Company commenced Stage 2 Metallurgical Testwork on a composite sample derived from 29 samples collected from hole VCRC0026 (which was drilled as part of the 7,500m RC drill programme completed mid CY2023). The samples are from the main mineralised zone of the Fold Nose Deposit. A 43.5kg bulk composite sample was created by combining 1.5kg of material from each of the 29 samples provided to the laboratory. 5 x 150g splits of this bulk composite sample underwent grind establishment tests to determine the optimum grind size. Samples were ground to different size fractions ranging from 212 to 45µm (P98) and underwent subsequent Davis Tube Recovery (DTR) testing to produce a magnetic concentrate. The examination of the magnetic concentrate and tail produced has identified the following significant attributes, with the detailed findings below:8 • • • • The ore has a low sensitivity to grind size to produce a quality concentrate. Mass recovery remains high, ranging between 52.2% to 54.6% Concentrate grade remains consistent for key target elements, ranging between; o V2O5: 1.40% to 1.41% o Fe: 58.0% to 58.6% o TiO2: 11.2% to 11.7% Combined silica and alumina levels are low (from 4.1% to 4.6%) but require a further regrind and cleaning stage to achieve target levels. 7 Viking Mines (ASX:VKA) ASX Announcement 4 August 2023 – Viking Achieves Exceptional Vanadium Recoveries up to 99.3% at Canegrass Project 8 Viking Mines (ASX:VKA) ASX Announcement 15 December 2023 – Viking Receives Excellent Met Testwork Results at 1.4% V O 2 5 Annual Report Viking Mines Limited Page 9 of 63 Review of Operations 30 June 2024 Figure 4: Photos showing A) Samples being prepared for filtration after DTR testwork completed, B) Eirez Davis Tube tester setup for sighter DTR testing and C) Magnetic concentrate produced after filtration. Bulk magnetic separation was completed to produce a high-quality magnetite concentrate via LIMS methodology grading 1.43% V2O5, 59% Fe and 11.7% TiO2. Recoveries from the ore are high at 93.0%, 83.7% and 79.5% respectively,9 with an overall mass pull of 53.2%. Importantly, SiO2 and Al2O3 had a combined total of 3.8%, which is below the threshold of 4% required for roasting of the concentrate to liberate the V2O5. Following the receipt of the LIMS testwork the Company commenced sighter roasting on 16 subsamples of the magnetic concentrate. The sighter roasting was extremely successful and delivered recoveries of Vanadium up to 93.2% into solution from the magnetic concentrate feed.10 Each of the 16 tests used a 200g sample collected from the bulk magnetic concentrate and was combined with 4 different reagents, subjected to 2 different temperature and 2 different roasting durations. After roasting, a water leach was used to extract the Vanadium into solution. Excellent recoveries of Vanadium into solution were achieved, up to a maximum of 93.2% and with 11 tests attaining >80%. 9 Viking Mines (ASX:VKA) ASX Announcement 6 March 2024 – VKA Achieves 1.43% V O & 59% Fe in High Quality Concentrate 2 5 10 Viking Mines (ASX:VKA) ASX Announcement 11 March 2024 – Viking Achieves Roasting Success and 93.2% V O Recovery 2 5 Annual Report Viking Mines Limited Page 10 of 63 Review of Operations 30 June 2024 Figure 5: Photos showing A) Magnetic concentrate prior to roasting, B) Sample removed from oven after roasting, C) Water leaching from roasted sample & D) Filtered liquor containing leached Vanadium. Figure 6: Schematic diagram showing industry standard flowsheet stages used to process Canegrass mineralisation with the stages completed to date (dark blue) and the stages yet to be completed (grey). Annual Report Viking Mines Limited Page 11 of 63 Review of Operations 30 June 2024 Bulk roasting testwork was undertaken on a larger sample of the magnetic concentrate using the optimum conditions determined from the sighter roasting testwork. Subsequently, the roasted concentrate was leached to produce a Vanadium rich liquor. This liquor underwent a process of desilication, evaporation and precipitation to produce V2O5 flake. The production of V2O5 flake is a first for the Project and is a critical milestone as it demonstrates that the metallurgy is amenable to producing the highly valuable Vanadium found within this large Mineral Resource. On completion of the Stage 2 metallurgical testwork and in the reporting period, stage 3 metallurgical testwork commenced. Two drillhole intervals of Vanadium mineralisation from the Fold Nose Deposit were delivered to ALS Metallurgy in Perth, Western Australia. This testwork programme had been designed with two primary objectives: 1. Determine the viability of producing a sulphide concentrate to recover the Cu, Ni and Co minerals present in the mineralisation, through sulphide flotation testwork. 2. Improve the Iron grade of the magnetic concentrate by trialing alternate magnetic separation techniques to separate the titanium minerals (Ilmenite). Prior to sulphide flotation, samples undergo magnetic separation to concentrate the magnetic minerals using parameters determined from the Stage 2 testwork. The sulphide flotation will be undertaken on the non-magnetic tail. A substantial quantity of magnetic concentrate will be produced in this process (>40kg expected), which will support future testwork for Vanadium recovery. The testwork is ongoing at the end of the reporting period. Farm-In Agreement Status Table 3 below outlines the schedule of the Farm-In Agreement (FIA), as announced on 30 November 2022. During the reporting period, the Company completed stage 1 and secured 25% of the Project.11 Subsequent to the end of the reporting period, the Company completed the requirements for Stage 2 and secured a further 24% of the Project, taking the total ownership via Vikings wholly owned subsidiary Viking Critical Minerals Pty Ltd to 49%.12 In addition, the Company entered into a Share Sale Agreement with Red Hawk Mining (ASX:RHK) to acquire their subsidiary Flinders Canegrass Pty Ltd, which holds the remaining 51% of the Project. Through this acquisition, Viking now controls 100% of the Project. 11 12 ASX Announcement 16 August 2023 – Viking Proceeds to Stage 2 of Canegrass Project Farm-In ASX Announcement 5 September 2024 - Viking moves to 100% ownership of Canegrass Project Annual Report Viking Mines Limited Page 12 of 63 Review of Operations 30 June 2024 Table 2: Farm-In Agreement terms for Viking to acquire up to 99% of the Canegrass Battery Minerals Project as of 31st August 2024. Item Signing of agreement Stage 1 earn-in Stage 2 earn-in Stage 3 earn-in Stage 4 earn-in TOTAL Cash Payment at completion of each stage Exploration Spend Duration (months) Stage Equity Earned (VKA) Cumulative Equity Earned (VKA) Status $50,000 $0 1 0% 0% COMPLETE $225,000 $1,000,000 18 25% 25% COMPLETE $275,000 $1,000,000 12 24% 49% COMPLETE $325,000 $1,000,000 12 26% 75% $375,000 $1,000,000 12 24% 99% $1,250,000 $4,000,000 54* - - * Excludes 1-month due diligence period First Hit Gold Project The Company’s First Hit Project is located 50km west of Menzies in the Western Australia Goldfields. During the year, the Company recommenced lithium focused exploration activities, initially completing a review of historical data, which identified lithium anomalies in soil samples and rock chips. In addition, the Company completed a transaction to acquire 95% of tenement E30/505, located to the NW of the First Hit mine. The Company has assessed rock chip data with results up to 400ppm Lithium and corresponding high elevated Rubidium values up to 3,000ppm.13 Viking also successfully won two of the four ballots held in association with Vikings tenement application E30/571 during the March quarter. The additional tenure is located to the West of the Company’s existing tenure, providing an additional 32.8km2 and adjacent to Ora Banda Mining (ASX:OBM). The total land position now stands at 493km2, with 281km2 granted tenure and 213km2 under application (Figure 7).14 13 Viking Mines (ASX:VKA) ASX Announcement 27 November 2023 – VKA Grows Tenure and Starts Lithium Exploration at First Hit 14 Viking Mines (ASX:VKA) ASX Announcement 2 February 2024 – Viking Wins Ballot for Lithium Tenure – Updated Annual Report Viking Mines Limited Page 13 of 63 Review of Operations 30 June 2024 Figure 7: Location of the First Hit Project tenements and adjoining Company landholdings. Annual Report Viking Mines Limited Page 14 of 63 Review of Operations 30 June 2024 Auger Drill Programme Results were received for a 1,220-hole auger drilling programme (completed in the December 2023 quarter) testing ~55km2 of Viking’s tenure encompassing the highly prospective Ida Shear Zone. Nineteen (19) individual anomalies have been defined within the newly acquired auger data and historical soil sampling data. The location of the anomalies and results are shown in Figure 8. From the nineteen anomalies, eight (8) targets are high-priority and require immediate follow-up field work and exploration.15 Figure 8: Map showing Lithium results in ppm for the recently completed auger drilling programme and historical soil sampling by previous explorers with background of interpolated lithium and magnetic geophysics. Six of these groups contain the eight highest priority anomalies and relate to high lithium values >50ppm in the raw data, with peak values up to 138ppm Li. All high-priority target areas also have results with low K/Rb ratios and +/- LCT Pegmatite pathfinder elements associated with them (Sn, Tl, Be, Cs, Nb, Ta). 15 Viking Mines (ASX:VKA) ASX Announcement 19 February 2024 – Viking Defines Large Lithium Anomalies on IDA Fault Annual Report Viking Mines Limited Page 15 of 63 Review of Operations 30 June 2024 Ghana Akoase Gold Project During the reporting period, the defendants made a payment of US$2.12M (A$3.3016) towards the Court ruled debt of US$2.88m. The funds received are considered as final payment towards the judgement of 24 January 2023, ordering the Defendants to pay US$2.88M.17 No further activity will be conducted by the Company in Ghana. Business Development The Company continues to review and conduct due diligence on a vast array of mineral acquisition opportunities, to compliment the Company’s existing project portfolio, with the objective of acquiring mature exploration assets with the potential to deliver long-term shareholder returns. The Board believes the Company is uniquely positioned to capitalise on some of the opportunity’s that currently exist in the sector and has particular focus on acquiring advanced precious and future metal projects. The Company will update the market should any of these opportunities that are being reviewed proceed to a more formal stage in line with the Company’s continuous disclosure obligations. Competent Persons Statements Information in this release that relates to Exploration Results and exploration target is based on information compiled by Mr Julian Woodcock, who is a member of the Australian Institute of Mining and Metallurgy (MAusIMM(CP) – 305446). Mr Woodcock is a full-time employee of Viking Mines Ltd. Mr Woodcock has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken 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’. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcements. The information in this announcement that relates to the Mineral Resource estimate is derived from information compiled by Mr Dean O’Keefe, a Fellow of the Australasian Institute of Mining and Metallurgy (AusIMM, #112948), and Competent Person for this style of mineralisation. Mr O’Keefe is a consultant to Viking Mines Limited, and is employed by MEC Mining, an independent mining and exploration consultancy. Mr O’Keefe has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as Competent Person as defined in the 2012 edition of the Australasian Code for the Reporting of Exploration Results, Mineral Resources, and Ore Reserves (JORC Code). The Company confirms that the form and context in which the results are presented and all material assumptions and technical parameters underpinning the estimates in the original market announcement continue to apply and have not materially changed from the original announcement and that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original announcements on 20 November 2023 and 18 March 2024. 16 Calculated using ofx.com on 24 September 2023 using an exchange rate of 1USD = 1.5535986 AUD 17 Viking Mines (ASX:VKA) ASX Announcement 30 January 2023 – Viking Succeeds in Ghana Legal Claim with greater than A$4M due Annual Report Viking Mines Limited Page 16 of 63 Directors’ Report 30 June 2024 The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity') consisting of Viking Mines Limited (referred to hereafter as the 'Company' or 'parent entity') and the entities it controlled at the end of, or during, the year ended 30 June 2024. Directors The following persons held office as Directors of Viking Mines Limited from the start of the financial year and up to the date of this report. Directors were in office for this entire period unless otherwise stated. Charles Thomas Non-Executive Chairman Julian Woodcock Managing Director and CEO Michael Cox Non-Executive Director Bevan Tarratt Non-Executive Director (appointed 3 October 2023) Principal Activities The principal activity of the consolidated entity during the financial year was investment in mineral exploration projects. Dividends No dividends have been paid, recommended or declared during the current or previous financial year. Review of Operations The loss after income tax expense for the consolidated entity amounted to $2,766,113 (30 June 2023: profit $1,212,405). A more detailed review of operations is included in the Operations Report accompanying this annual report. Material Business Risks The Group considers the following to be the key material business risks: i. ii. iii. Funding for operational activities and capital availability Exploration & discovery risk Environmental and heritage risk Risk associated with future capital requirements Mineral exploration and resource companies without an operating mine (including the Company) do not generate cashflow via sale of a commodity or product. Annual Report Viking Mines Limited Page 17 of 63 Directors’ Report 30 June 2024 Financing of future operating costs and expenditure commitments will ultimately at some point in the future exceed the current cash reserves. To meet future expenses, the company may be required to either secure debt funding or raise new equity via capital raisings through the issue of new shares in the Company. The extent of funding required will depend on the level of activity being undertaken at that time and at this time cannot be determined. There are no assurances that the amount of any potential future financing can be met on terms acceptable to the Company, however the current cash reserves of the company are sufficient to meet the planned operating and exploration expenses for FY25 and as such the Board of Directors deems this a low risk for the coming financial year. In the event funding is required and the Company is unable to secure sufficient finance either through debt or equity, the Company may be required to reduce the scope of its operations and exploration activity to ensure solvency. Risk of failure in exploration, discovery, development or production The nature of exploration for commodities carries the risk of being unsuccessful in the discovery of the commodities. When resources are discovered, significant ongoing expenditure is required to advance the discovered commodities to sufficient level and understanding to be able to determine and estimate Mineral Resources & Reserves. By the nature of the activity and exploring for commodities, there is no guarantee of success in defining economic deposits. In exploration, the probability of discovery is inherently low, however with effective strategies and systematic exploration, projects can be tested and assessed to minimise the expenditure required to determine the likelihood of success. For this reason and to mitigate the risk as effectively as possible, the Company adopts a staged exploration approach with exploration programmes planned to meet key objectives before committing to further expenditure. All exploration programmes are expensed until they reach a level of confidence which the Company feels confident that a future economic return can be made from the Project being evaluated. This has the effect of not overstating the balance sheet of the company for expenses which may not in future generate returns for the Company through either divestment or development. The Company further mitigates this risk by focusing on more mature and advanced projects which inherently have a higher probability of success as opposed to early-stage grass roots or Greenfields projects which have a lower probability of success. Environmental & Heritage The Company recognises the environmental risks associated with both exploration activity and any future production related activity. The risks relate to meeting legal requirements associated with the activity, social risks associated with the perception of the activity being undertaken and the physical risks associated with undertaking the activity. The consequences of not managing these risks can be in the form of penalties/fines, loss of social licence to operate and damaging the natural environment. Annual Report Viking Mines Limited Page 18 of 63 Directors’ Report 30 June 2024 The Company manages the Environmental risk by ensuring that all work is completed to a high standard and to all legal requirements as determined in the jurisdictions within which we operate. Experienced, skilled and professional contractors are engaged in the exploration activity when fieldwork is undertaken, minimising the environmental impact of ou