A formulation for use as a lost circulation preventive material is a cement-forming aqueous fluid comprising water, at least one viscoelastic surfactant (VES), at least one monovalent or multivalent salt, at least one magnesium powder, and at least one retarder. The formulation is used in a method of drilling into a subterranean formation that includes introducing into a wellbore passing at least partially through the subterranean formation the cement-forming aqueous fluid, and further increasing the viscosity of the aqueous fluid by the action of the VES forming elongated micelles; where the at least one monovalent salt is present in an amount effective to pseudo-crosslink the elongated VES micelles to further increase the viscosity of the aqueous fluid. The formulation further forms a cement by reacting the at least one magnesium powder and the water which reaction is retarded by the retarder. The water may be saline water.