DENVER, June 4 /PRNewswire-FirstCall/ -- Vista Gold Corp. ("Vista")
(TSX & NYSE Amex Equities: VGZ) is pleased to announce the
results of a Preliminary Economic Assessment ("PEA") for the Batman
deposit at the Mt. Todd gold project in Northern Territory,
Australia. The PEA reflects the technical studies which Vista has
undertaken since the issuance of the initial PEA on December 29,
2006, including over 18,000 meters of diamond drilling, a two-year
metallurgical program which included crushing and grinding,
flotation and leach testwork, mine design and various preliminary
engineering studies and cost estimates. The PEA was prepared by
TetraTech Inc. of Golden, Colorado, under the direction of Mr. John
Rozelle, an independent qualified person under Canadian National
Instrument 43-101 ("NI 43-101"). Three potential operating
scenarios were evaluated using a gold price of $750 per ounce
(three year running average), an exchange rate of US$1 = A$1.35 and
first quarter 2009 costs. The results of the PEA indicate that
development of the base case alternative would have an estimated
cash cost of $453 per ounce and a pre-tax Internal Rate of Return
("IRR") of 21.6%. The total gold mined over the 15.2 year mine life
is estimated to be 4,526,000 ounces, with an estimated annual
production of 245,500 ounces (with average production over the
first three years of 296,700 ounces). The PEA estimated that an
economic gold cut-off grade of approximately 0.4 grams gold per
tonne should be employed which results in a 12.8% increase (579,000
ounces) in Measured and Indicated Resources(1). Fred Earnest,
President and COO of Vista, stated, "The results of the PEA are
very encouraging and follow two years of successful exploration
programs and a comprehensive metallurgical test program. The Mt.
Todd project has grown considerably since our acquisition of the
project and we are confident that there is potential for continued
substantial growth in resources. The results of the PEA are
positive with an IRR of 21.6% at long-term gold prices of US$750
per ounce and an IRR of 37.7% at a US$950 gold price. We plan to
advance the project as a matter of priority and are progressing
towards the completion of the pre-feasibility study which we
anticipate will enable the estimation of Mineral Reserves(4). We
are also hopeful that the results of the next drilling program will
convert most of the estimated Inferred Resources(2) at Mt. Todd to
Measured and Indicated Resources(1) within the Base Case pit. To
date we have focused nearly all of our energy on the Batman
deposit. Under the direction of Frank Fenne (VP Exploration) and
Peter Harris (Mt. Todd Exploration Manager), we are evaluating
other targets, which we plan to drill during the next 12 months on
the Mining Licenses ("ML's") and within the extensive area
surrounding the ML's covered by our Exploration Licenses. We
believe that we have a world-class gold deposit at Mt. Todd." The
PEA evaluated three operating scenarios. The parameters and pre-tax
results are summarized in the following table. LG Pit Resources
Cut-off Internal Net Cash NPV8 @ Shell used in the Grade Rate of
Flow US$750 (US$/oz Evaluation (grams Return (US$000's) per Au)
(1)(2) gold @ US$750 @ US$750 ounce per per ounce per Gold(3)
tonne) Gold(3) ounce Gold(3) Base Case 600 Measured, Indicated
& Inferred 0.42 21.6% 646,682 232,894 Case 2 550 Measured &
Indicated 0.58 23.1% 485,697 211,916 Case 3 750 Measured, Indicated
& Inferred 0.34 20.4% 815,944 302,153 Notes: The
Lerchs-Grossman economic pit shells formed the basis for the final
pit designs which incorporated pit wall smoothing and ramps. NPV(8)
is the pre-tax net present value calculated with an 8% discount
rate. The IRR is calculated on a pre-tax basis. On January 26,
2009, Vista announced a new mineral resource estimate that
incorporated the results of the 2008 drilling program. The resource
estimate report can be found on SEDAR at http://www.sedar.com/,
entitled "MT. TODD GOLD PROJECT, Gold Resource Update, Northern
Territory, Australia" dated February 27, 2009. The resource
estimate was reported assuming a gold cut-off grade of 0.50 grams
per gold tonne, slightly higher than the PEA report's economic gold
cut-off grade of approximately 0.4 grams per gold tonne. The
resource estimate report represents an increase in estimated
Measured Resources(1) of 119,000 ounces of gold and an increase in
Indicated Resources(1) of 460,000 ounces of gold resulting in a
combined estimated increase in Measured and Indicated Resources(1)
of 579,000 ounces of gold at a cutoff grade of 0.40 grams per tonne
(0.015 ounces of gold per ton). The updated gold mineral resource
estimate for the Batman deposit as of January 23, 2009, assuming a
cutoff grade of 0.40 grams of gold per tonne is set out below.
Resource Metric Average Grade Short Tons Average Grade Contained
Classification Tonnes (grams/tonne) (x1000) (ounces/ton) Gold
(x1000) Ounces (x1000) Measured(1) 52,919 0.91 58,333 0.026 1,543
Indicated(1) 138,020 0.81 152,139 0.024 3,581 Measured &
Indicated(1) 190,939 0.84 210,472 0.024 5,125 Inferred(2) 94,008
0.74 103,625 0.022 2,244 TetraTech worked with Resource Development
inc. ("RDi") of Arvada, Colorado and Ausenco of Perth, Australia in
the completion of the PEA. Key elements of the PEA are summarized
below. In Pit Mineral Resource Estimation At the present time, the
Mt. Todd gold project contains no CIM definable Mineral Reserves(3)
. However, in accordance with accepted standards for a PEA,
Measured and Indicated Resources(1) (and in two cases, Inferred
Resources(2)) have been used as the basis for the economic
evaluation. The Base Case(3) final pit design is based on the
US$600 per ounce gold Lerchs-Grossman ("LG") economic pit which
used all three mineral resource classifications in its analysis.
Case 2 is a more conservative case with the final pit design based
on the US$550 per ounce gold LG economic pit which used only
Measured and Indicated Resources(1). Case 3(3) evaluates the
up-side potential of the project with the final pit design based on
the US$750 per ounce gold LG economic pit which used all three
mineral resource classifications. In all three cases, the LG
economic pit was smoothed and ramps were added to arrive at a final
pit design. Mine production schedules were developed for the first
three years of operation, after which an average ore and waste
profile was used as the basis for the cash flow analysis. The
following table summarizes the estimated mineral resources included
in the PEA for each of the three cases. Base Case(3) (US$600 Tonnes
Grade Contained Design) (000's) (grams Au per Ounces tonne) Gold(1)
Measured Resources(1) 46,528 0.95 1,421,110 Indicated Resources(1)
101,041 0.87 2,826,530 Inferred Resources(2) 14,249 0.73 334,420
Case 2 (US$550 Design) Tonnes Grade Contained (000's) (grams Au per
Ounces tonne) Gold(1) Measured Resources(1) 32,908 1.09 1,153,240
Indicated Resources(1) 59,225 1.04 1,980,260 Inferred Resources(2)
1,561 0.78 39,150 Case 3(3) (US$750 Tonnes Grade Contained Design)
(000's) (grams Au per Ounces tonne) Gold(1) Measured Resources(1)
56,790 0.87 1,588,480 Indicated Resources(1) 152,060 0.75 3,666,630
Inferred Resources(2) 44,912 070 1,010,770 Mining In both the Base
Case(3) and Case 2, the operation has been sized to mine and
process 30,000 tonnes of ore per day (nominally 10.5 million tonnes
per year). The estimated mine life of Base Case(3) is 15.2 years
and 8.9 years for Case 2. In Case 3(3) the operation has been sized
to mine and process 60,000 tonnes of ore per day (nominally 21.0
million tonnes per year) and the resulting mine life is 11.9 years.
In all three cases the mine schedule and equipment requirements are
based on an owner-operated fleet of 141 tonne trucks and 18 m(3)
shovels. The mining costs are estimated to be US$1.34 per tonne in
the Base Case(3) , US$1.23 in Case 2 and US$1.26 in Case 3(3) .
Optimization of the project (including the fleet size) will occur
as part of the pre-feasibility study. The following table presents
basic mine and project production results: Total Life of Average
Average Average Average Contained Mine Grade - Grade - Gold Gold
Ounces Stripping Years 1-3 Life of Production - Production - Ratio
(grams Au Mine Years 1-3 Life of Mine (waste : per tonne)(grams Au
ounces/year ounces/year ore) per tonne) Base Case(3) 4,526,000 1.9
1.06 0.87 296,700 245,500 Case 2 3,163,000 2.7 1.18 1.05 331,300
291,600 Case 3(3) 6,200,000 1.6 0.87 0.76 486,700 429,700
Processing Since acquiring the Mt. Todd gold project, Vista has
been evaluating processing alternatives for the Mt. Todd ore. The
metallurgical testing has been aided by a better understanding of
the mineralogy of the orebody after two years of exploration
drilling in the Batman deposit. An investigation of the sulfide
species present in the deposit indicates that pyrite is the
predominant sulfide mineral near the surface with chalcocite and
chalcopyrite. Near the bottom of the existing pit, pyrite begins to
transition to pyrrhotite and the chalcocite is replaced almost
entirely by chalcopyrite. At depth, pyrrhotite becomes the dominant
sulfide with lesser amounts of pyrite and chalcopyrite. Galena and
sphalerite are also present in minor quantities in various parts of
the deposit. The transition out of the chalcocitic mineralization
in the early part of the project indicates that the quantity of
cyanide soluble copper in the deposit is considerably less than
previously thought and should not present any long-term processing
challenges. Vista's metallurgical test programs have successfully
focused on two critical areas of the process flowsheet, namely:
crushing/grinding and gold recovery. Several significant
advancements have resulted in reductions in operating costs without
reducing gold recoveries. Studies completed to date have indicated
that the Mt. Todd ore will be amenable to processing using high
pressure grinding roll ("HPGR") technology. The test work to date
has determined that a gold recovery of 82% can likely be achieved
in a whole ore leach circuit with a grind circuit product of 80%
passing 100 mesh ("P(80) 100"). Testwork completed by RDi and
Polysius indicate that a crushing/grinding circuit with three
stages of crushing followed by high pressure grinding rolls and
grinding in ball mills will have an 18.1 kilowatt-hour per tonne
ore power requirement. This is a 46% reduction in power
requirements compared to the previously contemplated conventional
crushing, SAG mill/ball mill circuit with an 80% passing 200 mesh
product. We expect that the process circuit will include cyanide
detoxification prior to tailings handling. The processing costs are
estimated to be US$5.75 per tonne of material processed (exclusive
of tailings treatment). Tailings Management As a result of the
relatively coarse grind employed in the leaching circuit (P(80)
100) and subsequent product size, Vista has evaluated filtration
and the use of a dry-stack tailings storage system. A preliminary
evaluation indicates that the technology may be economically
implemented at Mt. Todd. Employing dry-stack tailings results in a
significant reduction in capital costs compared to a conventional
tailings storage facility and a small increase in operating costs.
We expect that the material will be compacted and the side slopes
will be armored with rock and revegetated to minimize erosion. The
tailings de-watering and stacking costs are estimated to be US$0.36
per tonne of material processed. Water Management and Acid Rock
Drainage Vista has implemented a water management program to handle
surface run-off and acid rock drainage ("ARD") from the existing,
unreclaimed waste dump and heap leach. Vista expects to commission
a lime treatment plant in June as part of a planned improvement in
the water management program. Vista plans to encapsulate the
existing facilities and in a similar manner isolate waste with an
ARD potential prior to closure. A passive treatment system will be
evaluated as part of the closure planning. Infrastructure The Mt.
Todd mine site is 230 km southeast of the port of Darwin and 56 km
by road north-northeast of the regional center of Katherine.
Katherine and Darwin are connected to Darwin by a railroad and the
Stuart Highway. An existing paved road connects the mine site to
the Stuart Highway. The site's existing electric power facilities
are sufficient for current and expected construction requirements.
During project operation, Vista expects to use natural gas-fired
generators as the source of project power and we have included them
in the capital and operating cost estimates. An existing raw water
dam and reservoir is expected to provide water for the process
requirements. Operating Costs The operating costs have been
developed based on current conditions in Northern Territory,
Australia. Quotes have been obtained for diesel fuel and natural
gas as the primary energy components. Labor rates have been
developed based on Vista's experience in Australia and have been
compared to rates provided by AUSENCO (the Australian engineering
firm retained to complete the pre-feasibility process engineering).
Mine equipment operating and maintenance costs have been estimated
based on US experience. Reagent costs have been provided by
AUSENCO. Grinding media costs have been estimated based on world
commodity prices. All Australian costs have been converted to US$
costs using a foreign exchange rate of A$1.35 per US$1. The
following table summarizes the operating costs for the three cases
evaluated in the PEA. Base Case 2 Case Case(3) 3(3) Mining
(US$/tonne material mined) $1.34 $1.23 $1.26 Mining (US$/tonne
material processed) $3.84 $4.59 $3.25 Milling (US$/tonne material
processed) $5.75 $5.75 $5.32 Tailings De-watering (US$/tonne
material processed) $0.23 $0.23 $0.23 Tailings Dry-Stacking
(US$/tonne material processed) $0.13 $0.13 $0.13 Environmental
(US$/tonne material processed) $0.05 $0.05 $0.05 G&A (US$/tonne
material processed) $0.44 $0.44 $0.44 Total Operating Costs
(US$/tonne material processed) $10.44 $11.19 $9.42 Capital Costs
The mining capital equipment costs area based on budgetary quotes
for the first quarter 2009. RDi obtained quotes for the major mill
components. Capital costs for the remainder of the process area
were estimated based on accepted factors. In Case 3, the same sized
mining equipment was used even though the mining rate doubled.
Vista views this as an opportunity for future improvement in the
project. The process equipment capital costs for the 60,000 tonne
per day mill were factored from the 30,000 tonne per day mill in
the base case. A 20% contingency factor was applied to all capital
costs and is included in the estimate. Economic Analysis The cash
flow analysis results for the three cases evaluated in the PEA are
summarized in the following table. Net Cash Pre-Tax Internal Flow
NPV8 Rate of Life of Pay-back (US$000's) @ (US$000's) @ Return @
Mine Period US$750 per US$750 per US$750 per (years) (years) ounce
Gold ounce Gold ounce Gold Base Case(3) 15.2 3.0 $646,682 $232,894
21.6% Case 2 8.9 3.8 $485,697 $211,916 23.1% Case 3(3) 11.9 3.3
$815,944 $302,153 20.4% Pre- Life- Cash Operating Capital Total
Gold Production of-Mine Cost Cost Production Capital Capital (US$/
(US$/ (ounces) (US$000's) (US$000's) ounce Au) ounce Au) Base
Case(3) 3,732,000 $323,142 $417,787 $453 $112 Case 2 2,595,000
$339,846 $380,496 $404 $147 Case 3(3) 5,114,000 $494,477 $567,392
$467 $110 Sensitivity Analysis The PEA includes an analysis of
project sensitivity to changes in gold price, capital costs and
operating costs. The following table summarizes the results of the
sensitivity analysis for the Base Case. NPV8 - Base Case Gold Price
of US$750/ounce (US$ millions) -20% -10% Base Case +10% +20% Gold
Price ($43.7) $94.6 $232.9 $371.2 $509.5 Capital Cost $299.6 $266.3
$232.9 $199.5 $166.1 Operating Cost $397.4 $315.1 $232.9 $150.6
$68.4 Base Case Sensitivity to Various Gold Prices (US$ millions)
Gold Price (US$/oz Au) US$650 US$750 US$850 US$950 US$1050 NPV8
$48.5 $232.9 $417.3 $601.7 $786.1 Internal Rate of Return 11.3%
21.6% 30.1% 37.7% 44.7% Note: NPV8 and IRR are calculated on a
pre-tax basis. Discussion and Planning As previously announced,
work on the pre-feasibility study is underway including additional
high pressure grinding roll testing at JKTech Pty Ltd. in
Queensland, Australia and a 7-10,000 meter drilling program is
planned to potentially expand the estimated gold resource and, if
possible, to convert Inferred Resources(2) to Measured and
Indicated Resources(1). Vista is currently considering
consolidating the pre-feasibility and bankable feasibility programs
in order to accelerate the completion of the bankable feasibility
study on the Mt. Todd gold project. For further information of the
Mt. Todd gold project please see our technical report available on
SEDAR entitled "MT. TODD GOLD PROJECT, Gold Resource Update,
Northern Territory, Australia" and dated February 27, 2009. This
technical report was prepared by or under the supervision of Mr.
John Rozelle, an independent qualified person under NI 43-101.
Update on Paredones Amarillos Project Vista continues to work
through the permitting process at the Paredones Amarillos project,
located in Baja California Sur, Mexico. Vista is awaiting a permit
for a small drilling program as well as the Temporary Occupation
Permit which is a prerequisite for the Change of Land Use Permit.
Mike Richings, Executive Chairman and CEO commented, "The delay in
receipt of these permits has been frustrating but our Mexican
advisors and the Mexican regulators continue to confirm to us that
Vista has the legal right to mine and develop the Paredones
Amarillos deposit. We have been and will continue to look for ways
to expedite the permitting process so that we can commence
development and construction at Paredones Amarillos. In the
meantime, our continued success at Mt. Todd enables Vista to
effectively allocate resources and advance both projects as part of
our strategy to become a mid-tier gold producer over the next two
to five years." About Vista Gold Corp. Since 2001, Vista has
acquired a number of gold projects with the expectation that higher
gold prices would increase their value. Vista has undertaken
programs to advance the Paredones Amarillos project, located in
Baja California Sur, Mexico, including a definitive feasibility
study, the purchase of long delivery equipment items, and the
purchase of land for the processing facilities, related
infrastructure and the desalination plant. The results of a
Preliminary Economic Assessment completed in 2009 on the Mt. Todd
project in Australia are encouraging and Vista is undertaking other
studies to advance the project. Vista's other holdings include the
Guadalupe de los Reyes project in Mexico, Yellow Pine project in
Idaho, Awak Mas project in Indonesia, and the Long Valley project
in California. (1) Cautionary Note to U.S. Investors concerning
estimates of Measured and Indicated Resources: This press release
uses the terms "Measured Resources", "Indicated Resources" and
"Measured & Indicated Resources." We advise U.S. investors that
while these terms are defined in and required by Canadian
regulations, these terms are not defined terms under the U.S.
Securities and Exchange Commission ("SEC") Industry Guide 7 and are
normally not permitted to be used in reports and registration
statements filed with the SEC. The SEC normally only permits
issuers to report mineralization that does not constitute SEC
Industry Guide 7 compliant "reserves" as in-place tonnage and grade
without reference to unit measures. The term "contained gold
ounces" used in this press release is not permitted under the rules
of the SEC. U.S. investors are cautioned not to assume that any
part or all of mineral deposits in these categories will ever be
converted into reserves. (2) Cautionary Note to U.S. Investors
concerning estimates of Inferred Resources: This press release uses
the term "inferred resources". We advise U.S. investors that while
this term is defined in and required by Canadian regulations, this
term is not a defined term under SEC Industry Guide 7 and is
normally not permitted to be used in reports and registration
statements filed with the SEC. "Inferred resources" have a great
amount of uncertainty as to their existence, and great uncertainty
as to their economic and legal feasibility. It cannot be assumed
that all or any part of an inferred mineral resource will ever be
upgraded to a higher category. Under Canadian rules, estimates of
inferred mineral resources may not form the basis of a feasibility
study or prefeasibility studies, except in rare cases. The SEC
normally only permits issuers to report mineralization that does
not constitute SEC Industry Guide 7 compliant "reserves" as
in-place tonnage and grade without reference to unit measures. The
term "contained gold ounces" used in this press release is not
permitted under the rules of the SEC. U.S. investors are cautioned
not to assume that any part or all of an inferred resource exists
or is economically or legally minable. (3) Cautionary Note
concerning economic analysis that include Inferred Resources:
Mineral Resources that are not Mineral Reserves do not have
demonstrated economic viability. This PEA is preliminary in nature
and it includes Inferred Resources that are considered too
speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as Mineral
Reserves, and there is no certainty that the PEA will be realized.
(4) Cautionary Note to U.S. Investors concerning estimates of
Reserves: This press release uses the term "Mineral Reserve". We
advise U.S. investors that while this term is defined in and
required by Canadian regulations, such definitions differ from the
definitions in the SEC Industry Guide. Under SEC Industry Guide 7
standards, a "final" or "bankable" feasibility study is required to
report reserves, the three-year historical average price is used in
any reserve or cash flow analysis to designate reserves and the
primary environmental analysis or report must be filed with the
appropriate governmental authority. This press release contains
forward-looking statements within the meaning of the U.S.
Securities Act of 1933, as amended, and U.S. Securities Exchange
Act of 1934, as amended, and forward-looking information within the
meaning of Canadian securities laws. All statements, other than
statements of historical facts, included in this press release that
address activities, events or developments that Vista expects or
anticipates will or may occur in the future, including such things
as the economic analysis, estimates of mineral resources, the
conversion of inferred resources to measured and indicated
resources, the conversion of mineral resources to mineral reserves,
life of mine estimates, the potential for gold resources in the
Batman deposit and other targets within the Mt. Todd project, the
waste-to-ore ratio at Mt. Todd, the successful completion of a
metallurgical testing program at Mt. Todd, the beginning of a Mt.
Todd pre-feasibility study, future gold prices, future
U.S.-to-Australian dollar exchange rates, the improved efficiencies
of high pressure grinding roll technology, favorable effects of Mt.
Todd project economics and Vista's ability to add value in a
cost-effective manner the estimated operating and capital costs and
the cash flow analysis and sensitivity analysis in the Mt. Todd
Preliminary Economic Assessment, anticipated processing and
tailings management and other such matters are forward-looking
statements and forward-looking information. When used in this press
release, the words "optimistic", "potential", "indicate", "expect",
"intend", "hopes," "believe," "may," "will," "if, "anticipate" and
similar expressions are intended to identify forward-looking
statements and forward-looking information. These statements
involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of
Vista to be materially different from any future results,
performance or achievements expressed or implied by such
statements. Such factors include, among others, uncertainty of
resource estimates, estimates of results based on such resource
estimates; risks relating to completing metallurgical testing and
scheduling for pre-feasibility studies; risks relating to cost
increases for capital and operating costs including cost of power;
risks relating to delays at the Mt. Todd Project; risks of
shortages and fluctuating costs of equipment or supplies; risks
relating to fluctuations in the price of gold; the inherently
hazardous nature of mining-related activities; uncertainties
concerning resource estimates; potential effects on Vista's
operations of environmental regulations in the countries in which
it operates; risks due to legal proceedings; risks relating to
political and economic instability in certain countries in which it
operates; risks related to repayment of debt; risks related to
increased leverage and uncertainty of being able to raise capital
on favorable terms or at all; as well as those factors discussed
under the headings "Uncertainty of Forward-Looking Statements" and
"Risk Factors" in Vista's latest Annual Report on Form 10-K as
filed on March 13, 2009, as amended April 16, 2009, and Quarterly
Report on Form 10-Q, as filed May 6, 2009, and other documents
filed with the U.S. Securities and Exchange Commission and Canadian
securities commissions. Although Vista has attempted to identify
important factors that could cause actual results to differ
materially from those described in forward-looking statements and
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated or intended. Except as
required by law, Vista assumes no obligation to publicly update any
forward-looking statements or forward-looking information; whether
as a result of new information, future events or otherwise. Without
limiting the foregoing, this press release uses terms that comply
with reporting standards in Canada and certain estimates are made
in accordance with NI 43-101. NI 43-101 is a rule developed by the
Canadian Securities Administrators that establishes standards for
all public disclosures an issuer makes of scientific and technical
information concerning mineral projects. All mineral resource
estimates contained in this press release, including the terms
"measured mineral resources," "indicated mineral resources" and
"inferred mineral resources", have been prepared in accordance with
NI 43-101, and these standards differ significantly from the
requirements of the SEC. The resource information contained in this
press release is not comparable to similar information disclosed by
U.S. companies. See the Cautionary Notes to U.S. Investors above.
For further information, please contact Connie Martinez at (720)
981-1185, or visit the Vista Gold Corp. website at
http://www.vistagold.com/ DATASOURCE: Vista Gold Corp. CONTACT:
Connie Martinez of Vista Gold Corp., +1-720-981-1185 Web Site:
http://www.vistagold.com/
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