DENVER, Aug. 9 /CNW/ -- Vista Gold Corp. (TSX & NYSE Amex: VGZ)
("Vista" or the "Corporation") announced today its financial
results for the quarter and six months ended June 30, 2010, as
filed on August 6, 2010, with the United States Securities and
Exchange Commission (the "SEC") and the relevant securities
regulatory authorities in Canada in the Corporation's Quarterly
Report on Form 10-Q, and announces a management quarterly
conference call scheduled for Thursday, August 12, 2010, at 1:00
P.M. MDT. Results from Operations All dollar amounts in this press
release are in United States dollars, unless otherwise noted. Our
consolidated net loss for the three-month period ended June 30,
2010, was $4.2 million or $0.09 per share compared to consolidated
net earnings of $3.9 million or $0.11 per share for the same period
in 2009. Our consolidated net loss for the six-month period ended
June 30, 2010, was $5.9 million or $0.13 per share compared to
consolidated net earnings of $2.0 million or $0.06 per share for
the same period in 2009. For both the three- and six-month periods,
the increases in the consolidated net losses of $8.0 million and
$7.9 million from the respective prior periods are primarily due to
decreases in the gain on disposal of marketable securities of $6.8
million and $6.6 million from the respective prior periods. The
gain during the 2009 periods was the result of the sale of our
Allied Nevada Gold Corp. ("Allied") shares which we retained in
connection with the transaction that resulted in the formation of
Allied and the transfer of Vista's Nevada properties to Allied.
Also contributing to the increase in net losses for both the three-
and six-month periods was an increase in the loss on early
extinguishment of our senior secured convertible notes (the
"Notes") of $2.0 million for both the three- and six-month periods
ended June 30, 2010. On May 20, 2010, we entered into a Notes
repurchase agreement whereby we repurchased $5.7 million of
outstanding principal amount of Notes in exchange for cash and
common shares of the Corporation ("Common Shares"). Exploration,
property evaluation and holding costs Exploration, property
evaluation and holding costs were $0.5 million for the three-month
period ended June 30, 2010 and $1.0 million for the six-month
period ended June 30, 2010, as compared with $0.3 million and $0.6
million for the same periods in 2009. For both the three-month and
six-month periods, there were no significant variances as we
continue to move our projects towards development decisions.
Corporate administration and investor relations Corporate
administration and investor relations costs increased to $1.1
million during the three-month period ended June 30, 2010, compared
with $1.0 million for the same period in 2009. The increase of $0.1
million from the respective prior period is primarily due to an
increase in legal costs of $0.1 million and an increase in audit,
tax and other accounting-related fees of $0.05 million. These
amounts have been partially offset by a decrease in stock-based
compensation expense of $0.04 million. Corporate administration and
investor relations costs increased to $2.1 million for the
six-month period ended June 30, 2010 compared with $2.0 million for
the same period in 2009. The increase of $0.08 million from the
respective prior period is primarily due to an increase in legal
fees of $0.07 million, an increase in freight and shipping expenses
related to the year end mailing of shareholder materials of $0.05
and an increase in audit, tax and other accounting-related fees of
$0.04 million. These amounts have been partially offset by a
decrease in stock-based compensation expense of $0.1 million.
Interest expense Interest expense of $0.5 million during the
three-month period ended June 30, 2010 and $1.1 million during the
six-month period ended June 30, 2010 was slightly less than $0.6
million and $1.2 million for the same periods in 2009. This slight
decrease is attributable to the repurchase of $1.3 million in
principal amount of the Notes in July 2009 and the repurchase of
$5.7 million in principal amount of the Notes in May 2010. For the
three-month period ended June 30, 2010, $0.2 million is
attributable to the accretion of the debt discount and $0.3 million
is attributable to interest expense. For the six-month period ended
June 30, 2010, $0.5 million is attributable to the accretion of the
debt discount and $0.6 million is attributable to interest expense.
These amounts are approximately 24% of the full interest expense
associated with the issuance of the Notes. We capitalized the
remaining 76% as additions to mineral properties in accordance with
ASC 835-20 Capitalization of Interest and our accounting policy.
Other income and expense Gain on disposal of marketable securities
There were no gains or losses on the disposal of marketable
securities for the three-month period ended June 30, 2010, compared
with a gain of $6.8 million for the same period in 2009. The gain
for the three-month period in 2009 resulted from the sale of
securities that had a book value of $2.2 million. For the six-month
period ended June 30, 2010, we realized a gain of $0.2 million on
the disposal of marketable securities, compared with a gain of $6.8
million for the same period in 2009. The gain for the six-month
period in 2010 resulted from the sale of securities that had a book
value of $0.01 million and the gain for the same period in 2009
resulted from the sale of securities that had a book value of $2.2
million. For both the three- and six-month periods ended June 30,
2010, the decreases in gains were mostly the result of our sale on
April 3, 2009, of all of our 1,529,848 common shares of Allied for
$9.0 million. These shares had a book value of $2.2 million. At
June 30, 2010, we held marketable securities available for sale
with a quoted market value of $0.9 million. We purchased the
securities for investing purposes with the intent to hold the
securities until such time as it would be advantageous to sell the
securities at a gain. Although there can be no reasonable assurance
that a gain will be realized from the sale of the securities, we
monitor the market status of the securities consistently in order
to mitigate the risk of loss on the investment. Loss on early
extinguishment of convertible notes On May 20, 2010, we entered
into a Notes Repurchase Agreement (the "Agreement") with Whitebox
Advisors LLC ("Whitebox") whereby we agreed to repurchase their
remaining Notes. Pursuant to the Agreement, we agreed to repurchase
Notes in the principal amount of $5.7 million and to settle
interest payable through maturity on the Notes of $0.7 million. We
agreed to pay Whitebox $2.2 million in cash and to issue to them
1,902,684 in Common Shares, at a price of $2.15 per Common Share,
as consideration for the aggregate principal amount of the Notes
and interest payable of $6.4 million. We allocated the
consideration paid on the repurchase of the Notes to the liability
and equity elements of the security based on their relative fair
values at the date of the Agreement as is required under Emerging
Issues Committee Abstract no. ("EIC-96"), "Accounting for the Early
Extinguishment of Convertible Securities Through (1) Early
Redemption or Repurchase and (2) Induced Early Conversion". The
accounting treatment in EIC- 96 requires us to compare the number
of Common Shares that would have been issued if the note-holder had
exercised its option under the original terms of the Notes to
convert the Notes into Common Shares priced at $4.80, compared to
the number of Common Shares issued under the Agreement. The
additional Common Shares issued are treated as additional
consideration to the noteholders, resulting in the recognition of a
loss of $2.0 million in our Consolidated Statement of Earnings and
(Loss) as a result of the Notes repurchase. This was not a cash
loss and, in the opinion of the Corporation's board and audit
committee does not represent an economic loss to our shareholders.
There were no similar transactions during the 2009 period. The
Agreement was initiated by Whitebox and was not the result of any
solicitation by or on our behalf. We have not initiated any broader
efforts to repurchase or restructure any of our remaining Notes and
did not act upon the basis of material non-public information in
determining whether to enter into the Agreement. The Common Shares
issued have not been registered under the United States Securities
Act of 1933, as amended, or any applicable state securities laws
and were issued pursuant to exemptions from such registration
requirements. Financial Position, Liquidity and Capital Resources
Cash used in operations Net cash used in operating activities was
$2.7 million for the three-month period ended June 30, 2010,
compared to $3.0 million for the same period in 2009. The decrease
of $0.3 million is mostly the result of a decrease of $0.3 million
in the amount of interest paid on the Notes. We repurchased $1.3
million in principal amount of the Notes in July 2009 and $5.7
million in principal amount of the Notes in May 2010, therefore the
outstanding principal balance upon which we pay interest on was
less during the 2010 period as compared with the 2009 period. Net
cash used in operating activities was $4.3 million for the
six-month period ended June 30, 2010, compared to $4.2 million for
the same period in 2008. The slight increase of $0.1 million is
mostly the result of the decrease in interest paid of $0.4 million,
as noted above, and has been partially offset by an increase in
cash used for other current assets of $0.3 million. Investing
activities Net cash used in investing activities was $3.5 million
for the three-month period ended June 30, 2010, as compared to net
cash provided by investing activities of $8.4 million for the same
period in 2009. The increase in cash used by investing activities
of $11.9 million is due to the following: -- A decrease in the
proceeds from the sale of marketable securities of $9.0 million. On
April 3, 2009, we sold all 1,529,848 common shares of Allied that
we held for $9.0 million; -- An increase in cash used for additions
to mineral properties of $2.7 million. During the 2010 period we
undertook a drilling program at the Mt. Todd gold mine. There were
no similar programs during the 2009 period; and -- A decrease in
the proceeds received upon the disposal of mineral property. In
June 2009, we sold most of the remaining patented mining claims in
Colorado for $0.2 million. There were no similar transactions
during the 2010 period. Net cash used in investing activities was
$5.2 million for the six-month period ended June 30, 2010, as
compared to net cash provided by investing activities of $7.3
million for the same period in 2009. The increase in cash used in
investing activities of $12.4 million is mostly the result of the
same items that increased cash used for the three-month period
including: a decrease in the proceeds from the sale of marketable
securities of $8.8 million, an increase in cash used for additions
to mineral properties of $3.8 million and a decrease in the
proceeds received upon the disposal of mineral properties of $0.2
million. Offsetting these increases were an increase in cash
provided for short-term investments of $0.3 million and a decrease
in cash used in the additions to plant and equipment of $0.1
million. Financing activities Net cash used in financing activities
was $2.2 million for both the three- and six-month periods ended
June 30, 2010. There was no cash provided by or used in financing
activities for the same periods during 2009. The cash used in
financing activities for both the three- and six-month periods
ended June 30, 2010 was the result of the cash consideration paid
for the repurchase of $5.7 million in principal amount of Notes on
May 20, 2010. Liquidity and Capital Resources At June 30, 2010, our
total assets were $88.7 million compared to $92.6 million at
December 31, 2009, representing a decrease of $3.9 million. At June
30, 2010, we had negative working capital of $3.7 million as
compared with positive working capital of $29.4 million at December
31, 2009, representing a decrease of $33.0 million. This decrease
relates primarily to a reclassification of the Notes to a
short-term debt obligation of $21.2 million as of June 30, 2010 as
compared to a long-term debt obligation of $24.9 million as of
December 31, 2009. The Notes come due on March 4, 2011. Also
contributing to the decrease is a decrease in cash balances of
$11.7 million from December 31, 2009 as well as a decrease in our
marketable securities of $0.2 million from December 31, 2009. The
principal components of working capital at June 30, 2010 are cash
and cash equivalents of $16.7 million and the Notes of $21.2
million. The principal component of working capital at December 31,
2009 was cash and cash equivalents of $28.4 million. Other
components include marketable securities (June 30, 2010 - $0.9
million; December 31, 2009 - $1.2 million) and other liquid assets
(June 30, 2010 - $0.9 million; December 31, 2009 - $0.8 million).
As a result of the delay in the issuance of the Change of Forest
Land Use Permit ("CUSF") at the Paredones Amarillos gold project
and the current uncertainty in the resource and financial markets,
management has adopted a revised plan and budget for the year 2010.
The plan continues those programs necessary to expedite the
development of the Paredones Amarillos gold project and to advance
the Mt. Todd gold project Pre-Feasibility Study, while minimizing
expenditures in other areas. The budget estimates that, in the
event that financing for the Paredones Amarillos gold project is
not available on acceptable terms in 2010, we would have sufficient
working capital to fund our planned operations at least through the
end of 2010, without additional financing. We will continue to
examine potential funding alternatives for the project, which may
include project financing, debt financing or equity financing. On
March 4, 2011, the $23.0 million principal balance of the Notes
will come due. Presently, we do not have sufficient capital to meet
this obligation. We are currently examining potential alternatives
for raising the additional capital needed, which could include
public offerings, other equity financings, or project financing if
and when the CUSF is obtained for the Paredones Amarillos gold
project. We may also consider potential renegotiation of the terms
of the original Notes. While we have been successful in the past
with raising funds through equity and debt financings, and although
the current sustained high gold prices have increased investor
interest in the gold market and, in addition, we have a
shelf-registration effective in order to expedite the completion of
a public equity offering, no assurances can be given that we will
be successful in raising such funds in the future. The selected
financial data including the results of operations for the
three-month and six-month periods ended June 30, 2010 compared to
the 2009 periods, and the financial positions as at June 30, 2010
compared to December 31, 2009, is summarized in the following
table: DENVER, Aug. 9 /CNW/ -- Three Months Six Months Selected
Ended June Ended June Financial Data 30, 30, 2010 2009 2010 2009
U.S. $000's, except loss per share Results of operations Net
earnings/ (loss) $(4,152) $3,890 $(5,851) $2,010 Basic and diluted
earnings/ (loss) per share (0.09) 0.11 (0.13) 0.06 Net cash used in
operations (2,661) (3,043) (4,273) (4,225) Net cash provided/(used
in) investing activities (3,532) 8,361 (5,176) 7,259 Net cash
provided/(used in)by financing activities (2,233) - (2,233) -
Financial June December position 30, 31, 2010 2009 Current assets
$18,594 $30,317 Total assets 88,725 92,573 Current liabilities
22,246 926 Total liabilities 22,474 26,093 Shareholders' equity
66,251 66,480 Working capital (3,652) 29,391 Management Conference
Call To review Vista's Quarterly Report on Form 10-Q for the fiscal
quarter ending June 30, 2010, including our Management Discussion
& Analysis, visit either www.sedar.com, www.sec.gov or
www.vistagold.com. A conference call with management to review our
financial results for the quarter ended June 30, 2010 and to
discuss corporate and project activities is scheduled on Thursday,
August 12, 2010, at 1:00 p.m. MDT. Toll-free in North America:
1-866-782-8903 International: 1-647-426-1845 This call will also be
web-cast and can be accessed at the following web location:
http://www.snwebcastcenter.com/event/?event_id=1075 This call will
be archived and available at www.vistagold.com after August 12,
2010. Audio replay will be available for three weeks by calling in
North America: 1-866-245-6755, passcode 409766. If you are unable
to access the audio or phone-in on the day of the conference call,
please feel free to email questions to Connie Martinez, Manager -
Investor Relations, (email: connie@vistagold.com) and we will try
to address these questions prior to or during the conference call.
About Vista Gold Corp. Vista is focused on the development of the
Paredones Amarillos gold project in Baja California Sur, Mexico,
and the Mt. Todd gold project in Northern Territory, Australia, to
achieve its goal of becoming a gold producer. Vista's other
holdings include the Guadalupe de los Reyes gold project in Mexico,
the Yellow Pine gold project in Idaho, the Awak Mas gold project in
Indonesia, and the Long Valley gold project in California. For more
information about our projects, including technical studies and
resource estimates, please visit our website at www.vistagold.com.
Forward-Looking Statements 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 resolution of permitting matters at the Paredones Amarillos
gold project, the Corporation's strategy for advancement of the
permitting process for the Paredones Amarillos gold project, the
expected timeframe for the refiling of the CUSF application, the
continuation of the advancement of the Paredones Amarillos gold
project, the timing for commencement of construction, development
and production for the Paredones Amarillos gold project, the
potential to enhance the project economics of the Mt. Todd gold
project through additional resource drilling, including drilling at
the Quigley deposit, the timing for completion and expected results
of the preliminary feasibility study on the Mt. Todd gold project,
favorable effects of Mt. Todd project economics, the results of the
PEA on the Mt. Todd gold project, and other such matters are
forward-looking statements and forward-looking information. When
used in this press release, the words "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
regarding the amendment and re-filing of the CUSF application,
uncertainty regarding the review by the Mexican Secretariat of the
Environment and Natural Resources ("SEMARNAT") of the amended CUSF
application, risks related to the Corporation's failure to obtain
approval of the CUSF and begin construction of its Paredones
Amarillos gold project, including unanticipated delays in beginning
construction of the project due to a lack of obtaining the CUSF and
the possible reduction of mineral reserves to mineral resources,
uncertainty regarding potential court action against SEMARNAT in
relation to the dismissal of the CUSF application and risks related
to the outcome of such court action, including failure to receive
approval of the CUSF application, uncertainty regarding the
Corporation's legal challenges to SEMARNAT's issues with the CUSF
application and SEMARNAT's authority in reviewing the CUSF
application, uncertainty and risks regarding any political factors
influencing the approval of the CUSF, possible impairment or write
down of the carrying value of the Paredones Amarillos gold project
if the CUSF is not granted, uncertainty of resource and reserve
estimates, estimates of results based on such resource and reserve
estimates, risks relating to cost increases for capital and
operating costs, risks relating to delays in the completion of the
drilling program, risks related to the adequacy of the design of
the drilling program, risk regarding the preliminary feasibility
study for the Mt. Todd gold project, risks relating to the delays
at the Mt. Todd gold project, risks related to the potential grade
and production at the Quigleys deposit, risks related to the
ability to obtain the necessary permits, 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, 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 16, 2010, and other documents filed with the SEC and
Canadian securities regulatory authorities. 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. All mineral reserves and
resources have been estimated in accordance with the definition
standards on mineral resources and mineral reserves of the Canadian
Institute of Mining, Metallurgy and Petroleum referred to in
National Instrument 43-101, commonly referred to as NI 43-101. U.S.
reporting requirements for disclosure of mineral properties are
governed by SEC Industry Guide 7. Canadian and SEC Industry Guide 7
standards are substantially different and the information contained
in the documents referenced in this press release and the PEA are
not comparable to similar information disclosed by U.S. companies
The documents referenced in this press release and the PEA
referenced in this press release use the terms "measured,"
"indicated," and "inferred" resources. We advise investors that
while those terms are recognized and required by Canadian
regulations, the SEC does not recognize them. Inferred mineral
resources are considered too speculative geologically to have
economic considerations applied to them that enable them to be
categorized as mineral reserves. 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 feasibility or
pre-feasibility studies, except in rare cases. U.S. investors are
cautioned not to assume that part or all of an inferred resource
exists, or is economically or legally minable. 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. DENVER, Aug.
9 /CNW/ -- For further information, please contact Connie Martinez
at (720) 981-1185, or visit the Vista Gold Corp. website at
www.vistagold.com. Connie Martinez, +1-720-981-1185, for Vista Gold
Corp. Web Site: http://www.vistagold.com
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