Vista Gold Corp. (NYSE American and TSX: VGZ) (“Vista” or the
“Company”) today announced its unaudited financial results for the
quarter ended March 31, 2020. The Company’s unaudited financial
statements, Management’s Discussion and Analysis together with
other important disclosures can be found in the Company’s Quarterly
Report on Form 10-Q, filed on May 4, 2020 with the U.S. Securities
and Exchange Commission and the Canadian securities regulatory
authorities.
Summary of Q1 2020 Financial
Results
Vista reported a net loss of $3.5 million or
$0.03 per share for the three months ended March 31, 2020. The loss
was comprised of $2.3 million of operating expenses, a $1.1 million
mark-to-market loss on our investments in Midas Gold Corp. and
Nusantara Resources Limited, and other expenses of $0.1
million.
Working capital at March 31, 2020 totaled
approximately $4.9 million, including cash and short-term
investments (comprised of government securities) of approximately
$3.2 million. The Company has no debt.
Vista’s President and CEO, Mr. Frederick H.
Earnest commented, “The COVID-19 pandemic continues to have a
significant impact on human life and health, and on the global
economy, financial markets and commodities. The health, safety and
well-being of our employees and other stakeholders remains a
priority for our Company. Although global travel restrictions have
prevented us from engaging in face-to-face meetings with potential
strategic partners, we continue to advance our objective of
securing a partner for the construction and development of Mt
Todd.
Current market conditions highlight the leverage
to gold price that favors the Mt Todd gold project. At a
current gold price of approximately $1,700 per ounce and a foreign
exchange rate of $US0.65=A$1.00, the project economics demonstrate
an after-tax NPV5% of more than US$1.6 billion and an IRR of 40%.
The recently released benchmarking study further supports the
capital and operating costs behind these compelling economic
estimates. We are also pleased that notice to exercise the option
has been provided by the holder of the Awak Mas project to cancel
half of the net smelter return royalty held by Vista, and we expect
to receive the required $2.4 million payment within days. This
payment will provide an important source of working capital for the
next twelve months.”
COVID-19 Pandemic Update
Vista is responding to the COVID-19 pandemic to
ensure the health and safety of its employees and other
stakeholders. Corporate activities continue with personnel working
remotely. Corporate travel and participation in conferences has
been replaced by an increased use of video conferencing technology.
In Australia, Mt Todd is classified as a critical business and is
operating under a COVID-19 Management and Mitigation Plan. To date,
our workforce remains healthy and free of symptoms of the
virus.
Awak Mas Project, Indonesia
Vista holds an NSR royalty on the Awak Mas
project in Indonesia. During 2019, Vista and PT Masmindo Dwi Area
(“PT Masmindo”) amended the original royalty agreement to allow PT
Masmindo to make a $2.4 million payment to Vista by April 30, 2020
to cancel a 1% NSR on the first 1,250,000 ounces produced at Awak
Mas and a 1.25% NSR on the next 1,250,000 ounces produced. The due
date for this payment was subsequently amended to May 8, 2020. On
April 29, 2020, PT Masmindo provided notice to Vista to exercise
the option to cancel the related 1% NSR and 1.25% NSR upon making a
payment of $2.4 million, which the Company expects to receive by
May 8, 2020. Upon receipt of the $2.4 million payment, PT Masmindo
will then have the right to cancel the remaining 1% NSR and 1.25%
NSR for an additional payment of $2.5 million by April 30, 2021. If
PT Masmindo does not make the $2.4 million payment by May 8, 2020,
Vista will retain the full royalty interests and can pursue
alternative monetization strategies.
Independent Benchmarking
Study
In March 2020, Vista announced the positive
results of an independent benchmarking study ("Study") of the 2019
updated preliminary feasibility study for the Mt Todd Gold Project
(the “Project”) in the Northern Territory, Australia ("2019 PFS").
Concurrent with completing the 2019 PFS, the Company engaged an
independent consultant to review and compare Vista’s estimated
costs and schedules. The analysis, review and positive results of
the Study are an indication of the Company’s commitment to ensuring
that Project designs, schedules and economic analyses are
reasonable and appropriate.
All dollar amounts in this press release are in
U.S. dollars.
About Vista Gold Corp.
The Company is a gold project developer. Our
principal asset is our flagship Mt Todd gold project in Northern
Territory, Australia. Mt Todd is the largest undeveloped gold
project in Australia.
For further information, please contact Pamela
Solly, Vice President of Investor Relations, at (720) 981-1185.
Technical Report on Mt Todd
For further information on the Mt Todd Gold
Project, see the Technical Report entitled “NI 43-101 Technical
Report Mt Todd Gold Project 50,000 tpd Preliminary Feasibility
Study Northern Territory, Australia” with an effective date of
September 10, 2019 and an issue date of October 7, 2019, which is
available on SEDAR as well as on Vista’s website under the
Technical Reports section. John Rozelle, Vista’s Sr. Vice
President, a Qualified Person as defined by NI 43-101, has
approved the information in this press release.
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 we expect or anticipate
will or may occur in the future, including such things as our plans
to continue to advance the process of seeking a partner for the
construction and development of Mt Todd; the Mt Todd project
economics including the NPV5% of approximately US$1.6 billion and
an IRR of 40% indicated above; the Company’s plans to focus on
monetizing non-dilutive potential sources of funding, including
converting royalty interests held by the Company, future option
payments under the Los Reyes option agreement and sales of other
non-core assets such as our mill equipment; Vista’s plans to
respond appropriately to the COVID-19 pandemic to ensure the health
and safety of its employees; the Company’s expected receipt of $2.4
million by May 8, 2020 related to the exercise of the option to
cancel the above noted royalty and any future payments in relation
to the Awak Mas project; and our belief that Mt Todd is the largest
undeveloped gold project in Australia are forward-looking
statements and forward-looking information. The material factors
and assumptions used to develop the forward-looking statements and
forward-looking information contained in this press release include
the following: our assumption that PT Masmindo will make the $2.4
million cash payment when due; our forecasts and expected cash
flows; our projected capital and operating costs; our expectations
regarding mining and metallurgical recoveries; mine life and
production rates; that laws or regulations impacting mine
development or mining activities will remain consistent; our
approved business plans, our mineral resource and reserve estimates
and results of preliminary economic assessments; preliminary
feasibility studies and feasibility studies on our projects, if
any; our experience with regulators; our experience and knowledge
of the Australian mining industry and our expectations of economic
conditions and the price of gold. 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
the Company 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 and reserve estimates, uncertainty as to the Company’s
future operating costs and ability to raise capital; risks relating
to cost increases for capital and operating costs; 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
our 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; uncertainty as to the results of bulk metallurgical
test work; and uncertainty as to completion of critical milestones
for Mt Todd; as well as those factors discussed under the headings
“Note Regarding Forward-Looking Statements” and “Risk Factors” in
the Company’s latest Annual Report on Form 10-K as filed in
February 2019 and other documents filed with the U.S. Securities
and Exchange Commission and Canadian securities regulatory
authorities. Although we have 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, we assume no obligation to publicly update any
forward-looking statements or forward-looking information; whether
as a result of new information, future events or otherwise.
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