Vista Gold Corp. (NYSE American and TSX: VGZ) (“Vista” or the
“Company”) today reviewed its key 2020 accomplishments and outlined
2021 priorities for the Company’s 100% owned Mt Todd gold project
(“Mt Todd” or the “Project”) located in Northern Territory (“NT”),
Australia.
Fred Earnest, President and CEO of Vista Gold,
stated, “We are pleased to have achieved many of our 2020 corporate
objectives in spite of the challenges presented by the COVID-19
pandemic.
Financially, we successfully monetized non-core
assets to fund working capital, strengthen our balance sheet and
cash position, and set the path to generate additional cash of up
to US$4.6 million during 2021. Technically, we engaged with the NT
government to support its review of our Mining Management Plan
(“MMP”) and move it toward approval, completed and announced
positive results of an independent benchmarking study of the 2019
PFS and commenced a drill program to test the existence of
mineralization with vertical and lateral continuity within and
immediately adjacent to the planned Batman pit. Strategically, we
strengthened our relationship with the Jawoyn Association through
an updated agreement and laid the foundation to support the pursuit
of opportunities that will create greater value for our
shareholders.
As we begin 2021, we are encouraged about the
prospects for Vista, Mt Todd and our shareholders. Most
importantly, our strategy will continue to focus on programs to
enhance value and de-risk Mt Todd as we work to achieve a valuation
reflective of the size of the gold deposit, together with its
Tier-1 mining jurisdiction in Australia’s low-risk NT, favorable
low operating costs, robust project economics, and the fact that we
hold approvals for all major environmental permits. With an asset
of this scale, one of the best ways to balance risk and narrow the
gap between Vista’s current market capitalization and Project net
present value (“NPV”) is to seek a strategic transaction with a
partner who is prepared to provide Vista shareholders with an
appropriate valuation for the interest to be acquired, and that
brings project development and operation skills and financial
strength as we advance Mt Todd together. Fundamental to any
transaction that we may consider, is our commitment to preserve
maximum Project ownership for our shareholders, while minimizing
future dilution. It is important to reiterate that we are not
constrained or obligated to complete a transaction that does not
achieve the goal of enhancing Vista’s valuation.
Our top 2021 priorities are to achieve a market
capitalization that is more reflective of the Mt Todd Project NPV,
receive approval of the MMP, and initiate a follow up drill program
to expand on the successful results of the current proof of concept
drilling program.”
Key 2020 Highlights
FinancialDuring 2020, Vista effectively
monetized non-core assets, managed costs and capital spending, and
strengthened its balance sheet. The Company continues to have no
debt.
VGZ Share Price PerformanceFor the twelve months
ended December 31, 2020, VGZ shares increased 49.0%. Vista
continues to enjoy strong leverage to the price of gold, in part
due to significant improvements in Mt Todd project economics.
ExplorationVista commenced an eight-hole proof
of concept drilling program to test targets known as the Batman
Hanging Wall Lode and the Batman North Extension, with the goal of
the program to test the existence of mineralization with vertical
and lateral continuity within and immediately adjacent to the
planned Batman pit. In December, Vista reported results from hole 1
(VB20-001) in the Batman Hanging Wall Lode, which confirmed our
initial interpretation and suggest that additional drilling could
provide the basis for an increase in the mineral resource estimates
both within and outside the currently designed Batman pit.
Mining Management PlanThroughout 2020, Vista
continued to work with the NT Division of Mines and the newly
formed NT Department of Industry, Tourism and Trade to advance the
review and approval process of the Mt Todd MMP. Once approved,
Vista will hold all major permits for the Project.
Jawoyn AgreementVista and the Jawoyn Association
updated their existing agreement to include a royalty and mutual
cooperation and support commitments. This provides the Jawoyn
Association with a gross proceeds royalty instead of its previous
right to become a 10% participating joint venture partner in Mt
Todd and provides Vista with greater flexibility in its decisions
to develop and operate Mt Todd. It also provides greater commitment
for a shared vision of promoting cross-cultural awareness,
protecting cultural heritage sites, and providing economic
opportunities for aboriginal people as integral components of the
development of Mt Todd.
Project Gold Price SensitivityThe Company
updated its Project sensitivity analysis based on sustained higher
gold prices. The October 2019 preliminary feasibility study (the
“2019 PFS”) was completed using a gold price of US$1,350 and
exchange rate of US$0.70=A$1.00. Based on these parameters, the
after-tax NPV5% is US$823 million and the IRR is 23.4%. At a
current gold price of US$1,850 and a US$0.775=A$1.00 foreign
exchange rate, the after-tax NPV5% is US$1.7 billion and the IRR is
38.5%. Mt Todd demonstrates significant project-level leverage to
the gold price and as shown in the updated sensitivity analysis,
for every US$100 increase in the gold price the NPV5% increases
approximately US$200 million.
Water Management ProgramThe Mt Todd water
management program achieved significant results. In the past, Vista
successfully treated 11.5 gigaliters of acidic water stored in the
Batman Pit and began discharging treated water in compliance with a
NT EPA discharge license. Through continued dewatering, the water
level in the Batman pit was lowered by 23 meters in 2020.
Independent Benchmarking StudyPositive results
from an independent benchmarking study (“Study”) of the 2019 PFS
were announced in early 2020. The objective of the Study was to
confirm capital and operating costs, and construction,
commissioning and ramp up schedules as presented in the 2019 PFS.
The positive findings provide greater assurance that the Company’s
inputs and assumptions are reasonable and that schedules are
practical.
2021 Outlook
Mining Management PlanVista believes the NT
Department of Industry, Tourism and Trade is in the final stages of
their approval process and hopes to receive authorization of the
MMP in the near future. Upon receipt, Vista will have all major
authorizations to commence development of the mine.
Internal Evaluations of Mine Plans at Higher
Gold PricesVista’s mine plans are conservatively based on US$1,000
economic pit shapes. With the sustained improvement in gold price,
Vista believes that a higher gold price can appropriately be
applied for determining the optimal pit design.
Ongoing Drilling ProgramDrilling is progressing
for the current drill program. The remaining holes are targeting
the Batman North Extension. Holes 2, 3 and 4 are now complete, with
results expected to be announced in the near future. Drillholes 5
through 8 will continue through mid-February. Based on the results
of this program, Vista may undertake additional follow-up
drilling.
Dewatering the Batman PitOngoing dewatering of
the Batman pit will be a priority for the Company during the
current wet season (November 2020 through April 2021). The Batman
pit is expected to be effectively dewatered in 2021, representing
the completion of an important milestone prior to a potential start
of construction.
FinancialThe Company received US$1.1 million in
January and expects to further strengthen its cash position with
the receipt of up to US$3.5 million by the end of July 2021 from a
cash payment from Prime Mining Corp. and an option payment for the
cancellation of the Company’s remaining royalty on the Awak Mas
project. Vista expects to announce Q4 and full year 2020 financial
results in February 2021.
Strategic OpportunitiesManagement will focus on
engaging with potential partners and identifying strategic
opportunities to advance the development of Mt Todd in a way that
preserves maximum Project ownership for our shareholders, while
minimizing future dilution.
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, amended
September 22, 2020, 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
National Instrument 43-101 – Standards of Disclosure for Mineral
Projects, has approved the information in this press
release. See Cautionary Note to Investors regarding
Estimates of Mineral Reserves and Resources below.
About Vista Gold Corp.
The Company is a gold project developer. The
Company’s flagship asset is the Mt Todd gold project in the Tier-1
mining jurisdiction of NT, Australia. Mt Todd is the largest
undeveloped gold project in Australia and if developed as presently
designed, would potentially be Australia’s 6th largest gold
producer on an annual basis.
For further information about Vista or the Mt
Todd Gold Project, please contact Pamela Solly, Vice President of
Investor Relations, at (720) 981-1185 or visit the Company’s
website at www.vistagold.com to access important information,
including the current Technical Report.
Forward Looking Statement
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
belief that we will achieve a valuation for the Company that is
reflective of the size of the gold deposit and that this will be
achieved through a strategic transaction with a partner; our belief
that additional drilling could result in the basis for an increase
in the mineral resource estimates both within and outside the
current Batman pit; our estimates and expectations pertaining to
the updated Project NPV and sensitivity analysis; our belief that
the Northern Territory Department of Industry, Tourism and Trade is
in the final stages of their approval process and our hope to
receive authorization of the MMP in the near future; our plans for
ongoing drilling of the Batman North Extension; our expectation
that the Batman pit is expected to be effectively dewatered by
mid-2021; our expectation that we will further strengthen the
company’s cash position with the receipt of up to US$3.5 million by
the end of July 2021; the timing of when we expect to announce Q4
and full year financial results; our plan to focus on engaging with
potential partners and identifying strategic opportunities to
advance the development of Mt Todd in a way that preserves maximum
Project ownership for our shareholders, while minimizing future
dilution; and our belief that Mt Todd is the largest undeveloped
gold project in Australia and if developed as presently designed,
would potentially be Australia’s 6th largest gold producer on an
annual basis 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 approved
business plans, exploration and assay results, results of our test
work for process area improvements, mineral resource and reserve
estimates and results of preliminary economic assessments,
prefeasibility studies and feasibility studies on our projects, if
any, our experience with regulators, and positive changes to
current 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 February 26, 2020 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.
Cautionary Note to Investors Regarding
Estimates of Mineral Reserves and Resources
The 2019 PFS referenced herein uses the terms
defined in Canadian National Instrument 43-101
– Standards of Disclosure for Mineral
Projects (“NI 43-101”) and the Canadian Institute of
Mining, Metallurgy and Petroleum (the “CIM”) – CIM
Definition Standards on Mineral Resources and Mineral Reserves,
adopted by the CIM Council, as amended (the “CIM Definition
Standards”). These definitions differ from the definitions in the
mining disclosure rules of the United States Securities and
Exchange Commission (“SEC”) Industry Guide 7 (“SEC Industry
Guide 7”) under the United States Securities Exchange Act of 1933,
as amended (the “Exchange Act”) and the new mining disclosure rules
of Subpart 1300 of Regulation S-K under the Exchange Act (“SEC
Modernization Rules”). Under SEC Industry Guide 7, the definitions
and standards for mineral reserves are substantially different than
NI 43-101 standards and the terms “measured mineral resources”,
“indicated mineral resources” and “inferred mineral resources” are
not recognized or permitted. Under the SEC Modernization Rules, the
definitions of “proven mineral reserves” and “probable mineral
reserves” have been amended to be substantially similar to the
corresponding CIM Definition Standards and the SEC has added
definitions to recognize “measured mineral resources”, “indicated
mineral resources” and “inferred mineral resources” which are also
substantially similar to the corresponding CIM Definition
Standards; however there are differences in the definitions and
standards under the SEC Modernization Rules and the CIM Definition
Standards and therefore once the Company begins reporting under the
SEC Modernization Rules there is no assurance that the Company’s
mineral reserve and mineral resource estimates will be the same as
those reported under NI 43-101 and CIM Definition Standards as
contained in the 2019 PFS or that the economics for the Mt Todd
project estimated in the 2019 PFS will be the same as those
estimated in any technical report prepared by the Company under the
SEC Modernization Rules in the future.
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