Vista Gold Corp. is an international gold mining company based in Littleton, Colorado, with a plus 20-year history of gold exploration, development and operations. Vista is traded on both the TSX and NYSE Amex under the symbol VGZ. Since 2001, Vista has correctly predicted that gold prices would significantly increase for many years to come, and has acquired a number of impressive gold projects during 2001-2006. During 2006 and 2007, Vista completed transactions that resulted in the formation and successful spin-off to its shareholders of Allied Nevada Gold Corp. Since the spin-off Vista has sold one project and currently holds six projects with an estimated 1.3 million ounces of proven and probable reserves, 12.8 million ounces of measured and indicated resources and 4.6 million ounces inferred. Vista has undertaken programs to advance the Paredones Amarillos gold 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 gold project in Australia are encouraging and Vista is undertaking other studies to advance the project. Vista's other holdings include the Yellow Pine gold project in Idaho, Guadalupe de los Reyes gold project in Mexico, Long Valley gold project in California, and Awak Mas gold project in Indonesia.
Vista controls six properties with an estimated 1.3 million ounces of proven and probable reserves, 12.8 million measured and indicated gold resource ounces and 4.6 million inferred gold resource ounces. These resource ounces were determined by studies completed by independent consultants. (Dollars referenced below are U.S. dollars).
Paredones Amarillos, Mexico- Vista continues to work through the permitting process at the Paredones Amarillos gold project, located in Baja California Sur, Mexico. Vista is awaiting a permit for a drilling program as well two permits essential for the development to proceed. 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.”
The Paredones gold project is located in a special use area within the buffer zone of the Sierra Laguna Biosphere Reserve. As previously reported, earlier in 2008 Vista announced that it had received correspondence from the local La Paz office of the Mexican Environmental and Natural Resource Service (“SEMARNAT”) which indicates that staff in that office are of the opinion that the Change of Land Use Permit (“CUSF”) approved by SEMARNAT in 1997 in relation to the Paredones project is no longer valid. Vista's advisors and counsel in Mexico were of the opinion that the permit remained valid; however, they also advised Vista that a new CUSF application would be the most expeditious way to obtain the necessary approvals. The application for a new CUSF requires as a prerequisite appropriate authorization or ownership of the surface affected by the CUSF permit. Vista has acquired the surface for the process plant and tailings impoundment facility and has presented an application for a Temporary Occupation Permit (“TOP”) for the use of the federal land which overlies the deposit and remainder of the area affected. Vista has obtained the necessary environmental permit and completed the other prerequisite studies for the submittal of the CUSF permit application and will file that permit application as soon as the TOP is received.
Vista has completed a definitive feasibility study on the Paredones Amarillos Project in Baja California Sur, Mexico, (see Vista's press release of September 8, 2008) reflecting an anticipated production rate of 127,000 (143,000) ounces per year during the 9.5 year life of the reserve. The economic analysis was completed using a gold price of $850 per ounce in the first three years of production, decreasing to $725 per ounce for the remainder. The mineralized zone comprises of 71 million tonnes of measured and indicated resource with a gold grade of 0.93 g/t and a gold content of 2.1 million ounces. Economic reserves comprise of 38 million tonnes of proven and probable ore with a grade of 1.08 g/t and a gold content of 1.3 million ounces. Based on the study, the estimated life-of-mine average cash production costs are projected to be $419 per ounce, with lower costs of $388 per ounce projected during the first five years of production. Pre-production capital costs, using conservative contingencies, owner's costs and working capital, are estimated to be $196.7 million or $165 per ounce of gold produced.
In February 2009, Vista retained the Roberts and Schaefer Company (“R&S”) to conduct a review of the proposed Paredones Amarillos gold project process facility lay-out and the proposed design of the crushing, material handling and milling area as presented in the bankable feasibility study for the project. R&S' study is nearing completion and several design improvements have been identified that have the potential to improve operating efficiencies and to reduce the estimated capital costs for the proposed processing facility. Vista has retained R&S to undertake a complete re-estimate of the process area capital and operating costs. Vista has also retained SRK Consulting to complete a re-estimation of the project capital and operating costs and expects these cost up-dates early in the third quarter of 2009. The new estimates will reflect current economic conditions.
Vista plans to utilize outside sources to provide the additional capital required for the project capital costs and will be proceeding to examine various project financing alternatives, including debt and equity components. Vista has already purchased the major mill equipment for the project and intends to purchase the remaining long delivery items when required to ensure an expedited project construction. Upon successful completion of project financing, and the issuance of a new Change of Land Use Permit, construction on the Paredones project could begin shortly thereafter.
Mt. Todd, Australia –
In June 2006, Vista completed the acquisition of the Mt. Todd gold mine in the Northern Territory, Australia, for $2.1 million.
Vista completed a Preliminary Economic Assessment (“PEA”), in accordance with Canadian National Instrument 43-101?Standards of Disclosure for Mineral Projects (“NI 43-101”) for the Batman deposit. 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 Tetra Tech Inc. of Golden, Colorado, under the direction of Mr. John Rozelle, an independent qualified person under Canadian National Instrument 43-101 (“NI 43-101”). The Preliminary Economic Assessment on the Mt. Todd gold project has been filed and is available on SEDAR at www.sedar.com and also on Vista's website under the Properties/Mt. Todd tabs.
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 produce gold at an estimated average cash cost of $453 per ounce and a pre-tax internal rate of return 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.
Following a review of the results of the PEA, Vista's Board approved the expenditure of funds for the preparation of a Preliminary Feasibility Study (“PFS”) at the Mt. Todd gold project. Vista has awarded a contract to Tetra Tech Inc. to manage and prepare the PFS in accordance with NI 43-101. The contract for the process and infrastructure engineering portion of the PFS has been awarded to Ausenco Limited of Queensland, Australia. In addition, Resource Development inc. of Denver, Colorado, will continue to supervise metallurgical testing and act as metallurgical consultant.
Vista is currently developing plans to undertake development drilling in the Batman pit area to convert inferred resources to indicated resources or measured resources and to undertake exploration drilling on the mining and exploration licenses at Mt. Todd.
Yellow Pine, Idaho -
Located in Valley County, Idaho, this project contains measured and indicated gold resources of 2.2 million ounces and inferred gold resources of 819,000 ounces. The property has excellent potential for expansion laterally and at depth. A preliminary economic assessment completed in December 2006 projects a 10-year mine life (8,600 tpd plant), producing 190,000 ounces of gold a year. Initial capital costs at Yellow Pine were estimated at $150 million. Once in production, the net cash flow to Vista is estimated at $266 million (based on a gold price of $630 an ounce). Currently, Vista is developing a plan to begin collecting baseline environmental data for permitting.
Guadalupe de los Reyes, Mexico -
This project, located in the Sierra Madre Range, contains measured and indicated resources of 485,000 gold ounces and inferred resources of 316,000 gold ounces with significant silver credits. In January 2008, Vista completed an acquisition that consolidated all of the known gold and silver resources in the district under Vista's ownership.
Long Valley, California -
Long Valley is an epithermal deposit located 30 miles northwest of Bishop in Mono County, California. Measured and indicated gold resources stand at 1.2 million ounces plus 0.6 million inferred gold ounces. Some 880,000 gold ounces are in near-surface oxide material. There are numerous exploration targets to expand the resource base. Vista completed a Preliminary Assessment of the project in January 2008 which indicated the project could be viable as a heap-leach operation at gold prices above $550 per ounce.
Awak Mas, Indonesia -
The Awak Mas gold deposit located in Sulawesi, Indonesia, contains measured and indicated gold resources of 1.7 million ounces and inferred gold resources of 539,000 ounces. Vista acquired the project for $1.5 million in May 2005. The project has undergone significant exploration, drilling and feasibility studies by major companies from 1991 through 1997 with over $40 million spent on the property. In late 2006, Vista completed a drilling program, a new resource estimate in June 2007 and a Preliminary Assessment in January 2008.
