Vista Gold Corp. Announces Receipt of the $7 Million Second Instalment Payment Under Wheaton Precious Metals Royalty

Rhea-AI Summary

Vista Gold Corp. announces receipt of $7 million second instalment payment under royalty agreement with Wheaton Precious Metals for Mt Todd gold project in Australia. The $20 million royalty will be used to advance the project and for general corporate purposes.

Insights

Market Research Analyst

The announcement by Vista Gold Corp. regarding the receipt of the second instalment payment from Wheaton Precious Metals under the royalty agreement is a significant financial event for the company. The financial injection of $7 million is part of a larger $20 million royalty agreement which is earmarked for the advancement of the Mt Todd gold project and general corporate purposes. This capital inflow is likely to enhance Vista's project development capabilities and may positively influence investor confidence in the company's ability to progress its operations.

From a market research perspective, the fulfilment of conditions precedent, such as government approvals and registration of security interests, signals a robust administrative and legal framework within Vista, which can be reassuring for stakeholders. Additionally, the stipulation for a designated drilling program as a condition for the final instalment suggests a forward-looking growth strategy that could potentially yield positive exploration results, thereby impacting future valuation and stock performance.

Financial Analyst

As a financial analyst, examining the implications of Vista's royalty agreement with Wheaton, it is important to consider the liquidity benefits and the associated financial commitments. The $7 million received contributes to Vista's liquidity, which can be critical for ongoing project expenses and mitigating operational risks. However, it's also important to scrutinize the royalty agreement's terms, as they can have long-term financial implications for revenue sharing and control over the project's resources.

The royalty agreement with Wheaton is a non-dilutive financing option, which is beneficial for existing shareholders as it avoids the dilution of their equity stake. Nevertheless, the impact on future cash flows once the project is operational must be evaluated, as royalty payments could reduce the net income attributable to Vista shareholders over the life of the mine.

Mining Industry Expert

In the context of the mining industry, the Mt Todd gold project's advancement through the royalty agreement with Wheaton is notable. Royalty financing is a common method to raise capital in the mining sector, allowing the mining company to fund exploration and development without incurring debt or issuing new equity. The receipt of the second instalment indicates that Vista Gold Corp. is meeting its developmental milestones and maintaining good standing with regulatory bodies, such as the Australian government's Foreign Investment Review Board.

Investors and analysts often view the progression of mining projects through such developmental phases as positive indicators of a company's potential for future production and revenue. The conditions attached to the royalty agreement, specifically the commencement of a designated drilling program, are indicative of Vista's commitment to resource expansion and operational advancement, which are critical factors for long-term success in the mining industry.

DENVER--(BUSINESS WIRE)-- Vista Gold Corp. (NYSE American and TSX: VGZ) (“Vista” or the “Company”) is pleased to announce that its wholly-owned subsidiary, Vista Gold Australia Pty. Ltd. (“Vista Australia”), has received the second instalment payment of $7 million (“Second Instalment”) under the royalty agreement between Vista Australia and Wheaton Precious Metals (Cayman) Co., an affiliate of Wheaton Precious Metals Corp. (“Wheaton”), dated December 13, 2023 (“Royalty Agreement”), in relation to the Company’s Mt Todd gold project (“Mt Todd” or the “Project”) located in Northern Territory, Australia. All dollar amounts in this news release are in US dollars.

The Second Instalment is part of the $20 million royalty with Wheaton, which will be used to advance Mt Todd and for general corporate purposes. Receipt of the Second Instalment followed satisfaction of certain conditions precedent to this instalment, which included approval from the Australian government Foreign Investment Review Board, registration of security interests pursuant to a general security deed between Vista Australia and Wheaton, providing for, among other things, a mortgage on the mineral tenements that comprise Mt Todd, and satisfaction of other customary conditions, representations and warranties. The final instalment of $10 million is to be received six months from the date of the first instalment provided Vista Australia has commenced a designated drilling program at Mt Todd and satisfied other customary conditions, representations and warranties. The principal terms of the Royalty Agreement are as described in the Company’s news release dated December 14, 2023. See News Release.

About Vista Gold Corp.

Vista is a gold project developer. The Company’s flagship asset is Mt Todd, located in the mining friendly jurisdiction of Northern Territory, Australia. Situated approximately 250 km southeast of Darwin, Mt Todd is one of the largest development stage opportunities in Australia and demonstrates compelling economics. All major environmental and operating permits necessary to initiate development of Mt Todd are in place.

Mt Todd benefits from its location in a leading mining jurisdiction and demonstrates multiple opportunities to add value through growth of mineral resources, staged development, and other de-risking activities.

For further information about Vista or Mt Todd, please contact Pamela Solly, Vice President of Investor Relations, at (720) 981-1185 or visit the Company’s website at www.vistagold.com.

Forward-Looking Statements

This news 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 news release that address activities, events or developments that we expect or anticipate will or may occur in the future, including such things as the final instalment of $10 million is to be received six months from the date of the first instalment providing Vista Australia has commenced a designated drilling program at Mt Todd and satisfied other customary conditions, representations, and warranties; our belief that Mt Todd is one of the largest development stage opportunities in Australia and demonstrates compelling economics; our belief that Mt Todd benefits from its location in a leading mining jurisdiction; and our belief that Mt Todd demonstrates multiple opportunities to add value through growth of mineral resources, staged development, and other de-risking activities 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 news release include the following: 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; political and social support of the mining industry in Australia; our experience and knowledge of the Australian mining industry and our expectations of economic conditions and the price of gold. When used in this news 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 2023, subsequent Quarterly Reports on Form 10-Q, 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240227467925/en/

Pamela Solly

Vice President of Investor Relations

(720) 981-1185

Source: Vista Gold Corp.

FAQ

What is the ticker symbol for Vista Gold Corp.?

The ticker symbol for Vista Gold Corp. is VGZ.

What is the purpose of the $7 million second instalment payment received by Vista Gold Australia Pty. Ltd.?

The $7 million second instalment payment is part of a $20 million royalty agreement with Wheaton Precious Metals for the Mt Todd gold project in Australia. It will be used to advance the project and for general corporate purposes.

What are the conditions precedent that Vista Australia had to satisfy to receive the second instalment payment?

Vista Australia had to satisfy conditions such as approval from the Australian government Foreign Investment Review Board, registration of security interests, including a mortgage on the mineral tenements at Mt Todd, and other customary conditions, representations, and warranties.

When is the final instalment of $10 million expected to be received?

The final instalment of $10 million is expected to be received six months from the date of the first instalment, provided Vista Australia has commenced a designated drilling program at Mt Todd and satisfied other customary conditions, representations, and warranties.

What is the purpose of the $20 million royalty with Wheaton Precious Metals?

The $20 million royalty with Wheaton Precious Metals will be used to advance the Mt Todd gold project in Australia and for general corporate purposes.