Vista Gold Corp. Announces Second Quarter 2024 Financial Results

Rhea-AI Summary

Vista Gold Corp. (NYSE American and TSX: VGZ) announced its Q2 2024 financial results, reporting net income of $15.6 million and cash totaling $20.2 million. The company received the final $10 million instalment payment under a recent royalty agreement, completing the total $20 million payment. Vista completed Phase 1 of the Mt Todd drilling program and started Phase 2, with results expected in August. The Northern Territory, Australia passed legislation enacting the Mineral Royalties Act 2024, reducing royalties for Mt Todd from nearly 7% to 3.5%, improving project economics. Vista reported a significant increase in net income compared to Q2 2023, largely due to a $16.9 million gain from the royalty agreement payment.

Positive

• Net income of $15.6 million in Q2 2024, compared to a net loss of $1.5 million in Q2 2023
• Cash position increased to $20.2 million from $6.1 million at the end of 2023
• Received final $10 million instalment of $20 million royalty agreement
• New Mineral Royalties Act 2024 reduces royalties for Mt Todd from ~7% to 3.5%, improving project economics
• Completed Phase 1 of Mt Todd drilling program and commenced Phase 2

Negative

• None.

Insights

Financial Analyst

Vista Gold's Q2 2024 financial results reveal a significant turnaround, with net income of $15.6 million compared to a net loss in the same quarter last year. This positive shift is primarily attributed to a $16.9 million gain from the final installment of a royalty agreement. The company's cash position has strengthened substantially, increasing from $6.1 million at the end of 2023 to $20.2 million as of June 30, 2024.

The completion of the $20 million royalty agreement payments is a important development, providing Vista with a robust financial foundation. This influx of cash offers the company flexibility for future operations and development, particularly at its flagship Mt Todd project.

The recent legislative change in the Northern Territory, reducing the royalty rate from nearly 7% to 3.5%, is a significant positive for Vista. Based on their 2024 feasibility study at an $1,800 gold price, this could potentially save the company $765 million in royalty payments over the life of the mine. This improvement in project economics could accelerate returns to shareholders and enhance the overall viability of the Mt Todd project.

However, investors should note that the company is still in the exploration and development phase, with no current revenue from operations. The ongoing drilling program and trade-off studies for a smaller-scale project at Mt Todd will be critical in determining the company's future direction and potential for profitability.

Mining Industry Expert

Vista Gold's focus on the Mt Todd project in Australia's Northern Territory is showing promising developments. The completion of Phase 1 drilling and commencement of Phase 2 indicates ongoing progress in resource definition and potential expansion. The anticipation of Phase 1 results in August could provide valuable insights into the project's geological potential.

The company's strategic shift towards evaluating an initially smaller-scale project at Mt Todd is noteworthy. This approach could potentially lower initial capital requirements and accelerate the path to production, which is important in the current market environment of rising gold prices. It's a prudent strategy that balances resource optimization with financial pragmatism.

The recent legislative change reducing the royalty rate is a game-changer for Mt Todd's economics. A nearly 50% reduction in payable royalties significantly enhances the project's financial viability and competitiveness within the global gold mining landscape. This could potentially attract more investor interest and improve the project's chances of securing financing for development.

However, it's important to note that the mining industry faces ongoing challenges, including rising operational costs, environmental regulations and social license considerations. Vista's mention of executing health, safety and environmental initiatives is crucial, as these factors increasingly influence project success and company valuation in the mining sector.

The current strong gold price environment provides a favorable backdrop for Vista's activities. If sustained, it could enhance the economic attractiveness of Mt Todd and potentially accelerate development timelines. However, investors should remain aware of the inherent volatility in commodity markets and its potential impact on project economics.

DENVER--(BUSINESS WIRE)-- Vista Gold Corp. (NYSE American and TSX: VGZ) (“Vista” or the “Company”) today announced its unaudited financial results for the quarter ended June 30, 2024, with net income of $15.6 million and cash totaling $20.2 million. All dollar amounts in this press release are in U.S. dollars.

Frederick H. Earnest, President and CEO of Vista, said, “During the second quarter, we received the final $10 million instalment payment under the recent royalty agreement. All payments under the royalty agreement totaling $20 million have now been received, which significantly strengthens our balance sheet. We completed Phase 1 of the Mt Todd drilling program and commenced Phase 2. We expect to announce results from Phase 1 in August.”

Mr. Earnest concluded, “We have commenced trade-off studies and preliminary evaluations related to an initially smaller scale project at Mt Todd. We will continue to prioritize the efficient use of our cash while we seek opportunities to create long-term value for our shareholders in the current climate of a strong and rising gold price, and execute our health, safety, and environmental initiatives.”

In June, the Company also announced that the Northern Territory, Australia (the “NT”) passed legislation to enact the Mineral Royalties Act 2024 effective July 1, 2024. The 3.5% royalty to be applied to production from Mt Todd represents a nearly 50% reduction in payable royalties. This results in improved project economics and earlier shareholder returns compared to our 2024 updated feasibility study, which included NT royalties equivalent to nearly a 7% ad valorum rate. Under the previous net profits royalty regime, our base case economic analysis at an $1,800 gold price estimated the payment of $765 million in NT royalties over the life of the mine.

Summary of Financial Results

Vista reported consolidated net income of $15.6 million, or $0.13 per basic common share, for the quarter ended June 30, 2024, compared to a consolidated net loss of $1.5 million, or $0.01 per basic common share for the quarter ended June 30, 2023. Net income for the current quarter includes a recognized gain of $16.9 million upon receipt of the final instalment under the royalty agreement.

Cash and cash equivalents totaled $20.2 million at June 30, 2024, compared to $6.1 million at December 31, 2023. The Company continued to have no debt.

Management Conference Call

Management’s conference call to review financial results for the quarter ended June 30, 2024, and to discuss corporate and project activities is scheduled for July 30, 2024, at 2:00 p.m. MDT (4:00 p.m. EDT).

Participant Toll Free: +1 (800) 717-1738
Participant International: +1 (289) 514-5100
Conference ID: 85480

This call will be archived and available at www.vistagold.com after July 30, 2024. An audio replay will also be available through August 15, 2024, by calling toll-free in North America +1 (888) 660-6264 or +1 (289) 819-1325 using passcode 85480#.

If you are unable to access the audio or phone-in on the day of the conference call, please email your questions to ir@vistagold.com.

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 offers opportunities to add value through growth of mineral reserves, alternative development strategies, 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 our belief that the final $10 million instalment payment under the recent royalty agreement significantly strengthens our balance sheet; our belief that results from Phase 1 of the drilling program are expected to be announced in August; our belief that we will continue to prioritize the efficient use of our cash while we seek opportunities to create long-term value for shareholders in the current climate of a strong and rising gold price, and execute our health, safety, and environmental initiatives; our belief that the new 3.5% royalty to be applied to production from Mt Todd represents a nearly 50% reduction in payable royalties and results in improved project economics and earlier shareholder returns compared to our 2024 updated feasibility study, which included NT royalties equivalent to nearly a 7% ad valorum rate; our belief that under the previous net profits royalty regime, our base case economic analysis at an $1,800 gold price estimated the payment of $765 million in NT royalties over the life of the mine; statements regarding Mt Todd being one of the largest development stage opportunities in Australia and demonstrating compelling economics; our belief that Mt Todd benefits from its location in a leading mining jurisdiction; and our belief that Mt Todd offers opportunities to add value through growth of mineral reserves, alternative development strategies, 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 March 2024, 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/20240729761534/en/

Pamela Solly

Vice President of Investor Relations

(720) 981-1185

www.vistagold.com

Source: Vista Gold Corp.

FAQ

What was Vista Gold's net income for Q2 2024?

Vista Gold Corp. (VGZ) reported a net income of $15.6 million for the second quarter of 2024.

How much cash does Vista Gold have as of June 30, 2024?

Vista Gold Corp. (VGZ) reported cash and cash equivalents totaling $20.2 million as of June 30, 2024.

What is the new royalty rate for the Mt Todd project under the Mineral Royalties Act 2024?

The new royalty rate for the Mt Todd project is 3.5% under the Mineral Royalties Act 2024, which represents a nearly 50% reduction from the previous rate.

When will Vista Gold (VGZ) announce results from Phase 1 of the Mt Todd drilling program?

Vista Gold (VGZ) expects to announce results from Phase 1 of the Mt Todd drilling program in August 2024.