Vista Gold Corp. to Evaluate Staged Development Strategy for Mt Todd

Rhea-AI Summary

Vista Gold Corp. (VGZ) announces plans to initiate a program at the Mt Todd gold project aimed at increasing near surface gold resources and evaluating a staged development strategy. The 2023 Scoping Study indicated a nominal 5 million tonne per year project with initial capital expenditure of less than US$350 million and initial production of 150,000 – 200,000 ounces of gold per year. The company plans to commence a targeted drilling program of 6,000 – 7,000 meters to upgrade inferred gold resources and further define uncategorized mineralization. Vista expects to undertake additional technical studies to advance the staged development strategy.

Insights

Mining Industry Analyst

Vista Gold Corp.'s announcement of a new drilling program aimed at increasing near-surface gold resources at the Mt Todd gold project is a significant development for the company and its stakeholders. The shift towards a staged development strategy, which requires less initial capital, is a prudent move in the current economic climate where cost efficiency and risk management are paramount. The potential to start with a 5 million tonne per year project at a cost below US$350 million is competitive, especially considering the initial production estimates of 150,000 – 200,000 ounces of gold annually at low all-in sustaining costs.

This strategic pivot could make Vista Gold Corp. more attractive to potential partners or acquirers as it aims to maximize shareholder value while reducing development risk. The ability to fund future expansions through project cashflows rather than external financing could enhance the project's overall financial viability and reduce the dilution risk for existing shareholders. The focus on upgrading inferred resources to measured and indicated categories within 300 meters of the surface also indicates a targeted approach to resource development that could improve the project's economics by enhancing the mine plan and extending the mine life.

Resource Geologist

The technical aspects of Vista Gold Corp.'s planned drilling program are of particular interest. Upgrading inferred gold resources to the measured and indicated categories can substantially increase the confidence in the project's resource estimates. This is critical for investors as it directly impacts the perceived value and potential return on investment. The targeted drilling of 6,000 – 7,000 meters along the strike of the Batman deposit is a strategic move, as it focuses on an area with existing inferred resources and uncategorized mineralization, which suggests a high potential for resource expansion.

However, it is important to note that the classification of resources is subject to rigorous criteria set by industry standards such as the Canadian National Instrument 43-101 and there is no guarantee that the drilling results will lead to a successful upgrade of resource categories. The uncertainty around whether the drilling will result in the inferred gold resources being upgraded or the uncategorized mineralization being delineated as mineral resources is a risk that stakeholders must consider.

Financial Analyst

The financial implications of Vista Gold Corp.'s announcement are multifaceted. On one hand, the company's decision to pursue a smaller-scale project initially could lead to a reduction in both capital expenditure and development risk. This staged development approach aligns with a conservative capital management strategy, which can be particularly appealing to investors in a volatile gold market. Furthermore, the projected all-in sustaining costs suggest that the project could be in the lower quartile of the cost curve, enhancing its resilience to gold price fluctuations and potentially delivering higher margins.

On the other hand, investors must weigh the costs of the new drilling program and subsequent technical studies against the potential for resource expansion and the enhancement of the project's economics. The strategic decision to seek a transaction that maximizes shareholder value suggests that the company is open to partnerships or sales, which could lead to significant changes in the company's stock valuation. Investors will be closely monitoring the results of the drilling program and any subsequent technical studies for indications of the project's viability and the likelihood of a lucrative transaction.

DENVER--(BUSINESS WIRE)-- Vista Gold Corp. (NYSE American and TSX: VGZ) (“Vista” or the “Company”) is pleased to announce plans to initiate a program at the Company’s 100%-owned Mt Todd gold project (“Mt Todd” or “Project”) directed at increasing near surface gold resources and further evaluating a staged development strategy. This program will build upon the extensive body of data underlying the Company’s 2022 feasibility study (the “2022 Feasibility Study”), its 2023 internal scoping-level study (the “2023 Scoping Study”), and previous drilling in the area immediately adjacent to the Batman deposit.

Staged development offers the distinct advantage of requiring substantially lower initial capital while retaining the longer-term potential to achieve world-class production levels. The 2023 Scoping Study indicated that a nominal 5 million tonne per year project could be designed and constructed with an initial capital expenditure of less than US$350 million, utilizing contract mining, and would achieve initial production in the range of 150,000 – 200,000 ounces of gold per year at very competitive all-in sustaining costs. For information on the 2023 Scoping Study, please see the Company’s news release dated March 1, 2023 available on SEDAR+.

Frederick Earnest, President and CEO of Vista Gold Corp., stated, “The internal scoping-level study completed last year confirmed to us that a smaller-scale project is technically viable and economically attractive. We see significant value in advancing the evaluation of this alternative development strategy. A smaller initial operation followed by staged development offers opportunities for substantially reduced initial capital, lower development risk and future growth supported by project cashflows. We believe Mt Todd is one of the largest development stage opportunities in Australia and continues to demonstrate compelling economics. The program we are announcing today is expected to add significant value and further de-risk Mt Todd while we continue to pursue our strategy to seek an appropriate transaction that maximizes shareholder value and reduces development risk.”

Vista plans to commence a targeted drilling program of 6,000 – 7,000 meters. The focus will be the area immediately adjacent to the Batman deposit along the strike of the Batman main core zone and extending approximately 400 meters north of the existing Batman pit. This area includes inferred gold resources which were classified as waste in the 2022 Feasibility Study and areas where there has been insufficient drilling to define a mineral resource. The objective of this drilling program is to upgrade the inferred gold resources to the measured and indicated resource categories within 300 meters of the surface at grades consistent with the current Batman deposit average and to further define the uncategorized mineralization in this area. It is uncertain if further drilling will result in the inferred gold resources being upgraded to the measured and indicated resource categories or that uncategorized mineralization target areas will be delineated as mineral resources.

Mr. Earnest added, “We expect that adding shallow gold resources adjacent to the pit would add substantial value to Mt Todd by enhancing the mine plan in earlier years, extending the life of mine and providing additional ore to support staged expansion.”

As drilling progresses, Vista expects to undertake additional technical studies to advance the staged development strategy. Most technical information is already available from the 2022 Feasibility Study; therefore, new studies are expected to be limited to confirming the mineralogy and metallurgical characteristics of new gold resources, conducting tradeoff studies covering a range of staged expansion alternatives, and developing layouts for the processing plant and other facilities.

For information on the 2022 Feasibility Study, please see the technical report summary entitled “S-K 1300 Technical Report Summary - Mt Todd Gold Project - 50,000 tpd Feasibility Study – Northern Territory, Australia” with an effective date of December 31, 2021, an issue date of February 9, 2022 and an amended date of February 7, 2023 available on EDGAR or the technical report entitled “NI 43-101 Technical Report - Mt Todd Gold Project - 50,000 tpd Feasibility Study – Northern Territory, Australia” with an effective date of December 31, 2021 and an issue date of February 9, 2022 available on SEDAR+.

John Rozelle, a “qualified person” as defined by Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects, has verified the data underlying the information contained in and has approved this press 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 among the largest development stage opportunities in Australia and continues to demonstrate 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 value adding and 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 this program will build upon the extensive body of data underlying the Company’s 2022 Feasibility Study, its 2023 Scoping Study, and previous drilling in the area immediately adjacent to the Batman deposit; our belief that staged development offers the distinct advantage of requiring substantially lower initial capital while retaining the longer-term potential to achieve world-class production levels; our belief that Vista’s 2023 Scoping Study indicated that a nominal 5 million tonne per year project could be designed and constructed with an initial capital expenditure of less than US$350 million, utilizing contract mining, and would achieve initial production in the range of 150,000 – 200,000 ounces of gold per year at very competitive all-in sustaining costs; our belief that the 2023 Scoping Study confirmed to us that a smaller-scale project is technically viable and economically attractive; our belief that there is significant value in advancing the evaluation of this alternative development strategy; our belief that a smaller initial operation followed by staged development offers opportunities for substantially reduced initial capital, lower development risk and future growth supported by project cashflows; our belief that Mt Todd is one of the largest development stage opportunities in Australia and continues to demonstrate compelling economics; our belief that the program we are announcing today is expected to add significant value and further de-risk Mt Todd while we continue to pursue our strategy to seek an appropriate transaction that maximizes shareholder value and reduces development risk; our plans to commence a targeted drilling program of 6,000 – 7,000 meters, focusing in the area immediately adjacent to the Batman deposit along the strike of the Batman main core zone and approximately 400 meters north of the existing Batman pit; our belief that adding shallow gold resources adjacent to the pit will add significant value to Mt Todd by enhancing the mine plan in earlier years, extending the life of mine and providing additional ore to support subsequent staged expansion; we expect, as drilling progresses, that we will undertake additional technical studies to advance the staged development strategy; our belief that most technical information is already available from the 2022 feasibility study and therefore new studies are expected to be limited to confirming the mineralogy and metallurgical characteristics of new gold resources, conducting tradeoff studies covering a range of staged expansion alternatives, and layouts for the processing plant and other facilities; our belief that all major environmental and operating permits necessary to initiate development of Mt Todd are in place; 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 value adding and 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/20240105595691/en/

Vista Gold Corp.

Pamela Solly, Vice President of Investor Relations

720-981-1185

Source: Vista Gold Corp.

FAQ

What are Vista Gold Corp.'s (VGZ) plans for the Mt Todd gold project?

Vista Gold Corp. (VGZ) plans to initiate a program aimed at increasing near surface gold resources and evaluating a staged development strategy at the Mt Todd gold project.

What were the findings of the 2023 Scoping Study for Vista Gold Corp. (VGZ)?

The 2023 Scoping Study indicated a nominal 5 million tonne per year project with initial capital expenditure of less than US$350 million and initial production of 150,000 – 200,000 ounces of gold per year.

What is the goal of Vista Gold Corp.'s (VGZ) targeted drilling program?

The goal of the targeted drilling program is to upgrade inferred gold resources to measured and indicated resource categories and further define uncategorized mineralization at the Mt Todd gold project.

Who is overseeing the data verification for Vista Gold Corp.'s (VGZ) press release?

John Rozelle, a qualified person as defined by Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects, has verified the data underlying the information contained in and has approved this press release.