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Vista Gold Corp.  TICKER: VGZ AMEX-TSX DESCRIPTION: Vista Gold Corp. acquires gold projects with defined resources for future development. With twelve projects containing 14.8 million ounces of gold resources, Vista’s shares act like an unexpiring call option on gold. Watch Wall Street Reporter interview with Vista Gold CEO WEBSITE: http://www.vistagold.com The information below is based on the most recent information we have received from analysts and the companies participating in The Gold Report. We encourage you to visit the company's web site for updates. The foremost and core project for Vista right now is to advance the Paredones Amarillos project, including the preparation of a definitive feasibility study and the purchase of long delivery equipment items, so that construction can begin during the second half of 2008. In August 2002, Vista completed the acquisition of this project in Baja California Sur, Mexico, from Viceroy Resource for $2.3MM. This is planned to be an open pit mine, and Vista has purchased a used mill with plant capacity of 11,000 tpd (tonnes per day). The M&I (Measured and Indicated) gold resources for this project is 1.9MM ounces, with expected average annual production of 114K oz per year. The mine life should be over 12 years. From the press release in February, the pre-production capital need is about $169MM, and operating cost is estimated to be $419/oz. In order to see the value of this project, I put together a quick spreadsheet with the following assumptions: today's $850/oz gold, $169M capital expenditure and $419/oz operating cost indicated above, discount rate at 10%, and only 12 years of mine life. The net cashflow will be $431/oz, or with 114K production per year, $49M per year for the next 12 years. Based on my NPV model, it gives me a value of $165MM, compared to the current market cap of Vista at around $120M. It seems that just this project alone would support the market cap of Vista. Vista has cash reserves of $28M now, but with the pre-production capital needs, managers are currently looking at various options of project financing to best serve the interest of shareholders. If everything goes smoothly, Vista is looking to start production toward the end of 2009. The second major project for Vista is the Mt. Todd project in Australia. Most recently, the M&I reserves have increased 65% to 2.9MM ounces of gold, with additional inferred 1.5MM ounces. ... Disclosure: I am long Vista Gold since September, 2007, and I believe it provides a good opportunity for a diversified mining portfolio for long term capital gain." (8/7/08) - Thomas Tan, Seeking Alpha
- Motley Fool
- The Gold Report Interview with Alfred Wirth
There has been some speculation of a buyout coming and certainly there are investors accumulating shares with some belief in a breakout... Vista Gold has recently changed its strategy, and is now focused on moving to production...With gold prices nearing $1,000 per ounce, it is becoming economically viable for smaller companies to consider producing. I am not sure what is moving Vista’s share price higher, but quiet accumulation of this type often precedes a breakout." (2/7/08) - Jason Hamlin, Seeking Alpha
In the preliminary assessment, Gustavson considered four different production scenarios, three cases at a production rate of 2.0 million tonnes of ore per year and one case at 3.5 million tonnes of ore per year. All four cases assumed contract mining and a base case gold price of US$625 per ounce. Estimates of projected total gold production ranged from 600,900 ounces to 1,040,000 ounces, with estimated project lives ranging from 7 to 15 years depending on production rate and the ultimate pit shape considered for the scenario. Overall gold recovery is estimated at 90.5%... Fred Earnest, Vista's President and COO, commented, "The preliminary assessment has identified areas of potential improvement which we will investigate as we proceed into the feasibility study period of the Contract of Work. We are optimistic that more detailed studies could potentially enhance the apparent economics of the project. We control a large, potentially prospective land package and we believe the discovery of additional gold will also enhance the project." (1/17/08) - PRNewswire
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