Australian Gold Developer Cuts Capex 60% with Feasibility Due Mid-2025

• Vista Gold Corp owns the Mt Todd gold project in Australia, one of the largest undeveloped gold projects globally with over 9 million ounces in total resources.
• The company is shifting strategy from a large-scale operation (50,000 tons/day, $1 billion capex) to a smaller, more fundable project (15,000 tons/day, target under $400 million capex).
• Vista Gold expects to complete a feasibility study for the smaller-scale project by mid-2025, with all necessary permits already in place.
• The company ended 2024 with almost $17 million in cash, providing a two-year runway without needing additional funding.
• The project's all-in sustaining costs are estimated at $960/oz for the large-scale operation, potentially $1,300/oz for the smaller operation, offering significant margins at current gold prices.

Vista Gold Corp, a Canadian mining company, owns the Mt Todd gold project in Australia, which stands as one of the largest undeveloped gold projects globally. With over 9 million ounces in total resources and more than 8 million ounces in measured and indicated categories, Mt Todd represents a significant opportunity in the gold mining sector. In a recent interview at the PDAC convention, Fred Earnest, President and CEO of Vista Gold, discussed the company's strategic shift toward developing Mt Todd at a smaller scale than previously planned.

"For years we talked about Mt Todd as this big project - 50,000 tons a day, 17.5 million tons a year, producing almost 500,000 ounces of gold per year over the first half of the life of the project. But that comes with a price tag, and even though we designed a project that was very efficient, a billion dollars US is still a big check to write."

The New Approach: Smaller, Faster, More Fundable

Vista Gold's revised strategy focuses on developing Mt Todd at approximately 15,000 tons per day, a scale that Earnest describes as "a very normal size gold mine." This smaller operation would produce between 150,000 to 200,000 ounces of gold annually over an extended period. The company launched a feasibility study for this revised approach in December 2024, with completion expected by mid-2025.

The most significant advantage of the smaller-scale approach is the substantial reduction in capital expenditure requirements. Earnest indicated that they are targeting a 60% reduction in capex, aiming for a total investment of around $400 million or less. This reduced capital requirement brings the project within funding reach of mid-tier mining companies and potentially even Vista Gold itself.

Project Readiness and Permitting Status

A key strength of the Mt Todd project is its advanced permitting status. The company has secured all necessary environmental licenses at both territorial and federal levels in Australia, along with mine operating permits and water use permits. This complete permitting package represents a significant de-risking of the project compared to many development-stage mining projects globally.

"Literally, I think we could write a letter and we could be in construction in two or three months' time.”

This advanced permitting position gives Vista Gold remarkable flexibility in determining its path forward, whether through partnership, outright sale, or self-development.

Financial Position and Funding Options

Vista Gold ended 2024 with approximately $17 million in cash, providing a runway of about two years at current spending levels. This financial position allows the company to complete the feasibility study without requiring additional funding. The company's strong cash position was bolstered by a royalty deal with Wheaton Precious Metals completed in 2023.

For the eventual project development, Vista Gold is exploring multiple funding avenues. Given that Mt Todd is located in Australia, the company has focused on Australian debt sources, including the Northern Australia Infrastructure Fund (NAIF) and banks like Macquarie. For equity financing, the company expects to leverage its North American listings, although Earnest acknowledged that an ASX listing might be considered in the future.

Interview with CEO Frederick H. Earnest

Project Economics and Gold Price Environment

In the current gold price environment, Mt Todd presents compelling economics. The large-scale version of the project had projected all-in sustaining costs (AISC) of approximately $960 per ounce. While the smaller-scale version may have slightly higher costs, Earnest estimates they would be around $1,300 per ounce, which remains competitive with global industry averages.

With gold prices significantly above these cost projections, Mt Todd offers substantial margin potential. The project's economic robustness is further enhanced by its location in Australia, a jurisdiction known for its stable mining regulations and export-driven economy.

Feasibility Study Timeline and Next Steps

The feasibility study for the smaller-scale approach is progressing well, with completion targeted for mid-2025. A new resource assessment incorporating drilling results from recent years will be completed within weeks, and process engineering work to select appropriate equipment for the smaller scale is already underway.

The final six weeks of the study, beginning in mid-May, will be crucial as cost estimates and economic models are finalized. Following the study's completion, Vista Gold plans an intensive investor outreach program to communicate the project's enhanced economics and development potential under the revised approach.

The Investment Thesis for Vista Gold

• Substantial Gold Resource: Mt Todd contains over 9 million ounces of gold in total resources, positioning it among the top 30 gold projects globally.
• Fully Permitted Project: All environmental licenses and operating permits are in place, dramatically reducing development timeline and regulatory risks.
• Strategic Pivot to Enhance Economics: The shift to a smaller-scale operation (15,000 tons/day) targets a 60% reduction in capital requirements (under $400 million) while maintaining healthy production of 150,000-200,000 ounces annually.
• Strong Financial Position: With $17 million in cash, Vista Gold has approximately two years of runway without requiring additional funding, allowing completion of the feasibility study from existing resources.
• Attractive Economics: Even at the smaller scale, projected all-in sustaining costs of approximately $1,300/oz provide significant margins at current gold prices.
• Multiple Strategic Options: The fully-permitted status and revised economics provide flexibility for development through partnership, outright sale, or self-development.
• Favourable Jurisdiction: Australia offers a stable mining regulatory environment with established infrastructure and mining services.

Gold Sector Analysis:

The gold mining sector is experiencing a notable dichotomy between rising gold prices and a dearth of new, large-scale development projects in safe jurisdictions. As Fred Earnest noted in the interview, the industry faces a critical challenge: 

"We're not discovering new mines, we're not discovering new huge deposits, and so at some point, the industry can't sustain itself as an industry unless we begin to develop new projects."

This observation takes on added significance given the current M&A landscape, which has primarily focused on producer-to-producer transactions seeking immediate cash flow rather than developing new resources. This trend creates both challenges and opportunities for companies like Vista Gold with large, advanced development projects.

The conversation highlighted that there are surprisingly few advanced development projects with resources exceeding 5 million ounces, particularly in favorable jurisdictions like Canada and Australia. This scarcity enhances the strategic value of projects like Mt Todd, which combines significant scale (over 9 million ounces) with full permitting in a mining-friendly jurisdiction.

Vista Gold's strategic pivot to a smaller initial development approach aligns with the industry's increasing focus on capital efficiency and manageable development risks. By targeting a substantially reduced capital requirement of under $400 million (versus the previous $1 billion), Vista positions Mt Todd as an attractive opportunity for mid-tier producers seeking growth through acquisition or partnership.

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