Vista Gold Advances Mt Todd Gold Project Through Staged Development

• Vista Gold owns the Mt Todd gold project in Northern Territory, Australia with 7 million gold ounce reserve.
• The company is considering developing the project in stages, starting with a smaller scale 150-200k oz/yr operation and reduce initial capex to under $350M.
• Vista Gold aims to minimize shareholder dilution and is exploring financing options including strategic partnerships.
• A drilling program is underway to define higher-grade, lower strip ratio ore that could improve project economics in the early years.
• The company is seeing board refreshment and aims to attract new institutional investors.

About Vista Gold

Vista Minerals is a gold project developer focused on advancing its flagship asset, the Mt Todd project, located in the mining-friendly jurisdiction of the Northern Territory, Australia. The company's primary goal is to bring Mt Todd into production, leveraging its significant potential and compelling economics.

Mt Todd is situated approximately 250 km southeast of Darwin and stands out as one of the largest development-stage opportunities in Australia. Vista Minerals has successfully secured all major environmental and operating permits necessary to initiate the development of the project, demonstrating its commitment to responsible and compliant operations.

The company recognizes the advantages of operating in a leading mining jurisdiction like the Northern Territory, which offers a stable political environment, well-established infrastructure, and access to a skilled workforce. These factors contribute to the overall attractiveness of the Mt Todd project and its potential for success.

Vista Minerals is actively exploring opportunities to enhance the value of the Mt Todd project through various strategies, including the growth of mineral reserves, the evaluation of alternative development approaches, and the implementation of de-risking activities. By pursuing these initiatives, the company aims to maximize the project's potential and create long-term value for its stakeholders.

With a strong focus on responsible development, a promising flagship asset, and a favorable operating environment, Vista Minerals is well-positioned to become a significant player in the Australian gold mining industry.

Interview with President & CEO, Frederick H. Earnest

Staged Development Approach

Mt Todd is a substantial gold asset containing 7 million ounces of reserves. A 2021 feasibility study outlined operation to produce nearly 500,000 ounces of gold per year. However, with a large initial capex of around $1 billion, the project is realistically only financeable by major gold producers. To expand its options and maintain control of its destiny, Vista is now looking at alternative development scenarios. Central to this is a staged approach, starting at a smaller production scale of 150-200k ounces per year.

"When you step back and you look at it and you say that for more than 20 years this mine could produce 150 to 200,000 a year, year in year out, that's a very significant, very solid gold mine," explained CEO Frederick Earnest. "And it's a great place to start."

The benefit of the staged approach is a much lower initial capex, estimated at under $350 million for the smaller scale operation. This would make the project potentially appealing to a broader range of financial and strategic partners.

While the company loses some operating efficiencies and economies of scale with the smaller throughput, all-in sustaining costs are still expected to be competitive at $1,100-1,200 per ounce. This compares favorably to current industry averages.

Minimizing Dilution

A key priority for Vista Gold is minimizing dilution for existing shareholders. The company currently has just 121 million shares outstanding and sees keeping tight control of the share structure as central to creating outsized returns.

"The way that we create leverage, the way that we create significant rewards for shareholders, is by not diluting them".

To that end, Vista is exploring a range of alternative financing options. The Northern Australia Infrastructure Facility (NAIF) could potentially provide low-cost debt financing as part of the overall funding package. The company is also in discussions with potential strategic partners that could contribute development capital and operating expertise.

Drilling for High-Margin Ounces

In parallel with its financing and development initiatives, Vista is investing in drilling to further optimize the Mt Todd mine plan. The current focus is on defining shallow, higher-grade ore zones that could be mined at a lower strip ratio in the early years of operation.

"The target that we've selected is a shallow target," explained Earnest. "It'll be low stripping ratio ounces that we targeting. And while it may not substantially change the grade, it could change it enough that we change the mine schedule and then we actually have some material that's lower strip ratio, essentially the same grade or maybe a little better in the early part of the first several years of the project. The appeal to us is that it has the opportunity to affect project economics through lowering initial costs."

Conclusion

Vista Gold's Mt Todd project is a substantial, advanced-stage gold asset in Australia's Northern Territory. While the large size of the deposit limits its appeal to only major producers at the full production scale, pursuing a staged development approach starting with a smaller operation could make the project more attractive to a broader universe of investors and partners. Management is acutely focused on limiting dilution and is taking tangible steps to optimize the mine plan and further de-risk the project. For investors looking for leveraged exposure to the rising gold price, Vista Gold offers significant speculative appeal at its current valuation with several potential catalysts on the horizon.

The Investment Thesis for Vista Gold

• Mt Todd is a world-class, substantially de-risked gold asset in a top mining jurisdiction
• Starting with a smaller scale operation lowers capex and expands potential financing options
• Management is committed to minimizing dilution and creating outsize returns for shareholders
• Current drilling could further optimize the mine plan and boost economics
• Vista trades at a substantial discount to the NPV of Mt Todd, offering significant revaluation potential as the company executes its business plan

Actionable Advice

• Vista Gold offers compelling speculative value at its current sub-$100 million market capitalization
• Investors should monitor upcoming drill results and feasibility progress for the staged development approach
• Key upcoming catalysts include a construction decision, financing package, and potential strategic partnership
• Vista is a leveraged play on the gold price with potential for multi-bagger returns if it executes

Macro Thematic Analysis

The current macro environment appears highly supportive for the gold price and gold equities. Elevated inflation, geopolitical instability, and concerns about the sustainability of global debt levels are prompting investors to seek safe havens outside of traditional financial assets. Gold has a long history as a store of value and is likely to see increasing investment demand if real interest rates remain negative. This could create a rising tide for gold developers like Vista Gold.

As Earnest sums up, "the gold price is obviously at record levels and that always seems to make the conference a little bit more buoyant...Gold price seems to be putting a skip in everyone's step."