Vista Gold - Smaller-Scale 15,000 tpd Strategy on Australia's Mt Todd Gold Project

• Vista Gold owns the Mount Todd gold project in Australia, one of the country's largest undeveloped gold projects with 7 million oz proven & probable reserves
• Vista is evaluating a smaller-scale 15,000 tpd project with <$350M capex to produce 150-200k oz/yr, more achievable than original 50,000 tpd plan
• Major permits and strong stakeholder relationships are in place. Additional drilling aims to define a higher-grade starter pit
• Vista has cash to complete a feasibility study on the smaller project. Multiple financing options exist, including the Northern Australia Infrastructure Fund
• A strategic partner could quickly advance Mt Todd to production. Smaller scale enables more potential partners vs. the original large-scale plan

About Vista Gold

Vista Gold Corp. (NYSE,TSX:VGZ) offers a compelling investment opportunity as it advances the Mt Todd gold project in Australia's Northern Territory. With 7 million ounces of proven and probable reserves, Mt Todd is one of Australia's largest undeveloped gold projects. Vista is taking a pragmatic approach, evaluating a smaller-scale development plan to expedite the path to production and broaden the pool of potential strategic partners.

Adapting to Market Conditions

Vista Gold originally envisioned Mt Todd as a large-scale 50,000 tonne per day (tpd) operation. However, recognizing the challenges of finding a partner able to finance a large project in the current market, Vista has demonstrated agility in adapting its strategy. The company is now evaluating a smaller-scale 15,000 tpd project with a reduced capex of less than $350 million.

As Vista Gold President and CEO Frederick Earnest explains,

"Adapting and being flexible is a really important element in our business right now. We recognize that one of the obstacles to finding a partner is it's really a handful of companies that can write billion-dollar checks to build a large project."

Interview with President & CEO, Frederick H. Earnest

Impressive Production Potential

While smaller than the original plan, a 15,000 tpd operation at Mt Todd would still be a significant producer, yielding 150,000 to 200,000 ounces of gold per year. Importantly, the project has the scale to support this production rate for 40 years, underscoring the long-term value opportunity.

Earnest elaborates, "We've tried to adapt, recognizing that the market is a dynamic thing and that we need to be flexible. We need to be prepared to strike when the iron is hot."

Advancing with Targeted Drilling

Vista is undertaking a targeted drilling program to further optimize the Mt Todd project. The initial phase aims to confirm resources on the northern end of the deposit and conduct additional metallurgical testing. The second phase will test an area that could host a higher-grade starter pit.

This drilling program, along with the planned feasibility study, will provide a solid foundation for engaging with potential strategic partners or evaluating other financing options to advance the project.

Key Permits in Place

One of Mt Todd's key advantages is having the major environmental permits already approved. The EIS for the large-scale project is in place, and modifying it for a smaller-scale operation simply requires notifying the relevant government agency. Similarly, the federal environmental authorization and mine operating permits have been granted.

This advanced permitting status significantly reduces the development timeline and risk, making Mt Todd an attractive opportunity for potential partners.

Strong Stakeholder Relationships

Vista has invested significant effort in building strong relationships with key stakeholders, including the Jawoyn (an Australian Aboriginal people living in the Northern Territory) who own the land in the project area. Jawoyn hold a royalty agreement that will see them benefit economically from the project's development.

The company also works closely with the local government and has the support of the community.

As Earnest notes, "We've been laying the groundwork. assuring that there's a firm foundation to build off of, that we enjoy the support in the community, that we have the authorizations."

Multiple Financing Options

With $11.9 million in cash at the end of Q2 and an additional $10 million payment expected from a royalty agreement, Vista has the financial resources to complete the feasibility study and continue to advance Mt Todd.

Looking ahead, multiple financing options exist. In addition to finding a strategic partner, Vista has engaged with the Northern Australia Infrastructure Fund, a government fund supporting development projects. With an approved project at a smaller scale, this could represent an attractive funding source.

Expedited Path to Production

Mt Todd's history as a brownfield site with existing infrastructure, including paved roads, a power line, and a tailings storage facility, means the project can be built quickly once financing is secured. The construction timeline for a 15,000 tpd operation is estimated at 12 to 18 months.

As Earnest explains, "There's things that make it so that this can be built very quickly without the traditional risk of developing infrastructure that many operations face."

Positive Jurisdiction

Australia's Northern Territory is a favorable mining jurisdiction, and the government is committed to supporting a viable mining industry. A recent change to the royalty regime, moving from a profit-based system to an ad valorem tax, has reduced Mt Todd's effective royalty rate from nearly 7% to 3.5%. This change enhances the project's economics and reflects the NT government's supportive stance.

Conclusion

Vista Gold's Mt Todd project presents a significant opportunity for investors, offering exposure to a large-scale gold resource in a top-tier mining jurisdiction. By adapting to market conditions and focusing on a smaller-scale development plan, Vista has enhanced the project's appeal and opened the door to a broader range of potential strategic partners.

With key permits in place, strong stakeholder relationships, and multiple financing options available, Vista is well-positioned to expedite Mt Todd's path to production. The company's targeted drilling program and feasibility study will further optimize the project and strengthen its investment case.

As the gold market evolves and producers seek to replenish their project pipelines, Mt Todd stands out as an attractive large-scale opportunity. Vista Gold's pragmatic approach and commitment to stakeholder engagement make it a compelling investment proposition for those seeking exposure to the long-term value of gold.

The Investment Thesis for Vista Gold

• Mt Todd is a large, long-life gold project in a stable, tier-one mining jurisdiction
• 7 Moz proven & probable reserves, 9.4 Moz total resource, with exploration upside
• Evaluating a smaller 15,000 tpd project to reduce capex, expedite timeline, and expand partnership options
• 150-200k oz/yr production potential over a 40-year mine life
• Major permits in place and strong stakeholder relationships significantly de-risk the project
• Ample cash to complete feasibility study; multiple financing options available
• Existing infrastructure enables quick construction and production ramp-up
• Positive recent changes to royalty regime in NT further enhance project economics

Key Takeaways

Vista Gold's Mt Todd project offers exposure to a significant, long-life gold resource in a stable jurisdiction. By pivoting to a smaller-scale development plan, Vista has improved the project's financial viability and partnership potential. With key permits in place, strong stakeholder support, and a clear path to production, Mt Todd represents a compelling opportunity for investors seeking long-term value in the gold sector.

Macro Thematic Analysis

The current environment for gold project development is challenging, with many producers focused on M&A rather than advancing new projects. However, this near-term focus is unsustainable, as declining reserves will eventually force companies to look to development-stage projects to replenish their pipelines.

Vista Gold CEO Frederick Earnest sums up the opportunity:

"At some point, the pendulum has got to start swinging back the other way, and some of the producers are going to have to start looking for development stage projects and take on what they perceive to be a little bit more risk."

As this shift occurs, projects like Mt Todd that offer significant scale, low jurisdictional risk, and a clear path to production will be well-positioned to attract investment and strategic partnerships. Vista's proactive approach in adapting to market conditions and advancing the project positions the company to capitalize on this future trend.