Mr. Fred Earnest reports
VISTA GOLD HIGHLIGHTS 2020 ACHIEVEMENTS AND PROVIDES 2021 OUTLOOK
Vista Gold Corp. has reviewed its key 2020 accomplishments and has outlined 2021 priorities for the company's 100-per-cent-owned Mt Todd gold project located in Northern Territory, Australia.
Fred Earnest, president and chief executive officer of Vista Gold, stated: "We are pleased to have achieved many of our 2020 corporate objectives in spite of the challenges presented by the COVID-19 pandemic.
"Financially, we successfully monetized non-core assets to fund working capital, strengthen our balance sheet and cash position, and set the path to generate additional cash of up to $4.6-million (U.S.) during 2021. Technically, we engaged with the NT government to support its review of our mining management plan (MMP) and move it toward approval, completed and announced positive results of an independent benchmarking study of the 2019 PFS, and commenced a drill program to test the existence of mineralization with vertical and lateral continuity within and immediately adjacent to the planned Batman pit. Strategically, we strengthened our relationship with the Jawoyn Association through an updated agreement and laid the foundation to support the pursuit of opportunities that will create greater value for our shareholders.
"As we begin 2021, we are encouraged about the prospects for Vista, Mt Todd and our shareholders. Most importantly, our strategy will continue to focus on programs to enhance value and derisk Mt Todd as we work to achieve a valuation reflective of the size of the gold deposit, together with its Tier 1 mining jurisdiction in Australia's low-risk NT, favourable low operating costs, robust project economics and the fact that we hold approvals for all major environmental permits. With an asset of this scale, one of the best ways to balance risk and narrow the gap between Vista's current market capitalization and project net present value (NPV) is to seek a strategic transaction with a partner who is prepared to provide Vista shareholders with an appropriate valuation for the interest to be acquired, and that brings project development and operation skills and financial strength as we advance Mt Todd together. Fundamental to any transaction that we may consider, is our commitment to preserve maximum project ownership for our shareholders, while minimizing future dilution. It is important to reiterate that we are not constrained or obligated to complete a transaction that does not achieve the goal of enhancing Vista's valuation.
"Our top 2021 priorities are to achieve a market capitalization that is more reflective of the Mt Todd project NPV, receive approval of the MMP and initiate a follow-up drill program to expand on the successful results of the current proof of concept drilling program."
Key 2020 highlights
During 2020, Vista effectively monetized non-core assets, managed costs and capital spending, and strengthened its balance sheet. The company continues to have no debt.
Vista Gold share price performance
For the 12 months ended Dec. 31, 2020, Vista Gold shares increased 49.0 per cent. Vista continues to enjoy strong leverage to the price of gold, in part due to significant improvements in Mt Todd project economics.
Vista commenced an eight-hole proof of concept drilling program to test targets known as the Batman hangingwall lode and the Batman North extension, with the goal of the program to test the existence of mineralization with vertical and lateral continuity within and immediately adjacent to the planned Batman pit. In December, Vista reported results from hole 1 (VB20-001) in the Batman hangingwall lode, which confirmed its initial interpretation and suggests that additional drilling could provide the basis for an increase in the mineral resource estimates both within and outside the currently designed Batman pit.
Mining management plan
Throughout 2020, Vista continued to work with the Northern Territory Division of Mines and the newly formed Northern Territory Department of Industry, Tourism and Trade to advance the review and approval process of the Mt Todd MMP. Once approved, Vista will hold all major permits for the project.
Vista and the Jawoyn Association updated their existing agreement to include a royalty and mutual co-operation and support commitments. This provides the Jawoyn Association with a gross proceeds royalty instead of its previous right to become a 10-per-cent participating joint venture partner in Mt Todd and provides Vista with greater flexibility in its decisions to develop and operate Mt Todd. It also provides greater commitment for a shared vision of promoting cross-cultural awareness, protecting cultural heritage sites and providing economic opportunities for aboriginal people as integral components of the development of Mt Todd.
Project gold price sensitivity
The company updated its project sensitivity analysis based on sustained higher gold prices. The October, 2019, preliminary feasibility study (the 2019 PFS) was completed using a gold price of $1,350 (U.S.) and exchange rate of 70 U.S. cents being equal to $1 (Australian). Based on these parameters, the after-tax net present value 5 per cent is $823-million (U.S.) and the internal rate of return is 23.4 per cent. At a current gold price of $1,850 (U.S.) and a 77.5-U.S.-cent-to-$1-(Australian) foreign exchange rate, the after-tax NPV 5 per cent is $1.7-billion (U.S.) and the IRR is 38.5 per cent. Mt Todd demonstrates significant project-level leverage to the gold price and as shown in the updated sensitivity analysis, for every $100 (U.S.) increase in the gold price the NPV 5 per cent increases approximately $200-million (U.S.).
Water management program
The Mt Todd water management program achieved significant results. In the past, Vista successfully treated 11.5 gigalitres of acidic water stored in the Batman pit and began discharging treated water in compliance with a Northern Territory Environmental Protection Agency discharge licence. Through continued dewatering, the water level in the Batman pit was lowered by 23 metres in 2020.
Independent benchmarking study
Positive results from an independent benchmarking study of the 2019 PFS were announced in early 2020. The objective of the study was to confirm capital and operating costs, and construction, commissioning and ramp-up schedules as presented in the 2019 PFS. The positive findings provide greater assurance that the company's inputs and assumptions are reasonable and that schedules are practical.
Mining management plan
Vista believes the Northern Territory Department of Industry, Tourism and Trade is in the final stages of its approval process and hopes to receive authorization of the MMP in the near future. Upon receipt, Vista will have all major authorizations to commence development of the mine.
Internal evaluations of mine plans at higher gold prices
Vista's mine plans are conservatively based on $1,000 (U.S.) economic pit shapes. With the sustained improvement in gold price, Vista believes that a higher gold price can appropriately be applied for determining the optimal pit design.
Continuing drilling program
Drilling is progressing for the current drill program. The remaining holes are targeting the Batman North Extension. Holes 2, 3 and 4 are now complete, with results expected to be announced in the near future. Drill holes 5 through 8 will continue through mid-February. Based on the results of this program, Vista may undertake additional follow-up drilling.
Dewatering the Batman pit
Continuing dewatering of the Batman pit will be a priority for the company during the current wet season (November, 2020, through April, 2021). The Batman pit is expected to be effectively dewatered in 2021, representing the completion of an important milestone prior to a potential start of construction.
The company received $1.1-million (U.S.) in January and expects to further strengthen its cash position with the receipt of up to $3.5-million (U.S.) by the end of July, 2021, from a cash payment from Prime Mining Corp. and an option payment for the cancellation of the company's remaining royalty on the Awak Mas project. Vista expects to announce Q4 and full year 2020 financial results in February, 2021.
Management will focus on engaging with potential partners and identifying strategic opportunities to advance the development of Mt Todd in a way that preserves maximum project ownership for its shareholders, while minimizing future dilution.
Technical report on Mt Todd
For further information on the Mt Todd gold project, see the technical report entitled "NI 43-101 Technical Report Mt Todd Gold Project 50,000 tpd Preliminary Feasibility Study Northern Territory, Australia" with an effective date of Sept. 10, 2019, and an issue date of Oct. 7, 2019, amended Sept. 22, 2020, which is available on SEDAR as well as on Vista's website under the technical reports section. John Rozelle, Vista's senior vice-president, a qualified person as defined by National Instrument 43-101 -- Standards of Disclosure for Mineral Projects, has approved the information in this press release.
About Vista Gold Corp.
The company is a gold project developer. The company's flagship asset is the Mt Todd gold project in the Tier 1 mining jurisdiction of Northern Territory, Australia. Mt Todd is the largest undeveloped gold project in Australia and if developed as presently designed, would potentially be Australia's sixth-largest gold producer on an annual basis.
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