Today we’re talking with Vista Gold (NYSEAM:VGZ)(TSX:VGZ), a company pushing forward at full speed with Mt Todd, its flagship gold project in Australia.
This article is disseminated in partnership with Vista Gold Corp., It is intended to inform investors and should not be taken as a recommendation or financial advice. The following is a transcription of the above video, and The Market Online has edited it for clarity.
With a fresh Feasibility Study completed earlier this week and a packed 2025 game plan, this story’s heating up fast. Frederick Earnest, President and CEO of Vista Gold, joins Coreena Robertson to share where things stand and where they’re headed next.
Coreena: Now, earlier this week you released impressive results from the new Mt Todd Feasibility Study. Please discuss some of the most important highlights of this study.
Frederick: I think first of all with the change in size of the project, we substantially reduced the CapEx of the project. It’s dropped almost 60%. The initial CapEx is now estimated to be US$425 million. We’ve taken some measures to raise the cutoff grade. The average grade of ore delivered to the mill is up 23% at 1.04 grams per ton for the first 15 years of the project. The NPV and IRR, we’re just really pleased with those. We used a $2,500 gold price and are reporting an NPV5 of $1.1 billion with an IRR at that gold price of 27.8%. All in sustaining cost, just a little under $1,450 an ounce. So really, really good numbers.
Coreena: Now in yesterday’s investor conference call, you mentioned that a new study is in a paradigm shift in the development of Mount Todd. Please talk more about that.
Frederick: For more than a decade, we’ve evaluated Mt Todd as a 50,000 ton per day operation, 17.5 million tons per year. We’ve decided that’s just too big for us. And so, this new study looks at a project that is 15,000 tons per day, or 5.3 million tons per annum. That’s a big shift right there. And so, in addition to right sizing the project, we’ve also taken some steps to have the right scope. Some things like, we’ve brought in contract mining. We’ve mentioned the prioritizing grade over tons. We’re very pleased with the set of consultants that we worked with on this Feasibility Study. Many of whom are based in Australia. The study author GR Engineering Services (“GRES”) has a tremendous track record of not only designing but engineering and building gold projects of similar scale in Western Australia.
And I think that they bring an incredible amount of credibility to the study. And we’ve preserved the optionality. Not only have we evaluated this smaller project, but we’ve allowed the space for it to be expanded and at the same time, not killed ounces, that if a bigger company wants to look at this and evaluate a bigger project, it’s still there. So, I think that we’ve added a new dimension and preserved all of the past excitement about the project.
Coreena: Lots of options now, feasibility study first, but then what, what does next steps actually look like for Vista? Are you preparing for a financing push, a partner or straight into development?
Frederick: The next 8 to 12 weeks are going to be really busy for us with trying to create broad awareness and interest in this project at a smaller scale. Obviously, we talked about options as far as development whether that’s building it ourselves or joint venturing it, or whether it ends up being a transaction at a project level or a corporate level. The first thing is to really get out there on the street and talk about what we’ve done, what we’ve accomplished, the selling points of the project, and then we’re going to have some work to do to evaluate and further those discussions. We started signing a number of confidentiality agreements several weeks ago. I expect that we’ll be signing more. Doug Tobler, our CFO and I are headed to Diggers and Dealers. a big conference in Australia that’ll be going on next week. And very excited for the opportunity to meet with some of our Australian gold producing peers and talk about a new Mt Todd Gold Project.
Coreena: Now, a lot of juniors talk about value creation, but most don’t have a project like Mt Todd to back it up. So, real talk. What needs to line up in 2025 for Vista Gold to finally get the re-rate you believe is coming?
Frederick: Well, first of all, I’m counting on a continued strong gold price. I think that’s one element that’s just really, really important for us. But second of all, one of the things that would help us out immensely would be just a small shift in the focus of producers toward looking at development projects. We’ve seen tremendous interest in producers acquiring producers. I think that we’re at the top of the list when it comes to development stage projects. We have a great project that’s large, permits are in place for the large project. We just need a little shift in that the development stage projects are a good thing. I think just genuine interest from one or two companies would go a long ways with the investment community to help them see that this really is a project that can be built today. And then we’ve got a lot of hard work to do. We’re not going to count on luck or anything like that. We know what we’ve got to do and we’re ready to get after it.
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