- Vista Gold strengthened its balance sheet with a US$45 million public offering, ending the quarter with more than US$52 million in cash and no debt
- The company is advancing permitting, engineering and team expansion as it prepares Mt Todd for development
- Management is targeting first gold production in late 2029 and commercial production in early 2030
Gold developer shifts focus from planning to execution
What does it look like when a gold developer moves from talking about potential — to actively preparing for production?
In this episode of the Capital Compass, we’re checking back in with Vista Gold (AMEX:VGZ, TSX:VGZ), a company advancing its flagship Mt Todd Gold Project in Australia’s Northern Territory.
This article is disseminated in partnership with Vista Gold. It is intended to inform investors and should not be taken as a recommendation or financial advice.
Earlier this year, Vista completed a successful public offering that strengthened the company’s balance sheet, leaving it with more than US$52 million in cash and no debt as it advances the next phase of development at Mt Todd.
The company is now focused on a series of key work programs designed to move the project toward detailed engineering, construction, and ultimately first gold production later this decade. Joining me now to walk us through the company’s strategy, project advancement, and development timeline is Fred Earnest, President and CEO of Vista Gold.
Watch the full video above, or read the full transcript below.
Vista Gold advances Mt Todd toward production
Ricki: In March Vista completed a successful public offering, as I just mentioned there, raising gross proceeds of nearly $45 million US dollars. And you recently reported a strong cash position with no debt. How does that enhanced financial strength position the company to execute on its strategic objectives at Mt Todd?
Fred: It’s an interesting question. We went to the market in March to raise $30 million. The offering was way oversubscribed. We ended up taking $45 million and still leaving a pretty good amount of unfilled demand that buy in the market.
And so, with the support that we got and the additional funds that we were able to raise, we’re now in a position to not only get ourselves through permitting, but to also start some of the front end engineering and design work that will allow us to streamline ultimately the detailed engineering process.
Ricki: And you’ve said the company is now advancing Mt Todd on a standalone basis following the updated feasibility work. Can you walk us through some of the key programs currently underway that are helping move the project toward development?
Fred: You know here for Vista, we use the we use the initial PPE and I know that for most people here that they think of personal protective equipment, but for us it’s permitting, people and engineering, you know, the permitting, you can’t build a project without permitting.
We have permits, but they’re for the much larger project that we designed previously. And so, we’re in the process of modifying and amending those permits to align with the results of the feasibility study. People are obviously a very important part and we’re adding to the team.
And then we’ve started some or we’re completing the optimization studies that were recommended in the feasibility study as well as starting some other work that will ultimately allow us to streamline, as I said, the detailed engineering and construction process.
Ricki: I hope that’s not too confusing for your HR department. Part of the work also includes strengthening your operational presence in Australia. So how important is the expansion of the Australian based team, both from a project execution standpoint and in terms of preparing Mt Todd for the next stage of development?
Fred: Well, Ricki, in my experience people are 90% of the key to success in almost anything we do. And we view our work at Mt Todd no differently. We have no intention of driving or running the development of the project from Denver.
And so, hiring an Australian based team, we feel is the key to our success. We’ve already hired an approvals manager, which is supervising all of the work we’re doing on getting the permits modified and approved. We’ve hired an executive general manager of projects and technical services as well as an executive general manager of external relations and social performance.
I think that those two positions underscore our commitment to advance the project technically and to make sure that on the social front that we’re doing everything that we can and doing it right.
We’ve also added general counsel and right now we have a search underway for a managing director, and once we get the managing director on board, he will be a direct report of mine and he will supervise all of our activities in Australia.
And ultimately he’ll be hiring a project director, construction manager, and the other key people that are going to allow us to execute on our strategy to build Mt Todd.
Ricki: Sounds very exciting. Good luck with all of that. You’re also continuing technical work around metallurgy and geotechnical optimization. How meaningful could those studies be in terms of improving efficiencies, reducing stripping requirements, potentially enhancing the economics of the project?
Fred: Tremendous payback opportunities here, the geotechnical work that we’re doing between the previous study and our current study, the west slope of the pit wall got flattened. We think there’s a potential to reduce the amount of waste that we need to move by 70 million tons.
That moves the stripping ratio from four to one back down to closer to three and a half to one. So, there’s tremendous opportunity to improve economics just on not having to move material on the geotechnical side.
On the metallurgical studies, we’re trying to dial in the final grind size as well as develop data that we need for the detailed engineering equipment, selection, et cetera. But, just to kind of put things in perspective for the listeners, every 1% improvement in gold recovery amounts to about $200 million of additional revenue over the life of the project at today’s gold price.
So, these are real numbers that we’re talking about. We’re spending $800, $900,000 each on both of these studies with hundreds of millions of dollars potential return on that investment. So, I’m excited about what we’re doing.
Ricki: Wow. So that new manager you’re looking for has to have a good eye for detail it sounds. Finally, Fred, once detailed engineering and design begins, what does the development timeline look like from there? When could investors realistically expect first gold production?
Fred: So, we’ve been working very closely with GR Engineering Services in Perth. And the estimate is that once we start detailed engineering, we’re looking at a 27 month process to reach first gold pour.
So based on the assumption that we’re able to start detailed engineering the middle of next year or third quarter next year as we propose, that would mean that we would pour first gold in late 2029 and achieve commercial production in early 2030.
Ricki: Fred, thank you so much for joining us today and updating us on the progress at Vista Gold. For more information, you can visit vistagold.com.
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