Vista Gold Announces Updated Preliminary Feasibility Study for the Mt Todd Gold Project with Increased After-Tax NPV5% of $823 Million and IRR of 23.4%
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__________________ NEWS _________________
Vista Gold Announces Updated Preliminary Feasibility Study for the Mt Todd Gold Project
with Increased After-Tax NPV5% of $823 Million and IRR of 23.4%
Denver, Colorado, September 10, 2019 - Vista Gold Corp. (“Vista” or the “Company”) (NYSE American and TSX:
VGZ) today announced the positive results of an updated preliminary feasibility study (the “PFS”) for its Mt Todd gold
project (“Mt Todd” or the “Project”) in Northern Territory, Australia. The PFS is based on the results of metallurgical
optimization test work, a redesign of the fine grinding circuit, construction and ramp-up schedule changes and a
comprehensive review of all aspects of the Project, including an independent benchmarking study of key PFS
parameters. The process improvements have resulted in improved projected gold recovery and increased estimated
gold production at Mt Todd. All dollar amounts stated herein are in United States currency and are expressed as $
unless specified otherwise. References to A$ are to Australian dollars.
Highlights of the PFS for a 50,000 tonne per day (“tpd”) project include:
After-tax NPV5% of $823 million and IRR of 23.4% at a $1,350 per ounce gold price and a $0.70=A$1.00
exchange rate (the “Base Case”);
After-tax NPV5% of $1.15 billion and IRR of 30.3% at current prices and exchange rates ($1,500 per ounce
gold and $0.685=A$1.00 exchange rate);
Unchanged proven and probable mineral reserves estimated to be 5.85 million ounces of gold (221.0 million
tonnes at 0.82 grams of gold per tonne (“g Au/t”)) at a cut-off grade of 0.40 g Au/t(1);
Improved estimated annual production of 413,400 ounces of gold per year over the life of the Project, including
estimated average annual production of 495,100 ounces of gold per year during the first five years of
commercial operations;
Life of mine projected average cash costs of $645 per ounce, including projected average cash costs of $575
per ounce during the first five years of commercial operations (life of mine average all-in sustaining cost
(“AISC”) of $746 per ounce, including average AISC of $688 per ounce during the first five years of
commercial operations);
A projected 13-year mine life; and
Estimated initial capital requirements of $826 million.
(1) See “Cautionary Note to United States Investors” below.
Vista’s President and CEO, Frederick H. Earnest, commented, “We believe the PFS has substantially de-risked Mt
Todd. The metallurgical programs and process area design changes completed by Vista over the past months have
confirmed our belief that Mt Todd can achieve excellent anticipated gold recoveries within an attractive operating
cost profile. This work, combined with an independent review of capital and operating costs and development
schedules, underpin our confidence that Mt Todd will become a major Australian gold producing project and provide
a solid foundation to further advance the Project.”
Trading Symbol: VGZ
NYSE American and Toronto Stock Exchanges
7961 Shaffer Parkway
Suite 5
Littleton, CO 80127
Phone: 720-981-1185
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Mr. Earnest continued, “Vista’s management believes the PFS reflects significant value creation through Vista’s
optimization and development work. We believe project economics are strong at assumed long-term gold prices and
quite compelling at today’s market conditions. However, we do not believe Vista should develop Mt Todd on its own.
The PFS gives us a solid basis for conversations with prospective development partners who we believe will recognize
the value of Mt Todd and provide appropriate reward for Vista shareholders. To preserve the value of Mt Todd, we are
prepared to hold the project until a time when the value of the Project appropriately rewards shareholders.”
The PFS was authored by Tetra Tech Inc. (“Tetra Tech”) with Mine Development Associates, Resource Development
Inc., Proteus EPCM Engineers (a Tetra Tech Company, “Tetra Tech Proteus”), JDS Energy & Mining, Inc., and
POWER Engineers, Inc.
Vista’s senior management team is attendingthe Precious Metals Summit from September 10 to 13, 2019 in Beaver
Creek, CO and the Denver Gold Forum from September 16 to18, 2019 in Denver, CO, and will be available to discuss
these results at both conferences. A conference call and webcast to discuss highlights of the PFS will be held Thursday,
September 19, 2019 at 2:00 p.m. MDT.Call-in details are located at the end of this release.
Rex Bryan, Ph.D., Amy Hudson, Ph.D., April Hussey, P.E., Chris Johns, P.Eng., Guy Roemer, P.E., Vicki
Scharnhorst, P.E., Erik Spiller and Keith Thompson on behalf of Tetra Tech, Thomas Dyer on behalf of Mine
Development Associates, Dr. Deepak Malhotra on behalf of Resource Development Inc., Zvon Ponos on behalf of
Tetra Tech Proteus, Jessica Monasterio, P.E. on behalf of JDS Energy & Mining, Inc., each an independent Qualified
Person as defined by Canadian National Instrument 43-101 – Standards of Disclosure of Mineral Projects (“NI 43-
101”), prepared or supervised the preparation of the information that forms the basis for the scientific and technical
information disclosed herein and have reviewed this press release and consented to its release. Dr. Deepak Malhotra
has verified the metallurgical testing program and data in respect of the process improvements. For additional
information on data verification, quality assurance and control, key assumptions and other matters relating to the
Project, see Vista’s Annual Report Form 10-K as filed on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov/edgar.shtml on February 25, 2019.
Overview
An overview of the PFS is presented in the table below.
50,000 tpd Base Case Years 1-5 Life of Mine
(13 years)
Annual
Average Total Annual
Average Total
Average Plant Feed Grade (g Au/t) 0.96 0.82
Payable Gold (000’s ozs) 495 2,476 413 5,305
Gold Recovery 92.3% 91.9%
Cash Costs ($/oz) $575 $645
AISC ($/oz) $688 $746
Strip Ratio (waste:ore) 2.65 2.52
Initial Capital (millions) $826
After-tax Payback (production years) 2.9
After-tax NPV5% (millions) $823
IRR (after-tax) 23.4%
Note: Economics presented using $1,350/oz gold and a flat $0.70 : A$1.00 exchange rate and assumes deferral of certain territory tax
obligations as well as realization of equipment salvage values at the end of the mine life.
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Sensitivity Analysis
The following table provides additional details of the Project’s after-tax economics at variable gold prices and exchange
rate assumptions.
Foreign
Exchange
($/A$)
Gold Price
$1,200 $1,300 $1,350 $1,400 $1,500
IRR NPV5% IRR NPV5% IRR NPV5% IRR NPV5% IRR NPV5%
0.60 21.7% $686 26.4% $895 28.6% $994 30.8% $1,093 35.0% $1,297
0.65 19.2% $603 23.7% $807 25.9% $911 28.0% $1,011 32.2% $1,209
0.70 16.8% $521 21.2% $718 23.4% $823 25.5% $927 29.6% $1,126
0.75 14.6% $436 18.9% $634 20.9% $733 23.1% $839 27.1% $1,043
0.80 12.5% $351 16.7% $553 18.7% $650 20.7% $749 24.7% $954
Note: Changes in foreign exchange rates are only applied to operating costs and not applied to either initial or sustaining capital costs.
Capital Costs
Key capital expenditures for initial and sustaining capital requirements are identified in the following table.
Capital Expenditures (000s)
50,000 tpd Base Case Initial Capital Sustaining Capital
Mining $121,239 $406,347
Process Plant $366,693 $17,027
Project Services $109,204 $72,448
Project Infrastructure $26,220 $0
Site Establishment & Early Works $17,537 $0
Management, Engineering, EPCM Services $82,058 $0
Preproduction Costs $16,121 $0
Contingency $86,641 $40,354
Sub-Total $825,712 $536,176
Asset Sale and Salvage $0 ($139,631)
Total Capital $825,712 $396,545(1)
Total Capital Per Payable ounce gold $156 $75(1)
Notes: may not add due to rounding.
(1) Net of asset sales.
Operating Costs
Operating Cost
50,000 tpd Base Case
First 5 Years Life of Mine Cost
Per tonne
processed Per ounce Per tonne
processed Per ounce
Mining $6.51 $233.60 $6.02 $250.90
Processing $7.82 $280.78 $7.88 $328.48
Site General and Administrative $1.07 $38.57 $1.11 $46.43
Jawoyn Royalty $0.38 $13.50 $0.32 $13.50
Water Treatment $0.07 $2.35 $0.08 $3.53
Tailings Management $0.08 $2.71 $0.07 $3.07
Refining Costs $0.09 $3.20 $0.08 $3.22
Power Credit $0.00 $0.00 $-0.10 $-3.99
Total Cash Costs $16.01 $574.71 $15.48 $645.14
Note: Jawoyn Royalty and refinery costs calculated at $1,350 per ounce gold. May not add due to rounding.
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Mining and Production
The mine plan contemplates that 221.0 million tonnes of ore containing an estimated 5.85 million ounces of gold at an
average grade of 0.82 g Au/t to be processed over the 13-year operating life of the Project. Total recovered gold is
expected to be 5.3 million ounces. Average annual gold production over the life of the Project is expected to be 413,400
ounces, averaging 495,100 ounces during the first five years of commercial operations, with 608,600 ounces produced
in the first year of commercial operation. Commercial production is anticipated to begin after two years of construction
and six months of commissioning and ramp-up.
The table below highlights the PFS production schedule.
Years Ore Mined
(kt)
Waste Mined
(kt)
Strip
Ratio
(W:O)
Milled Ore
(kt)
Milled
Grade
(g/t)
Contained
Ounces
(kozs)
Mill
Production
(kozs)
-1 2,859 8,802 3.08 - - - -
1 16,138 10,498 0.65 12,461 1.17 469 430
2 15,613 47,536 3.04 17,750 0.85 482 438
3 24,495 32,880 1.34 17,799 1.04 593 541
4 15,586 76,531 4.91 17,750 0.70 399 360
5 29,852 58,085 1.95 17,750 1.10 629 574
6 8,984 87,011 9.69 17,750 0.78 446 404
7 7,178 68,218 9.50 17,799 0.52 298 264
8 13,482 56,598 4.20 17,750 0.61 297 266
9 18,750 42,935 2.29 17,750 0.70 397 358
10 28,653 29,747 1.04 17,750 0.93 528 481
11 25,970 4,148 0.16 17,799 1.18 674 618
12 127 0 0 17,750 0.65 371 334
13 - - - 15,805 0.52 265 237
Total 207,687 522,990 2.52 221,041 0.82 5,848 5,305
Note: May not add due to rounding. Total milled ore includes material from the heap leach pad that is planned to be processed at the end of the mine life.
Project Mineral Resources and Reserves
The table below presents the estimated mineral resources and reserves for the Project. The effective date of the Batman
and Quigleys deposits mineral resource estimates is January 24, 2018. The effective date of the heap leach mineral
resource estimate is July 9, 2014.
Mt. Todd Gold Project Mineral Reserves – 50,000 tpd, 0.40 g Au/t cut-off and $1,250 per ounce gold
Batman Deposit Heap Leach Pad Quigleys Deposit Total
Tonnes
(000s)
Grade
(g/t)
Contained
Ounces
(000s)
Tonnes
(000s)
Grade
(g/t)
Contained
Ounces
(000s)
Tonnes
(000s)
Grade
(g/t)
Contained
Ounces
(000s)
Tonnes
(000s)
Grade
(g/t)
Contained
Ounces
(000s)
Proven 72,672 0.88 2,057 - - - - - - 72,672 0.88 2,057
Probable 135,015 0.82 3,559 13,354 0.54 232 - - - 148,369 0.79 3,791
Proven & Probable 207,687 0.84 5,616 13,354 0.54 232 - - - 221,041 0.82 5,848
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Mt. Todd Gold Project Mineral Resources
Batman Deposit Heap Leach Pad Quigleys Deposit Total
Tonnes
(000s)
Grade
(g/t)
Contained
Ounces
(000s)
Tonnes
(000s)
Grade
(g/t)
Contained
Ounces
(000s)
Tonnes
(000s)
Grade
(g/t)
Contained
Ounces
(000s)
Tonnes
(000s)
Grade
(g/t)
Contained
Ounces
(000s)
Measured 77,725 0.88 2,191 - - - 457 1.27 19 78,182 0.88 2,210
Indicated 200,112 0.80 5,169 13,354 0.54 232 5,743 1.12 207 219,209 0.80 5,608
Measured &
Indicated 277,837 0.82 7,360 13,354 0.54 232 6,200 1.13 225 297,391 0.82 7,818
Inferred 61,323 0.72 1,421 - - - 1,600 0.84 43 62,923 0.72 1,464
Note: Measured & indicated mineral resources include proven and probable mineral reserves. Batman and Quigleys mineral resources are quoted at a 0.40g Au/t
cut-off grade. Heap Leach mineral resources are the average grade of the heap, no cut-off grade applied. Economic analysis conducted only on proven and
probable mineral reserves. Rex Bryan of Tetra Tech is the Qualified Person responsible for the geologic mineral resource estimates. Thomas Dyer of Mine
Development Associates is the Qualified Person responsible for developing mineral reserves for the Batman deposit. Dr. Deepak Malhotra of Resource Development
Inc. is the Qualified Person responsible for the metallurgical data and program, and for developing mineral reserves for the heap leach. See “Cautionary Note to
United States Investors” below.
Project Description
Gold mineralization in the Batman Deposit at the Project occurs in sheeted veins within silicified
greywackes/shales/siltstones. The Batman deposit strikes north-northeast and dips steeply to the east. Higher grade
zones of the deposit plunge to the south. The core zone is approximately 200-250 meters wide and 1.5 kilometers long,
with several hanging wall structures providing additional width to the deposit. Mineralization is open at depth as well
as along strike, although the intensity of mineralization weakens to the north and south along strike.
The Project is designed to be a conventional, owner-operated, open-pit mining operation that will utilize large-scale
mining equipment in a drill/blast/load/haul operation. Ore is planned to be processed in a comminution circuit
consisting of a gyratory crusher, two cone crushers, two high pressure grinding roll crushers, and primary grinding by
two ball mills and secondary grinding by 10 FLSmidth VXP mills. Vista plans to recover gold in a conventional
carbon-in-pulp recovery circuit.
Metallurgy, Processing and Infrastructure
Vista has completed extensive metallurgic test work that was announced in press releases dated August 2, 2018, January
9, 2019, April 8, 2019, May 29, 2019, and August 13, 2019.
Vista’s recent metallurgic test programs confirmed: (1) the efficiency of ore sorting across a broad range of head grades
and the natural concentration of gold in the screen undersize material prior to sorting; (2) the efficiency of fine grinding
and improved gold leach recoveries at an 80% passing grind size of 40 microns; and (3) the selection of FLSmidth
VXP mill as the preferred fine-grinding mill.
Benchmarking
Vista retained GR Engineering Services of Perth, Australia to undertake a benchmarking study to assess the
appropriateness of capital and operating cost estimates, construction and ramp-up schedules, owner’s costs and key
components of the Project, such as power supply. Vista has given thorough consideration to this study, resulting in
important changes to the costs and schedule of the Project.
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Opportunities for Adding Value
In addition to the mineral reserves at the Batman Deposit, we estimate measured and indicated resources of 1.7 million
ounces gold (70.2 million tonnes at 0.77 g Au/t) and inferred resources of 1.4 million ounces gold (61.3 million tonnes
at 0.72 g Au/t). A portion of the inferred resources are contained within the existing pit design and are currently included
in the mine plan as waste material. Additional resources are predominantly at depth and lateral along strike. Potential
to convert part of the mineral resources to reserves represents an opportunity to improve existing LOM economics and
extend mine life.
The Company also has known mineral resources at the Quigleys Deposit, which is close to the planned processing
plant. The estimated grade of the Quigleys Deposit is higher than the estimated average grade of the Batman Deposit
and could provide a source of higher-grade feed in the mid years of the Project when higher stripping is encountered
and the average grade of feed to the plant is expected to decrease. Additional drilling and metallurgical testing are
required to develop mine plans and ultimately convert part of the Quigleys resource to proven or probable reserves.
Growth through exploration represents additional opportunity to add value at Mt Todd. Both the Batman Deposit and
Quigleys Deposit remain open. In addition, Vista controls over 1,100 sq. km of contiguous exploration licenses at the
southeast end of the Pine Creek Mining District. Various gold targets have been identified through early-stage, grass
roots exploration programs along the Cullen-Australis and Batman-Driffield structural corridors, the latter of which is
the host to the Batman Deposit. To-date, Vista’s exploration efforts have primarily focused on the Batman Deposit.
The PFS uses a natural gas price derived from east coast gas pricing. The Company believes that there would be a
significant opportunity to achieve a lower gas price upon commitment to a long-term gas delivery contract. This belief
is in part based on local expectations of significantly increased gas reserves in the Beetaloo Basin south of the Mt Todd
project. The Company is also considering additional optimization of the power plant.
Conference Call Details
A conference call and webcast to discuss highlights of the PFS will be held Thursday, September 19, 2019 at 2:00 p.m.
MDT.
Toll-free in North America: 844-898-8648
International: 647-689-4225
Confirmation Code: 2416449
This call will also be web-cast and can be accessed at the following web location:
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valid.http://event.on24.com/r.htm?e=2087023&s=1&k=D1D1D87054C6B0E6EBDA948F2FB3BC32
This call will be archived and available at www.vistagold.com after September 19, 2019. Audio replay will
be available for 14 days by calling toll-free in North America: 855-859-2056.
Detailed Report
An NI 43-101 compliant technical report will be filed on SEDAR and EDGAR within 45 days of the date hereof and
will be available on our website at that time. As part of the sensitivity analysis of the Project, Vista intends to complete
and present the results of an alternate 33,000 tpd project as part of the technical report.
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About Vista Gold Corp.
The Company is a well-funded gold project developer. Our principal asset is our flagship Mt Todd gold project in
Northern Territory, Australia. Mt Todd is the largest known undeveloped gold project in Australia.
For further information, please contact Pamela Solly, Vice President of Investor Relations, at (720) 981-1185.
For more information about our projects, including technical studies and mineral resource estimates, please visit our
website at www.vistagold.com.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the U.S. Securities Act of 1933, as amended, and U.S. Securities
Exchange Act of 1934, as amended, and forward-looking information within the meaning of Canadian securities laws. All statements, other
than statements of historical facts, included in this press release that address activities, events or developments that Vista expects or anticipates
will or may occur in the future, including such things as, the Company’s continued work on the Mt Todd gold project; that process
improvements will result in lower operating costs, reduced power consumption, increased gold recovery and higher gold production; estimates
of mineral reserves and resources; projected project economics, including anticipated production, average cash costs, before and after-tax
NPV, IRR, capital requirements and expenditures, gold recovery after-tax payback, operating costs, average tonne per day milling, mining
methods procedures, estimated gold recovery, project design, and life of mine; that the Project is an advanced stage development project;
average annual production overtime; commencement of commercial production; timing for construction and commissioning; exploration of
new deposits at Mt Todd and the surrounding exploration areas; size of final product through the high pressure grinding roll crusher; potential
costs or savings related to gas price; ability to convert Quigleys estimated mineral resources to proven or probable mineral reserves; grade of
minerals at the Quigleys deposit; ability to add higher grade feed from the Quigleys deposit to the Project in its mid years; timing for and
completion of the NI 43-101 technical report for the PFS; and other such matters are forward-looking statements and forward-looking
information. The material factors and assumptions used to develop the forward-looking statements and forward-looking information contained
in this press release include the following: the accuracy of the results of the PFS, mineral resource and reserve estimates, and exploration and
assay results; the terms and conditions of our agreements with contractors and our approved business plan; the anticipated timing and
completion of a feasibility study on the Project; the anticipated receipt of required permits; no change in laws that materially impact mining
development or operations of a mining business; the potential occurrence and timing of a production decision; the anticipated gold production
at the Project; the life of any mine at the Project; all economic projections relating to the Project, including estimated cash cost, NPV, IRR,
and initial capital requirements; and Vista’s goal of becoming a gold producer. When used in this press release, the words “optimistic,”
“potential,” “indicate,” “expect,” “intend,” “plans,” “hopes,” “believe,” “may,” “will,” “if,” “anticipate,” and similar expressions are intended
to identify forward-looking statements and forward-looking information. These statements involve known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or achievements of Vista to be materially different from any future results,
performance or achievements expressed or implied by such statements. Such factors include, among others, uncertainty of mineral resource
estimates, estimates of results based on such mineral resource estimates; risks relating to cost increases for capital and operating costs; risks
related to the timing and the ability to obtain the necessary permits, risks of shortages and fluctuating costs of equipment or supplies; risks
relating to fluctuations in the price of gold; the inherently hazardous nature of mining-related activities; potential effects on Vista’s operations
of environmental regulations in the countries in which it operates; risks due to legal proceedings; risks relating to political and economic
instability in certain countries in which it operates; as well as those factors discussed under the headings “Note Regarding Forward-Looking
Statements” and “Risk Factors” in Vista’s Annual Report Form 10-K as filed in February 2019 and other documents filed with the U.S.
Securities and Exchange Commission and Canadian securities regulatory authorities. Although Vista has attempted to identify important
factors that could cause actual results to differ materially from those described in forward-looking statements and forward-looking information,
there may be other factors that cause results not to be as anticipated, estimated or intended. Except as required by law, Vista assumes no
obligation to publicly update any forward-looking statements or forward-looking information; whether as a result of new information, future
events or otherwise.
Cautionary Note to United States Investors
The United States Securities and Exchange Commission (“SEC”) limits disclosure for U.S. reporting purposes to mineral deposits that a
company can economically and legally extract or produce. This press release uses the terms “Proven reserves” and “Probable reserves”.
Reserve estimates contained in this press release are made pursuant to NI 43-101 standards in Canada and do not represent reserves under the
standards of the SEC’s Industry Guide 7 and may not constitute reserves under the SEC’s newly adopted disclosure rules to modernize mineral
property disclosure requirements, which became effective February 25, 2019 and will be applicable to the Company in its annual report for
the fiscal year ending December 31, 2021. Under the currently applicable SEC Industry Guide 7 standards, a “final” or “bankable” feasibility
study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves
and all necessary permits and government approvals must be filed with the appropriate governmental authority. Additionally, this press release
uses the terms “Measured resources”, “Indicated resources”, and “Measured & Indicated resources”. We advise U.S. investors that while
these terms are Canadian mining terms as defined in accordance with NI 43-101, such terms are not recognized under SEC Industry Guide 7
and normally are not permitted to be used in reports and registration statements filed with the SEC. Mineral resources described in this press
release have a great amount of uncertainty as to their economic and legal feasibility. The SEC normally only permits issuers to report
mineralization that does not constitute SEC Industry Guide 7 compliant “reserves” as in-place tonnage and grade, without reference to unit
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measures. The term “contained gold ounces” used in this press release is not permitted under the rules of the SEC. “Inferred resources” have
a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that
any or all part of an Inferred resource will ever be upgraded to a higher category. U.S. Investors are cautioned not to assume that any part
or all of mineral deposits in these categories will ever be converted into SEC Industry Guide 7 reserves.