Vista Gold (TSX:VGZ) - Smart $600M Cost Reduction Paves Way for Mount Todd Gold Project's Development

Dec 13, 2024

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Interview with Frederick H. Earnest, President & CEO of Vista Gold

Our previous interview: https://www.cruxinvestor.com/posts/vista-gold-tsxvgz-smaller-scale-strategy-to-enhance-economics-5520

Recording date: 11th December 2024

Vista Gold Corp (NYSE-AMERICAN & TSX:VGZ) has unveiled plans to transform its flagship Mount Todd gold project in Australia's Northern Territory through a new, optimized development approach. The company is pivoting from its previous large-scale development plan to a more manageable and capital-efficient operation.

The new feasibility study, currently underway, will evaluate a 15,000 tonne per day operation, significantly scaled down from the original 50,000 tonne per day plan. This revised approach aims to reduce initial capital costs from over $1 billion to less than $400 million, representing a 60% reduction. Despite the smaller scale, the project is expected to maintain robust production of 150,000-200,000 ounces of gold annually over a mine life exceeding 30 years.

Vista Gold plans to enhance project economics by implementing a higher cut-off grade of 0.45-0.5 g/t gold, up from the previous 0.35 g/t. This adjustment is expected to lift the reserve grade closer to 1.0 g/t, though it will reduce the overall reserve to approximately 5-5.5 million ounces of gold. The company will also incorporate contract mining to optimize capital costs, though this will result in slightly higher all-in sustaining costs of $1,200-$1,250 per ounce.

Recent exploration success has added another dimension to the project's potential. Drilling at the new South Crossload area has revealed significant high-grade intercepts, including 2.1 meters at 13.0 g/t gold and 1.0 meter at approximately 26 g/t gold. This previously unknown style of mineralization suggests potential for future underground mining operations to supplement the main project.

A key advantage of Mount Todd is its advanced permitting status, with all major authorizations secured, including Federal Environmental Impact Statement approval and Northern Territory operating permits. This positions the project for rapid advancement once a construction decision is made.

The development strategy aligns with broader industry trends, as global gold producers face declining reserves and limited new discoveries. Vista Gold's CEO Frederick Earnest emphasizes that the industry cannot sustain current production levels of approximately 3,000 tons of gold annually without developing new projects and making major discoveries.

With the feasibility study expected to be completed in mid-2025, Vista Gold aims to demonstrate Mount Todd's potential as a significant new gold producer in a stable mining jurisdiction.

View Vista Gold's company profile: https://www.cruxinvestor.com/companies/vista-gold-corporation