DENVER - Vista Gold (NYSE:VGZ) Corp. (NYSE American: VGZ) has announced the completion of Phase 1 and the commencement of Phase 2 of its 2024 drilling program at the Mt Todd gold project in Northern Territory, Australia. The initial phase included 11 drill holes totaling 2,910 meters, with results confirming the extension of the core zone and the mineralized boundaries of the Batman deposit.
The company highlighted a significant intercept from hole VB24-001, which yielded an average gold grade of 1.17 grams per tonne (g Au/t) over 58 meters, surpassing the previously estimated average grade of 0.45 g Au/t in that area. This discovery suggests the potential for higher-grade gold mineralization than initially expected.
Phase 2 started in July 2024, focusing on near-surface drilling in the Southern Cross Lode zone. This area intersects the Batman deposit and has shown promise for higher-grade gold based on historical drilling. The results could potentially reclassify areas currently deemed as waste in the project's 2024 Feasibility Study pit design. Completion of Phase 2 is anticipated by the end of the year.
Frederick H. Earnest, President and CEO of Vista Gold, expressed satisfaction with the Phase 1 outcomes and optimism for the ongoing drilling program. He indicated plans to update the Mt Todd mineral resource estimate following the 2024 drilling program's conclusion. The company aims to leverage previous technical studies to evaluate development scenarios targeting annual gold production of 150,000 to 200,000 ounces.
Vista Gold's strategy involves advancing the Mt Todd project with discipline and patience, anticipating that the approach will align with market trends and the gold industry to enhance shareholder value. The company expects the strength of gold prices to continue, emphasizing the importance of shovel-ready projects like Mt Todd for addressing the global decline in gold reserves.
This news is based on a press release statement from Vista Gold Corp ., which maintains that all major environmental and operating permits necessary for the development of Mt Todd are already in place. The company has not disclosed any financial details or specific timelines for the expected resource update or development scenario evaluations.
In other recent news, Vista Gold Corp. reported strong Q2 2024 operating and financial results, bolstered by the final $10 million payment from a royalty transaction with Wheaton Precious Metals (NYSE:WPM) and the commencement of the second phase of its 2024 drilling program. The company also welcomed Maria Vallejo Garcia as the new Director of Projects and Technical Services. The enactment of the Mineral Royalties Act of 2024 by the Northern Territory Government of Australia is expected to impact positively on Vista Gold's Mt Todd gold project. The company, with a robust cash position of $20.2 million and no debt, is advancing evaluations of a smaller scale Mt Todd project.
Recent developments also include a feasibility study on the smaller scale project, expected to be completed next year. The new ad valorem royalty regime is anticipated to reduce costs by approximately $350 million over the mine's life, enhancing the project's competitiveness. Discussions between Doug Tobler and Fred Earnest revealed the positive impact of the new 3.5% ad valorem royalty on the Mt Todd project, simplifying the net profits calculation and improving the project's competitive position. Further studies to support the valuation of Mt Todd are planned for the coming months, reflecting its intrinsic value.
InvestingPro Insights
As Vista Gold Corp. (NYSE American: VGZ) progresses with its drilling program at the Mt Todd gold project, the company's stock performance and financial health remain a focal point for investors. Recent data from InvestingPro provides a snapshot of Vista Gold's financial standing and market performance that may be of interest to stakeholders monitoring the company's developments.
InvestingPro Data shows a robust 20.11% return over the last week for Vista Gold, which could reflect investor confidence in the company's operational updates and the potential of the Mt Todd project. This is part of a larger trend, with the 6-month price total return reaching an impressive 84.95%, indicating a significant appreciation in the company's stock value over a longer period.
However, the company's operational efficiency is under scrutiny, with an operating income and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for the last twelve months as of Q2 2024 showing negative figures at -$6.65M and -$6.61M, respectively. This suggests challenges in profitability despite the positive market performance.
InvestingPro Tips highlight that while Vista Gold has experienced strong returns over various periods, it suffers from weak gross profit margins and a valuation that implies a poor free cash flow yield. These factors are critical for investors to consider when assessing the company's long-term financial sustainability and growth potential.
For those interested in a deeper analysis, there are additional InvestingPro Tips available that provide further insights into Vista Gold's financial health and market performance. These include observations on the company's liquidity and profitability over various timeframes. To explore these insights, visit InvestingPro at: https://www.investing.com/pro/VGZ.
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