Vista Gold (VGZ) has a storied history as a junior gold miner. In 2012 new management, led by CEO, Fred Earnest, took control of the operations and has been advancing the Mt. Todd gold project, which is the largest undeveloped gold project in Australia.
Mt. Todd contains nearly 6 million ounces of gold reserve (proven/probable). A Preliminary Feasibility Study updated in 2018 shows a project with 381,000 ozs of annual production over a 13-yr mine life (479,000 ozs/yr for first 5 years), an after-tax IRR of 20% and after-tax NPV of $679 million. The current market cap of the stock is $57 million (100 million shares outstanding). As an operating mine, it would be the fourth largest gold mine in Australia and one of the largest new gold mines in the world over the last several years.
I’m not sure why VGZ trades at a huge discount to its peers and to its “intrinsic value.” To be sure, the Mt. Todd Project has a checkered history. But this is primarily attributable to inept management by previous owners. On the surface the resource grade may appear low (.82 grams per tonne). But VGZ has successfully tested and implemented high-tech ore sorting technology which has improved the throughput grade by as much as 50% (1.2 grams per tonne) and has taken heap leach recovery rates north of 90%.
The Mt Todd Project will be converted eventually to a mine. I suspect that, as the price of gold rises, a large mining company will either invest in the Project and take over operational control or acquire Vista outright. The Company has signed recent non-disclosure agreements with mining companies interested in the Project. Until an “exit strategy” event unfolds, this stock is an easy double from its current price.
The Mining Stock Daily’s Trevor Hall interviewed Vista’s CEO to discuss the Mt. Todd Project (click on the graphic below to stream the interview or stream it on your favorite app here – Mining Stock Daily):
The Mining Stock Daily is produced by Clear Creek Digital and the Mining Stock Journal. MSD is now sponsored by Mineral Alamos, which has a portfolio of high quality gold and gold-silver-copper polymetallic assets in Mexico.
You can learn more about Vista Gold and other highly undervalued junior mining stock in the Mining Stock Journal: Mining Stock Journal information.
In the latest issue, I discuss my outlook for the precious metals and mining stocks in my latest Mining Stock Journal. I also present a list of large and mid-cap mining stocks that should outperform the market for at least a few months, including ideas for using call options.
I was hoping you would follow up on your December 8 article about Vail Mountain Resorts. Can they “dig out of the avalanche” from yesterday’s price implosion?
I’ll be reviewing MTN for my subscribers in tomorrow’s Short Seller’s Journal
Is it a coincidence the government shutdown prevents certain economic reports from being published?
Dave, do you conduct similar analysis to Otto Rock over at incakolanews blogspot, who almost daily publishes revelations on the latest scam artists, pump-and-dump mechants and outright liars who seem to populate the management of a large percentage of mining companies.
Latest examples: Pretium, Sandspring Resource, Juggernaut Exploration, Prize Mining, Continental gold, First Mining, Detour Gold…the list goes on and on.
He also complains about ineffective regulatory oversight by the BCSC.
Where does all this leave potential retail investors in mining stocks?
Minera Alamos seems to be having trouble paying for the Guadalupe de los Reyes project in Mexico: http://vistagold.investorroom.com/2018-10-24-Vista-Gold-Corp-Agrees-to-Defer-Guadalupe-de-los-Reyes-Option-Payment
Is there any update on this story? Do you think Vista would be better off to spin off its non-Mt. Todd assets into a separate company, like Almaden did with Almadex?
Spin-off won’t help them raise the money or find a JV partner. A $100 higher gold price will.
Spin-off won’t help them raise the money or find a JV partner. A $100 higher gold price will.