Friday, March 19, 2010

Vista Gold: An Explorer Worth Exploring

We continue our series of interesting junior precious metals companies for investors to consider. 

Vista Gold Corp. (VGZ) is an international gold mining company based in Littleton, Colorado, with a 20-year history of Gold exploration, development and operations.

Vista has positioned the company to benefit from higher Gold prices and has acquired a number of impressive gold projects from 2001 to 2006.  During 2006 and 2007, Vista completed transactions that resulted in the formation and successful spin-off to its shareholders of Allied Nevada Gold Corp. (ANV).

Since the spin-off, Vista has sold one project and currently holds six projects with an estimated 1.3 million ounces of proven and probable reserves, 12.8 million ounces of measured and indicated resources and 4.6 million ounces inferred.  Vista has undertaken programs to advance the Paredones Amarillos gold project, located in Baja California Sur, Mexico, including a definitive feasibility study, the purchase of long delivery equipment items and the purchase of land for the processing facilities, related infrastructure and the desalination plant.

The results of a Preliminary Economic Assessment completed in 2009 on the Mt. Todd gold project in Australia are encouraging and Vista is undertaking other studies to advance the project. Vista's other holdings include the Yellow Pine gold project in Idaho, Guadalupe de los Reyes gold project in Mexico, Long Valley gold project in California and Awak Mas gold project in Indonesia.

The spin-off of intermediate-producer Allied Nevada has proven to be a huge home run to shareholders.  ANV, which produces Gold in Nevada, has a market capitalization of more than $1 billion, as opposed to micro-cap Vista, which at current prices, has a market capitalization of UNDER $100 million!

Fellow explorer Seabridge Gold, recently featured on Marko's Take, ( has yet to successfully see a project advanced to the production stage with the unbridled sucess of the Allied-Nevada spin-off.

As an explorer, Vista's earnings are fairly meaningless.  More important, by far, is Vista's track record, longevity, management and financial situation.

Vista recently released full-year results.  A quick review of the balance sheet reveals plenty of cash and liquid resources totalling approximately $30 million, or one-third of the Company's entire market capitalization.  Offsetting that somewhat is long-term debt of about $25 million, principally in the form of convertible notes.
The convertible notes are currently "out of the money" with a strike price of $4.80 per share.  The Company has been able to repurchase some of the notes in privately arranged transactions.

In September 2009, Vista successfully sold 10.3 million shares for $2.25 per share - realizing proceeds of $20.3 million, bolstering the balance sheet and providing additional liquidity to fund its ongoing exploration and development.

In the interest of full disclosure, I personally own shares of Vista Gold.

Vista was recently recommended by the excellent technician Clive Maund (

Happy Investing!

Marko's Take

Other investing sites of merit that we recommend:  LeMetropole Cafe ( and StockMavrick ( and Global Green Forex LLC (, a money management firm specializing in foreign exchange trading.

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