Q2 2020 Vista Gold Corp Earnings Call
Good day, ladies and gentlemen, welcome to Vista golds second quarter Twentytwenty financial results conference call and webcast at this time.
Vince Arnone listen only mode. Following the presentation, we will conduct a question answer session.
Hi, participants are asked to press Star one to register for your question.
During today's call. Please press star zero on your Touchtone phone as a reminder, this conference is being recorded today is Thursday July Thirtyth Twentytwenty. It's now my pleasure to introduce Pamela Sally Vice President Investor Relations. Please go ahead.
Thank you Brenda.
Good afternoon, ladies and gentlemen, thank you for joining the Vista Gold Corp, second quarter 2020 financial result in corporate update conference call.
Hi, Pamela Sally Vice President of Investor Relations on the call today, as Bret Ernest President and Chief Executive Officer, and Doug Tobler, Chief Financial Officer.
During the course of this call we will be making forward looking statements.
These statements involve known and unknown risks uncertainties and other factors that may cause actual results performance or achievements of vista to be materially different from results performance or achievements expressed or implied by such statements.
Please refer to our most recently filed form 10-Q, four a detailed discussion of risks and other important factors that could cause actual results to differ materially from those in our forward looking statements I will now turn the call over to Fred Ernest.
Thank you Pam.
And thank you everyone for joining us on the call today.
I'll begin this afternoon by briefly addressing the covert 19 pandemic, which continues to have a significant impact on human life and health and on the global economy.
This is response to the covert 19 pandemic has been to ensure the health.
And safety of its employees and other stakeholders.
Corporate activities continue with personnel working remotely and on a limited in office basis.
Corporate travel and participation in conferences has been replaced by video conferencing.
That's true.
Our Mt. Todd project is classified as a critical business and is operating under a cobot 19 management and mitigation plan direct costs improved but implement this plan are minimal.
To date.
Workforce and their families remain healthy.
Moving onto our second quarter results I'm pleased to report that we strengthened our balance sheet through our ongoing efforts to monetize noncore assets continue to our business practice or maintaining a current shelf registration statement and associated agreements of note our new shelf registration has eliminated $25 million substantially so.
Stanch Lee less than our previous show the at a limit of 100 million.
We continue to work with the Northern territory Division of mines in the review of our mind management plan.
We also announced recent geological evaluation results for areas adjacent to our plan Mt. Todd mine.
And continued our efforts to identifying and engage in discussions with potential development partners.
I will discuss these topics in greater detail later in the call.
But I will now turn the time over to Doug Tobler.
For a review of our financial results for the quarter ended June Thirtyth 2020.
Thank you Fred and thanks to those on the call. We appreciate your interest today.
Just a filed its most recent form 10-Q yesterday today I'll provide a brief overview of our results of operation and financial condition for the quarter ended June Thirtyth 2020.
For more in depth analysis, please refer to our form 10-Q, which is out on our website.
For the quarter into June 320, 20, we reported net income of $1.9 million that compared to a net loss of $3 million for the same period last year.
There were two key drivers that account for this quarters net income and the variance when compared to 2019.
First in May 2020, we received $2.8 million to cancel a portion of our royalties on the all walks Moscow project in Indonesia.
This amount plus or related deferred option game resulted in recognizing a gain of $2.6 million.
And secondly, our holdings and Midas gold shares appreciated in value, which resulted in a $1.1 million gain during the quarter ended June 30 2020.
This was a complete trip slip from our second quarter of 2019 Winberg free we recorded a mark to Mark loss on the Mighty shares of 1.1 million.
Our net loss for the six months ended June 32020, and 29 team was 1.6 million and 5.7 million respectively. Again. This variance is largely accounted for by the gain recognized for all work loss and the mark to market adjustments for the milestones.
Our net income reported for this quarter and potential humor future payments from agreements in place to monetize noncore assets [noise].
That's our objective of says sustaining our balance sheet, while minimizing dilution.
Working capital of June 30, 20, $24.8 million, which was net of noncash deferred option gains of $3 million that were included as current liabilities.
Ignoring these noncash items, our current assets net of accounts payable in accrued liabilities was $7.8 million. This compares to our working capital at December 31st 2019, which was also $7.8 million.
And we were able to maintain or financial position largely because of the I'll walk most transactions and my disclosures as we discussed earlier.
We also benefited from did use of the ATM program and maintaining our low expenditure profile.
And now we're not occurring during the second quarter. We recently received the final 1.5 million dollar payment from Prime mining there was required to complete the purchase of the laws, most Ras gold and silver project in Mexico.
This transaction also requires prime lending to pay us an additional $2.1 million over the next year in lieu of being granted certain royalties and the Bakken right.
And as a closing note on our financial position, we continue to have no debt.
Yeah looking forward just leaks briefly we believe our existing working capital together with the Los Reyes transaction, an additional option payment of $2.5 million due in April 2021 under the almost lost agreement and other potential sources of non dilutive financing will be sufficient to fully fund are currently funded.
Pivot is for more than 12 months.
With that I'll turn it back or Fred Thank you for your participation today.
Doug Thank you for that that overview.
I will begin with our achievements during and subsequent to the quarter ended June Thirtyth 2020, and then provide an outlook for the remainder of this year.
As most of you know.
One of vistas major objectives is to maintain a disciplined capital structure to limit dilution to our shareholders. One way we've been able to achieve this is through the monetization of our non core assets.
As Doug mentioned earlier during the quarter, we received $2.4 million from P.T. mass mendo to cancel 50% of the net smelter return royalties on the I'll walk must project in Indonesia.
PT mass mendo retains the right to cancel the remaining 50% for an additional payment of 2.5 million.
By April Thirtyth 2021.
If P.T. mass Mendo does not make the $2.5 million payment by April Thirtyth of 2021 Vista will retain the remaining royalty interest and can pursue alternative monetization strategies, if we choose.
Turning to the Guadalupe de Los Reyes project in June.
This amended the agreement with Prime mining for the Guadalupe de Los Reyes Gold and silver project and sent a lower Mexico.
The amended agreement accelerated the due date for the final 1.5 million dollar payment.
Which was received by Vista in July and provided and and and.
Fights for.
An additional 2.1 million dollar.
Payments payable to Vista in lieu of being granted certain royalties and Bakken rights.
Just the expects to receive the $2.1 million through two payments within the next 12 months [noise].
If prime mining fails to make the two payments Vista will have the right to reinstate the royalties and backend right.
During the quarter.
We filed a new $25 million shelf registration statement with the U.S. Securities and Exchange Commission.
Shelf registration statement became effective on June 24th 2020.
To replace the company's prior $100 million shelf registration statement that was set to expire on July 15th 2020.
A parallel $25 million preliminary short form base shelf prospectus results will file on each of the provinces of Canada.
Other than Quebec on June 22nd.
2020, which is still under review by the British Columbia Securities Commission.
At the same time the company also amended.
Its existing 10 million dollar aftermarket offering with HC Wainwright, which originally became effective on November 22nd 2017 to incorporate certain representations and warranties of the company.
And other information in relation to the filings the new shelf registration statement and to remove the termination date.
August 30, Onest 2020.
Going forward the ATM agreement can be terminated by either H.C. Wainwright or Vista.
Upon proper notice under the terms of the agreement.
It is important to note.
That the shelf registration statement and ATM agreement are part of the company's ongoing business practice to maintain current financial instruments without any incumbent obligation for their use.
Let me turn to.
Matters related to Mount Todd.
In June we announced positive results of ongoing geological evaluations at Mt. Todd Gold project, which is located in the northern territory of Australia.
This initial phase of evaluations focused on areas within an adjacent to the Batman deposit extending northeast to the quickly deposit.
Results demonstrated greater potential for continuity of Goldman realization, along a 5.4 kilometer strike length.
Although these results are preliminary nature of the recent work by our geologic team to understand the connectivity of the Batman deposit to the Gulf told us and Quigleys deposits indicates potential.
Our district continuity.
As we evaluate this potential combined with the continuing improve gold prices.
As possible breast envision a 20 plus year mine life for the Mt. Todd Gold project.
Changing to permitting.
We continue to work with the Northern territory Division of minds on the approval of the Mt. Todd.
Jack Mine management plan.
Which is the equivalent of a mine operating permit in North America.
In March of this year, we were asked to provide a number of independent assessments of our designs and operating and closure plans.
These assessments have been Favourably completed.
And final corresponding documents are in the process of being submitted.
We are hopeful that in the coming months, we will receive the final approval of the mine management plan.
Once approved Vista will then hold all of the major projects for major permits.
For the Mt Todd project.
Moving onto our share price performance. This to shares are up approximately 66% year to date our shares like most companies.
Were negatively impacted during the initial phases of the covert 19 pandemic, but have since rebounded with the increase in the gold price.
Vista continues to enjoy strong leverage to due to the price of gold.
In part due to the significant improvement in Mt. Todd Project Economics.
That correspond to relatively small improvements in the gold price.
Since November.
13th 2018.
The date that.
Golden broke out of its horizontal trend.
Through July 29, 2020, the gold prices improved by approximately 61%.
Well this is share price has improved by approximately 173%.
This is nearly three times the improvement in the gold price on a percentage basis.
This compares to the value of the Gtx, Jay improving by approximately two times improvement in the price of gold over the same period.
Looking ahead.
Mr continues to advance and de risk Mt. Todd and is well positioned in the current gold environment to consider prospective development partners, who we believe we'll recognize the value of Mt, Todd and appropriately reward shareholders.
We continue to believe that the debt and dilution needed to build Mt. Todd on a standalone basis is not in the best interest of our shareholders. Our objective is to achieve a valuation for Mt. Todd that is reflective of the size of the deposit.
Together with its location in Australia is low risk northern territory.
Favourable low operating costs robust project economics, and the fact that.
We have approvals.
For all major environmental permits.
We believe these factors coupled with the technically advanced stage of the project an excellent infrastructure placed Mt. Todd on the short list of the most attractive development stage projects in the world.
In 2000, <unk> I'm, sorry that 2019 preliminary feasibility study provides a solid basis for engagement with prospective development partners.
And current market conditions demonstrate the robust economics of the project.
Our goal is to provide appropriate reward for our shareholders.
In addition to seeking a strategic partner, we will continue to de risk Mt. Todd in a cost effective manner.
Work with the Northern territory Department of primary industries and resources to receive authorization of the Mt. Todd Mine management plan and monetize other noncore assets.
Opportunistically.
Finally.
With the continued improvement in gold price, we are evaluating the positive impact of higher gold prices on mine plans and project economics.
In conclusion.
We find ourselves in a market with record gold prices and governments around the world on the cusp of improving additional stimulus packages.
We believe this bodes well for sustained improvement in the gold price in the coming 12 to 24 months.
The work we have completed over the past several years has positioned to our Mt. Todd Gold project as the largest single deposit undeveloped gold project in Australia.
With 5.85 million ounces.
Gold as proven and probable reserves Vista controls the third largest reserve package in Australia.
Our 2019 preliminary feasibility study demonstrated a net present value at a 5% discount rate of 823 million with an internal rate of return of 23.4% at a thirteenfifty gold price and using 70 cents.
You asked for Australian dollar foreign exchange rate.
At the current gold price of approximately $1950 and foreign exchange rate.
71, and a half since you asked perhaps trillion dollar.
The project economics demonstrate an after tax NPV, 5% discount rate of more than $2 billion and an internal rate of return of 45.3%.
Mt. Todd is ideally located in the northern territory of Australia with paved roads, the site and other existing infrastructure, such as power lines and natural gas pipeline freshwater storage reservoir and tailings empowerment facility.
The project improvements, we have achieved along with our estimated reserves and production profiles have created the foundation for the leverage to gold price and improve shareholder value.
We have earned the trust of local stakeholders and believes that our social license is firmly in hand.
We've worked hard to secure the authorization of the major environmental permits and are now focused on gaining the authorization of the mine management plan.
We believe.
Mt. Todd is a superior asset located in a politically stable.
And mining friendly jurisdiction and one of the most attractive development stage gold projects not just in Australia, but in the world.
I reiterate our commitment to finding apartment finding a partner to advance the project and at the same time realize value for our shareholders.
For a more comprehensive assessment of the value. According to this and the Mt. Todd project.
I refer you to our corporate presentation, which can be found on our website at W. W. W Vista Gold Dot com.
We believe that Vista gold represents an exceptional investment opportunity for the gold investor looking for value.
Growth potential low geopolitical risk exposure and strong leverage to the gold price.
We'll now respond to any questions from the participants on this call.
Thank you if you would like to ask a question. Please signal by pressing star one on your telephone keypad. If you are using a speakerphone. Please make sure. Your mute function has turned off to allow your signal to reach our equipment again for star wants to ask your question, we'll pause for just a moment to allow everyone an opportunity to signal for questions.
The first question will come from HEICO Ella with HCW. Please go ahead.
Hey, guys good quarter and thank you for taking my questions.
Hi, guys, thanks for being on the call today.
Gentlemen, Hey, I'm just curious your use releases drove 2020, I mean, you got a bunch of money coming in from being almost loss and and all the other stuff, but let's talk a little bit about exploration for the rest. Your if you could how much do you think is going to happen for the remainder of the year and how much do you plan on spending on.
Please.
Yeah. Thanks, Thanks for asking HEICO I'm always as a result.
As as a result of the geologic evaluation that was discussed previously on the call.
We've identified two areas of interest immediately adjacent to the currently design Batman pit.
We've completed surface mapping and sampling and plan to a modest program to test both of these targets.
Which if successful would be expected to immediately add a small number of ounces to the project resources and could form the basis for future mine design changes given that there on the very limits of the pit.
Furthermore, this drilling will mark our first efforts to establish continuity of the.
Nobody of deposit.
Trending to the northeast.
Right now, we contemplate spending approximately $430000 on this first small drilling program.
Through the end of the year.
No.
Income.
And completely unrelated to this I'm sorry for jumping around like that can you just walk me a little bit through and I asked same store to kind of questioning the last conference call.
The so called with 19 thing that's been putting everything is this a rate can you just sort of walk me through costs and expenditures and and just general corporate impact from that what are you seeing I mean from the best My understanding is surely is still closed all planes can only have you know 30 or fish.
The people and it's tough to travel around and see things can you sort of walk me through impact in the company. Please thank you.
Yeah, absolutely the a financially the impacts of the covert 19 pandemic to Vista gold has been minimal.
We have our compliance costs in Australia, and as indicated on the call Mt. Todd is considered a critical business.
We have a government approved Ur cobot 19.
Management mitigation plan the costs of implementing that plan was.
No more than $1000.
It was really the is the purchase of additional personal protective equipment masks, and ER and sort of seasonal I think $1000. That's it.
$1000.
Yeah.
It's a very very very minimal.
And so.
The the site that the site management and our activities there have been largely unaffected.
The biggest the biggest thing that's happened is that our weekly crew change over.
Has happened.
By a video conference rather than everybody being together at site at the same time, which has been our operating practice in the past here in the Denver office, we have.
We have adjusted work schedules.
So that Dan at a in accordance with government regulations here in Colorado that no more than half of our staff is in the office.
At any given time, we that means that.
We work here in the office three days, a week and we work remotely from home two days a week, we communicate on a daily basis by Zoom video conference calls.
And we do the same thing with our team in Australia, so our or our ability to adapt has been.
Actually quite easily implemented the.
Here in Denver, the financial impacts have been slightly different we've actually.
Received significant.
Benefit from the limitations on on travel and our our travel expenses are considerably lower than budget.
As we've not had any corporate travel basically since PDAC. The first week of March.
As you may be aware.
International travel to and from Australia and parts of Europe are.
Essentially.
Shut down.
And as such we have we've not been able to travel at all men. We've replaced the a the usual face to face contact that we would have with key members and investors with a with video conference calls we have made some small investments in ER and technology here in a in the debt.
Our office.
Video conferencing equipment than in some cases.
The same for team members homes, but.
I would say that our total cost for compliance an adjustment to the cobot 19 pandemic here in Denver has been less than something on the order of 2500 to $3000. So on a corporate basis, we've spent less than less than five $5000 to be a to adapt to a conditions of the pandemic hike.
Okay, well. Thank you for taking my questions I'll get back in queue and congratulations again.
Thank you Heiko.
Thank you. The next question will come from Adrian Day, with Adrian Day asset management. Please go ahead.
Good afternoon Threadneedle, there's two questions. If I may the first question you talked about the 430000 on this new drilling program, which is good to see but can you tell us the totality of what you're expecting to spend in the coming in both the Mt. Todd.
And also on Gionee in general.
Yeah, I'm going to turn that I'm going to turn that question to Doug Tobler, Our CFO for response Crazy High Adrian that's Jeff Hi, So our ongoing run rate is going to be essentially the same. If you went back and took the previous four quarters. So in round numbers, you're looking at a.
Holding costs were run rate cost for the whole corporation, including the normal things, we do at Mt. Todd of about $6 million per year, so million and a half per quarter.
Then a program like this 430000 of course that would be on top of that.
Okay.
That's about half and half DNA in Mt. Todd.
Yes.
Yeah.
Yes, okay because.
Almost static for the last year.
Okay.
You.
My Okay, I just thought it might have gone down the bed since you know yield.
You finish some pretty critical issues at Mt Todd but.
My second question is.
You've obviously done an excellent job all.
Raising cash from non core assets so that the is.
But you know and it's been a little bit if I may use you expression or its appeared to be a little bit of sort of hand to mouth, you've always managed to succeed and putting a wrap it up somewhere else.
But of course were running so we're running low one remaining rabbits, if you want.
And I just want to I just want two things one is that there's thing, but the increase in the press it gold that there's been any increase interest in the mill maybe too soon yet and then the second thing is on my does he will no longer a reporting shareholder.
Would you at least announced to the market when you have sold everything in Midas.
Oh I'll respond to the question about the mill equipment and I'll, let Doug respond to the a part of the question on Midas and our and our ownership there.
The.
With the increase in gold price.
We have not yet seen.
As and when I say increase in gold price I'm talking the last say six weeks or eight weeks I would say that that with the improvement in gold price that we saw at the end of 2019 that we were seeing a and improvement or an uptick in interest in the yet the mill equipment that we.
I have.
And we had a a and a number of ER visits and inquiries in the first quarter of the year.
Much of that interest has gone quiet.
As a result of that covert 19 pandemic expansion projects.
And and other a other activities that were driving the interest in the project have died down some some of the engineering work has been put on hold and so the covert 19 pandemic has set and then the limitations on travel.
I have had an impact on that now having said that I expect that as you know in coming months as things start to open up and I certainly we all hope that they will that that that interest will revive I think that I think that theme the improvements in gold price over the last a lot.
Four to six weeks.
I will also start to drive a little bit of interest, but we've we've not seen an uptick in that interest at as of today Adrian Okay. Okay now that makes sense. So.
So with regards to the Midas shares I'll turn it over to Doug, Yes. So the minus information you're right. We're not required to report that information outside of what we put in our 10 keys in our 10-K and we do have that in the footnotes to document. So at OCA end of June we still had 4.7 million shares.
Yes.
Okay.
Good good thank you.
Thanks, Thanks, Adrian Thanks for being on the call.
Thank you for the question as a quick reminder, if you have a question at this time that star one to enter into Q. The next question will come from Linkohr Kim with Premier Enterprises. Please go ahead.
Gentlemen.
Good afternoon link.
Just a two part question about the Mt. Todd projects first I'm very glad to hear you have the environmental permits approved that's always a fun hurdle.
So first of all what what's the conservative timeframe in which you believe the mine management plan will be approved for the Mt. Todd project, you have a feel for that.
We're hopeful that within the coming months.
And a you know we like I indicated in the in the prepared that portion of the call.
In March we were asked to to prepare and submit.
Independent assessments of our designs and and operating and closure plans.
Those have all been completed we're hopeful that within the next the next five business days that all of those set and the associated documents will be in the hands of the government.
And and with that we believe that we're nearing the end of the review process and that and that and that that drives the optimism that we're within we're within a number of months I would hope that sometime late this quarter or early fourth quarter that we would have that authorization.
Great.
And then part to do that then would be what you know once the mine management plan is approved.
How long will it take roughly to ramp up to full production with your existing equipment.
So there is no existing equipment.
Todd or actually this why do you have to existing plan [laughter] sorry.
Yes. So the plan is as we indicated to attract and enter into an agreement a transaction with a partner.
For the development of the project.
And yeah, we we've been working on this since near the first of the year.
And the October 19, pandemic has definitely slowed that down Doug and I had a plan to beyond the road in a in parts of Australia in Southeast Asia. The the first weeks of February.
As the pandemic broke and airline started restricting travel and canceling flights. We ultimately cancelled all of that we have since been successful in reaching out to a number of parties we've signed a.
Confidentiality agreements with a number of a entities who are conducting due diligence and and we expect that we will sign more confidentiality agreements in the coming in the coming weeks and months.
Having said that.
The due diligence process as a is a can be a lengthy process and right now with travel restricted to Australia that may have a have an impact.
Taking that into consideration I think that it would be reasonable to expect that sometime early next year, we would be in a position to have.
An agreement with a potential partner and from there it would be a the exercises of.
Completing final a feasibility study evaluations.
Undertaking a financing discussions.
Construction itself as noted in our preliminary feasibility study our engineers think that it could be completed a in 18 months. We've allowed 24 months from the start of construction through to.
The start of a.
Production and then a six month to ramp up to achieve.
A full scale commercial operations.
Okay.
Appreciate the insight.
Yes, the safe.
Very good thanks for being on calling.
Thank you for the question. The next question will come from Sean drink a shareholder. Please go ahead.
We'll show you.
Hello, how are we doing now you've got to answer both questions. The there's less gentlemen, so I appreciate that kinda because there was operational permit the co good as to stalling that process at all.
And so that all my second part of the question would be as cool.
Yes affecting the potential partners coming and visiting the site.
Yeah, so as so that the covert 19 pandemic has all has only minimally affected the.
The work, we're doing to get the mine management plan approved a were fortunate in that regard that the devaluation of the study was well advanced and the work that we have been asked to complete has that only nominally been impacted we've had one particular consultant that are there.
Or particular office and and jurisdiction requirements have limited a their ability to complete work in that and as timely manner is what we had expected. It's been one of the delay I wanted I suppose one of the reasons for the delays in getting a these less these these estimates assessments completed in into the Gulf.
But.
With regards to that the impact of the pandemic on finding a partner that the impact is more pronounced.
Our our inability to travel and meet people face to face has a has slowed the process down.
Combined with the fact that a number of the the companies and groups that we would Oh, we would.
Hope would that take interest as potential partners have a.
Have a likewise been impacted that.
Producers in Australia, we're aware of a number of cases, where you know through the period a late March April may their business development teams were re task.
As covert 19 management teams and we're not doing any business development work and so our calls went largely ignored in unanswered.
We're starting to see a bit of a change in that regard that that we have had a in the last a in the last month six weeks a number of a very interesting calls and so we're we're seeing a change in that regard that did the next challenge, though is as I indicated previously is that the site visits.
And completing the due diligence and right now or travel to Australia continues to be restricted.
And as such.
Those entities that have operations are staff engineering people, a technical teams within Australia have a distinct advantage.
Provided that they're not in the states of Victoria or Sydney.
Those areas are restricted from traveling to the northern territory at the present time due to the up the uptick in the number of covert 19 cases, but that people in Perth can.
Can travel to a the northern territory in some instances people are still required to so quarantine for 14 days. So so there's some challenges around that however, all of the yet you know the data review the a and there's an exhaustive amount of information available for Mt. Todd.
All of that can be completed remotely, but when it comes to the actual site visits walking the ground, meaning the people being able to see the rocket et cetera.
The pandemic is still having a a significant impact on our ability to accomplish that part of the due diligence process.
Thank you very much.
Thank you.
The next question will come from Henry Westendorp with.
Mr. Please go ahead.
Hey, I'm.
I'm wondering if you can elaborate a little bit on what.
Pardon the remains when you're looking to partner.
This could range anywhere from some the project over to you guys. There the project and they just phase the money and there's probably a half a dozen stops in between what are you looking for what's best for the shareholders.
That's a that's a very insightful question or when when we say we're looking for a partner to help advance the project. We're looking to enter into an arrangement an agreement with a a another party.
Whereby they would acquire upfront.
A significant part of the project and ideally for US it would be a 50 50 arrangement.
It may end up depending on the partner.
For example, if it was a senior producer a well established name in the in the and the gold.
Producer sector that we would end up at something less than that our goal is to receive a submission sufficient amount of cash or consideration upfront that we would then be able to fund our proportional share of the development of the project.
With very little or no dilution to our shareholders now.
Partner could be.
Yeah, a senior or large mid tier producer.
It could be a a strategic financial interest.
Or one of any number of different flavors.
And as you a astutely pointed out it could mean that.
No we as a partnership develop the project with the with the partner in the case of it of the partner being a a senior producer driving the boat and being the one that makes a lot of the decisions and provides a lot of the personnel for the development and construction of the project or.
On the other ended the spectrum, if it's a strategic financial partner it could be that vis that would be expected to build the the development and construction team and ultimately operate the the project at this point in time, we're agnostic as to which type of partner.
We we end up with we're talking to many different groups and companies.
And the idea right now is to help individuals understand the intrinsic value of the project.
With the with the goal in the objective of.
Achieving the greatest realization of value for our shareholders.
That's possible.
When you mentioned the $2 billion net present value 1950 go.
That's something that eventually wouldn't be shared between the partners or I'm, Oh, I I am trying to figure out how that equates to.
Oh, what you might develop will apart.
Yeah. So if you took the this is Doug tobler by the way as Jeff.
Our feasibility study we're looking at a 13 year mine life presently and we're looking at a little bit better than 400000 ounces per year, almost 500000 ounces in the first five years. So if you use the 50 50 joint venture is an example than on the construction side of things.
As Fred said, we would expect to see a consideration come to us through the joint venture arrangement that would effectively fund all or most of just as cost to participate at at that percentage.
Then.
If it's a major you know we don't have any any believes that a major is going to ask us to build it of course are going to bring in their expertise and that's part of the reason you bring in a major.
On the other side willingness organization have the ability to do it all of US have been involved in construction projects in the past so a financial investor would really be more putting up the funding with us being the development partner so that pass depends on how it goes but the relationship after that would be there would be an op.
Operator, they would David run the day to day operations, we would have a management committee and depending on the ownership structure that would determine effectively how many vote you have sitting at the table and in certain decisions. You would have Super majority is for example plant expansions typically require super majority because it's a new.
Capital investment, but Thats years down the road then as the as the.
Nine goes into operations each party takes.
Credit for and received the financial benefit of their respective number of ounces and covers off their respective portion unsure of the operating expenses. So.
50, 50 deal then we'd be looking at.
Two vistas credit for the first five years something in the order of 250000 ounces of attributable gold and life of mine something fractionally over 200000 ounces here. So that would be our objective is once the project is built we've done minimal dilution to our shareholders and yet hang onto some.
Think of that magnitude.
As a.
As attributable to us and I think if you go out and look at.
You actions around 200000 gold producers.
That's that's where we'd like to get to and.
That number will change over time, depending on where the gold prices at the right now.
Being a 200000 ounce producer would be a very nice aspirations for this.
Last year or one of the recent calls.
You.
Talks about.
This is share price.
Compared to.
The share prices of other players with some or if there arent a but you know equivalent projects and my veg recollection is that a you are way on the low end of the scale compared to.
Other alternatives to the so partners might have.
Does that sound familiar.
Well, we don't have the presentation of the numbers in front of us, but broadly speaking our multiple as a percentage of the net present value. The project is quite low typically somewhere in the order of 0.1 times, our pricing any of the project, sometimes slightly less than that.
Where is that how because the gold price had gone up substantially.
Driving the NPV.
What the what we're trying to accomplish in when we talk about getting value for our shareholders is building a bridge from being an undervalued developer that frankly the ticket for this project is bigger and would cause the dilution that we don't want to give shareholders. So we're trying to build bridge with joint venture partner.
Whereas the joint venture transaction is accretive to the shareholders, but ultimately the objective would be to get into that producer category, where you could be looking at I.
I think the range right now is somewhere between say 0.7, and a little bit over one times your price to any movie and getting there is is the magic of what we're trying to deal with the joint venture partner. So we would effectively be doing a two step approach get a joint venture partner, that's accretive to our shareholders.
In the near term and then.
We have the longer term opportunity to see a producer Pete and Avi type free rating, so and all the while trying to not do a massive duty that to our shareholders.
I would tell you guys it sounds pretty good.
Well, thanks for being on the call today.
All right.
Thank you again as a reminder, if you have a question at this time, please dial star one.
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Very good thank you Brandon.
Especially thank you to all of you who have been on the call today and for those of you who've asked questions they've been a very interesting and insightful questions.
As I indicated earlier in the call we find ourselves in a very interesting period of time with regards to the gold markets.
And current market and global conditions suggests that the gold price will remain strong and and continued to improve in the coming.
12 to 24 months and and I think that that bodes very well for the project in and the value of the project as I indicated that the leverage to the project the leverage of the project to the price of gold is tremendous.
Huh.
With a.
You know I roughly a 600 dollar improvement in gold price, we have seen Uh huh.
Almost a tripling in the in the value of.
Yes, the NPV of the project.
Looking more like two and a half times, but.
The important thing is that the I think this is one of the things that distinguishes Vista gold from many of our peers is this tremendous leverage that we have to the price a goal and I would simply reiterate that if.
If an investor is looking for a.
An opportunity to invest in a project that's in a safe jurisdiction.
With tremendous.
Value that can be unlocked and growth potential and strong leverage to the price of gold that Vista gold represents the kind of investment that you should be looking at and.
We heres the management team at vis a appreciate the support of our shareholders and for those who are contemplating an investment in Vista. If you have further questions or would like to visit with a member of the team.
Please feel free to reach out to US we thank you for your time. This afternoon, and we look forward to being able to chat with you again in the future. Thanks, everyone.
Thank you ladies and gentlemen, this concludes today's event.
Disconnect your lines.
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