Vista Gold Corp. President and CEO Discusses Strategy and Future Plans
July 11 2007 - 8:01PM
PR Newswire (US)
DENVER, July 11 /PRNewswire-FirstCall/ -- Vista Gold Corp.'s (TSX
& Amex: VGZ) President and CEO Michael Richings explains
Vista's strategy and future plans: "Vista recently announced (May
10, 2007) the completion of a transaction that resulted in the
launch of a new publicly owned company, Allied Nevada Gold Corp.
Since completion of this transaction, Vista's share price has been
quite volatile and has generally traded in a price range lower than
what we and our advisors had expected. Based on calls we have
received and conversations I have had with investors, I am
concerned that there may be some confusion concerning Vista, its
assets and its strategy. I therefore wish to clarify our plans and
strategy and to confirm that Vista intends to continue to provide
value and leverage to the gold investor. First, a little background
on our strategy: in 2002, we started acquiring already discovered
gold deposits and by 2006 we had under our control 13 projects,
with substantial gold resources. The 11 project acquisitions made
during this period were, in our view, at a very low cost, and our
plan was to hold these in anticipation of higher gold prices. This
strategy worked well and as the gold price increased, we added
significant value to the Corporation which was reflected in a
strong share price. However, we felt we could do better. In early
2006, we took steps to place our Nevada assets into a new
Nevada-based mining company -- Allied Nevada, which we felt would
cause these assets to be more highly valued. At the same time, we
had an opportunity to acquire one of the largest privately held
packages of mining property interests in Nevada. We felt the
combination of our assets, the new assets and an experienced
management and board, would generate increased returns for our
shareholders. When the transaction was completed, approximately 65%
of the shares of Allied Nevada were distributed to Vista
shareholders, approximately 4% of the Allied Nevada shares were
retained by Vista, and approximately 31% of the Allied Nevada
shares were paid as partial payment to the vendors of the property
interests. Allied Nevada is well financed and managed, and its
early trading has been consistent with our estimate of value. We
anticipate significant returns for our shareholders who received
Allied Nevada shares, as its resources are explored and developed.
In the almost 12 months it took us to complete the Allied Nevada
transaction, the gold price has traded consistently over $600 per
ounce and it has become evident to us that the leverage to gold
price we had earlier achieved by holding the resources in the
ground is no longer as high as it was. Furthermore, higher gold
prices and increased competition make it more difficult to add
value by the acquisition of quality resources at accretive prices.
We have therefore modified our strategic plan. Vista now holds
seven gold properties (please see our website for a tabulation of
properties, resources and reserves) and the mineral deposits on
these properties are well defined, with approximately 71% of the
estimated gold resources categorized as measured and indicated.
Three of these are advanced and either preliminary feasibility
studies (Paredones Amarillos) or preliminary assessments (Mt. Todd
and Yellow Pine) have been completed. Based on the recently
completed studies and evaluations for Paredones Amarillos, Mt. Todd
and Yellow Pine (published on SEDAR and our website), we believe
these projects are potentially economic to develop at current gold
prices. We have therefore modified our plans to implement a staged
development plan of these three advanced projects, which will
include studies that will seek to eliminate economic and technical
uncertainties about the development of these mines. We will
continue to hold the remaining properties for higher gold prices
and continue to seek the acquisition of new resources as
opportunities arise. One of the more important goals in
implementing this strategic plan is to significantly reduce the
uncertainties associated with these projects, in the anticipation
that the reduction of these uncertainties will be reflected
positively in our share price. Each of Vista's projects has the
benefit of significant historic expenditures made by other
companies on testing, engineering and evaluation, which information
and experience Vista acquired along with the properties for, what
we believe were, very modest investments. The most advanced project
is the Paredones Amarillos in Mexico and we plan to advance this
project so that in 2008 we can make the decision to construct and
build the mine. If we decide to proceed with development and
operation of all three of our advanced projects and assuming a
favorable gold price, Vista could be a mid-size producer in the
next five years. Vista's management team has demonstrated over the
past five years the ability to undertake, negotiate and complete a
variety of transactions designed to add value for Vista's
shareholders. In particular, the creation of Allied Nevada has
provided Vista shareholders with excellent exposure to a well-run
Nevada based mining company. The team will continue to seek out
opportunities to generate increased shareholder value going
forward." About Vista Gold Corp. Since 2001, Vista has acquired a
number of discovered gold projects with the expectation that higher
gold prices would significantly increase their value. As gold
prices have risen, Vista has completed various preliminary
evaluations that have demonstrated that some of the projects would
be potentially viable operations at today's gold prices. Currently,
Vista is undertaking technical programs to bring the most advanced
projects to the point where decisions can be made to put these
projects into production, either by Vista, or through sale or joint
venture to other mining companies. Vista's holdings include the
Paredones Amarillos and Guadalupe de los Reyes Projects in Mexico,
Mt. Todd Project in Australia, Yellow Pine Project in Idaho, Awak
Mas Project in Indonesia, Long Valley Project in California, and
the Amayapampa Project in Bolivia. This press release contains
forward-looking statements within the meaning of the U.S.
Securities Act of 1933 and U.S. Securities Exchange Act of 1934.
All statements, other than statements of historical facts, included
in this press release that address activities, events or
developments that Vista expects or anticipates will or may occur in
the future, including such things as future business strategy,
competitive strengths, goals, operations, plans, potential project
development, future share price and valuation, future gold prices,
Vista's potential status as a producer, and other such matters are
forward-looking statements. When used in this press release, the
words "estimate", "plan", "anticipate", "expect", "intend",
"believe" and similar expressions are intended to identify
forward-looking statements. These statements involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of Vista to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Such factors include, among others, risks that Vista's
acquisition, exploration and property advancement efforts will not
be successful; risks relating to fluctuations in the price of gold;
the inherently hazardous nature of mining-related activities;
uncertainties concerning reserve and resource estimates; potential
effects on Vista's operations of environmental regulations in the
countries in which it operates; risks due to legal proceedings;
risks relating to political and economic instability in certain
countries in which it operates; and uncertainty of being able to
raise capital on favorable terms or at all; as well as those
factors discussed in Vista's latest Annual Report on Form 10-K and
Quarterly Report on Form 10-Q and other documents filed with the
U.S. Securities and Exchange Commission. Although Vista has
attempted to identify important factors that could cause actual
results to differ materially from those described in
forward-looking statements, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can
be no assurance that such statements will prove to be accurate as
actual results and future events could differ materially from those
anticipated in such statements. Vista assumes no obligation to
publicly update any forward-looking statements, whether as a result
of new information, future events or otherwise. For further
information, please contact Connie Martinez at (720) 981-1185, or
visit the Vista Gold Corp. website at http://www.vistagold.com/.
DATASOURCE: Vista Gold Corp. CONTACT: Connie Martinez of Vista Gold
Corp., +1-720-981-1185 Web site: http://www.vistagold.com/
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