Vista Gold Corp. Announces Results From a Preliminary Assessment of Its Awak Mas Gold Project, Sulawesi, Indonesia
January 17 2008 - 9:40PM
PR Newswire (US)
DENVER, Jan. 17 /PRNewswire-FirstCall/ -- Vista Gold Corp. (Amex:
VGZ; TSX) announces the results from a preliminary assessment for
the Awak Mas Project in Sulawesi, Indonesia, that was completed on
January 16, 2008, by Gustavson Associates, LLC ("Gustavson") of
Boulder, Colorado, under the direction of Mr. John Rozelle, an
independent Qualified Person as defined in Canadian National
Instrument 43-101. Vista will file this preliminary assessment
entitled "Preliminary Assessment, Awak Mas Gold Project, Sulawesi,
Indonesia" on SEDAR. Gustavson had estimated mineral resources in a
report entitled "Report NI 43-101 Technical Report on the Awak Mas
Gold Project, Sulawesi, Indonesia" dated June 6, 2007, the results
of which were previously reported by Vista in a press release dated
June 6, 2007. Based on the June 2007 report, the gold resources for
the Awak Mas deposit, reported at a cutoff grade of 0.5 grams of
gold per tonne are: Tonnes Grade Contained Gold (000s) (grams per
tonne) Ounces Measured resources 1) 7,084 1.30 296,000 Indicated
resources 1) 34,609 1.22 1,360,000 Measured and indicated resources
1) 41,693 1.24 1,656,000 1) Cautionary Note to U.S. Investors
concerning estimates of Measured and Indicated Resources: This
table uses the terms "measured resources" and "indicated
resources". We advise U.S. investors that while these terms are
recognized and required by Canadian regulations, the U.S.
Securities and Exchange Commission does not recognize them. U.S.
investors are cautioned not to assume that any part or all of
mineral deposits in these categories will ever be converted into
reserves. Tonnes Grade Contained Gold (000s) (grams per tonne)
Ounces Inferred resources 2) 20,425 0.82 39,000 2) Cautionary Note
to U.S. Investors concerning estimates of Inferred Resources: This
table uses the term "inferred resources". We advise U.S. investors
that while this term is recognized and required by Canadian
regulations, the U.S. Securities and Exchange Commission does not
recognize it. "Inferred resources" have a great amount of
uncertainty as to their existence, and great uncertainty as to
their economic and legal feasibility. It cannot be assumed that all
or any part of an inferred mineral resource will ever be upgraded
to a higher category. Under Canadian rules, estimates of inferred
mineral resources may not form the basis of a feasibility study or
prefeasibility studies, except in rare cases. U.S. investors are
cautioned not to assume that any part or all of an inferred
resource exists or is economically or legally mineable. In
undertaking the preliminary assessment, Gustavson considered the
economic and technical parameters associated with development of
the mineral resources by open-pit mining. The study included a
process flowsheet based on three stages of laboratory and pilot
plant test programs from 1994 to 1997. The flowsheet was developed
by Minproc Engineers Ltd. in 1997, and reviewed and approved by
Resource Development Inc. of Wheat Ridge, Colorado, for this study.
The flowsheet includes a flotation circuit to recover gold
associated with sulfide minerals, following which the concentrate
would be treated in a carbon-in-leach circuit to recover the gold.
The benign tailings from the flotation circuit would flow by
gravity into a tailings impoundment and the sulfide tailings would
be detoxified, filtered and trucked to a small "dry-stack" sulfide
tailings storage facility. MWH Americas Inc. of Denver and
Steamboat Springs, Colorado, prepared the tailings disposal sites
layout and closure plans, and assessed permitting requirements.
Using a gold cutoff grade of 0.6 g/t, the estimated potentially
mineable resources are as shown in the following table. PRELIMINARY
ASSESSMENT STUDY Estimated Potentially Mineable Resources above a
0.6 g/t Au cutoff grade January 2008 Class Mineral Gold Grade
Contained Total Total Stripping Tonnes (g/t) Gold Waste Tonnes
Ratio (x 1000) (oz) Tonnes (x 1000) (W:O) (x 1000) Measured
resources (1) 4,909 1.40 220,959 NA Indicated resources (1) 16,279
1.37 717,033 NA Inferred resources (2) 2,595 0.91 75,922 NA 104,868
128,651 4.41 (1) Cautionary Note to U.S. Investors concerning
estimates of Measured and Indicated Resources: This table uses the
terms "measured resources" and "indicated resources". We advise
U.S. investors that while these terms are recognized and required
by Canadian regulations, the U.S. Securities and Exchange
Commission does not recognize them. U.S. investors are cautioned
not to assume that any part or all of mineral deposits in these
categories will ever be converted into reserves. (2) Cautionary
Note to U.S. Investors concerning estimates of Inferred Resources:
This table uses the term "inferred resources". We advise U.S.
investors that while this term is recognized and required by
Canadian regulations, the U.S. Securities and Exchange Commission
does not recognize it. "Inferred resources" have a great amount of
uncertainty as to their existence, and great uncertainty as to
their economic and legal feasibility. It cannot be assumed that all
or any part of an inferred mineral resource will ever be upgraded
to a higher category. Under Canadian rules, estimates of inferred
mineral resources may not form the basis of a feasibility study or
prefeasibility studies, except in rare cases. U.S. investors are
cautioned not to assume that any part or all of an inferred
resource exists or is economically or legally mineable. In the
preliminary assessment, Gustavson considered four different
production scenarios, three cases at a production rate of 2.0
million tonnes of ore per year and one case at 3.5 million tonnes
of ore per year. All four cases assumed contract mining and a base
case gold price of US$625 per ounce. Estimates of projected total
gold production ranged from 600,900 ounces to 1,040,000 ounces,
with estimated project lives ranging from 7 to 15 years depending
on production rate and the ultimate pit shape considered for the
scenario. Overall gold recovery is estimated at 90.5%. Startup
capital estimates ranged from US$123.4 million for one of the 2.0
million tonne per year cases to US$177.5 million for the 3.5
million tonne per year case. Total project capital ranged from
US$148.3 million to US$217.7 million. Mining costs are estimated at
US$1.60 per tonne of material mined, processing costs are estimated
at US$10.04 per tonne of ore processed for the 2.0 million tonne
per year cases and US$9.67 per tonne of ore processed for the 3.5
million tonne per year case. General and administrative costs are
estimated at US$1.9 million per year for all cases. Gustavson
prepared cash flow economic analyses and sensitivity studies for
gold prices of US$600, US$625, US$700, US$800, US$900 and US$1,000
per ounce, as well as sensitivities for operating and capital
costs. Sensitivities were run to show the positive effect on the
project if a lower cost source of electric power can be obtained
and/or if infrastructure costs can be lowered. The following tables
summarize the results of the four scenarios. Initial capital and
total capital costs include working capital. VISTA GOLD CORP. -
AWAK MAS PRELIMINARY ASSESSMENT Economic Evaluation Summary of the
Four Cases (Before Tax) Base Case Power: US$0.21/kwh; Access Road:
US$10.2 M Based on US$625 Gold Price Case Initial Total Breakeven
NPV Gold Cash Op Mine (Mtpy/MT) Investment Capital Gold @ 5%
Production Costs Life (US$M) (US$M) Price (US$M) (Koz) (US$/oz)
(Years) (US$/oz) 1 (2.0/24) 123.9 158.4 679 (66.7) 904.8 523 12 2
(3.5/30) 177.5 217.7 693 (87.3) 1,040.0 521 9 3 (2.0/14) 123.4
148.3 637 (25.3) 600.9 421 7 4 (2.0/30) 123.9 165.4 688 (81.7)
1,040.0 545 15 The following table summarizes the impact on the
project if lower power costs can be obtained and if the cost of
improving the access road can be reduced. VISTA GOLD CORP. - AWAK
MAS PRELIMINARY ASSESSMENT Economic Sensitivity Analysis of the
Four Cases (Before Tax) Based on NPV @ 5 % (US$M) Case US$600/oz
US$625/oz US$700/oz US$800/oz US$900/oz US$1,000/oz (Mtpy/MT) Base
Case Power: US$0.21/kwh; Access Road: US$10.2 M 1 (2.0/24) (81.9)
(66.7) (21.1) 39.8 100.6 161.5 2 (3.5/30) (106.0) (87.3) (31.4)
43.2 117.8 192.4 3 (2.0/14) (36.6) (25.3) 8.5 53.5 98.5 143.5 4
(2.0/30) (98.2) (81.7) (32.3) 33.5 99.4 165.2 Power: US$0.12/kwh;
Access Road: US$10.2 M 1 (2.0/24) (44.1) (28.9) 16.7 77.5 138.4
199.2 2 (3.5/30) (57.0) (38.4) 17.6 92.2 166.7 241.3 3 (2.0/14)
(11.7) (0.5) 33.3 78.3 123.3 168.3 4 (2.0/30) (53.6) (37.1) 12.3
78.1 143.9 209.8 Power: US$0.12/kwh; Access Road: US$2.0 M 1
(2.0/24) (36.5) (21.3) 24.3 85.2 146.0 206.9 2 (3.5/30) (49.3)
(30.7) 25.2 99.8 174.4 248.9 3 (2.0/14) (4.1) 7.1 40.9 85.9 130.9
175.9 4 (2.0/30) (45.9) (29.5) 19.9 85.7 151.6 217.4 The results of
the preliminary assessment shown in the economic sensitivity table
above indicate that primarily as a result of high energy prices and
infrastructure costs, the Awak Mas project needs sustained gold
prices in excess of US$800 per ounce to justify development. The
"preliminary assessment" is preliminary in nature and includes
inferred mineral resources (8% inferred gold ounces and 93%
measured and indicated gold ounces) that are considered too
speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as mineral
reserves, and there is no certainty that the preliminary assessment
will be realized. Mineral resources that are not mineral reserves
do not have demonstrated economic viability. Fred Earnest, Vista's
President and COO, commented, "The preliminary assessment has
identified areas of potential improvement which we will investigate
as we proceed into the feasibility study period of the Contract of
Work. We are optimistic that more detailed studies could
potentially enhance the apparent economics of the project. We
control a large, potentially prospective land package and we
believe the discovery of additional gold will also enhance the
project." About Vista Gold Corp. Since 2001, Vista has acquired a
number of gold projects with the expectation that higher gold
prices would significantly increase their value. Vista has recently
completed a preliminary feasibility study on the Paredones
Amarillos project in Mexico that indicated positive results at gold
prices lower than those now prevailing. Vista plans to confirm
these results with definitive feasibility studies in 2008. Vista is
undertaking programs to advance the Paredones Amarillos project,
including the purchase of long delivery equipment items, so that
construction can begin during the second half of 2008. The results
of a preliminary assessment completed in 2007 on the Mt. Todd
project in Australia were encouraging and additional technical
studies are underway with a definitive feasibility study planned
for completion by mid-2009. Vista's other holdings include the
Guadalupe de los Reyes project in Mexico, Yellow Pine project in
Idaho, Awak Mas project in Indonesia, Long Valley project in
California, and 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 and
forward-looking information under Canadian securities laws. 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 results of the preliminary assessment for
the Awak Mas deposit including previous and recently reported
resource estimates, economic and technical parameters associated
with possible development of resources at the Awak Mas deposit
including mining and processing methods and design of process
flowsheet, compliance with permitting requirements, estimated
capital costs for the Awak Mas project and estimated operating
costs and components thereof, estimated mine life and estimated
production over the mine life, gold price projections, estimates of
net present value and other economic measures for the Awak Mas
project at various gold prices, estimates of breakeven gold prices
for various production scenarios, anticipated costs for power and
costs for improving the access road to the project, areas for
potential improvement in connection with possible development of
the Awak Mas project, plans for feasibility studies, preliminary
feasibility study results for the Paredones Amarillos project, and
plans for a definitive feasibility study and for construction and
development activities at the Paredones Amarillos project, plans
for evaluation of the Mt. Todd project including preliminary
assessment results and plans, timing and results for a definitive
feasibility study to be undertaken at the Mt. Todd project, Vista's
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 and
forward-looking information. 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 statements. Such factors
include, among others, uncertainty of preliminary assessment
results and of feasibility study results and estimates on which
such results are based; risks relating to scheduling for
feasibility studies; risks relating to cost increases for capital
and operating costs including cost of power; risks relating to
delays in commencement and completion of construction at the
Paredones Amarillos project; risks of shortages of equipment or
supplies; risks of inability to achieve anticipated production
volume or manage cost increases; 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 and Canadian securities
commissions. 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 or
forward-looking information, 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, +1-720-981-1185, for
Vista Gold Corp. Web site: http://www.vistagold.com/
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