Earnings call transcript: Vista Gold reports Q1 2025 loss amid feasibility study progress

Vista Gold Corporation (VGZ) reported a net loss for the first quarter of 2025, amounting to $2.71 million, compared to a $1.07 million loss in the same period last year. The company’s stock price decreased by 2.22% in after-hours trading, reflecting investor concerns over the financial results despite progress in its Mt Todd project feasibility study. According to InvestingPro data, the company maintains strong financial health with a GREAT overall score, supported by its robust current ratio of 16.73x, indicating excellent short-term liquidity.

Key Takeaways

• Vista Gold reported a Q1 net loss of $2.71 million, higher than the previous year’s loss.
• The company maintains a cash position of $15 million with no outstanding debt.
• Mt Todd feasibility study aims to reduce capital costs significantly and enhance project viability.
• Gold prices remain near record highs, benefiting Vista Gold’s strategic positioning.
• Stock price dropped 2.22% in after-hours trading following the earnings announcement.

Company Performance

Vista Gold’s performance in Q1 2025 was marked by a significant net loss increase compared to the previous year. The company’s ongoing efforts to develop the Mt Todd project, one of the largest undeveloped gold deposits in Australia, are central to its strategy. Despite the financial setback, Vista Gold’s debt-free status and substantial cash reserves provide a buffer as it advances its project plans. InvestingPro analysis reveals the company holds more cash than debt on its balance sheet, with liquid assets exceeding short-term obligations - just two of the many insights available in the comprehensive Pro Research Report covering this mining stock.

Financial Highlights

• Net loss: $2.71 million in Q1 2025, up from $1.07 million in Q1 2024.
• Cash position: $15 million as of March 31, 2025, down from $16.9 million at the end of 2024.
• No outstanding debt.
• Estimated net recurring costs of $6.5 million for the next 12 months, with an additional $3 million allocated for Mt Todd work plans.

Market Reaction

Vista Gold’s stock experienced a 2.22% decline in after-hours trading following the earnings release. The stock’s movement reflects investor apprehension about the increased net loss and the ongoing capital requirements for the Mt Todd project. Despite recent volatility, VGZ has delivered impressive returns, with a year-to-date gain of 61.29% and a one-year return of 85.45%. The current stock price remains within its 52-week range, with a low of $0.45 and a high of $1.04, indicating some resilience amid broader market trends. Based on InvestingPro Fair Value analysis, the stock appears slightly overvalued at current levels.

Outlook & Guidance

Vista Gold is focused on completing the Mt Todd feasibility study by mid-2025. The study aims to reduce initial capital investment by 60%, targeting a capital cost of approximately $400 million. The company projects annual gold production of 150,000 to 200,000 ounces and expects the feasibility study to act as a catalyst for value creation.

Executive Commentary

CEO Fred Ernest expressed confidence in the timing of the feasibility study results, stating, "We believe the release of the 15,000 tonne per day feasibility study results will be well timed in the current gold cycle and serve as a catalyst to accelerate value creation." He also highlighted the favorable impact of high gold prices and the Australian dollar exchange rate on the project’s economics. Trading at a P/E ratio of 9.88x and a Price/Book multiple of 6.12x, investors can access detailed valuation metrics and 10+ additional ProTips through InvestingPro’s comprehensive analysis tools.

Risks and Challenges

• Increased net loss may strain financial resources if not offset by improved project economics.
• Fluctuations in gold prices could impact revenue projections and investor sentiment.
• Potential delays in the Mt Todd feasibility study could affect project timelines and investor confidence.
• Regulatory and environmental considerations in Australia may pose additional challenges.

Q&A

During the earnings call, analysts and investors inquired about market interest and share valuation. Heiko Ihle from H.C. Wainwright discussed the impact of Australian gold pricing, while a private investor named Henry expressed optimism about future gold prices and questioned the current share valuation.

Full transcript - Vista Gold Corp (VGZ) Q1 2025:

Constantine, Conference Call Operator: Good day, ladies and gentlemen. Welcome to Vista Gold’s First Quarter twenty twenty five Financial Results and Corporate Update Conference Call. At this time, all participants are in a listen only mode. Following the presentation, we will conduct a question and answer session. As a reminder, this conference call is being recorded.

Today is Friday, 05/02/2025. It’s now my pleasure to introduce Pamela Salli, Vice President of Investor Relations. Please go ahead. Thank you, Constantine, and good day, everyone. Thank you for joining the Vista Goldcorp first quarter twenty twenty five financial results and corporate update conference call.

I’m Pamela Salli, Vice President of Investor Relations. On the call today is Fred Ernest, President and Chief Executive Officer and Doug Tobler, Chief Financial Officer. On 05/01/2025, Vista reported its operating and financial results for the quarter ended 03/31/2025. Copies of the news release and quarterly report on Form 10 Q are available on our website at www.vistagold.com. During the course of this call and the question and answer session, 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 for details of risks and other important factors that could cause actual results to materially from those in our forward looking statements and the cautionary note regarding estimates of mineral resources and mineral reserves. I will now turn the call over to Fred Earnest.

Fred Ernest, President and Chief Executive Officer, Vista Gold: Thank you, Pam, and thank you everyone for joining us on the call today. In the first quarter, we hit the ground running making great strides toward our 2025 goals and objectives. The progress we have made to date is a reflection of our team’s dedication and relentless focus on delivering value for our shareholders. Our first quarter achievements continue to underscore our commitment to creating greater value for all stakeholders and positioning Vista and Mt Todd for long term success. During the quarter, we advanced the 15,000 tonne per day Mt Todd feasibility study as planned, completed twelve sixty four consecutive days without a lost time accident on-site and ended the quarter with a strong cash position.

We are committed to deliverability study by 2025 prioritizing the efficient use of our cash and creating long term value for our shareholders through disciplined execution of our strategy for the Mt Todd gold project. I will discuss some of 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 03/31/2025.

Doug Tobler, Chief Financial Officer, Vista Gold: Thanks, Fred. I’ll begin today by a discussion or by discussing the summary of our results of operations for the three month period ended 03/31/2025. As a general comment, I’m pleased to report that our overall financial results are tracking in line with expectations. This includes the work that’s in progress for the 2025 feasibility study that Fred highlighted in his opening remarks. We reported a net loss of $2,708,000 for Q1 twenty twenty five compared to a net loss of $1,073,000 for Q1 twenty twenty four.

The increase in our loss was primarily the result of two variances. First, we sold part of our used mill equipment during Q1 of twenty twenty four. This resulted in a net gain of $802,000 in that period, but there was no similar transaction in Q1 of twenty twenty. And secondly, we reported an increase in our Mt Todd net expenses for exploration, property valuation and holding costs. In 2024, the Batman drilling program was in progress.

Drilling and other related site costs totaled 1,000,002 and $56,000 during last year’s first quarter, of which $504,000 was capitalized as development costs. This left a net expense of 7 and $52,000 The drilling was largely completed by the end of twenty twenty four, then we started the 2025 feasibility study. As a result, total feasibility and other Mt Todd site costs in Q1 of twenty twenty five were $1,688,000 Of this amount, only $150,000 was capitalized as development costs. The result was a net expense of 1,000,005 and $38,000 which was $786,000 higher than the comparable twenty twenty four first quarter. Turning to our financial position at 03/31/2025.

We continued to maintain a strong cash position and support to support our ongoing work at Mt Todd. We ended the first quarter of twenty twenty five with $15,000,000 of cash on hand. This compared to $16,900,000 of cash on hand at 12/31/2024. The reduction in cash resulted primarily from expenditures for the feasibility study and our other costs of a recurring nature, which included Mt Todd holding costs and our corporate G and A. I would also highlight that we continue to have no debt.

Looking forward, we expect our recurring costs and other expenses to remain largely in line with our expectations. For the twelve months following 03/31/2025, the company estimates net recurring costs will be approximately $6,500,000 plus an additional $3,000,000 related to work plans at Mt Todd. Thank you. That concludes my remarks for the day. I’ll turn the call back to Fred.

Fred Ernest, President and Chief Executive Officer, Vista Gold: Thank you, Doug. Earlier this year, we provided an overview of our strategy and goals for 2025. Today, would like to take a moment to reaffirm our strategy and outline what we expect for the remainder of the year. As many of you are aware, in December, we started a new feasibility study for Mt Todd targeting a 60% reduction in capital, now estimated to be approximately $400,000,000 We are evaluating a 15,000 tonne per day or nominally 5,200,000 tons per year operation with anticipated gold production of 150,000 to 200,000 ounces of gold per year. We have raised the cutoff grade used to develop the mine designs to achieve our target of having a reserve grade of approximately one gram of gold per ton and expect to report gold reserves of more than 5,000,000 ounces.

The study will also incorporate strategies that prioritize higher grade ore during the early years of the operation. The consultants selected for this study have extensive Australian and international experience with projects of this scale. We are dedicated to delivering a fit for purpose design that can be built more efficiently and in a shorter period of time. This new feasibility study is expected to be completed midyear. This study is an integral part of our efforts to position Mt Todd as one of the most attractive ready to build projects in the world.

Now turning to our first quarter twenty twenty five achievements. As noted earlier, the 15,000 tonne per day feasibility study is materially on schedule for midyear completion and is on budget. This study will leverage prior preserve the potential for future expansion and demonstrate the opportunity for Mt Todd to deliver attractive economic returns with a smaller initial capital investment. The resource block model has been updated to incorporate data from our 2020 to 2022 and 2024 drilling programs and is being used as the basis for the new mine plan and feasibility study. The mineral resources estimate will be completed and announced as part of the feasibility study.

During the first quarter, we maintained our focus on safety, environmental stewardship and stakeholder interest. Mt Todd has achieved zero lost time accidents and has now surpassed twelve sixty four days without a workplace incident. We remain committed to our health and safety programs and are focused on building on this achievement. Site personnel continued to successfully manage the Mt Todd environmental initiatives and management continued its proactive engagement with the Jowan Aboriginal Association Corporation and other key stakeholders. Looking ahead, as we continue to advance Mt Todd in ways that efficiently position the project for development, we are committed to unlocking the potential maximize shareholder value.

Our key strategic focus in 2025 is to complete the Mt Todd feasibility study and announce results by mid-twenty twenty five. We believe the release of the 15,000 tonne per day feasibility study results will be well timed in the current gold cycle and serve as a catalyst to accelerate value creation. The results of this feasibility study are expected to confirm Mt Todd’s position as one of the most attractive ready to build projects in the gold sector. Momentum continues to build sector. We believe the capital cost of the 15,000 ton per day project in this feasibility study is already attracting interest from investors seeking ready to build gold projects like Mt Todd.

Vista is committed to seeing Mt Todd developed in compliance with the highest mining and ESG standards and will work diligently toward that goal. For a comprehensive review of the work completed by Vista on the Mt Todd project, I refer you to our corporate presentation, which can be found on our website at www.vistagold.com. We believe that Vista Gold represents an exceptional investment opportunity and that current prices represent a tremendous opportunity to establish a position or increase one’s holding in Vista Gold. This concludes my formal remarks. We will now respond to any questions from participants on this call.

Constantine, Conference Call Operator: Ladies and gentlemen, we will now begin the question and answer session. Your first question comes from the line of Heiko Ihle from H. C. Wainwright. Please go ahead.

Heiko Ihle/Henry, Analyst/Private Investor, H.C. Wainwright/Unknown: Thanks, Fred. Hey, team. It’s Heiko. Just I assume you can hear me okay?

Fred Ernest, President and Chief Executive Officer, Vista Gold: Yes, can Heiko.

Heiko Ihle/Henry, Analyst/Private Investor, H.C. Wainwright/Unknown: Awesome. Thanks, Brad. We have received quite a bit more interest in Vista and Mt. Todd lately just from the buy side. And I attribute at least some of that to recent strength in spot pricing.

But I mean, can you give some color on what you’re seeing in the market? I mean, maybe it’s a question for Pam as well. And do you see increased investor awareness and also interest? I know you’ve attended quite a few conferences to ramp up awareness in the recent past. I mean, one of which we actually met at.

Maybe just a little bit of color on that please?

Fred Ernest, President and Chief Executive Officer, Vista Gold: Yes. Obviously, gold price is driving renewed interest in the gold gold equities. As you mentioned, we have participated in a number of conferences. And one of the things that we’ve observed is renewed and strong interest in Mt Todd and the work that we’re doing to significantly decrease the initial capital cost for the project. This particular part of the new feasibility study message has resonated particularly strongly with institutional investors and with companies who may be potential partners in some form of a transaction down the road.

Heiko Ihle/Henry, Analyst/Private Investor, H.C. Wainwright/Unknown: Fair enough. Building on the last question a little bit. I mean, everyone looks prices in USDs. But maybe if you look at a long term chart, call it a fifteen year chart of gold price in Australian dollars today, we’re about $5,000 right now, essentially at all time highs. Anything you want to like provide some color on what that does to profitability?

Mean, obviously, you guys are very dependent on the gold price and this thing has much more of a correlation to gold pricing than some of the things we cover. Maybe anything you want to leave us with in that regard?

Fred Ernest, President and Chief Executive Officer, Vista Gold: Well, being an Australian based gold project, many of our costs for the project will be in Australian dollars. And as you have rightly noted, the Australian gold price is in that range of $5,000 an ounce and record highs. The Australian investment community is very oriented toward resource investments and gold has risen to be a priority in their portfolios. Obviously, the higher gold price with the majority of our costs being on Australian dollars bodes very well for us. And it’s something that we’re delighted to be able to take advantage of at this period of time as we advanced the feasibility study on smaller scale project.

I think that the timing for this study is going to ultimately work out to be very advantageous for our shareholders, our stakeholders and we’re very excited about that.

Heiko Ihle/Henry, Analyst/Private Investor, H.C. Wainwright/Unknown: Fair enough. We’ll get back in queue and keep monitoring the firm. Thanks a lot.

Fred Ernest, President and Chief Executive Officer, Vista Gold: Thank you, Heiko.

Constantine, Conference Call Operator: There are no further questions at this time. Sorry, we have a question from the line of a Private Investor. Please go ahead.

Heiko Ihle/Henry, Analyst/Private Investor, H.C. Wainwright/Unknown: Good morning.

Fred Ernest, President and Chief Executive Officer, Vista Gold: Good morning, Henry.

Heiko Ihle/Henry, Analyst/Private Investor, H.C. Wainwright/Unknown: I have kind of a subjective view, but I’m having difficulty understanding the price of the shares compared to the value of the resource compared to other resources out there that are available for the majors to look at. In my amateur way, I’m seeing this should be an $8 or $10 stock, not a $1 stock. Why would your valuations be lower?

Fred Ernest, President and Chief Executive Officer, Vista Gold: Henry, that’s a very astute question. You should not be self deprecating about asking that question. It’s a question we ask ourselves all the time. You may or may not be aware that all of our past work in evaluating Mt Todd has been designed at a throughput rate of 50,000 tonnes per day or 17,500,000 tonnes per year. At that scale, the initial capital costs of the project are estimated to be over $1,000,000,000 And we think reasons why there’s this considerable disconnect between our share price, our market cap, perhaps better said, and the intrinsic value of the deposit is the tremendous initial investment that would be required to build Mt.

Todd at that project and the concerns over how that would be financed. Having said that, this is one the key reasons why we have decided to undertake a feasibility study at significantly smaller scale, roughly a third the size is because that it represents an opportunity to significantly reduce the initial capital costs of the project without severely impacting the overall economics. And so one of the things that a smaller initial start and certainly when I say initial start, I’m implying that we’re preserving the opportunity for expansion of the project is that it allows the project to be built with a smaller initial investment. It also opens the door to a broader range of companies who might be potential transaction or joint venture partners, because it becomes imminently more financeable and more affordable. We think that this is an important step.

And as we noted in the discussion that we believe this will be a catalyst to changing the value of Mt Todd as we eliminate this considerable initial capital investment overhang that has surrounded the project for a number of years as we thought that the appropriate scale of the project given the size of the resource was much larger. As I commented previously, we’re finding a lot of support for the initial smaller scale project and we’re very excited about that feedback and the potential that this has to be the catalyst for an important re rating on our way to evaluation more in line with your thinking?

Heiko Ihle/Henry, Analyst/Private Investor, H.C. Wainwright/Unknown: My hope is that if when gold gets to $4,000 5 thousand dollars instead of nobody showing great interest, everybody will show great interest. So I’m hoping you’ve got an excellent future. I had a great future in 1980, another 01/2011. And I think my third happiness will be next year. We’ll see.

Good luck to you gentlemen.

Fred Ernest, President and Chief Executive Officer, Vista Gold: Well, thank you, Henry, and we’re trying to lay the foundation for exactly what you’re looking forward to.

Heiko Ihle/Henry, Analyst/Private Investor, H.C. Wainwright/Unknown: Thank

Fred Ernest, President and Chief Executive Officer, Vista Gold: you.

Constantine, Conference Call Operator: There are no further questions at this time. I’d like to turn the call over to Fred Earnest for closing comments. Sir, please go ahead.

Fred Ernest, President and Chief Executive Officer, Vista Gold: Thank you, Constantine, and thank you to those who have asked questions. As we’ve indicated on the call, this is a very interesting time with gold having hit record highs in the last weeks and many expectations for the price of gold to continue to go higher. We are very encouraged by the feedback that we’ve received with regards to the direction that we are pursuing with the Mt Todd project. I have indicated and pleased to report that the feasibility study is materially on time and on budget and we look forward to being able to announce results. We expect the July.

We remain deeply committed to the core values that we espouse as a corporation and as a management team, the health and safety of our people, the protection of the environment, our present and ongoing compliance with all cultural and heritage and ESG principles and regulations. And we’re moving forward to ensure that we’re able to continue to achieve all of these objectives. We’re grateful for the support of our shareholders and we recognize that all investors have multiple choices that they must make. We hope that those of you who may be new to the Vista story will take a serious look at the opportunity that the Mt Todd project represents. We would love to have you as shareholders.

For those who are already shareholders, we’re working hard to increase the value of your investment and create value for you. I would like to thank you for your time and attention on the call today and we wish all of you a very pleasant day. Thank you.

Constantine, Conference Call Operator: This concludes today’s conference call. Thank you very much for your participation. You may now disconnect.

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