Source: Streetwise Reports 01/09/2018
As this gold explorer continues to test its Australian property, an updated preliminary feasibility study is expected this quarter.
Vista Gold Corp.’s (VGZ:NYSE.MKT; VGZ:TSX) principal asset is the Mt. Todd gold project in Australia’s Northern Territory, where the company is undertaking metallurgical testing. At the end of November, Vista Gold announced that its test work has led to improved gold recoveries; automated sorting and a two-stage grinding circuit would “enable the project to achieve a finer grind size, higher gold recoveries/higher gold production, and lower processing costs with no material increase in project capital.”
Heiko Ihle, an analyst with H.C. Wainwright & Co., noted in a Nov. 28 update on Vista Gold that his firm expects “a reduction in grinding, leaching, and tailings handling costs due to lower volume of material processed, and reiterate[s] the potential for these changes to reduce the above costs by around 10%.”
“We expect the improvement in recoveries to translate to greater production and profitability at Mt Todd,” Ihle wrote.
The company is now updating the preliminary feasibility study (PFS), which it plans to release this quarter. “We continue to expect an updated PFS for Mt Todd to be completed in 1Q18 and expect the study to reflect a project that can provide value to shareholders at the current gold price, rather than a potentially higher price in the future,” Ihle noted.
Fund manager Adrian Day of Adrian Day Asset Management, wrote in Global Analyst on Nov. 20 that “the updated study should be strong, with CEO Fred Earnest telling investors ‘to expect improved recovery, sorting, power savings, and an improved currency exchange rate,’ which will combine to produce ‘a compelling rate of return at today’s gold price.'”
“This is significant,” Day noted, “because Mt Todd has a reputation as a deposit that requires a higher gold price to be economic. Earnest said Vista is ‘no longer just a call option on the price of gold, but owners of a large-scale, economically viable gold project.’ Indeed, Mt Todd is the largest undeveloped gold project in Australia and the third-largest reserve package in that country. It could be among the top five producing mines in Australia, with costs in the lowest quartile.”
Adrian Day included Vista Gold in his short list of Best Buys on Dec. 19.
Analyst Ihle also discussed the Vista’s valuation: “We view the current share price as a buying opportunity and believe that recent metallurgical testing should meaningfully improve the economics of the project. In our opinion, the Vista Gold share price thus far has not reflected these improvements.”
“We continue to expect an updated PFS for Mt Todd to be completed in 1Q18 and expect the study to reflect a project that can provide value to shareholders at the current gold price, rather than a potentially higher price in the future,” Ihle concluded.
Adrian Day shared the sentiment in his Nov. 20 report. “Despite the progress and very …read more
Source:: The Gold Report