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Vista Gold Corp. Message Board

  • caustic_fred caustic_fred Apr 14, 2013 1:38 PM Flag

    There never will be a gold mine

    From the 3/28/2013 press release, "significant development commitments will be deferred until market conditions improve for junior gold equities." In other words, in order to develop a mine they need to keep printing and selling more shares, but since nobody wants to buy shares now they need to shut down development. And what happen just as soon as the market for this stock improves? Bamm! New shares are printed and dumped on the market.

    Meanwhile, the milling equipment that was bought way back in 2008 is being put up for sale. This equipment was used to entice many an investor to buy newly printed shares. See, we've got the milling equipment, a gold mine must be just around the corner. And five years later? Now they're selling the equipment.

    I believe this equipment is carried on the books, so they just got a $10 million loan to cover their salaries until the sale goes through. The lender had great "confidence" in the company because they only charged a 3.5% fee up front ("Here's $10 million, now give us back $350k right away") plus 8% interest. Any shareholder can borrow money under better terms. Confidence.

    There will be no mine without further stock sales, and nobody wants to buy more stock. Ergo, no gold mine.

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    • I spoke to Fred Earnest about the sale of the mining equipment in Mexico. The Invecture Group, the investors that will earn 62.5% of the project once they pay in $20MM and begin mining, wanted their own (different) equipment to begin mining.

      They were offered the Vista accumulated equipment, but choose to go a different route for mining there.

      I also spoke to him about the Sprott loan. Sprott has investors that want reliable, monthly dividends and this is a product they offer to good junior miners they believe in who have adequate cash balances. In a world where there is so much uncertainty in financing, Fred felt it best to take advantage of the loan to make sure there was financing available down the road when they begin mining at Mt. Todd.

      'Any' shareholder CANNOT borrow under better this loan was not secured so it was partly balanced with a 3.5% up front fee. As a business owner with a $2MM credit facility at a major bank.....that credit facility is secured by cash, cash equivalents and receivables on a near 1-for-1 basis. I think our current rate is prime + 1% today...but there is no up front fee because it's 'secured' any time we make use of it thru the year as business warrants it's use.

      You may be being too caustic, Fred - there may be methodology to the apparent madness at Vista ; )

      Sentiment: Strong Buy

    • Yea, the sad result will be no gold and the Edith River will be an ecological disaster.

      Sentiment: Strong Sell

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