"While (VGZ) Vista Gold has a number of positive things going for it, we remain concerned that the liquidity situation may pose some serious near-term challenges."
"Favorable Jurisdiction - VGZ operates in Australia, which is one of the safest jurisdictions for mining companies. The country has a long history of mining, many good technical and human resources, and the government is relatively friendly to precious metals miners.
Additionally, Australia is a much more preferable jurisdiction for Chinese mining acquisitions than the US or Canada, and since Chinese companies are one of the few sets of miners on the prowl for cheap acquisitions, Vista Gold's presence in Australia is a definite positive.
Cheaper Valuation - With a real acquisition cost (including a 40% premium) of under $100 million dollars, VGZ is not a large acquisition for a larger company. This is a positive because it limits the risk from an acquirer's point-of-view and allows for a much bigger pool of potential buyers.
Non Dilutive Liquidity Potential - While liquidity is definitely a negative for the company, they do have some potential near-term liquidity items that are non-dilutive. The sale of the company's milling equipment ($10 million or less), the earn-in at Los Cardones (a potential $20 million in cash), or even the sale of a portion of its Mount Todd project in terms of net smelter returns or royalties (similar to what Western Copper accomplished (WRN)) would eliminate some of the concerns of near-term liquidity and would give the company some financial flexibility to continue Mount Todd development.
Exposure to Midas Gold - As an owner of more than 25% of Midas Gold, this company is obviously heavily exposed to Midas's project. This can obviously be a good or bad thing for Vista Gold depending on how Midas's development goes, but we'll list it here because we believe the market is heavily discounting their ownership in Midas Gold."
Owning 28 percent of MIDAS stock is equivalent to anywhere from 40 million (based on current price) to about 100 million (based on what it could reasonably reach this year if it keeps expanding its assets, as is being rumored). So that asset alone seems to cover most of Vista's current market cap.