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Vista Gold Corp. Message Board

  • benandemmiboo benandemmiboo Sep 28, 2013 8:06 PM Flag

    A write-up on VISTA from Russ WInter's Winteractionables website

    I spoke with Vista Gold’ s investor relations on Thursday. It’s market makers said the selling rout since Monday is coming from three sources. The company stock was pulled out of the GDX last Friday, when it traded at 66 to 67 cents. Previously, it was pulled from the Russell 3000. On both occasions, large blocks already traded, so this particular onslaught is inexplicable, though Vista suggested that it was residual. The company is not aware of any large institutional selling. There are tons of 100- to 500-share sell orders, all very sloppy. I understand the same thing has happened to Lydian.

    Vista was a presenter at the Denver Gold forum on Wednesday, and I heard absolutely nothing that would account for additional selling. But you can listen and decide for yourself. They are cutting their burn rate, and the executives have cut compensation, which is a plus in its favor. I mentioned VGZ in yesterday’s post, and doubled down at 50 1/2 cents.

    At 50 cents, the enterprise value after net cash, debt and its 24.9% holding in Midas is $27 million. VGZ has a extra mill for sale at $8 million and is due a JV payment of $20 million in 1Q, 2014. The property involved in the JV is in the permitting stage and VGZ told me the partner is still spending money. If collected, the end result of this nonsense is that you get the Mt. Todd project (5.9 million oz P&P, and 7.8 million oz M&I) in Australia for free. At current levels, the project has after-tax NPV of about $400 million and, as you see, great leverage to POG. Mt.Todd would be a billion-dollar capex, including sustaining capital; but at $664 cash cost, it’s far from an uneconomical deposit.

    Sentiment: Strong Buy

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    • Been watching this for years,, very surprized by this price. buying a little thur or fri....
      4 or 5 years ago , E-Trade ranked this as the # 2 gold mining co. .. # 1 was EGO......
      " best of buys to all "

      Sentiment: Buy

    • Just one thought - you mention the company is 'due' $20M in Q1, with all due respect that is complete rubbish! They are only 'due' $20M if Invecture get a permit to kine Los Cordones. They have been a JV partner for 18 months now and they have not even submitted the permit request yet, which apparently is due to all the work they have been doing behind the scenes, but still the fact remains that the permit is not a foregone conclusion and VGZ can hardly be banking on that payment, nice as it would be! The permit would mean that an 18 month construction period of the mine would ensue and the company could then be producing gold. However, more importantly is the cash flow problem, they have none, and have not had any for years - therefore they are now in debt, and unless they are able to sell an asset such as G de la R, or the mill equipment - you mention it is for sale for $8M, they bought the mill equipment for $16M in 2008-9, hardly good business!!

      Now that VGZ has been removed from the GDXJ, we will not benefit from higher gold prices and be swept up like we were before, therefore we are now totally and uttely dependant on permit news from Mt Todd and/or Invecture......

      You would need a strong conviction that this company can do something it has never done before, that is to get a permit! I have invested 150k in the company to date, I have more on the sidelines - if they can get a permit, i will be all over it, especially for Mt Todd, as they will sell that project for between $200M-$600M within weeks of the permit being granted and the DFS being completed. If they have not diluted the stock further at that time, a $600M takeover of Mt Todd is about $7.38 per share, you can do the maths from there.


      Sentiment: Hold

      • 1 Reply to bjsedco702
      • BJSEDCO702, I copied verbatim from Russ Winter's site.
        I do not disagree from your comment re: Los Cordones. THe big "if" is Invecture going forward with their desire to buy 62 percent interest of the Los Cordones project. For me, the sentiment behind Russ Winter's write-up is one I agree with, though. The risk of bankruptcy is zero. There is only a risk of selling certain properties for less profit than originally pursued -- or for less than they potentially could gain.

        I have about 1/3 of my portfolio now weighted toward VISTA, and my average PPS is under 50 cent per share. I am typically a LONG on exploratory miners, but due to how this has traded, I do have a quick finger when I am in the green. I don't expect VISTA to hover in the sub-50 cent range (I think this is a gift price), and will keep buying in this range.

        I personally don't think Mt Todd will command the prices you mention, and admittedly see its value less in MT Todd (which I see as a great mine only when gold rises above $1600) than in its MIDAS shares. I see MIDAS as a $6-10 stock, and I think it will get acquired -- its own permits will take a few years, but I have no concern. Its plan actually helps clean up the environment, not hurt it more.

        I also frankly like VISTA's approach -- to buy properties at distressed prices, then pretty them up until they're worth more, and sell them. Since they avoid much of the risks other exploratory miners face, they haven't in the past maximized some of the potential in their properties (ie those spun off to form ANV, and those spun off to form MIDAS), but they have made money from them. Going forward, I expect the same approach to more or less continue to have the same success, and I do expect gold to work somewhat in its favor. Goldman's call for sub-$1000 is predicated upon a market gaining strength next year, and I don't see that happening.

    • Sep 28, 2013 10:39 PM Flag

      I came to a similar conclusion and held my nose and bought at .49 despite the scary price action.

      This company is priced like it's going bankrupt, but as you point out they still have valuable assets that are being completely discounted by the market.

      Sentiment: Buy

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