Vista Gold’s feasibility study on Mt Todd project shows improved economics

Mt Todd gold project. Credit: Vista Gold Corp.

Vista Gold (TSX: VGZ) announced on Wednesday the results of a feasibility study (FS) for its 100% owned Mt Todd gold project in the Northern Territory, Australia.

With economics based on Q4 2021 costs, the project is expected to deliver compelling cashflows over a 16-year mine life, the study showed, totalling $2.1 billion for the first seven years of commercial operations (at a $1,800/oz gold price).

Using the same gold price, the FS gave the project an after-tax net present value (NPV) of $1.5 billion and an internal rate of return (IRR) of 26.7%.

The average cash costs over life of mine is estimated at $817/oz, including average cash costs of $752/oz during the first seven years of commercial operations. The average all-in sustaining cost (AISC) is $928/oz, including average AISC of $860/oz during the first seven years.

According to Vista, Mt Todd’s economic returns benefit from an increase in the gold reserve estimate, favorable results of the power plant trade-off study and slightly lower energy costs in the Northern Territory.

Gold reserves increased 19% to 6.98 million ounces, resulting in average annual gold production of 479,000 ounces during the first seven years and 395,000 ounces over the life of mine.

Initial capital requirements for the project is $892 million, an 8% increase, which reflects the use of a third-party owner/operator of the power plant.

“The FS affirms the strength of Mt Todd’s gold production capacity and ability to deliver solid economic results at a time when inflationary pressures are having significant impacts on operating mines and development projects alike,” CEO Frederick Earnest said in a media release.

“Completion of the FS represents another major step in de-risking Mt Todd and readying the project for development. The scale, quality of work completed and location of Mt Todd, together with the completion of the FS and the fact that all major authorizations for development have been obtained, distinguish Mt Todd as a unique development opportunity,” he added.

Shares in Vista Gold jumped 11.2% by 12:30 p.m. New York time, giving the gold developer a market value of $91.6 million.