Vista Gold(VGZ) - 2019 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Vista Gold Corp. reported a net loss of $5.7 million for the six months ended June 30, 2019, primarily due to an unrealized investment loss, leading to a decrease in total assets to $18.3 million Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Items | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $1,315 | $1,071 | | Total current assets | $10,394 | $14,070 | | Total assets | $18,315 | $22,126 | | Liabilities & Equity | | | | Total current liabilities | $838 | $872 | | Total liabilities | $2,270 | $872 | | Total shareholders' equity | $16,045 | $21,254 | | Total liabilities and shareholders' equity | $18,315 | $22,126 | Condensed Consolidated Statements of Comprehensive Income/(Loss) Consolidated Statement of Comprehensive Loss (in thousands, except per share data) | Metric | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--- | :--- | :--- | :--- | :--- | | Total operating expense | $(2,028) | $(1,955) | $(4,133) | $(5,151) | | (Loss)/gain on other investments | $(1,093) | $— | $(1,717) | $2,028 | | Net loss | $(3,044) | $(1,923) | $(5,696) | $(2,871) | | Net loss per share (Basic & Diluted) | $(0.03) | $(0.02) | $(0.06) | $(0.03) | Condensed Consolidated Statements of Cash Flows Consolidated Statement of Cash Flows (in thousands) | Cash Flow Activity | Six months ended June 30, 2019 | Six months ended June 30, 2018 | | :--- | :--- | :--- | | Net cash used in operating activities | $(3,391) | $(4,995) | | Net cash provided by investing activities | $3,615 | $6,185 | | Net cash provided by / (used in) financing activities | $20 | $(23) | | Net increase in cash and cash equivalents | $244 | $1,167 | | Cash and cash equivalents, end of period | $1,315 | $2,598 | Notes to Unaudited Condensed Consolidated Financial Statements - The company's primary asset is the 100% owned Mt Todd gold project in Australia, the largest undeveloped gold project in the country[17] - The company adopted the new lease accounting standard (ASU No. 2016-02) on January 1, 2019, recognizing right-of-use assets and lease liabilities of $186 thousand upon adoption[21] - The company holds 7.8 million shares of Midas Gold, which experienced an unrealized loss of $1.7 million for the six months ended June 30, 2019, compared to a $2.0 million gain in the same period of 2018[24] - In April 2019, the company received a $1.5 million option payment for the Guadalupe de los Reyes (GdlR) Project, which reduced the project's carrying value to zero and resulted in a deferred option gain of $1.392 million[31][32] - In May 2019, shareholders approved a Deferred Share Unit (DSU) Plan for non-employee directors, and the Board granted 366,000 DSUs, recognizing $209 thousand in expense[43] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Vista Gold's net loss increased to $5.7 million for the first half of 2019, primarily due to an unrealized loss on Midas Gold shares, despite decreased operating costs and ongoing metallurgical optimization at the Mt Todd project Financial Performance Summary (in thousands, except per share data) | Metric | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--- | :--- | :--- | :--- | :--- | | Consolidated net loss | $3,044 | $1,923 | $5,696 | $2,871 | | Loss per share | $0.03 | $0.02 | $0.06 | $0.03 | - Exploration and property holding costs decreased for the three and six months ended June 30, 2019, compared to 2018, due to reduced water discharge activities at Mt Todd following lower precipitation and an 8% weaker Australian dollar[60][62] - Net cash used in operating activities decreased to $3.4 million in H1 2019 from $5.0 million in H1 2018, due to lower cash expenditures and changes in working capital[67] - Working capital decreased from $13.2 million at year-end 2018 to $9.6 million at June 30, 2019, mainly due to funding operations and the reduction in fair value of Midas Gold shares[70] - The company has an at-the-market (ATM) offering agreement with H. C. Wainwright & Co., LLC, allowing it to sell up to $10 million in common shares for additional financial flexibility[73] Project Updates - The company has all major environmental approvals for the Mt Todd project and is conducting a metallurgical optimization program to improve gold recoveries, with a PFS update planned for the coming months[82][83] - Recent leach tests at Mt Todd achieved average gold recoveries of 92.7% on material with a P80 grind size of approximately 50 microns, confirming higher recoveries at finer grind sizes[87] 2018 PFS Base Case Highlights (50,000 tpd) | Metric | Life of Mine (13 years) | | :--- | :--- | | Average Annual Payable Gold | 381,000 ozs | | Total Payable Gold | 4,956,000 ozs | | Cash Costs ($/oz) | $645 | | Initial Capital | $839 million | | After-tax NPV 5% | $679 million | | After-tax IRR | 20.5% | | After-tax Payback | 3.2 years | - In June 2019, the option agreement for the Guadalupe de los Reyes (GdlR) Project was assigned from Minera Alamos to ePower Metals Inc., with Vista's consent[97] ITEM 4. CONTROLS AND PROCEDURES Management concluded that disclosure controls and procedures were effective as of June 30, 2019, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of the end of the quarter, the company's disclosure controls and procedures were effective[122] - There were no changes in internal control over financial reporting during the quarter ended June 30, 2019, that materially affected, or are reasonably likely to materially affect, internal controls[123] PART II – OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The company reports that it is not aware of any material pending or threatened litigation that would likely have a material adverse effect on its operations - The company is not aware of any material pending or threatened litigation[125] ITEM 1A. RISK FACTORS There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2018 - No material changes have occurred from the risk factors set forth in the Annual Report on Form 10-K for the year ended December 31, 2018[126] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS The company reported no unregistered sales of equity securities during the period - None[127] ITEM 3. DEFAULTS UPON SENIOR SECURITIES The company reported no defaults upon senior securities - None[128] ITEM 4. MINE SAFETY DISCLOSURE For the three months ended June 30, 2019, the company had no required disclosures under Section 1503(a) of the Dodd-Frank Act, as its U.S. exploration properties were not subject to regulation by the Federal Mine Safety and Health Administration (MSHA) - During the three months ended June 30, 2019, the company's U.S. exploration properties were not subject to MSHA regulation, and consequently, no disclosure is required under the Dodd-Frank Act[130] ITEM 5. OTHER INFORMATION The company reported no other information for the period - None[131] ITEM 6. EXHIBITS This section lists the exhibits filed as part of the Form 10-Q report, which include corporate articles, a warrant indenture, CEO and CFO certifications (pursuant to Rule 13a-14(a) and Section 906 of Sarbanes-Oxley), and XBRL data files - The report includes filed exhibits such as CEO and CFO certifications and financial data formatted in XBRL[132]