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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the period of November 20, 1998 Commission File Number: 1-9025
VISTA GOLD CORP.
(Name of Registrant)
Suite 3000
370 Seventeenth Street
Denver, Colorado 80202
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F
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Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the SEC
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
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If "Yes" is marked, indicate the file number assigned to the registrant in
connection with Rule 12g3-2(b): Not applicable.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
VISTA GOLD CORP.
Date: November 20, 1998 By:
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Roger L. Smith
Vice President Finance
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EXHIBIT INDEX
Exhibit Description of Exhibit
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99.1 Press release dated November 20, 1998, Vista announces third
quarter results.
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EXHIBIT 99.1
VISTA ANNOUNCES THIRD QUARTER RESULTS
DENVER, COLORADO, NOVEMBER 20, 1998 - Vista Gold Corp. reported a net loss of
US$1.0 million, or US$0.01 per share, for the three months ended September 30,
1998 compared to a net loss of US$35.7 million, or US$0.40 per share, for the
same period in 1997. For the first nine months of 1998, the Company reported net
earnings of US$1.7 million, or US$0.02 per share, compared to a net loss of
US$37.6, or US$0.42 per share, for the same period in 1997.
The Company's Hycroft mine in Nevada produced 24,578 ounces of gold in the third
quarter for a total of 94,766 ounces in the first nine months of the year. This
compares to third quarter 1997 production of 29,882 ounces and 90,421 ounces for
the first nine months of 1997. Measures taken by the Company to reduce costs
resulted in a cash operating cost per ounce of $248 for the three months ended
September 30, 1998, a decrease of $25, or nine percent, from 1997. For the nine
months ended September 30, 1998, the cash operating cost per ounce was $217 as
compared to $267 for the same period in 1997.
SUMMARY RESULTS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1998 1997 1998 1997
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<S> <C> <C> <C> <C>
(U.S. dollars in thousands, except share data)
Gold sales $ 7,816 $ 10,130 $29,987 $ 31,432
Net earnings (loss) (969) (35,701) 1,711 (37,583)
Net cash provided by (used in) operations 4,180 538 12,220 (367)
Cash operating cost per ounce 248 273 217 267
Net earnings (loss) per share (0.01) (0.40) 0.02 (0.42)
Gold production (ounces) 24,578 29,882 94,766 90,421
</TABLE>
The measures taken to reduce costs included reducing mining activities and
planning for the complete suspension of mining at the end of May 1998. As a
result of higher than expected grades at the Brimstone pit, the Company has been
able to defer the suspension until December 1998. Estimated gold production for
1998 has been increased to 108,000 ounces as a result of the higher grades and
the deferred mining suspension, and gold production will continue through 1999
and into 2000 from currently inventoried ore at reduced levels.
The Company has examined various mining plans that will allow resumption of
mining when gold prices return to more normal levels. In the short-term, the
Company will commence reclamation in areas that will not be affected by future
operations. The Hycroft property is not fully explored and the Company is
pursuing joint venture opportunities to explore for deeper and potentially
higher-grade ore.
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Subsequent to September 30, 1998, the Company paid $2.5 million and completely
retired the remaining bank debt secured by the assets of the Hycroft mine. This
concluded the Company's remaining obligations under the amended debt agreement
and allowed the Company to proceed with the acquisition of the Mineral Ridge
mine.
On October 21, 1998, Vista Gold Corp. ("Vista) completed the acquisition of
Mineral Ridge Resources Inc. ("MRRI") from Cornucopia Resources Ltd.
("Cornucopia"). Vista has acquired all of the shares of MRRI in consideration
for 1,562,000 shares of Vista at an aggregate value of US$250,000. Vista
concurrently subscribed on a private placement basis for 2,777,777 shares of
Cornucopia valued at US$250,000.
The Mineral Ridge mine, located near the town of Silver Peak, approximately 35
miles southwest of Tonopah, Nevada, was constructed by Cornucopia for a cost of
approximately US$17 million. The project was completed on May 17, 1997 and the
first gold was poured on June 20, 1997. However the project failed to meet
commercial production loan tests and was shutdown in December 1997. Vista has
completed an in-depth technical review and will undertake a number of
modifications to the facility prior to the restart of operations to eliminate
the problems experienced by Cornucopia. The improvements include changes to the
crushing and agglomeration circuits, the addition of surge capacity to the
crushing plant, employment of a coarser crusher product size and the
introduction of strong leach solutions during the agglomeration process, all of
which Vista believes will improve the rate of recovery of gold.
As a result of its due diligence study, Vista now estimates the proven and
probable reserves to be 4 million tons at a grade of 0.06 ounces per ton
containing 243,000 ounces of gold. The average estimated cash production costs
will be US$226 per ounce and production is planned to be approximately 55,000
ounces in 1999.
As part of the transaction, MRRI has amended its loan agreement with Dresdner
Bank. The amended agreement revised the terms of repayment of the previously
outstanding loan and accrued interest totaling approximately US$13.5 million and
provided additional loans to MRRI totaling US$1.6 million which will be used to
pay amounts owing to other creditors of MRRI. The revised agreement required the
contribution of US$5.0 million of mining equipment to the project by Vista. Net
cash flow from the project will be distributed on the basis of 70 percent to
Dresdner Bank and 30 percent to Vista after deduction of US$800,000 of
management fees payable to Vista over the next two years and rescheduled
principal payments on the additional loans used to repay other creditors. The
interest rate on the loans will be LIBOR plus 2 percent and the loans will be
secured by the assets of MRRI and the US$5 million of mining equipment
contributed by Vista. As part of the agreement with Dresdner, MRRI liquidated
forward gold hedges to provide US$3.5 million, which is to be used as working
capital and to pay for capital improvements on the project.
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Vista has also executed an amendment to MRRI's principal royalty agreement with
Mary Mining Company Inc. to modify the net smelter royalties payable from the
current flat rate of 4 percent if the gold price is US$500 or less, to a
graduated scale which increases progressively from 21/2 percent if the gold
price is US$300 or less. In consideration for the modification, Vista has paid
Mary Mining Company US$24,000 in additional advance royalty payments in 1998.
Mike Richings, the President and Chief Executive Officer of Vista, also reported
that the Board of Directors has approved the grant of options to purchase an
aggregate of 1,475,000 common shares to Vista Gold's 16 management and staff
personnel and options to purchase 100,000 common shares to each of its seven
non-employee directors of the company. These options are intended to replace all
of the 2,270,000 presently outstanding stock options, both vested and unvested.
An additional 792,500 options have expired over the past 12 months as a result
of staff reductions. The new options are subject to the holders of all
outstanding options agreeing to the cancellation of those options and are also
subject to all required regulatory approvals and approval by the shareholders of
Vista Gold at its next annual general meeting. The new options will be
exercisable at the closing price of the common shares on The Toronto Stock
Exchange on November 18, 1998.
Mr. Richings said, "The cancellation of all outstanding options and their
replacement with new options is intended to reflect the significant changes in
the mining industry and within the corporation over the past several years as a
result of the low gold price environment and other external factors. The new
options will provide meaningful incentives to key employees who have helped
Vista through a very difficult period while carrying considerably increased work
loads, and are essential to achieving the Company's aggressive goals. The old
options were granted when the corporation's Hycroft mine in Nevada was fully
operational at much higher gold prices and before the acquisition of the
Amayapampa project in Bolivia and, more recently, the acquisition of the Mineral
Ridge property in Nevada.
"The purpose of the new options is to ensure that the interests of all key
personnel are aligned with the shareholders and to help ensure the continued
growth of Vista Gold through the successful operation of the Mineral Ridge mine,
the early development of the Amayapampa project and the pursuit of other
opportunities. Mr. Richings also noted that the directors of the corporation had
waived their annual directors fees since 1997 and the increase in the number of
options for directors was intended to reflect the value of their contribution."
Mr. Richings also stated, "Vista Gold will end 1998 in a much stronger position
than it started the year, but is maintaining a program of cash conservation and,
accordingly, no cash incentive payments or bonuses will be paid to key employees
for 1998."
Vista Gold Corp. is an international gold mining, development and exploration
company based in Denver, Colorado. Its holdings include the Hycroft and Mineral
Ridge mines in Nevada, a development project in Bolivia, and exploration
projects in North and South America.
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The statements that are not historical facts are forward-looking statements
involving known and unknown risks and uncertainties that could cause actual
results to vary materially from the targeted results. Such risks and
uncertainties include those described in the Company's Form 20-F as amended.
For further information, please contact Investor Relations at (303) 629-2450 or
(888) 629-2450.
