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EXHIBIT 99.01
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SECOND QUARTER REPORT - 2000
DEAR FELLOW SHAREHOLDERS:
During the second quarter of the year, we continue to face very low gold
prices. The average price for the quarter was $280 per ounce compared to $290
per ounce during the first quarter.
The Corporation's efforts to reduce the cost of its activities, together with
the discontinuance of operations at the Mineral Ridge Mine enabled the
Corporation to reduce its losses to $775,000 for the three months ended June
30, 2000, compared to a net loss of $4.5 million in the same period in 1999.
At the end of the quarter, the Corporation had a net working capital of $1.9
million and cash of $0.9 million, including unsold gold bullion. Hycroft gold
production continued to exceed expectations, and by the end of the quarter
Hycroft had produced 4,212 ounces of gold and for the six months ended June
30, 2000, Hycroft's total gold production was 9,139 ounces. The Corporation
estimates that Hycroft's gold production for the year 2000 will exceed 12,000
ounces.
The Corporation's efforts during the quarter have been directed towards
working with its financial advisor and examining all potential financing
opportunities including a potential merger. As part of this program the
Corporation's engineers and geologists have been continuing to review the
information and data at the Hycroft Mine to fully assess the potential value
of the property and the economics of restarting operations. This work, which
was carried out with the assistance and review of independent consultants
Mineral Resources Development, Inc. ("MRDI"), resulted in the announcement of
new reserves and resources at Hycroft on June 19, 2000. The resources are
tabulated below.
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GOLD GRADE CONTAINED CONTAINED
RESOURCES TONS (OPT) GOLD (OZ) SILVER (OZ)
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<S> <C> <C> <C> <C>
Measured & Indicated 41,865,000 0.0196 819,000 6,967,000
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Inferred 14,108,000 0.0152 213,000 2,407,000
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TOTAL 55,973,000 0.0184 1,032,000 9,374,000
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Vista designed two pits to develop the mineral resources. The smaller pit was
designed to exploit only measured and indicated resources and therefore, by
definition, contains the proven and probable reserves. The second, larger
pit, which includes the smaller pit, was designed to develop also the
inferred resources. This pit design therefore includes the proven and
probable reserves and those mineral resources that can be mined for a profit.
The results for both pits are tabulated below. MRDI expressed the opinion
that these estimates of proven and probable reserves and mineral resources
are reasonable and were estimated in accordance with industry standards.
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PROVEN AND PROBABLE RESERVES AND MINERAL RESOURCES
ESTIMATED @$300 PER OUNCE GOLD PRICE
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ORE TONS GOLD WASTE
(000'S) GRADE GOLD (000'S) STRIP
PIT DESIGN TONS (OPT) (i) OUNCES TONS RATIO
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<S> <C> <C> <C> <C> <C>
(A) Proven & Probable Reserves 23,791 0.0204 486,288
SMALL PIT Inferred Resources 2,349 0.0177 41,535
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Total 26,140 0.0202 527,823 33,304 1.24
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Proven & Probable Reserves 23,791 0.0204 486,288
LARGE PIT Measured & Indicated Resources 3,214 0.0179 57,516
Inferred Resources 4,368 0.0178 77,918
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Total 31,373 0.0198 621,722 38,967 1.24
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Vista has completed a feasibility-level financial analysis of the incremental
benefit of restarting the run-of-mine heap-leaching operation at Hycroft
based on the larger pit. The metallurgical recovery, production schedule, and
operating and capital costs were developed from Hycroft's operating results
at Brimstone and were reviewed by MRDI. The analysis showed that the project
would produce approximately 350,000 ounces over a 7-year period, at an
average cash cost of $204 per ounce of gold (including royalties). The
capital cost would be $4.9 million ($15 per ounce) with a pre-production
stripping cost of $4.7 million and a working capital requirement of $2.3
million. The after-tax internal rate of return at a $300 per ounce spot gold
price is estimated to be 34 percent. In addition the Corporation is
continuing to study other production models, which may support a restart of
mining at prices below $300 per ounce.
Exploration activities at Hycroft are being directed towards the previously
announced geochemical anomaly and have revealed a 2000-foot long silicified
fault breccia in the foot-wall of the structure that defines the east margin
of the Brimstone pit. The silicified breccia has been mapped with widths
ranging from 20 to 120 feet. The zone has consistently anomalous gold and
silver values, with gold ranging from .006 to .014 ounces per ton, and silver
values ranging from one to five ounces per ton. Secondary oxidized silver
values over 30 ounces per ton have been obtained from chip samples of five
feet in width. The zone is a new target, which offers the opportunity to
increase the current Brimstone oxide ore reserves.
In the immediate foot-wall of this silicified structure, chalcedonic veins
and pyritic silicification have been sampled. Vein widths of up to three feet
have been encountered with neighboring pyritic silicification reaching widths
of five feet. Silver values of ten to 30 ounces per ton have been obtained in
five-foot chip samples and while this zone has not yet been drilled by Vista,
it indicates that higher grade, vein type mineralization is present on the
Hycroft Property.
In Bolivia the Corporation continues to hold the Amayapampa development
project. To minimize holding cost, Vista has reached an agreement with the
local community to maintain certain low cost social programs in exchange for
maintenance and security services at the project site.
The Corporation has relocated its executive office to 7961 Shaffer Parkway,
Suite 5, Littleton, Colorado 80127. The new telephone number is (720)
981-1185 and the facsimile number is (720) 981-1186.
Vista Gold Corp. is an international gold mining, development and exploration
company based in Denver, Colorado. Its holdings include the Hycroft mine in
Nevada, a development project in Bolivia, and exploration projects in North
and South America.
Mike B. Richings
President and Chief Executive Officer
August 11, 2000
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 10-K as amended.
For further information, please contact Investor Relations at (720) 981-1185
or (888) 629-2450.
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