EXHIBIT 99.01
[LOGO]
FIRST QUARTER REPORT - 2000
DEAR FELLOW SHAREHOLDERS:
During the first quarter of the year, we continued to be challenged by a very
volatile gold market and a low gold price. The average price for the quarter
was $290 per ounce and at the time of writing this report (May 11, 2000) the
gold price was $277 per ounce.
In light of the continued low gold prices, the Corporation has taken many
steps to reduce the cost of its activities, including a significant reduction
in holding costs in Bolivia. This reduction in expenses and the
discontinuance of operations at the Mineral Ridge Mine enabled the
Corporation to reduce its losses to $162,000 for the three months ended March
31, 2000, compared to a net loss of $3.0 million in the same period in 1999.
At the end of the quarter, the Corporation had a net working capital of $2.7
million and cash of $1.8 million including unsold gold bullion. Hycroft gold
production continued to exceed expectations, and by the end of the quarter
Hycroft had produced 4,927 ounces of gold. The Corporation now estimates that
Hycroft gold production for the year 2000 will exceed 12,000 ounces. At the
end of March, the Corporation announced new reserves at the Hycroft mine.
New estimated and calculated total reserves and resources at Hycroft are 87.3
million tons at a grade of 0.017 ounces per ton containing 1.5 million ounces
of gold. Contained in this resource are proven and probable reserves
calculated at a $275 per ounce gold price of 24 million tons at a grade of
.021 ounces per ton containing 495,000 ounces. The Corporation has been
conducting an analysis of restarting operations at Hycroft, and at the time
of writing, these studies were close to being completed and will become
available during the second quarter.
In February, the Corporation announced agreements with the Bolivian
Government confirming financial incentives for the Amayapampa project and the
sale of the inactive Capa Circa mine in Bolivia. The resulting agreements
will mean reduced holding costs in Bolivia and enhanced economics of the
Corporation's Amayapampa project. The terms of the sale of Yamin (Capa Circa)
include approximately $200,000 in cash payments to Vista over a four-year
period, the assumption of Yamin's debts and a small production royalty. At
the same time, the agreement reached with the government, which concerns the
accelerated recovery of $1.9 million of taxes and duties associated with
defined infrastructure projects for development of the Amayapampa project,
eliminates uncertainty and assists the Corporation with project financing.
The Corporation has also refined its development plan for Amayapampa. The
optimized plan will, at a $325 per ounce gold price, generate an after-tax
internal rate of return of 20 percent. Gold production during the first 5
years is estimated to average approximately 47,400 ounces per year at a cash
production cost of $164 per ounce (life-of-mine average $168). The initial
capital, including working capital, would be $25 million.
- 19 -
The Corporation currently has over 1.0 million ounces of gold in proven and
probable reserves, over 1.0 million ounces of resources with significant
exploration upside and a permitted operating facility in Nevada. Vista's
management is directing its efforts at preserving and enhancing this
potential value for its shareholders. The Corporation is pursuing a number of
alternative plans to raise the additional capital necessary to maintain its
assets or provide for the recommencement of operations. The Corporation has
recently retained a financial advisor with a mandate to assist with financing
opportunities and to examine all alternatives, including merger opportunities.
Vista Gold's ore reserves and resources as of March 27, 2000 are tabulated
below.
- ---------------------------------------------------------------------------------------------
1.1 GOLD RESERVES and RESOURCES
- ---------------------------------------------------------------------------------------------
2. Proven and Probable Reserves TONS GRADE CONTAINED OUNCES
- ---------------------------------------------------------------------------------------------
Amayapampa, Bolivia ($300/oz) 10,200,000 0.051 526,000
Hycroft Mine ($275/oz) 23,960,000 0.021 495,000
---------- ----- ---------
TOTAL 34,160,000 0.030 1,021,000
- ---------------------------------------------------------------------------------------------
3. Mineral Resources TONS GRADE CONTAINED OUNCES
- ---------------------------------------------------------------------------------------------
Amayapampa, Bolivia
Measured, Indicated and Inferred 1,692,000 0.052 88,000
Hycroft Mine, Nevada (0.005 oz/ton cut-off)
Measured and Indicated 47,400,000 0.016 776,000
3.1.1 Inferred 16,000,000 0.015 240,000
- ---------------------------------------------------------------------------------------------
4. Reserves and Resources TONS GRADE CONTAINED OUNCES
- ---------------------------------------------------------------------------------------------
Amayapampa 11,892,000 0.052 614,000
Hycroft 87,360,000 0.017 1,511,000
---------- ----- ---------
TOTAL 99,252,000 0.021 2,125,000
- ---------------------------------------------------------------------------------------------
Mike B. Richings
President and Chief Executive Officer
May 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 (303) 629-2450
or (888) 629-2450.
(303) 629-2450 - VOICE 370 SEVENTEENTH STREET - SUITE 3000 - DENVER, CO 80202
(303) 629-2499 - FAX
- 20 -