[LETTERHEAD]
Trading Symbol: VGZ
Toronto and American Stock Exchanges
______________________________________________________NEWS _________
VISTA GOLD CORP. ANNOUNCES SECOND QUARTER 1999 RESULTS
DENVER, COLORADO, AUGUST 13, 1999 - Vista Gold Corp. announced a net loss of
$4.5 million or $0.05 per share for the three months ended June 30, 1999 as
compared to net earnings of $0.5 million or $0.01 per share for the same
period in 1998. Cash provided by operations during the quarter was $1.3
million. The primary reasons for the decrease in net earnings were lower gold
prices, reduced gold production at the Hycroft mine, higher cost production
from the Mineral Ridge mine, and the holding and financing costs associated
with the Amayapampa project in Bolivia. In addition, the current quarter net
loss includes a $0.5 million write-off of the investment in Zamora Gold Corp.
Zamora is continuing to undertake exploration and gold production activities
in Ecuador with funding being provided by the sale of gold and by its
controlling shareholder, Compania Minera Gribipe, S.A. However, to reflect
the Corporation's decreased levels of ownership and control, the investment
was conservatively written off.
SUMMARY RESULTS
(U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
Three Months Ended Six Months Ended
June 30 June 30
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1999 1998 1999 1998
---- ---- ---- ----
Gold revenues $ 4,862 $ 11,199 $ 11,272 $ 22,170
Net cash provided by (used in)
operating activities 1,337 1,540 (496) 8,039
Net earnings (loss) (4,491) 502 (7,536) 2,680
Earnings (loss) per share $ (0.05) $ 0.01 $ (0.08) $ 0.03
Weighted average shares outstanding 90,715,040 89,152,540 90,715,040 89,152,540
CONSOLIDATED PRODUCTION
(OUNCES)
Hycroft mine gold production 10,104 35,171 25,874 70,188
Mineral Ridge mine gold production 7,908 - 11,398 -
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Total gold production 18,012 35,171 37,272 70,188
The Corporation's cash position as of June 30, 1999 remains strong with $5.2
million in cash and refined gold bullion available for sale. The Hycroft mine
secured a $1.5 million bank loan during the quarter that strengthened the
Corporation's cash position. The average spot price realized during the
quarter was $274 per ounce and the average direct cash cost was $266 per
ounce on a consolidated basis. The Corporation's net working capital at June
30, 1999 was $8.5 million.
Performance at Mineral Ridge is continuing to improve; however, production
for the quarter was below expectation as a result of mechanical problems in
the crushing plant. Ore crushed and placed on the heaps improved
significantly in July, but gold production lagged behind plan. Vista has
recently reviewed and revised its forecast for Mineral Ridge, and as a
result, is lowering its estimated gold
production for 1999 to 35,000 ounces. The revised estimate continues to show
satisfactory long-term cash flows from the mine.
Hycroft's gold production continued to exceed expectations, and by the end of
the quarter Hycroft had produced 25,874 ounces for the year--more than the
year's planned output. The Corporation has, as a result, raised its estimate
for Hycroft's annual production to 35,000 ounces.
As previously reported, the ore mined in the north end of the Brimstone
deposit at Hycroft (representing about 33 percent of the total Brimstone
resource) actually contained 37 percent more gold than estimated by the
exploration model prior to mining. Vista estimated that an additional 670,000
ounces of mineable reserves, based on a $300 per ounce gold price, could be
established if the same upgrade experienced in mining the north end of
Brimstone can be demonstrated at the south end.
To assist in the reevaluation of the Brimstone reserve, Vista conducted an
8-hole initial diamond drill program. The results from the twin-hole program
showed, on 106 paired samples where adequate core samples were obtained, a
16-percent higher grade with core drilling than with reverse circulation
drilling. Unfortunately, core recoveries in critical higher-grade areas were
unacceptably low (0-50 percent) and no comparison could be made in these
areas. Vista has retained an international mining and ore reserve consultant,
Micon International Limited, to assist in designing a program to reevaluate
the reserves and confirm the upgrade. This program will involve additional
sampling, remodeling and drilling.
Due to sustained gold prices below $260 per ounce, the Corporation suspended
financing efforts for the development of the Amayapampa project in Bolivia.
The project will require a capital investment of $26 million, and will
produce an average of 43,000 ounces of gold per year, at an estimated cash
cost of $157 per ounce. The Corporation plans to reduce holding costs in
Bolivia, while maintaining the properties for future development once gold
prices improve. Cost reduction steps will include laying off all 264 workers
who have been maintained on the payroll at a reduced salary while financing
efforts were underway. Reductions will also be made in overhead costs, but
the Corporation will continue to support a modest social program including
electric power, teachers' salaries and school supplies, school breakfasts,
and nurses' salaries and medical supplies.
While monitoring the situation closely, Vista believes that the technical
improvements it has made and the efforts of its operating group at Mineral
Ridge will be rewarded with a successful low-cost operation. The Corporation
has taken the necessary steps to conserve its cash and to maintain the other
parts of its business in a state of readiness for improved prices. Although
the current gold market is challenging, it also provides opportunity. Vista
is actively pursuing a number of potential business combinations and
acquisitions where it can use its operating skills and assets to provide
Vista with opportunities for growth when the gold price improves.
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 10-K.
For further information, please contact Investor Relations at (303) 629-2450.