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Tuesday, January 26, 2021

Vista Gold Corp. (NYSEMKT:VGZ) Big Stakes Down Under

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Vista Gold Corp. (NYSEMKT:VGZ) stock owners are keenly aware that the gold industry appears to be gaining momentum, based on rising prices and improved prospects for gold miners overall. That’s leading to investors searching out gold project developers with the brightest fortunes going forward. Vista Gold Corp. (NYSEMKT:VGZ), which operates a high-potential gold project in Northern Territory, Australia could be one of those companies.

Shares of Colorado-based VGZ are currently trading near $0.88, giving the company a total market capitalization of $86M. Over a 52-week period, shares of the company have traded as low as $0.26 and as high as $2.09. Shares of VGZ are currently trading within a very narrow band of $0.85 – $0.89. According to MarketWatch; the consensus analyst price target for the company is $2.96. That suggests that analysts believe the company could be ready to double – or even triple – over the next 12 months.

The main source of investor enthusiasm for VGZ remains the company’s Mt. Todd gold project in northern Australia, located approximately 250 kilometers southeast of Darwin. This project, acquired in 2006, has already resulted in 7.4 million oz. of gold production. Additionally, company management has assured investors that Mt. Todd has “significant exploration and district expansion potential.” It is, without a doubt, the largest undeveloped gold project in Australia – and that has investors re-thinking their valuations for VGZ stock.

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Other than its flagship Mt. Todd project, Vista Gold Corp. also has a 4.4 percent equity stake in Midas Gold Corp. and several non-core gold and silver mining projects in Mexico and the United States. It also has royalty interests in projects in Mexico and Indonesia.

Of all these non-core holdings, the one with the greatest potential is Guadalupe de los Reyes, a 100-percent owned gold/silver project located in the Sierra Madre range in Sinaloa, Mexico. This is located in historic mining district with a proven track record – over 600,000 oz. of gold and 40 million oz. of silver. Vista Gold says that Guadalupe de los Reyes has the potential for “high gold” and “bonanza silver” grades.

In terms of the overall financial strength of the company, there are a number of encouraging signs. As of June 2016, Vista Gold had no debt and adequate working capital to fund all planned activities up to 2018. That makes VGZ a well-funded gold project developer.

On Oct. 26, Vista Gold reported 3Q 2016 results. The company posted a net loss of $2.1 million ($0.02 per share). Under a special Australian government R&D program, the company receives multi-million-dollar payouts, with the latest one being a $4.3 million quarterly payout.

What’s interesting is how investors view Vista Gold as a highly leveraged play on the price of gold and global events. During summer 2016, as investors grew alarmed at the consequences of Brexit for the UK, there was a flight to safety and gold. At the end of June, shares of VGZ stock soared by more than 20 percent, as investors and traders looked for safe havens.

The core catalyst going forward, then, is the progress at the Mt. Todd gold mining project in Australia. While the company has several non-core projects in Mexico and the United States, it’s not clear what sort of timetable the company has for the future exploration and advancement of those projects – so all eyes are on the Australian gold project.

Right now, institutional owners control about one-quarter (26 percent) of all outstanding shares, giving VGZ a certain amount of stability and downside protection. What investors are hoping for, of course, is a lot of movement to the upside, driven by higher gold prices and improving fortunes for the gold industry overall. As recently as July 2016, shares of VGZ stock were trading at just over $2.00, so it’s definitely within possibility that shares could once again double over the near-term future. For more news on Vista Gold Corp. and other fast-moving penny stocks, please subscribe to OracleDispatch.com now.


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