Vista Gold said it has generated interest from a “broad range” of prospective partners for its Mt Todd gold project in Northern Territory.
The US-listed company has been advancing a strategic process to seek out a partner or other form of transaction for Mt Todd in the past year, which has seen several parties conduct a review of the project.
Vista Gold said it was engaging in constructive discussions with these groups before it progresses to any formal agreement.
“Our process has generated interest from a broad range of prospective parties, including high-quality gold producers of varying scale,” Vista Gold president and chief executive officer Frederick H. Earnest said.
“These groups conducted extensive due diligence on Mt Todd. Based on the feedback received, we are pleased that the technical merits of the project have stood up to the rigorous scrutiny of those who have evaluated (it).”
Earnest said that while there were interested parties, the current geopolitical and economic environment has meant some had adopted a more “cautious near-term business strategy”.
He suggested a successful transaction may depend on “improvement and stability in the economy and capital markets”.
Vista Gold released a Mt Todd feasibility study in February that demonstrated a potential 16-year mine life.
Based on fourth quarter 2021 costs and a $US1800 ($2691.85) per ounce (oz) gold price, Vista suggested Mt Todd would generate $US2.1 billion ($3.14 billion) of after-tax cash flow across the first seven years of its life.
At a $US1800/oz gold price, Mt Todd has an after-tax net present value (NPV) of $US1.5 billion ($2.24 billion) and an internal rate of return (IRR) of 26.7 per cent.
Mt Todd’s gold reserves increased by 19 per cent from prior estimates to 6.98 million ounces. The mine is expected to produce 395,000 ounces of gold per year, including 479,000 ounces during its first seven years.