Friday March 30, 2012
by Adrian Day, editor Global Analyst
Much is happening with Vista Gold (VGZ). And there are several catalysts in coming months which could attract the market’s attention.
First, there is a a potential solution to its biggest problem; Vista has been in permitting purgatory over its Concordia project in Mexico. But it has now joint-ventured with a private local mining company which should allow the project to move forward.
Various payments to Vista will allow the company, Invecture, to earn 60% of the project upon completion of an updated feasibility and permitting.
The payments might be considered moderate, but Invecture has a better chance of obtaining the permits and moving the stalled project forward. It’s a positive transaction in difficult circumstances.
Elsewhere, Mt. Todd in Australia is moving towards a feasibility shortly, but Vista indicates there is potential for a larger project, which could mean this feasibility is not the final study.
And at Vista’s other Mexican project, Guadaloupe de los Reyes, there has been more encouraging drill results.
The other development is that Michael Richings has, as expected, retired as CEO. He took over after the tragic death of Jock MacGregor, and was instrumental in revamping the company in those dark days, for the company and for the gold price.
The strategy was to buy cheap but proven ounces which required a higher gold price to be economic.
In all categories, the company has over 16 million ounces in several projects around the world. It is now monetizing those assets. Fred Earnest has assumed the leadership role, as expected.
With cash of nearly $18 million, the company is well funded. Its shares in Midas, which it took public last year, are worth almost $120 million, With a total market capitalization of $230 million, the cash and shares, plus ounces make Vista very undervalued.
Currently, at $3.10, Visa is the top buy on our list. The shares have dipped under $3 recently, so depending on whether you already own the shares, you can buy now or try a little lower.
Learn more about this financial newsletter at Adrian Day's Global Analyst.