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Vista Gold: Updated study for Mt Todd boosts projected economics

An updated preliminary feasibility study on Vista Gold Corp.'s Mt Todd gold project in Australia's Northern Territory outlined an increase in posttax net present value, discounted at 5%, to US$823 million, with a higher internal rate of return of 23.4% and a shorter 2.9-year payback period.

A January preliminary feasibility study on the project defined a posttax net present value of US$679 million, at a 5% discount, with a 20.5% internal rate of return and a 3.2-year payback period.

The new study is based on the results of metallurgical optimization test work, a redesign of the fine grinding circuit, construction and ramp-up schedule changes, and a comprehensive review of all aspects of the open pit operation, which resulted in improved gold recovery and increased gold production estimates.

The company said Sept. 10 that it expects average annual payable gold of 413,400 ounces, rather than 382,211 ounces forecast earlier, over a mine life of 13 years.

Meanwhile, life-of-mine average cash costs of US$645 per ounce remain unchanged, while all-in sustaining costs stand at US$746/oz.

Initial capital expenditure decreased to US$825.7 million, from US$838.8 million in the previous study. The new estimate includes an initial US$366.7 million for the process plant and US$86.6 million in contingency costs.

All of the estimates are based on a gold price of US$1,350/oz and a base case scenario of 50,000 tonnes per day.

The company believes that it should not develop Mt Todd on its own, and the study gives a basis for discussions with prospective development partners, President and CEO Frederick Earnest said.