Vista Gold Corp. (VGZ) Earnings Call Transcript & Summary

Good morning, and thank you for joining us for the Vista Gold Corp.'s Annual General and Special Meeting. [Operator Instructions] At this time, I will turn the meeting over to Mr. Michael Richings.

Thank you, operator, and good morning, everyone. My name is Mike Richings. I am the chair of the corporation's Board of Directors. Due to the ongoing COVID-19 pandemic, our meeting today is being held via live teleconference. We have made every effort to collect shareholders' votes by proxy ahead of this meeting and have provided a conference line to enable shareholders to vote during the meeting and listen to the proceedings. All registered shareholders or proxy holders should now have cast their votes in advance, by proxy or by ballot, to the scrutineer. Following the formal proceedings of the meeting, we will open the phone lines and endeavor to answer any questions from guests or shareholders. The 2021 Annual General and Special Meeting will now come to order. As Chair of the Corporation's Board of Directors, I will act as Chair of this meeting. I will ask Pamela Solly to act as secretary for this meeting, and I will also ask Marissa Beintema of Computershare Investor Services to act as scrutineer of this meeting. I've been advised that notice calling this meeting, together with the management information and proxy circular and the form of proxy were mailed to the registered shareholders of the corporation in accordance with Canadian securities regulations. Therefore, I conclude this meeting has been properly called. I have received a declaration from the scrutineer after such mailing, which is available for inspection by any shareholder by request after this meeting. In view of this, I will dispense of reading the notice. I have before me the scrutineer's preliminary report on attendance. I adopt the Scrutineer's report and declare that a quorum is present. I now declare that this meeting is regularly called and properly constituted for the transaction of business. The minutes of the last general meeting of the shareholders of the corporation, which was the annual general and special meeting held on April 30, 2020, are available for inspection. Unless there are questions arising from these minutes, I will consider the minutes as read and confirmed. On behalf of the Board of Directors, I have for presentation, the annual report for 2020, which contains the corporation's audited financial statements and the auditor's report thereon for the fiscal year ended December 31, 2020. And the annual report was provided to shareholders in accordance with applicable regulatory requirements, and copies are also available from the secretary. We will dispense with the reading of the financial statements, and I will consider the annual report received by the shareholders as submitted to this meeting. Each of the votes, today's meeting, will be conducted by way of a poll. We understand that each shareholder and proxy holder participating today by teleconference and wishing to vote his or her shares during the meeting has been given an opportunity to cast their votes with the scrutineer. If you are a registered shareholder or proxy holder, and you have not voted by proxy in advance of this meeting or with the scrutineer, please press 0 to signal the operator who will provide you with voting instructions. Please note that you may be delayed in joining the meeting while we confirm your voting eligibility. As Chair, I will propose motions as per the notice of meeting and in accordance with the articles of the corporation. No motion needs to be seconded. We will proceed with the nomination of the directors. The information circular at this meeting contains the names of and information about the 7 nominees to the Board of Directors, each for a 1-year term until the corporation's next Annual General Meeting. Therefore, I nominate the following 7 persons to act as directors for the ensuing year. John Clark, Frederick Earnest, Durand Eppler, Deborah Friedman, Thomas Ogryzlo, Michael Richings and Tracy Stevenson. As there were no further nominations that have been made in accordance with the advanced notice provisions of the articles of the corporation, I now declare the nominations closed. We will now proceed with the election of the directors. It is proposed that John Clark, Frederick Earnest, Durand Eppler, Deborah Friedman, Thomas Ogryzlo, Michael Richings and Tracy Stevenson be elected as Directors of the corporation. Accordingly, I move that such individuals be appointed each by separate ordinary resolution as a Director of the corporation for the ensuing year to hold Office until the Corporation's next Annual General Meeting or until their successor is elected or appointed. Unless their office is earlier vacated in accordance with the Contadina documents of the corporation or in accordance with the provisions of the governing corporate legislation. Is there any discussion on the motion?

[Operator Instructions] And there is no discussion at this time.

Thank you, operator. I have the preliminary results of the poll. Final voting results will be announced by press release subsequent to the meeting. With respect to the election of directors, the scrutineer's preliminary report states that the recorded vote is as follows: John Clark, in favor, 97.89; Frederick Earnest, in favor, 98.71; Durand Eppler, in favor, 97.67. Deborah Friedman, in favor, 98.13; Thomas Ogryzlo, in favor, 97.61; Michael Richings in favor, 96.95. And Tracy Stevenson, in favor, 97.75. Based on the votes available to me, I declare that John Clark, Frederick Earnest, Durand Eppler; Deborah Friedman, Thomas Ogryzlo, Michael Richings; and Tracy Stevenson to be duly elected as directors of the corporation. The next item of business is the appointment of auditors. It is proposed that Plante & Moran PLLC be reappointed as auditors of the corporation. Accordingly, I move that Plante & Moran PLLC be appointed as auditors of the corporation until the next Annual General meeting or until a successor is appointed. Is there any discussion on the motion? [Operator Instructions].

There is no discussion at this time.

Thank you. I have the preliminary results of the poll. Based on the votes available to me, I declare that the ordinary resolution appointing Plante & Moran PLLC as auditors of the corporation until the next Annual General Meeting or until a successor is appointed, passed by a majority of 99.23% of the shares voted at this meeting. The next item on the business of the business is the advisory note on executive compensation. Accordingly, I move to approve on an advisory nonbinding basis, the compensation of the corporation's named executive officers. The substance of this resolution is discussed in and the form of the resolution to be passed as set out in the circular for the meeting. Is there any discussion on the motion? [Operator Instructions].

There is no discussion at this time.

I have the preliminary results of the poll. Based on the votes available to me, I declare the ordinary resolution to approve on an advisory basis, the compensation of the corporation's named executive officers, has been passed by a majority of 94.88% of the shares voted at this meeting. The next item of business is the boat on the unallocated options under the corporation stock option plan. Accordingly, I move to approve all the unallocated stock options under the corporation's stock option plan. The substance of these resolutions is discussed in and the form of the resolutions to be passed is set out in the circular for this meeting. Is there any discussion on the motion? [Operator Instructions].

There is no discussion at this time.

I have the preliminary results of the poll. Based on the votes available to me, I declare that the ordinary resolution to approve all unallocated stock options under the corporation stock option plan has been passed by a majority of 93.81% of the shares voted at this meeting. Is there any further business? [Operator Instructions].

There is no further business at this time.

All the business for which this meeting was called has now been completed. Accordingly, I now move to conclude this meeting. Given our whole process for a majority of the votes eligible to be cast today, I hereby declare the motion carried and the Annual General and Special Meeting of the corporation duly concluded. I will now ask the operator to open the lines of the conference call to any questions or discussion.

[Operator Instructions]

In the meantime, while we're waiting for calls. Our CEO, Fred Earnest, has received a couple of questions by e-mail, and he would like to answer them now.

Very well. Thank you, Mike. As indicated, we did receive a couple of questions by e-mail, and I'll respond to those at this point in time. The first question is why is your stock so cheap? The disconnect between our market cap and the intrinsic value of Mt Todd compared to our peers is the focus of many discussions internally. Mt Todd is located in Australia, a safe investment jurisdiction and a mining-friendly country. All major environmental permits are approved, and we anticipate the approval of the mining management plan in the very near future. It is the largest undeveloped gold project in Australia and, if constructed as designed, would presently be the sixth largest gold producer in Australia. Most of the engineering is already at feasibility study levels. And as demonstrated in our most recent technical report, the project enjoys tremendous leverage to the price of gold, approximately $200 million of NPV per $100 change in the gold price. It is designed as a 50,000 tonne per day project that is expected to produce nearly 500,000 ounces of gold per year on average over the first 5 years. It is unmistakably already a large project with a very significant exploration upside potential. The initial CapEx is estimated to be $824 million, which on a per ounce of gold produced basis is a very efficient use of capital. Some of our peers with higher grade deposits are contemplating spending over $100 more per ounce than we will for initial capital. I believe the market loses sight of what you get for the initial capital investment and how efficiently it is spent and instead focuses on the quantum of the investment required. Additionally, we are aware that there are those who, in spite of repeated discussion about our plans to find a partner to work with us in the development of the project, believe that we will ultimately significantly dilute our shareholders. To those who hold this belief, I would simply state, this is not our plan. We believe we have one of the few shovel-ready projects of size sufficient to attract a senior producer as a partner. Additionally, one might point to the average grade of the deposit being less than 1 gram per ton. I would simply point out that there are many sub gram deposits that operate very profitably, take Kirkland Lake Gold's Detour Lake operation, for example. In the early years of the operation, the average grade at Mt Todd is estimated to be above 1 gram per tonne. So don't get hung up on the grade alone, but look at the operating costs. Mt. Todd is projected to have lowest quartile all-in sustaining costs, both in Australia and on a global basis. Finally, please be assured that this is very -- a very important matter for Vista's management team and represents a significant opportunity for investors who recognize the value creation potential as we execute on our strategies. The second question was, do you consider listing on the ASX. This is a topic that we evaluate on a regular basis. I believe the time will come when we will seriously consider a listing on the ASX. But that time is not now. Perhaps on a definitive investment decision is made with a partner or construction of the project is advancing, but we'll see. Mr. Chairman, that concludes the questions that we received prior to today's meeting.

Operator, is there any questions received?

We received no questions at this time.

Thank you, operator. Well, I will close the question-and-answer section and all the business for which the meeting was planned for as completed. And thank you very much for attending.

And again, ladies and gentlemen, that does conclude today's meeting. We thank you again for your participation. You may now disconnect.