Vista Gold Corp. (VGZ) filed Quarterly Report for the period ended 2009-09-30.
Vista Gold Corp. is a mining company which produces gold from its Crofoot/Lewis mine in Nevada and explores for precious metals in the United Stattes, Canada, Mexico, Bolivia, Vanezuela and Ecuador. Vista Gold Corp. has a market cap of $117.3 million; its shares were traded at around $2.71 .
Highlight of Business Operations:
Our consolidated net loss for the three-month period ended September 30, 2009, was $1,717 or $0.05 per share compared to a consolidated net loss of $2,823 or $0.08 per share for the same period in 2008. Our consolidated net earnings for the nine-month period ended September 30, 2009, was $293 or $0.01 per share compared to a consolidated net loss of $6,994 or $0.20 per share for the same period in 2008. For the three-month period, the decrease in the consolidated net loss of $1,106 from the prior period is primarily due to a gain of $537 on the repurchase of convertible notes. On July 14, 2009, we repurchased $1.333 million of our convertible notes for $866, which resulted in a gain. Also contributing to the decrease in the consolidated net loss for the three-month period was an increase in the gain on currency translation of $256 and a decrease in corporate administration and investor relations of $419; these amounts were partially offset by an increase in exploration, property evaluation and holding costs of $167. The increase in the consolidated net earnings of $7,287 for the nine-month period from the prior year period is largely due to a gain on disposal of marketable securities of $6,829. The gain was the result of the sale of our Allied Nevada Gold Corp. (“Allied”) shares which we retained in connection with the transaction that resulted in the formation of Allied and the transfer of Vista s Nevada properties to Allied. Also contributing to this increase was the gain on the repurchase of convertible notes of $537, a decrease in corporate administration and investor relations of $974 and an increase in the gain on currency translation of $295. These increases have been partially offset by an increase in exploration, evaluation and holding costs of $272, an increase in the future income tax expense of $550, an increase in the write-down of marketable securities of $123 and a decrease in interest income of $352.
Interest expense of $560 during the three-month period ended September 30, 2009 was less than $617 for the same period in 2008. This decrease is due to the repurchase of certain convertible notes during the period (see “Consolidated Financial Statements – Note 7”.) Interest expense increased to $1,723 for the nine-month period ended September 30, 2009, as compared with $1,386 for the same period in 2008. This increase is because the senior secured convertible notes (the “Notes”) were issued on March 4, 2008 and therefore only 118 days of interest were recorded for the 2008 period. For the three-month period ended September 30, 2009, $252 is attributable to the accretion of the debt discount and $308 is attributable to interest expense. For the nine-month period ended September 30, 2009, $775 is attributable to the accretion of the debt discount and $948 is attributable to interest expense. These amounts are approximately 43% of the full interest expense associated with the issuance of the Notes. We capitalized the remaining 57% as additions to mineral properties in accordance with SFAS No. 34 and our accounting policy.
Pursuant to the Whitebox Repurchase Agreements, the Corporation agreed to repurchase Notes (i) in the principal amount of $504,000 from Whitebox Combined Partners for an aggregate purchase price, including interest, of $331,800; (ii) in the principal amount of $510,000 from Whitebox Convertible Arbitrage for an aggregate purchase price, including interest, of $335,750; and (iii) in the principal amount of $319,000 from Whitebox Special Opportunities for an aggregate purchase price, including interest, of $210,008, based on a settlement date of July 14, 2009. The Corporation allocated the consideration paid on the repurchase of the convertible notes to the liability and equity elements of the security based on their relative fair values at the date of the transaction. A gain of $537,000 was recorded in the Corporation s Consolidated Statement of Earnings and (Loss) as a result of the convertible notes repurchase. There were no similar transactions during the 2008 periods.
Net cash used in operating activities was $964 for the three-month period ended September 30, 2009, compared to $1,706 for the same period in 2008. The decrease of $742 is mostly the result of a decrease in cash used for accounts payable, accrued liabilities and other of $588, a decrease in cash used for prepaids and other of $178, which was offset by an increase in cash used for accounts receivable of $37 and an increase in interest paid on our convertible notes of $11.
Net cash used in operating activities was $5,189 for the nine-month period ended September 30, 2009, compared to $4,985 for the same period in 2008. The increase of $204 is mostly the result of the increase in interest paid of $669 on the Notes. The Notes were issued on March 4, 2008 and therefore only 72 days of interest had accrued as of June 15, 2008, the date at which interest is paid. Other variances include a decrease in cash received from accounts receivable of $93, a decrease in cash used for prepaids and other of $229, a decrease in cash used for accounts payable, accrued liabilities and other of $240 as well as an overall decrease in non-cash items of $7,800 which was offset by a decrease in the net loss of $6,993.
At September 30, 2009, our total assets were $94,266 compared to $75,765 at December 31, 2008, representing an increase of $18,501. At September 30, 2009, we had working capital of $33,596 compared to $21,209 at December 31, 2008, representing an increase of $12,387. This increase relates primarily to an increase in our cash balance from year end as a result of our public offering and the over-allotment during September 2009 (see Consolidated Financial Statements – Note 8).
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