Fred Earnest – President and Chief Executive Officer Jack Engele – Senior Vice President and Chief Financial Officer

Heiko Ihle – Rodman Adrian Day – Asset Management

Good day, ladies and gentlemen. Welcome to today’s Vista Gold Second Quarter 2017 Financial Results and Quarterly Update Conference Call. [Operator Instructions] As a reminder, this call is being recorded today and it is Wednesday, August 9, 2017. It is now my pleasure to introduce Vista’s President and CEO and your host, Mr. Fred Earnest. Please go ahead.

Thank you, Jesse. Good afternoon, ladies and gentlemen. Thank you for joining Vista Gold Corp.’s second quarter 2017 financial results and corporate update conference call. I’m pleased to be joined on this call by Jack Engele, our Senior Vice President and Chief Financial Officer; and Connie Martinez, our Director of Investor Relations, both of them are here with me in our corporate office in Denver. Recently, we have announced the initial results of both metallurgical and possessory optimization testing programs for our Mt. Todd gold project. We have also announced the commencement of work to update our Mt. Todd preliminary feasibility study, which we expect to complete late this year or early next year. We will discuss these results and plans in more detail later in the call. In the course of this call, we will be making forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Vista to be materially different from any future results, performance or achievements expressed or implied by such statements. Please refer to our Form 10-K for a detailed discussion of risks and other important factors that could cause actual results to differ materially from those in our forward-looking statements. I’ll now turn the time over to Jack Engele.

Thank you, Fred. Good afternoon, everyone. I’ll start with our balance sheet and liquidity. Our balance sheet is in good shape. As reported, our working capital totaled approximately $23.6 million at June 30, 2017. This includes cash and short-term investments of about $20.2 million. Our short-term investments are comprised of U.S. T-Bills and notes. The company has no debt. Turning to our statement of income and loss from June 30, 2017. For the quarter, we reported a net loss of $2.7 million or $0.03 a share. The main components of this loss are $2.2 million of net operating expenses and an unrealized $0.5 million mark-to-market loss on our remaining 7.8 million Midas shares. The main cash components of the $2.2 million of our net operating loss are about $600,000 of fixed site management costs at our Mt. Todd gold project, about $400,000 of Mt. Todd discretionary programs comprised mainly of automated sorting tests and permitting. Our fixed G&A costs were about $800,000. Compared to the same quarter last year, total Mt. Todd fixed cost in Australian dollar terms remained fairly constant. Similarly, corporate G&A costs were substantially unchanged from Q2 2016. Our costs are well controlled. Looking ahead, we believe that our existing working capital, coupled with potential future sources of non-diluted financing, will be sufficient to cover our fixed costs and discretionary project maturities, including permitting and feasibility studies for the next several years. Potential future sources of non-diluted financing include the sale of our used mill equipment, the sale or auction of our non-core Guadalupe de los Reyes project in Mexico and, depending on market conditions, the sale of some or all of our remaining common shares for Midas Gold. That concludes my comments. Fred?

Thank you, Jack. Earlier this year, we indicated that we have shipped approximately 20 metric tons of material from the Mt. Todd project to Germany for bulk testing and sorting test – for bulk crushing and sorting tests. These tests were designed to confirm that the proposed project can reduce the volume of material to be milled without significant gold losses. I’m pleased to report that the automated sorting tests confirm that consistent with previous test work 8% to 10% of the run-of-mine feed to the crushing circuit can be removed from the process stream prior to the grinding circuit. This is expected to reduce grinding circuit operating costs and to provide a modest increase in grade to the grinding circuit. The testing program started with crushing the samples at the facilities of thyssenkrupp industries near Düsseldorf. We used their 1 meter diameter HPGR crusher, which happens to be the largest HPGR crusher in a laboratory facility. To obtain crusher product that will most closely approximate the size, distribution that we can expect to produce during the operations. The product from the crushing test was screened at 5/8 of an inch or approximately 16 millimeters in preparation for sorting tests on the course for action. I should point out that the application of automated sorting technology is not new to the mining sector. It is being used elsewhere in the gold sector, the diamond industry, and in industrial minerals, iron ore, limestone and coal operations to effectively sort ores that have distinct visual and/or density variations. Our test work was completed on 2 different production scale sorting machines, which were operated at production rates at facilities of Tomra Sorting Solutions near Hamburg. Being present for the sorting test work was an important factor for our team. We were able to observe firsthand the speed and the efficiency of the sorting methods, which were both very impressive. The testing was undertaken at various levels of sensitivity, sorting of each ore type produced results consistent with those of previous testing. The sorted plus-5/8 inch material has been returned to Denver for additional metallurgical test work and analysis. We expect to have assay results for the different sorted fractions in the coming weeks and plan to provide updated results at that time. Once assays are received, we will be able to define the optimal sorting parameters for the sorting circuit. The minus-5/8 inch material from the HPGR crushing exercise was generated at the facilities of thyssenkrupp industries is being shipped to Denver, and delivery is scheduled for the end of this month. Once it arrives, we will start grinding and leach optimization tests that are expected to compliment the results of the automated sorting test. We believe these tests will confirm the efficiencies and increased recovery we expect to achieve by grinding to a finer size in a redesign 2-stage grinding circuit. The grinding and leach optimization tests will be completed at the facilities of Resource Development Inc., Wheatridge, Colorado, and are expected to be completed in late September. The results of the bulk metallurgical testing program already completed provide key support for the assumptions underlying our decision to commence and update of the Mt. Todd preliminary feasibility study. As part of the update of the preliminary feasibility study, we intend to evaluate and include all appropriate production improvements and the most current economic factors. We believe the results of this study, when completed later this year or early next year, will demonstrate a technically improved project and provide an improved perspective of the value of the Mt. Todd gold project at present gold prices. As indicated in our last corporate update conference call, we have commenced the preparation of a draft Mt. Todd project Mine Management Plan or MMP. The preparation of this plan, which in the North American vernacular would be our mine operating permit, is on schedule, and we expect to complete the draft and have it ready for preliminary review starting in September. I would also not that we are pleased with the progress being made on the remaining federal environmental authorization and hope to receive the final approval in the coming months. In conclusion, our Mt. Todd gold project is the largest single deposit undeveloped gold project in Australia. With 5.9 million ounces of proven and probable reserves, Vista controls the third-largest reserve package in Australia. It is ideally located in the Northern Territory of Australia and enjoys the benefits of existing critical infrastructure components such as paved roads to the site, power lines and natural gas pipeline, freshwater storage reservoir and tailings impoundment facility. We are working to demonstrate significantly improved project economics before the end of the year and are well advanced with the permitting, the EIS having been approved in September of 2014. We have earned the trust of the local stakeholders and believe that our social license is firmly in hand. We believe that all of these factors combined to position us favorably compared to our peers in the developer space to provide our shareholders with exceptional leverage to price of gold. With the completion of the crushing and sorting tests in Germany, we now look forward to being able to report the results of the grinding and leach optimization tests later next month. The combined results of these programs are expected to confirm our belief that we can achieve cost reductions by removing uneconomic material from the process circuit prior to grinding and also achieve important improvements in gold recovery by efficiently grinding to a finer final grind size. Finally, we expect to demonstrate significantly improved project economics through the completion of the preliminary feasibility update prior to the end of the year. We believe that we have the financial resources to complete these programs and all other milestones that are necessary to advance the Mt. Todd project to the point of a development decision in addition to having the resources to fund several years of fixed operating costs. I believe having the financial strength to achieve all of these objectives is a distinguishing factor between Vista and many of its peers. I know that market activity in our sector is changing. Recent transactions indicate that the larger producers are starting to turn to the developer space to replace ounces with less risk than through grassroots exploration. Our present activities are focused on removing development risk and positioning Mt. Todd as a world-class project in a Tier 1 jurisdiction. I believe our updated PFS will demonstrate that the Mt. Todd project has the potential to be a top 5 gold producer in Australia, with operating costs in the lowest quartile. I would expect that our ongoing development efforts will increasingly attract the attention of producers seeking large scale, low cost, long life assets in solid jurisdictions will recognize this potential. As such, Vista represents an outstanding investment opportunity that should significantly improve in value as we complete the programs that we have discussed on the call today. We will now respond to any questions from the participants in this call.

[Operator Instructions] It appears we do have a question from Heiko Ihle from Rodman. Please go ahead your line is open.

Hey, guys thanks for taking my question and thanks to do in this call. So cash equivalents went from $23.9 million in Q1 to $20.2 million in Q2. That’s about a $3.7 million in burn. Should we assume this is the burn rate for the rest of the year?

Not necessarily, Heiko. We had drilling going on in the first quarter. The work on the crushing and screening – crushing, screening and sorting has been going on. So that’s – that has incurred some cost. But as I think about it, we are embarking on – starting the PFS update, which is something that we only have just put together and put an estimate around. And so this burn rate will – the burn rate – the escape as a consequence of finishing the drilling [indiscernible] will pick up as we move into the PFS. So the burn run rate will, I don’t have the numbers on my fingertips, but we’ll continue to approximate perhaps what we’ve seen.

Fair enough. The grinding and leaching optimization studies, you said that there is additional metallurgical testing done from the gold recoveries. And if I understood you correctly, on the call, you said those are coming later in September, right?

There is 2 different stages of results that will be announced, Heiko. First of all, we will have assays in the next week to 10 days on the course of material that would allow us to understand the grade of material – and that was sorted and the grade of the material that will be rejected. And then late in September, we will have the results of the grinding and leach optimization tests, which will provide – of interest to the market. And you will be the ultimate recovery that we expect to achieve at a grind size of 60 to 65 microns. It will also provide us with a wealth of information related to processor, grinding circuit design and operating costs for the updated PFS.

Got it. So really no intermediate news any time soon?

You should see an announcement in the next week or 10 days with the assay results that we’ll be able to quantify the effectiveness from a grade perspective. We’ve already announced what the mass balance, what results were from the sorting test. We’ll be able to quantify the upgrade in the material that goes to the grinding circuit and also talk about the gold losses, which we fully expect based on previous test work and our visual observations being there when the sorting was conducted to be very low. So we’ll be able to announce both of those.

Got it thank you so much.

Okay, Heiko have good afternoon.

[Operator Instructions] We’ll go ahead and take our next question from Alan Smith [ph].

I’m just a private uneducated investor. And I’ve been buying your stock on and off for the last 5 years. And I’ve been on some of these conference calls, of course, not all of them, [indiscernible] customers. The calls seem to be always positive, which, obviously, you will have to put up a positive front. And the last gentleman, very intelligent question. I would have never thought to ask that. But you talked about a possibly an upward swing of your stock or something similar to that. Well, 2 days ago, [indiscernible] holding note lose and the stock went down almost 12%, 15% and the volume went through the roof. So – and again, I’m uneducated, I’ve just – but I’m trying to get as much educated as I can. I’m looking for something, I mean, should I be hold on the old stuff or should I be dumping it? And can you explain the heavy volume and the loss in the last couple of days?

Alan, those are very interesting questions and worthy questions. Let me start with the market activity a couple of days ago. We do not know who the seller of the 250,000 shares was in the middle of the afternoon a couple of days ago. But you may or may not be aware that the – most of our shares trade on what is now called the NYSE American. It used to be NYSE MKT Exchange. And when they made the change in the name, they also changed their trading platform. And the markets in the past have worked because there has been a specialist or a market maker who performed a specific role of providing a more orderly market. And when big orders like that came in, they had – previously had the ability to act as a shock absorber and satisfy part of that demand to even things out. With the new platform that the exchange uses, which is called Pillar, it’s now electronic trading. And the role of the specialist is significantly reduced. Their role is much smaller. They have the pool to be able to cover the 250,000 sell order and so the computer kicked in and started lowering the price until they go to a point that it could put together enough buyers to satisfy the complete 250,000 shares sell order. And I don’t understand – I don’t pretend to understand the rationale of an individual who pushes the sell button on a stock that’s daily average trading volume over the last several weeks is somewhere between 170,000 and 200,000 shares a day. I mean you just have to know in your mind as an investor that that’s going to have some sort of an impact. When the share price went down all of a sudden, a lot of people realized that Vista was on sale, and the volumes increased because of the balance in the marketplace. Those individuals who looked at it and said, this is a fantastic opportunity for me to pick up Vista Gold’s stock at a price much lower than what I’ve seen it lately, balanced out by those individuals who may be have some of the same sentiment that you had when they’re saying, Oh No, what is going on with Vista Gold, and maybe I should be getting out before it goes down even further. There is no news that we have released or that we have in our position that would account for the selling that we’ve experienced over the last several days. In fact, the update that we provided today, I think, should point to the fact that we are in a position to be able to deliver on – deliver results on as indicated as promised that the programs that we’ve announced earlier in the year have been executed and others are progressing. We recently announced that we’re going to be updating the preliminary feasibility study. I think that this will be a very positive result when we’re able to announce the final results later this year, as it will help you and the rest of the market understand that at today’s gold price, the economics of the Mt. Todd gold project we expect will actually be significantly better than they were 4 years ago at the gold price that was higher. Part of that’s because of changes in foreign exchange rate, part of it’s because of the hard work that we’ve been doing over the last 3 to 4 years to optimize and make improvements such as the ones that are finally coming to fruition today. So obviously, the decision to hold or to sell or to even consider buying more is a decision that each investor makes on his own analysis of the data. And our goal is to provide you with the information and the data that help you make a decision that’s best for you. I don’t know if that answers your question, but I think it’s the best that I can provide.

And we can take our next question from Adrian Day.

Good report, Fred. Thank you. The last gentleman actually asked one of my questions. And so you have no idea whether this particular seller has more to sell or is all done, I guess, if you don’t know who it is, who would know that?

Adrian, it’s great you to be on the call today. The only thing that we know is that, 2 days ago, when we had the extremely high volume that the brokerage house that handled the biggest part of that and we suspected they represented the seller was a group named INCA, I-N-C-A. They’re the only ones that had volume that was greater than the size of that order. We think that Virtu is one of those that was acting on behalf of buyers. They had – they individually transacted about 220,000 shares that same day. So we don’t know who the seller was. And there were a couple of large orders that were filled shortly after the 250,000 share order. They totaled about 90,000 shares. I think that the volumes that we’re seeing right now is really just follow on to the events from the other days. The prices headed back up, and I would have expected that would happen.

Yes, yes, we’ve taken advantage of it. So we’re not unhappy. The question I had for you, obviously, you are in a really good position with the working capital to take you – as you said, to take you all the way through to a development decision without any dilutive financing. It’s a really good position to be in. On the other hand, one could say, you’re in a really great position to look to make any acquisitions. How do you view those 2 sort of choices?

Well, quite honestly, our primary focus, Adrian, is advancing the Mt. Todd project. We continually have [indiscernible] out. We’re continually looking for things that might fit in our wheelhouse. But our core focus is advancing the Mt. Todd project, eliminating development risk and putting it in a position where, as indicated at the close of our prepared remarks, that we think that this project would be, the dynamics of the market and the events that are transpiring that we have an opportunity that could present itself in the next year or 2 to generate significant shareholder value through a transaction with somebody who is looking for a shorter path to a production profile.

Okay. That’s good, that’s good. And then lastly, is there any progress on the mill sale or same?

We didn’t talk about the mill, but we’ve had a couple of groups that have expressed some interest. We’ve had an engineering firm that’s asked for detailed information and some of the drawings for the mill. We had another group with mining operations in Mexico actually go up and inspect the equipment with the folks from A.M. King. Our understanding of their assets is that it’s still a bit premature that they’re not ready to make a commitment on the equipment, but I can say that they’re very impressed with the equipment and its condition, and they left the site knowing that if their metallurgical testing pans out that they have a source for some equipment. So we don’t have anything that’s pending, but we’re starting to see an uptick in interest. And I think that’s encouraging.

Okay, great thank you.

Thanks Adrian.

[Operator Instructions]

Jesse, it appears that there are no further questions. That being the case, I would just like to take this opportunity to thank all of those who participated in the call today, and I’d like to thank those who asked questions on the call. We are very excited about where we’re at right now. It’s nice to be able to have news flow, to be working on things that we see within the next several months will put us in a position to be able to discuss the Mt. Todd in terms of present foreign exchange rates, present gold price. And given the work that we’ve been leading up to this, we feel that this will be – that the results of the update of the preliminary feasibility study will demonstrate considerably better project economics than what we were able to report 4 years ago. We invite you to continue to watch and keep ears open for news and to just follow the progress of those activities that we reported on today. I think that they will open the door for considerable interest in activity and value creation as we go forward. So with that, thanks once again, and we wish you all very good afternoon.

This does conclude today’s program. Thank you for your participation. You may disconnect at any time.