Item 8. Financial Statements and Supplementary Data
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Management’s Report on Internal Control Over Financial Reporting
The management of Vista Gold Corp. and its subsidiaries (collectively, “Vista,” the “Company,” “we,” “our,” or “us”) is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s board of directors (the “Board”), management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting at December 31, 2021. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission Internal Control-Integrated Framework in 2013. Based upon its assessment, management concluded that, at December 31, 2021, the Company’s internal control over financial reporting was effective.
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Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors of Vista Gold Corp.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Vista Gold Corp. (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of income/(loss), stockholders' equity, and cash flows for each of the years in the two-year period ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
The Company's management is responsible for these financial statements. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Critical Audit Matter Description
Impairment Assessment over Used Mill Equipment – Refer to Notes 5 and 8 to the financial statements.
During the year ended December 31, 2021, the Company reduced the carrying amount of the used mill equipment to $nil to reflect management’s estimate of recoverability. This estimate reflects management’s consideration of the duration this equipment has been actively marketed by an independent broker and the current competitive market conditions for used equipment yielding no sales.
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We identified the Company’s impairment charge for its used mill equipment as a critical audit matter. The principal considerations for our determination include the high degree of subjectivity associated with the significant assumption included in management's impairment assessment and management not having the ability to estimate recoverable sales proceeds with sufficient certainty. The significant assumption is the Company’s ability to sell the used mill equipment in the current market environment.
How the Critical Audit Matter was Addressed in the Audit
Our audit procedures performed to address this critical audit matter included the following, among others:
•
We gained an understanding of the Company’s internal controls over management’s impairment assessment of its used mill equipment.
•
We evaluated management’s impairment analysis.
•
We evaluated the significant assumption used to estimate fair value.
/s/ PLANTE & MORAN, PLLC
We have served as the Company’s auditor since 2014.
Denver, Colorado
February 24, 2022
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VISTA GOLD CORP.
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in U.S. dollars and in thousands, except shares)
December 31,
December 31,
2021
2020
Assets:
Current assets:
Cash and cash equivalents
$
12,757
$
7,762
Short-term investments (Note 3)
384
400
Other investments, at fair value (Note 3)
—
293
Other current assets
811
952
Total current assets
13,952
9,407
Non-current assets:
Mineral properties (Note 4)
2,146
2,146
Plant and equipment, net (Note 5)
233
5,643
Right-of-use assets
12
34
Total non-current assets
2,391
7,823
Total assets
$
16,343
$
17,230
Liabilities and Shareholders’ Equity:
Current liabilities:
Accounts payable
$
566
$
356
Accrued liabilities and other
839
702
Deferred option gain (Note 4)
383
68
Total current liabilities
1,788
1,126
Non-current liabilities:
Provision for environmental liability (Note 12)
240
240
Other liabilities
21
13
Total non-current liabilities
261
253
Total liabilities
2,049
1,379
Commitments and contingencies (Note 7)
Shareholders’ equity:
Common shares, no par value - unlimited shares authorized; shares outstanding:
2021 - 117,189,232 and 2020 - 103,171,904 (Note 6)
474,181
460,501
Accumulated deficit
( 459,887 )
( 444,650 )
Total shareholders’ equity
14,294
15,851
Total liabilities and shareholders’ equity
$
16,343
$
17,230
Approved by the Board of Directors
/s/ Tracy A. Stevenson
/s/ John M. Clark
Tracy A. Stevenson
John M. Clark
Director
Director
The accompanying notes are an integral part of these consolidated financial statements.
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VISTA GOLD CORP.
CONSOLIDATED STATEMENTS OF INCOME/(LOSS)
(Dollar amounts in U.S. dollars and in thousands, except shares and per share data)
Year Ended December 31,
2021
2020
Operating income/(expense):
Gain on disposal of mineral property interests, net (Note 4)
$
2,100
$
6,108
Exploration, property evaluation and holding costs
( 7,942 )
( 4,545 )
Corporate administration
( 3,945 )
( 3,777 )
Depreciation and amortization
( 49 )
( 48 )
Write-down of plant and equipment (Note 5)
( 5,500 )
—
Total operating expense
( 15,336 )
( 2,262 )
Non-operating income:
Gain on other investments (Note 3)
46
2,405
Interest income
3
16
Other income
50
261
Total non-operating income
99
2,682
Income/(loss) before income taxes
( 15,237 )
420
Net income/(loss)
$
( 15,237 )
$
420
Basic:
Weighted average number of shares outstanding
110,263,237
101,814,139
Net income/(loss) per share
$
( 0.14 )
$
0.00
Diluted:
Weighted average number of shares outstanding
110,263,237
104,478,920
Net income/(loss) per share
$
( 0.14 )
$
0.00
The accompanying notes are an integral part of these consolidated financial statements.
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VISTA GOLD CORP.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Dollar amounts in U.S. dollars and in thousands, except shares)
Total
Common
Accumulated
Shareholders’
Shares
Amount
Deficit
Equity
Balances at January 1, 2020
100,698,124
$
457,716
$
( 445,070 )
$
12,646
Shares issued, net of offering costs (Note 6)
2,028,334
1,959
—
1,959
Shares issued (RSUs vested, net of shares withheld)
(Note 6)
395,446
( 124 )
—
( 124 )
Shares issued (exercise of stock options) (Note 6)
50,000
37
—
37
Stock-based compensation (Note 6)
—
913
—
913
Net income
—
—
420
420
Balances at December 31, 2020
103,171,904
$
460,501
$
( 444,650 )
$
15,851
Balances at January 1, 2021
103,171,904
$
460,501
$
( 444,650 )
$
15,851
Shares issued, net of offering costs (Note 6)
13,071,000
13,194
—
13,194
Shares issued (RSUs vested, net of shares withheld)
(Note 6)
946,328
( 401 )
—
( 401 )
Stock-based compensation (Note 6)
—
887
—
887
Net loss
—
—
( 15,237 )
( 15,237 )
Balances at December 31, 2021
117,189,232
$
474,181
$
( 459,887 )
$
14,294
The accompanying notes are an integral part of these consolidated financial statements.
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VISTA GOLD CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in U.S. dollars and in thousands)
Year Ended December 31,
2021
2020
Cash flows from operating activities:
Net income/(loss)
$
( 15,237 )
$
420
Adjustments to reconcile net income/(loss) to net cash used in operations:
Depreciation and amortization
49
48
Stock-based compensation
887
913
Gain on disposal of mineral property interests, net
( 2,100 )
( 6,108 )
Write-down of plant and equipment
5,500
—
Gain on other investments
( 46 )
( 2,405 )
Change in working capital account items:
Other current assets
( 50 )
( 279 )
Accounts payable, accrued liabilities and other
377
456
Net cash used in operating activities
( 10,620 )
( 6,955 )
Cash flows from investing activities:
Proceeds from sales of marketable securities
339
5,788
Disposition of short-term investments, net
16
2,860
Additions to plant and equipment
( 139 )
( 68 )
Proceeds from option/sale agreements, net
2,415
3,048
Net cash provided by investing activities
2,631
11,628
Cash flows from financing activities:
Proceeds from equity financing, net
13,385
1,768
Payment of taxes from withheld shares
( 401 )
( 124 )
Proceeds from exercise of stock options
—
37
Net cash provided by financing activities
12,984
1,681
Net increase in cash and cash equivalents
4,995
6,354
Cash and cash equivalents, beginning of period
7,762
1,408
Cash and cash equivalents, end of period
$
12,757
$
7,762
Supplemental cash flow information (Note 9)
The accompanying notes are an integral part of these consolidated financial statements.
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VISTA GOLD CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts in U.S. dollars and in thousands, except share-related amounts)
1. Nature of Operations
Vista Gold Corp. and its subsidiaries (collectively, “Vista,” the “Company,” “we,” “our,” or “us”) operate in the gold mining industry. We are focused on evaluation, acquisition, exploration and advancement of gold exploration and potential development projects, which may lead to gold production or value adding strategic transactions such as earn-in right agreements, option agreements, leases to third parties, joint venture arrangements with other mining companies, or outright sales of assets for cash and/or other consideration. We look for opportunities to improve the value of our gold projects through exploration drilling and/or technical studies focused on optimizing previous engineering work. We do not currently generate cash flows from mining operations.
The Company’s flagship asset is its 100 % owned Mt Todd gold project (“Mt Todd” or the “Project”) in Northern Territory, Australia. Mt Todd is the largest undeveloped gold project in Australia. With the approval of the Mining Management Plan in June 2021, all major operating and environmental permits for Mt Todd have been received. Since acquiring Mt Todd in 2006, we have invested substantial financial resources to systematically explore, evaluate, engineer, permit and de-risk the Project. In February 2022, we completed a feasibility study for Mt Todd and are evaluating a potential partners, investors and lenders as we pursue a range of development alternatives.
2. Significant Accounting Policies and Estimates
Principles of Consolidation
The Consolidated Financial Statements include the accounts of Vista and its subsidiaries, all of which are more-than- 50 % owned subsidiaries and under Vista’s control. All significant intercompany balances and transactions have been eliminated. The Consolidated Financial Statements have been prepared in accordance with U.S. GAAP.
Use of Estimates
Preparation of the Company’s Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses during the reporting period. The more significant areas requiring the use of management estimates and assumptions are: asset impairments, the fair value and accounting treatment of financial instruments including warrants; useful lives of assets for asset depreciation purposes; valuation allowances for deferred tax assets; the fair value and accounting treatment of stock-based compensation; and the provision for environmental liabilities. Management based its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results will likely differ from amounts estimated in these financial statements.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and government securities with original maturities of 90 days or less when purchased. Because of the short maturity of these investments, carrying amounts approximate their fair values.
Foreign Currency Transactions
Our functional currency is the U.S. dollar. Foreign currency transactions denominated in currency other than the functional currency are recorded at the approximate rate of exchange at the transaction date and any gains/(losses) resulting therefrom are recorded in other expense. For each of the years ended December 31, 2021 and 2020, net foreign currency gains/(losses) were insignificant.
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Short-term Investments
Short-term investments consist of securities with original maturity dates greater than 90 days and less than one year. These securities are typically United States or Australian government treasury bills and/or notes. Short-term investments are recorded at amortized cost and are classified as debt securities held-to-maturity as the Company has the intention and ability to hold these instruments until their original maturity date at the time of purchase.
Mineral Properties
Mineral property acquisition costs, including directly related costs, are capitalized when incurred, and mineral property exploration costs are expensed as incurred. Capitalized costs will be depleted using the units-of-production method over the estimated life of the proven and probable reserves. If mineral properties are subsequently sold or abandoned, any un-depleted costs will be charged to expense in that period.
The recoverability of the carrying values of our mineral properties is dependent upon economic reserves being discovered or developed on the properties, permitting, financing, start-up, and commercial production from, or the sale/lease of, or other strategic transactions related to these properties. Development and/or start-up of any of these projects will depend on, among other things, management’s ability to raise sufficient capital for these purposes. Proceeds received from option or sale agreements are ascribed to recovery of the carrying value of the related project until the carrying value reaches zero. Thereafter, any additional proceeds received are recognized as a contract liability (deferred option gain) until control has transferred to the buyer or the related contract terminates.
We assess the carrying value of mineral properties for impairment whenever information or circumstances indicate the potential for impairment. This would include events and circumstances such as our inability to obtain all the necessary permits, changes in the legal status of our mineral properties, government actions, the results of exploration activities and technical evaluations and changes in economic conditions, including the price of gold and other commodities or input prices. Such evaluations compare estimated future net cash flows with our carrying costs and future obligations on an undiscounted basis. If it is determined that the estimated future undiscounted cash flows are less than the carrying value of the property, a write-down to the estimated fair value will then be reported in our Consolidated Statement of Income/(Loss) for the period. Where estimates of future net cash flows are not determinable and where other conditions indicate the potential for impairment, management uses available market information and/or third-party valuation experts to assess if the carrying value can be recovered and to estimate fair value.
Impairment
Carrying values of long-lived assets, other than mineral properties, are evaluated for impairment at such time that information becomes available indicating that the carrying value may not be recoverable. If it is determined that the fair value is less than the carrying value an impairment charge equal to the difference between the fair value and the carrying value will be recorded in our Consolidated Statements of Income/(Loss).
Stock-Based Compensation
Under our stock option, long-term incentive, and deferred share unit plans, the Company can grant stock incentive options, restricted share units, and deferred share units to executives, employees, consultants and non-employee directors as applicable. Compensation expense for such grants is recorded in the Consolidated Statements of Income/(Loss) as a component of exploration, property evaluation and holding costs and corporate administration, with a corresponding increase to Common Shares in the Consolidated Balance Sheets. The fair value of option grants is calculated using the Black-Scholes option pricing model. The fair value of restricted and deferred share units is based on the closing price of our Common Shares on the grant date, and in certain cases, adjusted by a Brownian motion price model. The expense is based on the fair value of the grant on the grant date and is recognized over the vesting period specified for each grant. Forfeitures of unvested awards for all stock-based compensation result in expense reversal upon forfeiture.
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Financial Instruments
Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures (“ASC 820”) of the Financial Accounting Standards Board (“FASB”) requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:
● Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
● Level 2 – Observable inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means.
● Level 3 – Prices or valuation techniques requiring inputs that are both significant to the fair value measurement and unobservable.
Our financial instruments include cash and cash equivalents, marketable securities, short-term investments, accounts payable and certain other current assets and liabilities. Due to the short-term nature of our cash and cash equivalents, short-term investments, accounts payable and certain other current assets and liabilities, we believe that their carrying amounts approximate fair value. Our other investments are accounted for at fair value based on quoted market prices in an active market and are included in Level 1 of the fair value hierarchy.
Recent Accounting Pronouncements
Government Assistance
In November 2021, the FASB issued ASU No. 2021-10 Government Assistance (Topic 832) Disclosures by Business Entities About Government Assistance , which requires additional footnote disclosure around material government assistance received by the entity. Disclosure includes the nature and amount of government assistance, commitments made by the Company, and significant components of the terms and conditions of the assistance. The Company is evaluating the impact of this pronouncement on its annual financial statements. The standard will be effective for the Company starting on January 1, 2022. Because the standard only affects footnote disclosure, it is not expected to result in a material effect on the financial statements.
3. Other Investments
Short-term investments
As of December 31, 2021 and 2020, the amortized cost basis of our short-term investments was $ 384 and $ 400 , respectively. The amortized cost basis approximates fair value at December 31, 2021 and 2020. Short-term investments at December 31, 2021 and 2020 are comprised of Australian or U.S. Government instruments, all of which have maturity dates greater than 90 days but less than one year.
Other investments
The Company held 1,333,334 shares of Nusantara Resources Limited (“Nusantara Resources”) as of December 31, 2020. On September 22, 2021, the shareholders of Nusantara Resources approved a scheme of arrangement whereby PT Indika Mineral Investindo (“Indika”) offered to acquire all issued shares of Nusantara Resources for A$ 0.35 per share. The transaction closed on October 6, 2021, resulting in Vista receiving $ 339 upon tendering its Nusantara Resources shares.
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Investments in marketable securities are recorded at fair value in the Consolidated Balance Sheets. Subsequent changes in fair value are recorded in the Consolidated Statements of Income/(Loss) in the period in which they occur. During the year ended December 31, 2020, the Company sold its common shares of Midas Gold Corp. (“Midas Gold Shares”) for net proceeds of $ 5,788 at a gain of $ 2,574 compared to the most recent measurement period. Cumulative realized loss since acquisition of these Midas Gold Shares in April 2011 was $ 11,841 , of which $ 14,415 was recognized in previous periods as unrealized loss, net.
The following table summarizes our investments in marketable securities as of December 31, 2021 and 2020.
December 31, 2021
December 31, 2020
Fair value at beginning of period
$
293
$
3,676
Midas Gold Shares sold
—
( 5,788 )
Nusantara Resources shares sold
( 339 )
—
Realized gain
46
2,405
Fair value at end of period
$
—
$
293
4. Mineral Properties
Mt Todd, Northern Territory, Australia
Capitalized mineral property values were:
At December 31, 2020
At December 31, 2019
Mt Todd, Australia
$
2,146
$
2,146
Guadalupe de los Reyes, Sinaloa, Mexico
In July 2020, the Company received the final $ 1,500 payment from Prime Mining Corporation (“Prime Mining”) for sale of the Guadalupe de los Reyes gold and silver project in Sinaloa, Mexico (“Los Reyes”). Upon receipt of final payment and transfer of the Los Reyes project to Prime Mining during the three months ended September 30, 2020, Vista recognized an operating gain of $ 3,540 , inclusive of previously deferred option gain of $ 2,892 and net of associated closing costs. As part of the terms of sale, Prime Mining was required to make additional payments to Vista of $ 2,100 in lieu of Vista being granted certain royalty and back-in rights. Prime Mining paid $ 1,100 in January 2021 and $ 1,000 in June 2021. Having received these payments as scheduled, Vista has no remaining right to be granted the royalties and back-in right, and Vista recognized a gain on disposal of mineral property interests of $ 2,100 during the year ended December 31, 2021.
Awak Mas, Sulawesi, Indonesia
Vista held a net smelter return royalty (“NSR”) on the Awak Mas project in Indonesia. During 2019, Vista and the holder of Awak Mas, Nusantara Resources, amended the original royalty agreement to allow the holder or a nominated party to make a $ 2,400 payment to Vista by April 30, 2020 to cancel a 1 % NSR on the first 1,250,000 ounces produced at Awak Mas and a 1.25 % NSR on the next 1,250,000 ounces produced. On May 5, 2020, the Company received $ 2,400 to cancel the related 1 % NSR and 1.25 % NSR. The gain recognized upon receipt of this payment was $ 2,568 , which included the $ 2,400 payment plus $ 168 of previously deferred option gain.
The Nusantara Resources subsidiary or a nominated party also had the right to cancel the remaining 1 % NSR and 1.25 % NSR for an additional payment of $ 2,500 by April 30, 2021. Vista and the Nusantara Resources subsidiary agreed in April 2021 to extend the payment date for the remaining $ 2,500 to not later than January 31, 2022 upon payment of certain extension fees. Vista received $ 315 during the year ended December 31, 2021 for extension fees. In October 2021, Nusantara Resources was acquired by Indika, which became the holder of Awak Mas. Indika made the final $ 2,500 payment on January 28, 2022. In 2022, the Company will recognize a gain for this amount plus $ 383 that is carried as deferred option gain as of December 31, 2021.
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5. Plant and Equipment
December 31, 2021
December 31, 2020
Accumulated
Accumulated
Cost
Depreciation
Net
Cost
Depreciation
Net
Mt Todd, Australia
$
5,359
$
5,126
$
233
$
5,306
$
5,163
$
143
Corporate, United States
333
333
—
333
333
—
Used mill equipment, Canada
—
—
—
5,500
—
5,500
$
5,692
$
5,459
$
233
$
11,139
$
5,496
$
5,643
During the year ended December 31, 2021, the Company reduced the carrying value of the used mill equipment to $nil to reflect management’s estimate of recoverability. The Company recorded this reduction as an operating loss of $ 5,500 in our Consolidated Statements of Income/(Loss). The inputs used in the valuing the used mill equipment included the duration this equipment has been actively marketed by an independent broker and the current competitive market conditions for used equipment yielding no sales. These inputs used in valuing the used mill equipment involved a high degree of subjectivity and resulted in management not having the ability to estimate recoverable sales proceeds with sufficient certainty. The used mill equipment continues to be marketed by the independent broker.
6. Common Shares
Equity Financing
During July 2021, we closed a public offering of 12,272,730 units (the “Units”) for net proceeds of $ 12,323 (the “2021 Offering”). The stock issuance costs associated with the 2021 Offering were $ 1,177 . Each Unit consisted of one common share of the Company (each a “Common Share”) and one-half of one Common Share purchase warrant (each full warrant, a “Warrant”). A total of 7,408,101 Warrants were issued, including 920,454 Warrants purchased by the underwriters pursuant to an overallotment option and 351,282 broker Warrants issued to the underwriters as compensation. Each Warrant entitles the holder thereof to purchase one Common Share at a price of $ 1.25 per Common Share (subject to adjustment in certain circumstances) and is exercisable for a period of 36 months from the closing of the 2021 Offering. The Warrants, which are classified as equity, had an aggregate relative fair value of $ 1,991 upon the issuance thereof on the closing date. The relative fair value of Warrants was estimated at the grant date using the Black-Scholes option pricing model using the following assumptions: 1) expected volatility of 70.6 % , 2) risk-free rate of 0.43 % , 3) contractual term of 3 years, and 4) stock price on the closing date of $ 0.89 per Common Share. A relative fair value of $ 11,509 was allocated to the Common Shares.
Vista was party to an at-the-market offering agreement (the “ATM Agreement”) with H. C. Wainwright & Co., LLC (“Wainwright”), under which the Company had the right, but was not obligated, to issue and sell Common Shares through Wainwright for aggregate sales proceeds of up to $ 10,000 (the “ATM Program”). No securities could be offered in Canada under the ATM Agreement. The ATM Agreement was amended in June 2020 to remain in force until terminated by either party. During the year ended December 31, 2020 the Company sold 2,028,334 Common Shares for net proceeds of $ 1,959 under the ATM Program, which included $ 191 that settled for cash in January 2021. During the year ended December 31, 2021 the Company sold 798,270 Common Shares for net proceeds of $ 871 under the ATM Program. Each sale under the ATM Agreement was made pursuant to an “at the market offering” as defined in Rule 415 under the United States Securities Act of 1933, as amended. In July 2021, the ATM Program was suspended in conjunction with the 2021 Offering.
Vista subsequently filed for and received notice of effectiveness of a new shelf registration statement in November 2021 with the Securities and Exchange Commission. In December 2021, the Company renewed the ATM Agreement on
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substantially the same terms, to provide for aggregate sales proceeds up to $ 10,000 (the “2021 ATM Program”). The entire $ 10,000 under the 2021 ATM Program remained available as of December 31, 2021.
Other Share Issuances
During the years ended December 31, 2021 and 2020 we issued 946,328 and 445,446 Common Shares, respectively, in connection with vesting of restricted share units (“RSUs”) and/or stock option exercises.
Warrants
Warrant activity is summarized in the following table. Intrinsic value is the aggregate value of warrants that were in the money at the end of the period. The warrants are subject to standard anti-dilution provisions.
Weighted
Weighted
average
average
Warrants
exercise price
remaining life
outstanding
per share
(yrs.)
As of December 31, 2020
—
$
—
—
Issued
7,408,101
1.25
3.0
As of December 31, 2021
7,408,101
$
1.25
2.5
Stock-Based Compensation
The Company’s stock-based compensation plans include: RSUs currently outstanding under the Company’s long-term equity incentive plan (“LTIP”), deferred share units (“DSUs”) issuable pursuant to the Company’s deferred share unit plan (“DSU Plan”) and stock options (“Stock Options”) issuable under the Company’s stock option plan (the “Plan”). Stock-based compensation may be issued to our directors, officers, employees and consultants. The maximum number of Common Shares that may be reserved for issuance under the combined stock-based compensation plans is a variable number equal to 10 % of the issued and outstanding Common Shares on a non-diluted basis at any one time. Vista also issued phantom units in 2018 to be settled in cash over a three-year term. Stock-based compensation and phantom units may be granted from time to time at the discretion of the Board of Directors of the Company (the “Board”), with vesting provisions as determined by the Board.
Stock-based compensation expense for the years ended December 31, 2021 and 2020 was:
Year Ended December 31,
2021
2020
RSUs
$
672
$
643
DSUs
212
209
Stock Options
3
61
$
887
$
913
Phantom units
$
26
$
98
As of December 31, 2021, unrecognized compensation expense for RSUs was $ 312 , which is expected to be recognized over a weighted average period of 1.2 years.
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Restricted Share Units
The following table summarizes RSU activity:
Weighted Average
Number
Grant-Date Fair
of RSUs
Value Per RSU
Unvested - December 31, 2019
1,491,301
$
0.51
Granted
1,609,000
0.41
Cancelled/forfeited
( 237,853 )
0.60
Vested, net of shares withheld
( 395,446 )
0.63
Unvested - December 31, 2020
2,467,002
$
0.42
Granted
891,000
0.76
Cancelled/forfeited
( 413,335 )
0.48
Vested, net of shares withheld
( 946,328 )
0.46
Unvested - December 31, 2021
1,998,339
$
0.53
During the years ended December 31, 2021 and 2020, the Company withheld shares equivalent to the value of employee withholding tax obligations which resulted from RSUs vesting in the period. Shares withheld are considered cancelled/forfeited.
Under the LTIP, a portion of the RSU awards vest on a fixed future date providing the recipient continues to be affiliated with Vista on that date. Other RSU awards vest subject to achievement of certain performance and market criteria, including the accomplishment of certain corporate objectives and the Company’s share price performance. Of the unvested RSUs, approximately 35 % will vest based on fixed future dates, and approximately 11 % and 54 % will vest on performance and share-price criteria, respectively. The minimum vesting period for RSUs is one year .
Deferred Share Units
The DSU Plan provides for granting of DSUs to non-employee directors. DSUs vest immediately; however, the Company will issue one Common Share for each DSU only after the non-employee director ceases to be a director of the Company. In February 2021, the Board granted 204,000 DSUs and the Company recognized $ 212 of DSU expense. In March 2020, the Board granted 360,000 DSUs and the Company recognized $ 209 of DSU expense.
The following table summarizes DSU activity:
Weighted Average
Number of
Grant-Date Fair
DSUs
Value per DSU
Unvested - December 31, 2019
366,000
$
0.57
Granted
360,000
0.58
Outstanding - December 31, 2020
726,000
$
0.57
Granted
204,000
1.04
Outstanding - December 31, 2021
930,000
$
0.68
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Stock Options
The following table summarizes option activity:
Weighted Average
Weighted Average
Remaining
Aggregate
Number of
Exercise Price
Contractual Term
Intrinsic
Options
Per Option
(Years)
Value
Outstanding - December 31, 2019
1,437,000
$
0.73
3.49
$
35
Granted
50,000
0.51
Exercised
( 50,000 )
0.75
9
Cancelled/Forfeited
( 70,000 )
1.02
—
Outstanding - December 31, 2020
1,367,000
$
0.71
2.63
$
507
Outstanding - December 31, 2021
1,367,000
$
0.71
1.64
$
38
Exercisable - December 31, 2021
1,367,000
$
0.71
1.64
$
38
The following table summarizes unvested option activity:
Weighted
Weighted
Average
Average
Remaining
Grant-Date
Amortization
Number of
Fair Value
Period
Options
Per Option
(Years)
Unvested - December 31, 2019
514,004
$
0.40
0.61
Granted
50,000
0.20
Vested
( 530,671 )
0.38
Unvested - December 31, 2020
33,333
$
0.31
0.25
Vested
( 33,333 )
0.31
Unvested - December 31, 2021
—
$
—
—
The fair value of stock options granted during the year ended December 31, 2020 to employees, directors and consultants was estimated at the grant date using the Black-Scholes option pricing model using the following weighted-average assumptions:
2020
Expected volatility
64.1
%
Risk-free interest rate
0.3
%
Expected life (years)
2.6
Dividend yield
0
%
Forfeiture assumption
0
%
Option pricing models require the input of highly subjective assumptions, including the expected price volatility. Expected price volatility is based on the historical volatility of our Common Shares. Changes in the subjective input assumptions can materially affect the fair value estimate. The expected term of the options granted represents the period of time that the options granted are expected to be outstanding using the simplified approach. The risk-free rate for the periods within the contractual term of the option is based on the U.S. Treasury yield curve in effect at the date of grant.
Phantom Units
The value of each phantom unit is equal to the Company’s share price on the vesting date and is payable in cash. Phantom units vest on fixed future dates provided the recipient continues to be affiliated with Vista on those dates. The Company accounts for these units as awards classified as liabilities with $ 39 included in current liabilities as of December 31, 2020. The Company recognized $ 26 and $ 98 of compensation expense for these units in the years ended December 31, 2021 and
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2020, respectively. The Company paid $ 65 for phantom units which vested during the year ended December 31, 2021. The Company paid $ 86 for phantom units which vested during the year ended December 31, 2020.
A summary of unvested phantom units is set forth in the following table:
Weighted Average
Remaining
Number of
Vesting Term
Phantom Units
(Years)
Unvested - December 31, 2019
144,000
1.0
Vested
( 72,000 )
Unvested - December 31, 2020
72,000
0.5
Vested
( 72,000 )
Unvested - December 31, 2021
—
—
Weighted Average Common Shares
At December 31,
2021
2020
Basic Common Shares
110,263,237
101,814,139
Effect of dilutive stock-based awards
—
2,664,781
Diluted Common Shares
110,263,237
104,478,920
Unvested RSUs representing 1,998,339 Common Shares, stock options to purchase 1,367,000 Common Shares, warrants to purchase 7,408,101 Common Shares, and vested DSUs representing 930,000 unissued Common Shares were outstanding at December 31, 2021 but were not included in the computation of diluted weighted average Common Shares outstanding because their effect would have been anti-dilutive.
Stock options to purchase 50,000 Common Shares were outstanding at December 31, 2020 but were not included in the computation of diluted weighted average Common Shares outstanding because their effect would have been anti-dilutive. The effect of dilutive stock-based awards was calculated using the treasury stock method, based on the remaining RSUs, DSUs, and stock options outstanding as of December 31, 2020.
7. Commitments and Contingencies
Our exploration and development activities are subject to various laws and regulations governing the protection of the environment. These laws and regulations are continually changing and are generally becoming more restrictive. As such, future expenditures that may be required for compliance with these laws and regulations cannot be predicted. We conduct our operations in a manner to minimize effects on the environment and believe our operations are in compliance with applicable laws and regulations in all material respects.
The Mt Todd site was not reclaimed by the predecessor owners when the mine closed in 2000. Liability for the reclamation of the environmental conditions at Mt Todd existing prior to the 2006 commencement of Vista’s involvement with the Project is presently the responsibility of the NT Government. After we provide notice to the NT Government that we intend to proceed with development the Company will then assume these historical rehabilitation liabilities currently estimated by the NT Government at approximately A$ 73 million.
In November 2020, we modified our agreement with the Jawoyn Association Aboriginal Corporation (the “Jawoyn”) with respect to the Project. The modified agreement provides the Jawoyn with a gross proceeds royalty (“GPR”) ranging between 0.125 % and 2.0 %, depending on prevailing gold prices and foreign exchange rates, instead of its previous right to become a 10 % participating joint venture partner in Mt Todd. The modified agreement did not affect the previously agreed 1.0 % GPR. The combined GPR range is now from 1.125 % to 3.0 %.
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8. Fair Value Accounting
The following table sets forth the Company’s assets measured at fair value by level within the fair value hierarchy. As required by accounting guidance, assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
Fair Value at December 31, 2021
Total
Level 1
Level 3
Other investments
$
—
$
—
$
—
Used mill equipment (non-recurring)
$
—
$
—
$
—
Fair Value at December 31, 2020
Total
Level 1
Level 3
Other investments
$
293
$
293
$
—
Our marketable securities and investment Nusantara Resources shares were classified as Level 1 of the fair value hierarchy as they are valued at quoted market prices in an active market. Marketable securities are included in Other Investments on the Consolidated Balance Sheets for each period presented.
The used mill equipment was classified as Level 3 of the fair value hierarchy. The management estimate of fair value at December 31, 2021 was $nil using a market approach. See Note 5 regarding inputs used for the Level 3 valuation of the used mill equipment.
There were no material transfers between levels nor were there any changes in valuation methods in 2021.
9. Supplemental Cash Flow Information and Material Non-Cash Transactions
As of December 31, 2021 and 2020, all of our cash was held in liquid bank deposits and/or government instruments in the United States or Australia.
There were no significant non-cash transactions for the years ended December 31, 2021 and 2020.
10. Income Taxes
The Company’s U.S. and foreign source income/(loss) were:
Years Ended December 31,
2021
2020
U.S.
$
( 136 )
$
1,879
Canada
( 7,155 )
( 308 )
Other foreign, net
( 7,946 )
( 1,151 )
$
( 15,237 )
$
420
During the years ended December 31, 2021 and 2020, the Company recognized $nil current and deferred income tax expense or benefit in each of the U.S., Canada, and other foreign jurisdictions, due to full valuation allowances within each jurisdiction.
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Rate Reconciliation
Reconciliations between the Company’s combined income taxes at statutory rates and the U.S. effective income tax (benefit)/expense were:
Years Ended December 31,
2021
2020
Income taxed at statutory rates
$
( 3,743 )
$
36
Increase (decrease) in taxes from:
State Tax
( 21 )
66
Stock-based compensation
33
50
Imputed interest
1
9
Other adjustments
—
( 1 )
Mining concessions disposition
—
853
Inflation adjustment
( 2 )
( 254 )
Prior year provision to actual adjustments
( 493 )
885
Change in U.S. tax rate
—
29
Change in foreign tax rate
—
100
Differentials in foreign tax rates
( 186 )
( 52 )
Changes in foreign exchange rates
911
( 1,236 )
Changes in valuation allowances affecting income tax expense or benefit
3,500
( 485 )
Income tax (benefit)/expense
$
—
$
—
Income tax benefit of $ 326 relating to deductible share offering costs were recorded directly in equity, offset by a corresponding valuation allowance.
Deferred Taxes
Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Components of the Company’s deferred tax assets and liabilities were:
December 31,
2021
2020
Deferred income tax assets
Excess tax basis over book basis of property, plant and equipment
$
7,225
$
7,776
Marketable securities
103
—
Operating loss carryforwards
40,620
36,965
Capital loss carryforwards
14,065
13,778
Capital expenditures
374
374
Stock compensation
179
164
VAT recoverable
145
150
Unrealized foreign exchange gain/loss
116
117
Environmental liability
65
65
Offering costs
305
46
Accrued vacation
26
22
Other
4
5
Total future tax assets
63,227
59,462
Valuation allowance for future tax assets
( 63,227 )
( 59,401 )
—
61
Deferred income tax liabilities
Other investments
—
61
—
61
Total Deferred Taxes
$
—
$
—
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Valuation Allowance on Canadian and Foreign Tax Assets
We establish a valuation allowance against income tax assets if, based on available information, it is more likely than not that all of the assets will not be realized. The valuation allowances of $ 63,227 and $ 59,401 at December 31, 2021 and 2020, respectively, related mainly to operating loss carryforwards where utilization is not more likely than not. The Company periodically assesses both positive and negative evidence to determine whether it is more likely than not that deferred tax assets can be realized prior to expiration.
Loss Carryforwards
The Company’s tax loss carryforwards expire as follows:
Noncapital
Canada
U.S.
Mexico
Barbados
Total
2021
—
—
—
4
4
2022
—
—
1,602
6
1,608
2023
—
—
373
6
379
2024
—
—
—
6
6
2025
—
—
80
6
86
2026
1,027
—
822
5
1,854
2027
847
—
—
7
854
2028
5,245
—
—
7
5,252
2029
4,022
—
—
—
4,022
2030
5,032
1,748
—
—
6,780
2031
3,806
3,407
72
—
7,285
2032
6,397
2,323
—
—
8,720
2033
6,185
3,098
—
—
9,283
2034
4,420
—
—
—
4,420
2035
3,729
2
—
—
3,731
2036
2,799
2,655
—
—
5,454
2037
1,916
2,482
—
—
4,398
2038
2,666
—
—
—
2,666
2039
3,338
—
—
—
3,338
2040
2,829
—
—
—
2,829
2041
5,370
—
—
—
5,370
$
59,628
$
15,715
$
2,949
$
47
$
78,339
U.S. loss carryforwards for tax years beginning in 2018 through 2021 of $ 2,686 , Canadian capital loss carryforwards of $ 104,184 and Australian NOLs of $ 63,795 , which do not expire, are not included in the previous table.
Accounting for uncertainty in taxes
Accounting Standards Codification Topic 740 (“ASC 740”) requires the Company to evaluate its income tax positions and recognize a liability for uncertain tax positions that are not more likely than not to be sustained by tax authorities. As of December 31, 2021 and 2020, the Company believes it had no income tax uncertainties that required recognition of a liability. If the Company were to determine that uncertain tax positions meet the criteria of ASC 740, an estimated liability and related interest and penalties would be recognized as income tax expense.
Tax statute of limitations
The Company files income tax returns in Canada, U.S. federal and state jurisdictions, and other foreign jurisdictions. There are currently no tax examinations underway for these jurisdictions. Furthermore, the Company is no longer subject to Canadian tax examinations by the Canadian Revenue Agency for years ended on or before December 31, 2017 or U.S.
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federal income tax examinations by the Internal Revenue Service for years ended on or before December 31, 2017. Some U.S. state and other foreign jurisdictions are still subject to tax examination for years ended on or before December 31, 2016.
Although certain tax years are closed under the statute of limitations, tax authorities can still adjust losses being carried forward to open years.
11. Geographic and Segment information
The Company has one reportable operating segment, consisting of evaluation, acquisition, and exploration activities. We evaluate, acquire, explore and advance gold exploration and potential development projects, which may lead to gold production or value adding strategic transactions. These activities are currently focused principally in Australia. We reported no revenues during the years ended December 31, 2021 or 2020. Geographic location of mineral properties and plant and equipment is provided in Notes 4 and 5, respectively.
12. Provision for Environmental Liability
Vista maintains a $ 240 provision for potential reclamation costs attributable to certain mining claims previously held by the Company should no other responsible or potentially responsible parties be identified.
13. Subsequent Events
The holder of Awak Mas, Indika, made the final $ 2,500 royalty cancellation payment on January 28, 2022. The Company canceled the remaining 1 % NSR and 1.25 % NSR and does not have any remaining interest in Awak Mas. In 2022, the Company will recognize a gain for the $ 2,500 payment plus $ 383 that is carried as deferred option gain as of December 31, 2021.
There have been no other material events subsequent to December 31, 2021.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTIN G AND FINANCIAL DISCLOSURE.
None.