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 of Directors”), 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, 2022. 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, 2022, the Company’s internal control over financial reporting was effective.
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Report of Independent Registered Public Accounting Firm
To the Shareholders 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, 2022 and 2021, the related consolidated statements of income/(loss), shareholders' equity, and cash flows for each of the years in the two-year period ended December 31, 2022, 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, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2022, 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 matters are matters arising from the current period audit of the financial statements that were 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. We determined that there are no critical audit matters.
/s/ PLANTE & MORAN, PLLC
We have served as the Company’s auditor since 2014.
Denver, Colorado
February 23, 2023
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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,
2022
2021
Assets:
Current assets:
Cash and cash equivalents
$
8,110
$
12,757
Short-term investments (Note 3)
—
384
Other current assets
537
811
Total current assets
8,647
13,952
Non-current assets:
Mineral properties (Note 4)
2,146
2,146
Plant and equipment, net (Note 5)
193
233
Right-of-use assets
—
12
Total non-current assets
2,339
2,391
Total assets
$
10,986
$
16,343
Liabilities and Shareholders’ Equity:
Current liabilities:
Accounts payable
$
169
$
566
Accrued liabilities and other
764
839
Deferred option gain (Note 4)
—
383
Total current liabilities
933
1,788
Non-current liabilities:
Provision for environmental liability (Note 7)
—
240
Other liabilities
24
21
Total non-current liabilities
24
261
Total liabilities
957
2,049
Commitments and contingencies (Note 7)
Shareholders’ equity:
Common shares, no par value - unlimited shares authorized; shares outstanding:
2022 - 118,480,878 and 2021 - 117,189,232 (Note 6)
474,847
474,181
Accumulated deficit
( 464,818 )
( 459,887 )
Total shareholders’ equity
10,029
14,294
Total liabilities and shareholders’ equity
$
10,986
$
16,343
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)
Years Ended December 31,
2022
2021
Operating income/(expense):
Gain on disposal of mineral property interests (Note 4)
$
2,883
$
2,100
Exploration, property evaluation and holding costs
( 4,522 )
( 7,942 )
Corporate administration
( 3,767 )
( 3,945 )
Depreciation and amortization
( 45 )
( 49 )
Write-down of plant and equipment (Note 5)
—
( 5,500 )
Total operating expense
( 5,451 )
( 15,336 )
Non-operating income:
Gain on other investments
—
46
Interest income
111
3
Other income
409
50
Total non-operating income
520
99
Loss before income taxes
( 4,931 )
( 15,237 )
Net loss
$
( 4,931 )
$
( 15,237 )
Basic:
Weighted average number of shares outstanding
118,005,490
110,263,237
Net loss per share
$
( 0.04 )
$
( 0.14 )
Diluted:
Weighted average number of shares outstanding
118,005,490
110,263,237
Net loss per share
$
( 0.04 )
$
( 0.14 )
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, 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
Balances at January 1, 2022
117,189,232
$
474,181
$
( 459,887 )
$
14,294
Shares issued, net of offering costs (Note 6)
401,884
244
—
244
Shares issued (RSUs vested, net of shares withheld)
(Note 6)
889,762
( 357 )
—
( 357 )
Stock-based compensation (Note 6)
—
779
—
779
Net loss
—
—
( 4,931 )
( 4,931 )
Balances at December 31, 2022
118,480,878
$
474,847
$
( 464,818 )
$
10,029
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,
2022
2021
Cash flows from operating activities:
Net loss
$
( 4,931 )
$
( 15,237 )
Adjustments to reconcile net loss to net cash used in operations:
Depreciation and amortization
45
49
Stock-based compensation
779
887
Gain on disposal of mineral property interests, net
( 2,883 )
( 2,100 )
Write-down of plant and equipment
—
5,500
Gain on other investments
—
( 46 )
Reduction of provision for environmental liability
( 240 )
—
Change in working capital account items:
Other current assets
274
( 50 )
Accounts payable, accrued liabilities and other
( 457 )
377
Net cash used in operating activities
( 7,413 )
( 10,620 )
Cash flows from investing activities:
Proceeds from sales of marketable securities
—
339
Maturities of short-term investments, net
384
16
Additions to plant and equipment
( 5 )
( 139 )
Proceeds from option/sale agreements, net
2,500
2,415
Net cash provided by investing activities
2,879
2,631
Cash flows from financing activities:
Proceeds from equity financing, net
244
13,385
Payment of taxes from withheld shares
( 357 )
( 401 )
Net cash provided by/(used in) financing activities
( 113 )
12,984
Net increase/(decrease) in cash and cash equivalents
( 4,647 )
4,995
Cash and cash equivalents, beginning of period
12,757
7,762
Cash and cash equivalents, end of period
$
8,110
$
12,757
Supplemental cash flow information (Note 8)
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 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 one of the largest undeveloped gold projects in Australia. With the approval of the Operational 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. In March 2022, we appointed CIBC Capital Markets as our strategic advisor, and we are advancing a strategic process to seek a partner or other form of transaction for Mt Todd.
References to $ are to United States dollars and A$ are to Australian dollars.
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 100%-owned subsidiaries, either directly or indirectly through a subsidiary, 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; 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 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.
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, 2022 and 2021, 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. After acquisition of a mineral property, associated exploration and evaluation costs are expensed as incurred until development commences. Development costs to establish access to mineral reserves reported in accordance with subpart 1300 of Regulation S-K under the Securities Exchange Act of 1934, as amended, and other preparations leading to commercial production would be capitalized following a decision by the Company to develop such mineral property. Capitalization of development costs would conclude upon commencement of sustainable production.
Capitalized costs associated with a mineral property will be amortized using the units-of-production method over the estimated life of mineral reserves once sustainable production is achieved. If mineral properties are subsequently sold or abandoned, any unamortized 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 profitable commercial production from, or the sale/lease of, or other strategic transactions related to these properties. Development and/or start-up of mineral properties will depend on, among other things, management’s ability to raise sufficient capital for these purposes. Any 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 other sources 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 when information becomes available that indicates 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
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our Common Shares on the grant date, or, in certain cases, amounts determined by a Brownian motion pricing 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.
Fair Value of Financial Instruments
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 these financial instruments, carrying amounts approximate fair value.
Recent Accounting Pronouncements
No recent accounting pronouncements are applicable to Vista at this time.
3. Other Investments
Short-term investments
As of December 31, 2022 and 2021, the amortized cost basis of our short-term investments was $nil and $ 384 , respectively. The amortized cost basis approximates fair value at December 31, 2021. Short-term investments at December 31, 2021 were comprised of Australian Government instruments, all of which had 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”) during 2021. 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.
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.
The following table summarizes our investments in marketable securities as of December 31, 2022 and 2021.
December 31, 2022
December 31, 2021
Fair value at beginning of period
$
—
$
293
Nusantara Resources shares sold
—
( 339 )
Realized gain
—
46
Fair value at end of period
$
—
$
—
4. Mineral Properties
Mt Todd, Northern Territory, Australia
Capitalized mineral property values were:
At December 31, 2022
At December 31, 2021
Mt Todd, Australia
$
2,146
$
2,146
Guadalupe de los Reyes, Sinaloa, Mexico
In July 2020, the Company sold the Guadalupe de los Reyes gold and silver project in Sinaloa, Mexico (“Los Reyes”) to Prime Mining Corporation (“Prime Mining”). 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
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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 (“Awak Mas”). Previously, Vista and the holder of Awak Mas amended the original NSR agreement to allow the holder or a nominated party to make certain payments to Vista to cancel the original NSR. The holder of the Awak Mas royalty made the final $ 2,500 payment in January 2022. The Company recognized a gain of $ 2,883 for this final payment, which included recognition of $ 383 that was carried as deferred option gain as of December 31, 2021. With this final payment, the Company has no remaining royalty interest in Awak Mas.
5. Plant and Equipment
December 31, 2022
December 31, 2021
Accumulated
Accumulated
Cost
Depreciation
Net
Cost
Depreciation
Net
Mt Todd, Australia
$
5,364
$
5,171
$
193
$
5,359
$
5,126
$
233
Corporate, United States
333
333
—
333
333
—
Used mill equipment, Canada
—
—
—
—
—
—
$
5,697
$
5,504
$
193
$
5,692
$
5,459
$
233
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 to value 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. Such inputs 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 is party to an at-the-market offering agreement (the “ATM Agreement”) with H. C. Wainwright & Co., LLC (“Wainwright”), under which the Company has the right, but was not obligated, to issue and sell Common Shares through
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Wainwright for aggregate sales proceeds of up to $ 10,000 (the “ATM Program”). No securities can be offered in Canada under the ATM Agreement. As of December 31, 2022, $ 9,748 remained available under the ATM Program.
During the year ended December 31, 2022 the Company sold 401,884 Common Shares for net proceeds of $ 244 under the ATM Program. During the year ended December 31, 2021 the Company sold 798,270 Common Shares for net proceeds of $ 871 under the ATM Program, which excluded $ 191 that settled for cash in January 2021. 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.
Other Share Issuances
During the years ended December 31, 2022 and 2021 we issued 889,762 and 946,328 Common Shares, respectively, in connection with vesting of restricted share units (“RSUs”).
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
(Years)
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
As of December 31, 2022
7,408,101
$
1.25
1.5
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 of Directors”), with vesting provisions as determined by the Board of Directors.
Stock-based compensation expense for the years ended December 31, 2022 and 2021 was:
Year Ended December 31,
2022
2021
RSUs
$
507
$
672
DSUs
272
212
Stock Options
—
3
$
779
$
887
Phantom units
$
—
$
26
As of December 31, 2022, unrecognized compensation expense for RSUs was $ 297 , 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, 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
Granted
759,000
0.59
Cancelled/forfeited
( 395,569 )
0.51
Vested, net of shares withheld
( 889,762 )
0.49
Unvested - December 31, 2022
1,472,008
$
0.60
During the years ended December 31, 2022 and 2021, 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 43 % will vest based on fixed future dates, and approximately 57 % will vest on share-price criteria. 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 March 2022, the Board of Directors granted 324,000 DSUs and the Company recognized $ 272 of DSU expense. In February 2021, the Board of Directors granted 204,000 DSUs and the Company recognized $ 212 of DSU expense.
The following table summarizes DSU activity:
Weighted Average
Number of
Grant-Date Fair
DSUs
Value per DSU
Outstanding - December 31, 2020
726,000
$
0.57
Granted
204,000
1.04
Outstanding - December 31, 2021
930,000
$
0.68
Granted
324,000
0.84
Outstanding - December 31, 2022
1,254,000
$
0.72
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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, 2020
1,367,000
$
0.71
2.63
$
507
Outstanding - December 31, 2021
1,367,000
$
0.71
1.64
$
38
Outstanding - December 31, 2022
1,367,000
$
0.71
0.64
$
—
Exercisable - December 31, 2022
1,367,000
$
0.71
0.64
$
—
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, 2020
33,333
$
0.31
0.25
Vested
( 33,333 )
0.31
Unvested - December 31, 2021
—
$
—
—
Unvested - December 31, 2022
—
$
—
—
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. The Company recognized $ 26 of compensation expense for these units in the year ended December 31, 2021. The Company paid $ 65 for phantom units which vested during the year ended December 31, 2021.
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, 2020
72,000
0.5
Vested
( 72,000 )
Unvested - December 31, 2021
—
—
Unvested - December 31, 2022
—
—
Weighted Average Common Shares
At December 31,
2022
2021
Basic Common Shares
118,005,490
110,263,237
Effect of dilutive stock-based awards
—
—
Diluted Common Shares
118,005,490
110,263,237
Unvested RSUs representing 1,472,008 Common Shares, stock options to purchase 1,367,000 Common Shares, warrants to purchase 7,408,101 Common Shares, and vested DSUs representing 1,254,000 unissued Common Shares were
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outstanding at December 31, 2022 but were not included in the computation of diluted weighted average Common Shares outstanding because their effect would have been anti-dilutive.
7. Commitments and Contingencies
The Mt Todd site was not reclaimed by the predecessor owners when the mine closed in 2000. Reclamation obligations associated with this period and prior to Vista’s acquisition in 2006 are presently the responsibility of the Northern Territory, Australia Government (the “NT Government”). At such time as we provide notice to the NT Government that we intend to proceed with development, the Company will then assume these historical rehabilitation liabilities currently stated by the NT Government at A$ 73 million.
Under an agreement with the Jawoyn Association Aboriginal Corporation with respect to Mt Todd, we have agreed to a gross proceeds royalty (“GPR”) ranging between 0.125 % and 2.0 %, depending on prevailing gold prices and foreign exchange rates, and a 1.0 % GPR not tied to gold price or foreign exchange rates. The combined GPR range is 1.125 % to 3.0 %.
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. Future expenditures that may be required for compliance with these laws and regulations cannot be predicted. If the Company determines that it is probable that an obligation exists and the amount can be reasonably estimated, a provision for environmental liability would be recorded. This may include reclamation costs attributable to mining claims previously held by the Company should no other responsible or potentially responsible parties be identified. We conduct our operations in a manner designed to minimize effects on the environment and believe our operations comply with applicable laws and regulations in all material respects. During 2022, the Company reviewed the provision for environmental liability for a previously held non-core property and the associated contingent liability and determined that the reclamation costs were neither probable nor could be reasonably estimated. The Company reversed its provision for environmental liability, which resulted in a $ 240 gain in other income/(loss).
8. Supplemental Cash Flow Information and Material Non-Cash Transactions
As of December 31, 2022 and 2021, all 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, 2022 and 2021.
9. Income Taxes
The Company’s U.S. and foreign source income/(loss) were:
Years Ended December 31,
2022
2021
U.S.
$
( 95 )
$
( 136 )
Canada
( 272 )
( 7,155 )
Other foreign, net
( 4,564 )
( 7,946 )
$
( 4,931 )
$
( 15,237 )
During the years ended December 31, 2022 and 2021, 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,
2022
2021
Income taxed at statutory rates
$
( 1,035 )
$
( 3,743 )
Increase (decrease) in taxes from:
State Tax
( 2 )
( 21 )
Stock-based compensation
120
33
Meals and Entertainment
1
—
Imputed interest
16
1
Other adjustments
( 16 )
—
Expiring NOLs
504
—
Inflation adjustment
—
( 2 )
Prior year provision to actual adjustments
472
( 493 )
Change in U.S. tax rate
5
—
Differentials in foreign tax rates
( 426 )
( 186 )
Changes in foreign exchange rates
1,421
911
Changes in valuation allowances affecting income tax expense or benefit
( 1,060 )
3,500
Income tax (benefit)/expense
$
—
$
—
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,
2022
2021
Deferred income tax assets
Excess tax basis over book basis of property, plant and equipment
$
7,225
$
7,225
Marketable securities
—
103
Operating loss carryforwards
39,709
40,620
Capital loss carryforwards
14,394
14,065
Capital expenditures
374
374
Stock compensation
55
179
VAT recoverable
152
145
Unrealized foreign exchange gain/loss
—
116
Environmental liability
—
65
Offering costs
229
305
Accrued vacation
29
26
Other
—
4
Total future tax assets
62,167
63,227
Valuation allowance for future tax assets
( 62,167 )
( 63,227 )
—
—
Deferred income tax liabilities
Other investments
—
—
—
—
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 $ 62,167 and $ 63,227 at December 31, 2022 and 2021, 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
2023
—
—
392
6
398
2024
—
—
—
6
6
2025
—
—
84
6
90
2026
1,027
—
863
5
1,895
2027
847
—
—
7
854
2028
5,245
—
—
7
5,252
2029
4,022
—
—
2
4,024
2030
5,032
1,748
—
—
6,780
2031
3,806
3,407
75
—
7,288
2032
6,397
2,323
52
—
8,772
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
3,195
—
—
—
3,195
2042
704
—
—
—
704
$
58,157
$
15,715
$
1,466
$
39
$
75,377
U.S. loss carryforwards for tax years beginning in 2018 through 2022 of $ 2,401 , Canadian capital loss carryforwards of $ 106,623 and Australian NOLs of $ 63,810 , 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, 2022 and 2021, 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, 2018 or U.S. federal income tax examinations by the Internal Revenue Service for years ended on or before December 31, 2018. Some
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U.S. state and other foreign jurisdictions are still subject to tax examination for years ended on or before December 31, 2017.
Although certain tax years are closed under the statute of limitations, tax authorities can still adjust losses being carried forward to open years.
10. 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, 2022 or 2021. Geographic location of mineral properties and plant and equipment is provided in Notes 4 and 5, respectively.
11. Subsequent Events
There have been no material subsequent events after December 31, 2022.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTIN G AND FINANCIAL DISCLOSURE.
None.