Saying that one knows where this particular market is going is like saying pigs can fly. Nerves and reaction times bear this out. Europe’s condition to pressing a “B” instead of an “M” also show this well. The flight from equities to gold and bonds can happen in a heartbeat so having a few ideas about a gold position can be a good idea, because this is where the capital goes in such a situation, even if the metals are not in your view at the moment. As witnessed, the turn can happen quickly so being ready is a wise idea.
Vista Gold Corp., a basic materials company, engages in the evaluation, acquisition and exploitation of base metals around the world. The company currently controls or has holdings in a variety of gold operations located in Idaho, California, Mexico, Australia and Indonesia.
In a general sense, the company worked through 2009 in good form. It was, however, a year of transition as it sold its Allied Nevada Gold Corp. position and made various moves to better position the company for increased exploration and extraction activities. At the end of 2009 the company reported a net loss of $0.05 per share as compared to a 2008 net loss of $0.29 per share. Its overall working capital at the end of 2009 increased $2 million to approximately $28 million. One, however, must also account for the capital expenditures made through the year which do appear to be readying the company for expansion in coming years as test data and other development activities progress.
Although the company is apparently in a transition phase, with new projects working their way through the development phase, there does appear to be solid evidence that Vista Gold Corp. is well positioned to be a benefiter of higher gold prices well into the future. Its current agreement with Pan Asia Resources Corp. in Indonesia finds Pan Asia performing a majority of the leg work to get that gold operation permitted and operational, leaving Vista with options if Pan Asia goes public.
With respect to Mexican operations, government activity seems to be moving in a favorable direction for the company’s project to make its next step. As one can never tell where this particular market is going, gold remains a hedge in one form or another. Vista Gold is ready and looks to have the timing of the economy just about right to benefit in both the short run and longer terms.
Please see disclaimer on QualityStocks website: disclaimer.qualitystocks.net
Disclosure: NO POSITIONS