NEVADA & THE WESTERN STATES — Vista works out bugs at Mineral Ridge mine

Technical setbacks at the newly acquired Mineral Ridge gold mine and lower production at the Hycroft gold mine, both of which are in Nevada, translated into a disappointing first quarter for Vista Gold (VGZ-X).

The Denver-based company posted a net loss of US$3 million (or 3 cents per share) for the recent 3-month period, compared with earnings of US$2.2 million (2 cents per share) in the first quarter of 1998.

Production at Mineral Ridge, which Vista acquired in November 1998, was lower than anticipated, owing to mechanical difficulties in the crushing circuit.

The glitches restricted production to only 3,490 oz. in the first quarter.

However, the bottleneck was eventually cleared, and production increased to 2,200 oz. in April and 3,000 oz. in May. Throughput has risen steadily to design capacity of 4,000 tons per day.

At full production, Vista expects to produce 5,000 oz. per month, for an estimated 50,000 oz. in 1999.

In an attempt to boost reserves at Mineral Ridge, the company has drilled 24 shallow reverse-circulation (RC) holes.

Exploration is also under way at the Hycroft mine’s Brimstone deposit, where eight core holes and 35 RC holes were put down in a US$400,000 program. Vista undertook the drilling after learning that Brimstone contained 30% more gold than originally projected.

Heap leaching at Hycroft has already produced 22,000 oz. of the 25,000 oz. that were projected for the current year, and cash costs have fallen to US$100 per oz. As a result, Vista has upgraded its production estimate to 35,000 oz. for 1999.

In other news, the company has terminated its proposed merger with Metallica Resources (MR-T).