VISTA GOLD CORP - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2002

OR

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to

Commission File Number 1-9025
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VISTA GOLD CORP.

(Exact Name of Registrant as Specified in its Charter)

CONTINUED UNDER THE LAWS OF THE YUKON TERRITORY NONE
(State or other Jurisdiction of Incorporation or (IRS Employer
Organization) Identification Number)

SUITE 5, 7961 SHAFFER PARKWAY
LITTLETON, COLORADO 80127
(Address of Principal Executive Offices) (Zip Code)

(720) 981-1185
(Registrant's Telephone Number, Including Area Code)

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SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

None.

INDICATE BY CHECK MARK WHETHER THE REGISTRANT: (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS); AND (2) HAS BEEN SUBJECT TO THE
FILING REQUIREMENTS FOR THE PAST 90 DAYS: YES /X/ NO / /

INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS AN ACCELERATED FILER (AS
DEFINED IN RULE 12B-2 OF THE ACT): Yes / / No /X/

INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K: / /

AGGREGATE MARKET VALUE OF OUTSTANDING COMMON SHARES HELD BY NON-AFFILIATES:

As of June 28, 2002, being the last business day of the Registrant's most
recently completed second fiscal quarter, the aggregate market value of
outstanding Common Shares of the registrant held by non-affiliates was
approximately $11,900,000.

OUTSTANDING COMMON SHARES: As of March 19, 2003, 12,411,725 Common Shares of the
registrant were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: To the extent herein specifically
referenced in Part III, portions of the registrant's definitive Proxy Statement
for the 2003 Annual General Meeting of Shareholders. See Part III.

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TABLE OF CONTENTS

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GLOSSARY

"ASSAY" means to test ores or minerals by chemical or other methods for the
purpose of determining the amount of valuable metals contained.

"BRECCIA" means rock consisting of fragments, more or less angular, in a matrix
of finer-grained material or of cementing material.

"CLAIM" means a mining title giving its holder the right to prospect, explore
for and exploit minerals within a defined area.

"COMMON SHARES" means common shares without par value of Vista Gold.

"COMPUTERSHARE" means Vista Gold's registrar and transfer agent, Computershare
Trust Company of Canada (formerly Montreal Trust Company of Canada).

"CORPORATION" means the consolidated group consisting of Vista Gold Corp. and
its subsidiaries Hycroft Resources & Development, Inc., Hycroft Lewis
Mine, Inc., Vista Gold Holdings Inc., Vista Gold U.S. Inc., Vista Nevada Corp.,
Granges Inc., Vista Gold (Antigua) Corp., Minera Paredones Amarillos S.A. de
C.V., Compania Inversora Vista S.A., Minera Nueva Vista, S.A., Compania
Exploradora Vistex S.A.

"CUT-OFF GRADE" means the grade below which mineralized material or ore will be
considered waste.

"DEPOSIT" means an informal term for an accumulation of mineral ores.

"DIAMOND DRILL" means a rotary type of rock drill that cuts a core of rock and
is recovered in long cylindrical sections, two centimeters or more in diameter.

"DORE" means unrefined gold and silver bullion consisting of approximately 90%
precious metals, which will be further refined to almost pure metal.

"FAULT" means a fracture in rock along which there has been displacement of the
two sides parallel to the fracture.

"HEAP LEACH" means a gold extraction method that percolates a cyanide solution
through ore heaped on an impervious pad or base.

"HYCROFT INC." means Hycroft Resources & Development, Inc., an indirect
wholly-owned subsidiary of Vista Gold.

"HYCROFT LEWIS" means Hycroft Lewis Mine, Inc., an indirect wholly-owned
subsidiary of Vista Gold.

"MINERALIZATION" means the concentration of metals within a body of rock.

"MINERALIZED MATERIAL" is a mineralized body which has been delineated by
appropriately spaced drilling and/or underground sampling to support a
sufficient tonnage and average grade of metal(s). Such a deposit does not
qualify as a reserve, until a comprehensive evaluation based upon unit cost,
grade, recoveries, and other material factors conclude legal and
economic feasibility.

"ORE" means material containing minerals that can be economically extracted.

"OXIDE" means mineralized rock in which some of the original minerals have been
oxidized (I.E., combined with oxygen). Oxidation tends to make the ore more
porous and permits a more complete permeation of cyanide solutions so that
minute particles of gold in the interior of the minerals will be more
readily dissolved.

"PROBABLE RESERVES" means reserves for which quantity and grade and/or quality
are computed from information similar to that used for proven reserves, but the
sites for inspection, sampling and measurement are farther apart or are
otherwise less adequately spaced. The degree of assurance, although lower than
that for proven reserves, is high enough to assume continuity between points
of observation.

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"PROVEN RESERVES" means reserves for which (a) quantity is computed from
dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or
quality are computed from the results of detailed sampling and (b) the sites for
inspection, sampling and measurement are spaced so closely and the geologic
character is so well defined that size, shape, depth, and mineral content of
reserves are well-established.

"RECOVERY" means that portion of the metal contained in the ore that is
successfully extracted by processing, expressed as a percentage.

"RESERVES" or "ORE RESERVES" mean that part of a mineral deposit, which could be
economically and legally extracted or produced at the time of the reserve
determination.

"SAMPLING" means selecting a fractional, but representative, part of a mineral
deposit for analysis.

"SEDIMENT" means solid material settled from suspension in a liquid.

"STOCKWORK" means a rock mass interpenetrated by small veins of mineralization.

"STRIKE", when used as a noun, means the direction, course or bearing of a vein
or rock formation measured on a level surface and, when used as a verb, means to
take such direction, course or bearing.

"STRIKE LENGTH" means the longest horizontal dimension of an orebody or zone
of mineralization.

"STRIPPING RATIO" means the ratio of waste to ore in an open pit mine.

"SULPHIDE" (or "SULFIDE") means a compound of sulfur and some other element.

"TAILINGS" means material rejected from a mill after most of the valuable
minerals have been extracted.

"TRENCHING" means prospecting in which subsurface strata are exposed by digging
pits across the strike of a lode.

"VEIN" means a fissure, fault or crack in a rock filled by minerals that have
traveled upwards from some deep source.

"VISTA GOLD" means Vista Gold Corp.

"VOLCANICLASTIC" means derived by ejection of volcanic material from a
volcanic vent.

"WASTE" means rock lacking sufficient grade and/or other characteristics
of ore.

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CURRENCY

Unless otherwise specified, all dollar amounts in this report are expressed in
United States dollars.

METRIC CONVERSION TABLE

UNCERTAINTY OF FORWARD-LOOKING STATEMENTS

This document, including any documents that are incorporated by reference as set
forth on the face page under "Documents incorporated by reference", contains
forwarding-looking statements concerning, among other things, projected annual
gold production, mineralized material, proven or probable reserves and cash
operating costs. Such statements are typically punctuated by words or phrases
such as "anticipates", "estimates", "projects", "foresees", "management
believes", "believes" and words or phrases of similar import. Such statements
are subject to certain risks, uncertainties or assumptions. If one or more of
these risks or uncertainties materialize, or if underlying assumptions prove
incorrect, actual results may vary materially from those anticipated, estimated
or projected. Important factors that could cause actual results to differ
materially from those in such forward-looking statements are identified in this
document under "Item 1. Business--Risk Factors". Vista Gold assumes no
obligation to update these forward-looking statements to reflect actual results,
changes in assumptions, or changes in other factors affecting such statements.

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PART I

ITEM 1. BUSINESS.

OVERVIEW

Vista Gold Corp. (the "Corporation") is currently engaged in the evaluation,
acquisition, exploration and improvement of gold exploration and potential
development projects. The Corporation's approach to acquisitions of gold
projects has generally been to seek projects within political jurisdictions with
well established mining, land ownership and tax laws, which have adequate
drilling and geological data to support the completion of a third-party review
of the geological data and to complete an estimate of the mineralized material.
In addition, the Corporation looks for opportunities to improve the value of its
gold projects through exploration drilling, and/or introducing technological
innovations. The Corporation expects that emphasis on gold project acquisition
and improvement will continue in the future.

Currently the Corporation owns or controls six gold properties: the Maverick
Springs and Mountain View projects and the Hycroft mine, all in Nevada; the Long
Valley project in east central Califorina; the Paredones Amarillos project in
Baja, Mexico; and the Amayapampa project in Bolivia. Additional information
about these projects is available in "Item 2. Properties". The Corporation also
owns several exploration claims in Canada and approximately 25% of the shares of
Zamora Gold Corp., a company exploring for gold in Ecuador.

The Corporation does not produce gold in commercial quantities and does not
currently generate operating earnings. Through fiscal 2002, funding to acquire
gold properties, explore and to operate the Corporation has been acquired
through private placements of equity units consisting of the Corporation's
common shares and warrants to purchase common shares. The Corporation expects to
continue to raise capital through the exercise of warrants and through
additional equity financings.

The Corporation was originally incorporated on November 28, 1983 under the name
"Granges Exploration Ltd." In November 1983, Granges Exploration Ltd. acquired
all the mining interests of Granges AB in Canada. On June 28, 1985, Granges
Exploration Ltd. and Pecos Resources Ltd. amalgamated under the name "Granges
Exploration Ltd." and on June 9, 1989, Granges Exploration Ltd. changed its name
to "Granges Inc." On May 1, 1995, Granges and Hycroft Resources & Development
Corporation were amalgamated under the name "Granges Inc." Effective
November 1, 1996, Granges and Da Capo Resources Ltd. amalgamated under the name
"Vista Gold Corp.". Effective December 19, 1997, Vista Gold was continued from
British Columbia to the Yukon Territory, Canada under the BUSINESS CORPORATIONS
ACT (Yukon Territory).

The current addresses, telephone and facsimile numbers of the offices of the
Corporation are:

EMPLOYEES

As of December 31, 2002, the Corporation had 8 full-time employees, of which
four were employed at the Hycroft mine and four were employed at the
Corporation's executive office in Littleton, Colorado. The Corporation uses
consultants with specific skills to assist with various aspects of its project
evaluation, due diligence and acquisition initiatives.

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SEGMENT INFORMATION

Segment information is provided in the Consolidated Financial
Statements--Note 18.

SIGNIFICANT DEVELOPMENTS IN 2002

In 2002, the Corporation completed $6.8 million in equity private placement
financings, with an additional equity private placement financing, for net
proceeds of $3.0 million, completed subsequent to December 31, 2002. See the
Consolidated Financial Statements--Notes 8 and 21(b).

On June 19, 2002, the Corporation effected a 1-for-20 consolidation of its
common shares. All references in this document to common shares and per-share
amounts are on a post-consolidation basis, unless otherwise indicated.

Through the use of cash and equity units, consisting of the Corporation's common
shares and warrants to purchase common shares, as consideration, the Corporation
began to build a portfolio of gold projects through a strategy that includes
evaluation, acquisition, exploration and improvement of gold exploration and
potential development projects. As discussed under "Item 2. Properties", the
Corporation acquired four gold projects in 2002 to add to its two existing
projects, as follows:

- On August 29, the Corporation acquired 100% of the Paredones Amarillos
gold project in the Mexican state of Baja California Sur from Viceroy
Resource Corporation (Viceroy). To acquire the project, the Corporation
paid cash of Cdn $1.0 million and issued 303,030 equity units to Viceroy;
on August 29, 2003 the Corporation will pay Viceroy an additional Cdn
$0.5 million.

- On October 7, 2002, the Corporation completed the acquisition of a 100%
interest in the Maverick Springs gold and silver project and the Mountain
View gold project from Newmont Mining Corporation (Newmont), and its
wholly-owned subsidiary Newmont Capital Limited. To acquire the Maverick
Springs project, the Corporation paid cash of $250,000 and issued of
141,243 equity units to Newmont and on October 7, 2003 the Corporation
will issue $500,000 in common shares to Newmont, together with an
equivalent number of two year warrants. To acquire the Mountain View
project the Corporation paid cash of $50,000 and issued 56,497 equity
units to Newmont Capital Limited.

- Pursuant to a transaction initiated in November 2002, the Corporation has
an option to acquire 100% of the Long Valley project from Standard
Industrial Minerals, Inc. ("Standard"). Under the terms of the option
agreement, the Corporation would pay Standard $750,000 over five years in
annual installments. The Corporation has paid the first installment
of $100,000.

PROPERTY INTERESTS AND MINING CLAIMS

In the United States, most of the Corporation's exploration activities are
conducted in the state of Nevada. Mineral interests may be owned in Nevada by
(i) the United States, (ii) the state of Nevada, or (iii) private parties. Where
prospective mineral properties are owned by private parties, or by the state,
some type of property acquisition agreement is necessary in order for the
Corporation to explore or develop such property. Generally, these agreements
take the form of long term mineral leases under which the Corporation acquires
the right to explore and develop the property in exchange for periodic cash
payments during the exploration and development phase and a royalty, usually
expressed as a percentage of gross production or net profits derived from the
leased properties if and when mines on the properties are brought into
production. Other forms of acquisition agreements are exploration agreements
coupled with options to purchase and joint venture agreements. Where prospective
mineral properties are held by the United States, mineral rights may be acquired
through the location of unpatented mineral claims upon unappropriated federal
land. If the statutory requirements for the location of a mining claim are met,
the locator obtains a valid possessory right to develop and produce minerals
from the claim. The right can be freely transferred and, provided that the
locator is able to prove the discovery of locatable minerals on the

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claims, is protected against appropriation by the government without just
compensation. The claim locator also acquires the right to obtain a patent or
fee title to his claim from the federal government upon compliance with certain
additional procedures.

Mining claims are subject to the same risk of defective title that is common to
all real property interests. Additionally, mining claims are self-initiated and
self-maintained and therefore, possess some unique vulnerabilities not
associated with other types of property interests. It is impossible to ascertain
the validity of unpatented mining claims solely from an examination of the
public real estate records and, therefore, it can be difficult or impossible to
confirm that all of the requisite steps have been followed for location and
maintenance of a claim. If the validity of a patented mining claim is challenged
by the Bureau of Land Management or Forest Service on the grounds that
mineralization has not been demonstrated, the claimant has the burden of proving
the present economic feasibility of mining minerals located thereon. Such a
challenge might be raised when a patent application is submitted or when the
government seeks to include the land in an area to be dedicated to another use.

RECLAMATION

The Corporation generally is required to mitigate long-term environmental
impacts by stabilizing, contouring, resloping, and revegetating various portions
of a site after mining and mineral processing operations are completed. These
reclamation efforts are conducted in accordance with detailed plans, which must
be reviewed and approved by the appropriate regulatory agencies.

The Corporation's principal reclamation liability is the Hycroft mine.
Management estimates the remaining reclamation costs for the Hycroft mine to be
$4.1 million.

GOVERNMENT REGULATION

Mining operations and exploration activities are subject to various national,
state, provincial and local laws and regulations in the United States, Bolivia,
Canada, Mexico and other jurisdictions, which govern prospecting, development,
mining, production, exports, taxes, labor standards, occupational health, waste
disposal, protection of the environment, mine safety, hazardous substances and
other matters. The Corporation has obtained or has pending applications for
those licenses, permits or other authorizations currently required to conduct
its exploration and other programs. The Corporation believes that it is in
compliance in all material respects with applicable mining, health, safety and
environmental statutes and the regulations passed thereunder in the United
States, Canada, Bolivia, Mexico and the other jurisdictions in which the
Corporation operates. There are no current orders or directions with respect to
the foregoing laws and regulations.

ENVIRONMENTAL REGULATION

The Corporation's gold projects are subject to various federal, state and local
laws and regulations governing protection of the environment. These laws are
continually changing and, as a general matter, are becoming more restrictive.
The Corporation's policy is to conduct business in a way that safeguards public
health and the environment. The Corporation believes that its operations are
conducted in material compliance with applicable laws and regulations.

Changes to current local, state or federal laws and regulations in the
jurisdictions where the Corporation operates could require additional capital
expenditures and increased operating and/or reclamation costs. Although the
Corporation is unable to predict what additional legislation, if any, might be
proposed or enacted, additional regulatory requirements could impact the
economics of its projects.

During 2002, there were no material environmental incidents or non-compliance
with any applicable environmental regulations. The Corporation estimates that it
will not incur material capital expenditures for environmental control
facilities during the fiscal year.

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COMPETITION

The Corporation competes with other mining companies in connection with the
acquisition of gold properties. There is competition for the limited number of
gold acquisition opportunities, some of which is with other companies having
substantially greater financial resources than the Corporation. As a result, the
Corporation may have difficulty acquiring attractive gold projects at
reasonable prices.

The Corporation believes no single company has sufficient market power to affect
the price or supply of gold in the world market.

RISK FACTORS

An investment in the Corporation's Common Shares involves risk. The risks
described below are not the only ones facing the Corporation. Additional risks
not presently known to the Corporation or which management currently considers
immaterial may also adversely affect the Corporation's business. Management has
attempted to identify the major factors under the heading "Risk Factors" that
could cause differences between actual and planned or expected results, and has
included all material risk factors. If any of the following risks actually
happen, the Corporation's business, financial condition and operating results
could be materially adversely affected.

MANAGEMENT CANNOT BE CERTAIN THAT THE CORPORATION'S ACQUISITION, EXPLORATION AND
DEVELOPMENT ACTIVITIES WILL BE COMMERCIALLY SUCCESSFUL.

The Corporation currently has no properties that produce gold in commercial
quantities. The Corporation's gold production has declined steadily since mining
activities were suspended at the Hycroft mine in 1998. Gold production is now
nominal and is incidental to heap leach pad rinsing activities. In these
circumstances, proceeds realized from the sale of gold are not reported as
revenues, but rather are netted against operating costs.

Substantial expenditures are required to acquire existing gold properties, to
establish ore reserves through drilling and analysis, to develop metallurgical
processes to extract metal from the ore and, in the case of new properties, to
develop the mining and processing facilities and infrastructure at any site
chosen for mining. There can be no assurance that any gold reserves or
mineralized material acquired or discovered will be in sufficient quantities to
justify commercial operations or that the funds required for development can be
obtained on a timely basis.

THE PRICE OF GOLD IS SUBJECT TO FLUCTUATIONS, WHICH COULD ADVERSELY AFFECT THE
REALIZABLE VALUE OF THE CORPORATION'S ASSETS AND POTENTIAL FUTURE RESULTS OF
OPERATIONS AND CASH FLOW.

The Corporation's principal assets are gold reserves and mineralized material.
The Corporation intends to attempt to acquire additional properties containing
gold reserves and mineralized material. The price that the Corporation pays to
acquire these properties will be, in large part, influenced by the price of gold
at the time of the acquisition. The Corporation's potential future revenues are
expected to be, in large part, derived from the mining and sale of gold from
these properties or from the outright sale of some of these properties. The
value of these gold reserves and mineralized material, and the value of any
potential gold production therefrom, will vary in direct proportion to
variations in gold prices. The price of gold has fluctuated widely, and is
affected by numerous factors beyond the control of the Corporation, including,
but not limited to, international, economic and political trends, expectations
of inflation, currency exchange fluctuations, central bank activities, interest
rates, global or regional consumption patterns and speculative activities. The
effect of these factors on the price of gold, and therefore the economic
viability of any of the Corporation's projects, cannot accurately be predicted.
Any drop in the price of gold would adversely affect the Corporation's asset
values, cash flows, potential revenues and profits.

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MINING EXPLORATION, DEVELOPMENT AND OPERATING ACTIVITIES ARE INHERENTLY
HAZARDOUS.

Mineral exploration involves many risks that even a combination of experience,
knowledge and careful evaluation may not be able to overcome. Operations in
which the Corporation has direct or indirect interests will be subject to all
the hazards and risks normally incidental to exploration, development and
production of gold and other metals, any of which could result in work
stoppages, damage to property and possible environmental damage. The nature of
these risks is such that liabilities might exceed any liability insurance policy
limits. It is also possible that the liabilities and hazards might not be
insurable, or, the Corporation could elect not to insure itself against such
liabilities due to high premium costs or other reasons, in which event, the
Corporation could incur significant costs that could have a material adverse
effect on its financial condition.

RESERVE CALCULATIONS ARE ESTIMATES ONLY, SUBJECT TO UNCERTAINTY DUE TO FACTORS
INCLUDING METAL PRICES AND RECOVERABILITY OF METAL IN THE MINING PROCESS.

There is a degree of uncertainty attributable to the calculation of reserves and
corresponding grades dedicated to future production. Until reserves are actually
mined and processed, the quantity of ore and grades must be considered as an
estimate only. In addition, the quantity of reserves and ore may vary depending
on metal prices. Any material change in the quantity of reserves,
mineralization, grade or stripping ratio may affect the economic viability of
the Corporation's properties. In addition, there can be no assurance that gold
recoveries or other metal recoveries in small-scale laboratory tests will be
duplicated in larger scale tests under on-site conditions or during production.

THE CORPORATION'S EXPLORATION AND DEVELOPMENT OPERATIONS ARE SUBJECT TO
ENVIRONMENTAL REGULATIONS, WHICH COULD RESULT IN INCURRENCE OF ADDITIONAL COSTS
AND OPERATIONAL DELAYS.

All phases of the Corporation's operations are subject to environmental
regulation. Environmental legislation is evolving in some countries or
jurisdictions in a manner which will require stricter standards and enforcement,
increased fines and penalties for non-compliance, more stringent environmental
assessments of proposed projects and a heightened degree of responsibility for
companies and their officers, directors and employees. There is no assurance
that future changes in environmental regulation, if any, will not adversely
affect the Corporation's projects. The Corporation is currently subject to
environmental regulations with respect to its properties in Nevada, Bolivia
and Mexico.

The Hycroft mine in Nevada occupies private and public lands. The public lands
include unpatented mining claims on lands administered by the U.S. Bureau of
Land Management. These claims are governed by the laws and regulations of the
U.S. federal government and the state of Nevada.

U.S. FEDERAL LAWS

The Bureau of Land Management requires that mining operations on lands subject
to its regulation obtain an approved plan of operations subject to environmental
impact evaluation under the National Environmental Policy Act. Any significant
modifications to the plan of operations may require the completion of an
environmental assessment or Environmental Impact Statement prior to approval.
Mining companies must post a bond or other surety to guarantee the cost of
post-mining reclamation. These requirements could add significant additional
cost and delays to any mining project undertaken by the Corporation.

Under the Resource Conservation and Recovery Act, mining companies may incur
costs for generating, transporting, treating, storing, or disposing of hazardous
waste, as well as for closure and post-closure maintenance once they have
completed mining activities on a property. The Corporation's mining operations
may produce air emissions, including fugitive dust and other air pollutants,
from stationary equipment, storage facilities, and the use of mobile sources
such as trucks and heavy construction equipment which are subject to review,
monitoring and/or control requirements under the Federal Clean

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Air Act and state air quality laws. Permitting rules may impose limitations on
the Corporation's production levels or create additional capital expenditures in
order to comply with the rules.

The Comprehensive Environmental Response Compensation and Liability Act of 1980,
as amended, ("CERCLA") imposes strict joint and several liability on parties
associated with releases or threats of releases of hazardous substances. Those
liable groups include, among others, the current owners and operators of
facilities which release hazardous substances into the environment and past
owners and operators of properties who owned such properties at the time the
disposal of the hazardous substances occurred. This liability could include the
cost of removal or remediation of the release and damages for injury to the
surrounding property. The Corporation cannot predict the potential for future
CERCLA liability with respect to its Nevada property or surrounding areas.

NEVADA LAWS

At the state level, mining operations in Nevada are also regulated by the Nevada
Department of Conservation and Natural Resources, Division of Environmental
Protection. Nevada state law requires the Hycroft mine to hold Nevada Water
Pollution Control Permits, which dictate operating controls and closure and
post-closure requirements directed at protecting surface and ground water. In
addition, the Corporation is required to hold Nevada Reclamation Permits
required under NRS 519A.010 through 519A.170. These permits mandate concurrent
and post-mining reclamation of mines and require the posting of reclamation
bonds sufficient to guarantee the cost of mine reclamation. Other Nevada
regulations govern operating and design standards for the construction and
operation of any source of air contamination, and landfill operations. Any
changes to these laws and regulations could have an adverse impact on the
Corporation's financial performance and results of operations by, for example,
required changes to operating constraints, technical criteria, fees or surety
requirements.

BOLIVIA LAWS

The Corporation is required under Bolivian laws and regulations to acquire
permits and other authorizations before it could develop and mine the Amayapampa
project. In Bolivia there is relatively new comprehensive environmental
legislation, and the permitting and authorization process may be less
established and less predictable than in the United States. There can be no
assurance that the Corporation will be able to acquire necessary permits or
authorizations on a timely basis. Delays in acquiring any permit or
authorization could increase the development cost of the Amayapampa project, or
delay the start of production.

Under Bolivian regulations, the primary component of environmental compliance
and permitting is the completion and approval of an environmental impact study
known as Estudio de Evaluacion de Impacto Ambiental, or EEIA. The EEIA provides
a description of the existing environment, both natural and socio-economic, at
the project site and in the region; interprets and analyzes the nature and
magnitude of potential environmental impacts that might result from project
activities, and describes and evaluates the effectiveness of the operational
measures planned to mitigate the environmental impacts. Baseline environmental
conditions, including meteorology and air quality, hydrological resources and
surface water, are the basis by which direct and indirect project-related
impacts are evaluated and by which potential mitigation measures are proposed.
If the Corporation's project is found to significantly adversely impact any of
these baseline conditions, the Corporation could incur significant costs to
correct the adverse impact, or delay the start of production.

MEXICO LAWS

The Corporation is required under Mexican laws and regulations to acquire
permits and other authorizations before the Paredones Amarillos project could be
developed and mined. Since the passage of Mexico's 1988 General Law on
Ecological Equilibrium and Environmental Protection, a sophisticated

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system for environmental regulation has evolved. In addition, North American
Free Trade Agreement (NAFTA) requirements for regulatory standards in Mexico
equivalent to those of the U.S. and Canada have obligated the Mexican government
to continue further development of environmental regulation. Most regulatory
programs are implemented by various divisions of the Environment, Natural
Resources and Fisheries Secretariat (SEMARNAP). There can be no assurance that
the Corporation will be able to acquire necessary permits or authorizations on a
timely basis. Delays in acquiring any permit or authorization could increase the
development cost of the Paredones Amarillos project, or delay the start
of production.

The most significant environmental permitting requirements, as they relate to
the Paredones Amarillos project are: developing reports on environmental
impacts; regulation and permitting of discharges to air, water and land; new
source performance standards for specific air and water pollutant emitting
sources; solid and hazardous waste management regulations; developing risk
assessment reports; developing evacuation plans; and monitoring inventories of
hazardous materials. If the Paredones Amarillos project is found to not be in
compliance with any of these requirements, the Corporation could incur
significant compliance costs, or delay the start of production.

THE CORPORATION FACES INTENSE COMPETITION IN THE MINING INDUSTRY.

The mining industry is intensely competitive in all of its phases. As a result
of this competition, some of which is with large established mining companies
with substantial capabilities and with greater financial and technical resources
than those of the Corporation, the Corporation may be unable to acquire
additional attractive mining claims or financing on terms management considers
acceptable. The Corporation competes with other mining companies in the
recruitment and retention of qualified managerial and technical employees. If
the Corporation is unable to successfully compete for qualified employees, its
exploration and development programs may be slowed down or suspended. The
Corporation competes with other gold companies for capital. If the Corporation
is unable to raise sufficient capital, its exploration and development programs
may be jeopardized or it may not be able to acquire, develop or operate
gold projects.

THE CORPORATION MAY BE UNABLE TO RAISE ADDITIONAL CAPITAL ON FAVORABLE TERMS.

The exploration and development of the Corporation's development properties,
specifically the construction of mining facilities and commencement of mining
operations, may require substantial additional financing. Significant capital
investment is required to achieve commercial production from each of the
Corporation's non-producing properties. The Corporation will have to raise
additional funds from external sources in order to restart mining activities at
the Hycroft mine or begin construction and development activities at any of its
other gold projects. There can be no assurance that additional financing will be
available at all or on acceptable terms and, if additional financing is not
available, the Corporation may have to substantially reduce or
cease operations.

10

SOME OF THE CORPORATION'S DIRECTORS MAY HAVE CONFLICTS OF INTEREST AS A RESULT
OF THEIR INVOLVEMENT WITH OTHER NATURAL RESOURCE COMPANIES.

Some of the Corporation's directors are directors or officers of other natural
resource or mining-related companies. Robert A. Quartermain is currently
President and a director of Silver Standard Resources Inc., and is an officer
and a director of Canplats Resources Corporation and of Pacific Sapphire
Company Ltd. He is a director of Repadre Capital Corporation (which holds
interests in resource properties), Western Copper Holdings Ltd., Paso Rico
Resources and Reliant Ventures Ltd. C. Thomas Ogryzlo is the President and Chief
Executive Officer of Canatec Development Corporation. Michael B. Richings is
President and a director of Kinrade Resources Limited. John Clark is a director
of Impact Energy Inc. (an oil & gas exploration company). These associations may
give rise to conflicts of interest from time to time. In the event that any such
conflict of interest arises, a director who has such a conflict is required to
disclose the conflict to a meeting of the directors of the company in question
and to abstain from voting for or against approval of any matter in which such
director may have a conflict. In appropriate cases, the company in question will
establish a special committee of independent directors to review a matter in
which several directors, or management, may have a conflict. In accordance with
the laws of the Yukon Territory, the directors of all companies are required to
act honestly, in good faith and in the best interests of a company for which
they serve as a director.

THERE MAY BE CHALLENGES TO THE CORPORATION'S TITLE IN ITS MINERAL PROPERTIES.

There may be challenges to title to the mineral properties in which the
Corporation holds a material interest. If there are title defects with respect
to any of the Corporation's properties, the Corporation might be required to
compensate other persons or perhaps reduce its interest in the affected
property. Also, in any such case, the investigation and resolution of title
issues would divert management's time from ongoing exploration and development
programs.

THE CORPORATION'S PROPERTY INTERESTS IN BOLIVIA ARE SUBJECT TO RISKS FROM
POLITICAL AND ECONOMIC INSTABILITY IN THAT COUNTRY.

Vista Gold has property interests in Bolivia, which may be affected by risks
associated with political or economic instability in that country. The risks
include, but are not limited to: military repression, extreme fluctuations in
currency exchange rates, labor instability or militancy, mineral title
irregularities and high rates of inflation. Changes in mining or investment
policies or shifts in political attitude in Bolivia may adversely affect the
Corporation's business. The Corporation may be affected in varying degrees by
government regulation with respect to restrictions on production, price
controls, export controls, income taxes, expropriation of property, maintenance
of claims, environmental legislation, land use, land claims of local people,
water use and mine safety. The effect of these factors cannot be accurately
predicted.

THE CORPORATION'S FINANCIAL POSITION AND RESULTS ARE SUBJECT TO FLUCTUATIONS IN
FOREIGN CURRENCY VALUES.

Because the Corporation has mining exploration and development operations in
North and South America, it is subject to foreign currency fluctuations, which
may materially affect its financial position and results. The Corporation does
not engage in currency hedging to offset any risk of currency fluctuations.

The Corporation measures and reports financial results in U.S. dollars. The
Corporation has mining projects in Bolivia and Mexico, and is looking for other
projects in Mexico and in Central and South America. Economic conditions and
monetary policies in these countries can result in severe currency fluctuations.

Currently all the Corporation's material transactions in Mexico and Bolivia are
denominated in U.S. dollars. However, if the Corporation were to begin
commercial operations in Mexico or Bolivia (or other Latin American countries)
it is possible that material transactions incurred in the local currency, such
as engagement of local contractors for major projects, will be settled at a
U.S. dollar value that is

11

different from the U.S. dollar value of the transaction at the time it was
incurred. This could have the effect of undermining profits from operations in
that country.

IT MAY BE DIFFICULT TO ENFORCE JUDGMENTS OR BRING ACTIONS OUTSIDE THE UNITED
STATES AGAINST THE CORPORATION AND CERTAIN OF ITS DIRECTORS AND OFFICERS.

Vista Gold is a Canadian corporation and certain of its directors and officers
are neither citizens nor residents of the United States. A substantial part of
the assets of several of these persons, and of Vista Gold, are located outside
the United States. As a result, it may be difficult or impossible for an
investor:

- to enforce in courts outside the United States judgments obtained in
United States courts based upon the civil liability provisions of United
States federal securities laws against these persons and Vista Gold; or

- to bring in courts outside the United States an original action to enforce
liabilities based upon United States federal securities laws against these
persons and Vista Gold.

ITEM 2. PROPERTIES.

Detailed information is contained herein with respect to the Maverick Springs
and Mountain View projects, the Hycroft mine, the Long Valley project, the
Paredones Amarillos and Amayapampa projects. The Corporation holds the Maverick
Springs, Mountain View and Long Valley projects through wholly-owned
subsidiaries Vista Gold Holdings Inc. and Vista Nevada Corp.; the Hycroft mine
is held through its wholly-owned subsidiaries, Vista Gold Holdings Inc., Hycroft
Resources Development, Inc. and Hycroft Lewis Mine, Inc.; Paredones Amarillos is
held through its wholly owned subsidiary Minera Paredones Amarillos S.A. de
C.V.; Amayapampa is held through wholly-owned subsidiaries, Vista Gold (Antigua)
Corp., Compania Inversora Vista S.A., Minera Nueva Vista S.A. Estimates of
reserves and mineralization herein are subject to the effect of changes in metal
prices and to the risks inherent in mining and processing operations.

MAVERICK SPRINGS

The Maverick Springs project is located in northeast Nevada at the southeast end
of the Carlin Trend belt of gold-silver mineralization, approximately half-way
between Elko and Ely, Nevada. The property consists of 86 claims with a total
area of approximately 3,900 acres.

On October 7, 2002, the Corporation completed the acquisition of a 100% interest
in the Maverick Springs gold and silver project and the Mountain View gold
project (described below) from Newmont Mining Corporation (Newmont), and its
wholly-owned subsidiary Newmont Capital Limited. To acquire the interest, the
Corporation paid cash of $250,000 and issued of 141,243 equity units to Newmont.
Newmont retains a 1.5% net smelter returns royalty; and on October 7, 2003 the
Corporation will issue $500,000 in common shares to Newmont, together with an
equivalent number of two year warrants. In addition, the Corporation must
complete 20,000 feet of drilling before October 7, 2004 and an additional 30,000
feet of drilling before October 7, 2006. The Corporation may terminate this
agreement at any time after October 7, 2004. After October 7, 2006, Newmont has
a one-time right to acquire a 51% interest in the project, by paying to the
Corporation twice the amount that the Corporation has spent on the project,
including acquisition costs. In the event that Newmont exercises this right,
Newmont will relinquish its 1.5% net smelter returns royalty. (See also
Consolidated Financial Statements--Note 3).

Maverick Springs is subject to a lease agreement, the Artemis lease, between
Newmont and Artemis Explorations Ltd. The lease was entered into on October 1,
2001 and the key terms include: payment of advanced minimum royalties of $50,000
on October 1, 2003, and $100,000 on October 1, 2004 and each year thereafter
while the agreement is in effect; work commitments of 6,400 feet of exploration
drilling, on or before October 1 in each of 2002 (extended by agreement to
November 15, 2002), 2003 and 2004, and a

12

preliminary economic evaluation is to be conducted by October 1, 2004; and a net
smelter returns royalty based on a sliding scale ranging from 2% to 6%,
depending on gold and silver prices at the time of production.

On November 7, 2002, the Corporation entered into a non-binding letter of intent
with respect to granting Silver Standard Resources Inc. (SSRI) an option to
acquire the Corporation's interest in the silver resources hosted in the
Maverick Springs project. The Corporation will retain its 100% interest in the
gold resources. Completion of this transaction is subject to regulatory
approvals, and negotiation and execution of a definitive agreement. The
agreement with SSRI will be subject to the terms of the purchase agreement
between Newmont and the Corporation. Under the proposed agreement, SSRI will pay
$1.5 million over four years including a payment of $300,000 at closing. The
remaining $1.2 million will be used to fund exploration programs, land holding
costs and option payments. SSRI and the Corporation will form a committee
through which they will jointly manage exploration of the Maverick Springs
project. The Corporation will be the operator and have a 45% vote on the
committee, and SSRI will have a 55% vote. After SSRI has completed its
$1.5 million in payments, costs will be shared by the two corporations on the
same ratio as established for operation of the management committee: Vista--45%
/ SSRI--55%, subject to standard dilution provisions. (See also Consolidated
Financial Statements--Note 20).

In November 2002, the Corporation completed a 7,020-foot drill program on its
Maverick Springs project. The program consisted of seven vertical reverse
circulation holes, stepped out 500 feet to 2,200 feet from previously identified
mineralization. All seven holes encountered flat-lying mineralization,
predominantly oxidized to depths of up to 900 feet. The program outlined
continuous mineralization in a 2,200-foot by 1,200-foot area, immediately
adjacent to known gold-silver mineralization. With additional in-fill drilling,
this newly outlined mineralization has the potential to significantly increase
the mineralized material. The Corporation expects to complete approximately
10,000 feet of drilling in 2003.

GEOLOGY

Maverick Springs can be classified as a Carlin-type or sediment/carbonate hosted
disseminated silver-gold deposit. Sediment hosted deposits are common within
northern Nevada, although the systems are usually gold dominated with relatively
minor amounts of silver. Silver and gold mineralization at Maverick Springs has
been interpreted as a roughly antiformal or arch-shaped zone with an axis that
plunges shallowly to the south and seems to flatten to horizontal over the
northern half of the deposit. The limbs of the arch dip shallowly to moderately
at 10-30 DEG. to the east and west. Overall, the mineralized zone is elongate in
the north-south direction with a length of over 6,000 feet, a width of up to
3,000 feet, and a thickness of commonly 100-300 feet.

Mineralization consists of micron-sized silver and gold with related pyrite,
stibnite and arsenic sulphides. It is usually associated with intense fracturing
and brecciation, with or without accompanying whole-rock silicification or
stockwork quartz.

Alteration consists of pervasive decalcification, weak to intense silicification
and weak alunitic argillization. Massive jasperoid is common in surface
exposures and in drill core. Oxidation has affected all sulphides on surface and
is pervasive to a depth of at least 400 feet, intermittent to 900 feet, and
generally absent below 1,000 feet.

Based on a third-party technical study completed by Snowden Mining Industry
Consultants of Vancouver, British Columbia the Maverick Springs project contains
approximately 97.1 million tons of mineralized material with an average grade of
0.011 ounces of gold per ton and 0.98 ounces of silver per ton at a cut-off
grade of 0.005 ounces of gold per ton.

MOUNTAIN VIEW

The Mountain View property is located in northwest Nevada near the Blackrock
Desert. The property is approximately 15 miles northwest of Gerlach, Nevada in
Washoe County; it straddles the boundary

13

between the Squaw Valley and Banjo topographic quadrangles. The property
currently consists of 127 claims with a total area of approximately
2,360 acres.

The Corporation's acquisition of the Mountain View property was completed along
with that of the Maverick Springs property, as described above. To acquire the
interest, the Corporation paid cash of $50,000 and issued 56,497 equity units to
Newmont Capital; and Newmont retains a 1.5% net smelter returns royalty. In
addition, the Corporation must complete 4,000 feet of drilling before
October 7, 2003 and an additional 4,000 feet of drilling before October 7, 2004.
The Corporation may terminate this agreement at any time after October 7, 2003.
After October 7, 2006, Newmont has a one-time right to acquire a 51% interest in
the project, by paying to the Corporation twice the amount that the Corporation
has spent on the project, including acquisition costs. In the event that Newmont
exercises this right, Newmont will relinquish its 1.5% net smelter returns
royalty (see also Consolidated Financial Statements--Note 3).

Newmont's interest in the Mountain View property is subject to a lease known as
the Wittkopp lease and two other royalty arrangements, the principal terms of
which are: the Wittkopp lease grants a 50% interest to Newmont in all claims,
with a few exceptions where a 5% interest is granted; and the lessee may
purchase the remaining interest in the claims for $250,000 at any time. The
lessee is obligated to purchase the remaining 50% for $250,000 on achieving
commercial production. Also, the lessee shall pay a 1% net smelter returns
royalty during production, with advance minimum payments of $25,000 per year.
Advanced royalties are deductible from the net smelter returns royalty and cease
upon purchase of the remaining interest from the Wittkopps. A 1% net smelter
returns royalty also applies to certain other claims.

The Corporation expects to complete 4,000 feet of drilling in 2003.

GEOLOGY

The dominant rock types in the area are Miocene volcanics and interbedded
volcaniclastic sediments. Minor greenschist facies Permo-Triassic strata occur
to the northeast and a large body of granodiorite makes up the bulk of the
Granite Range to the east and south.

The Miocene lithologies consist of mafic tuffs, rhyolite tuffs and flows,
volcaniclastic sediments and basalts. These units are separated from the Granite
Range to the east by a range front normal fault that dips steeply to the
southwest. The gold mineralization is hosted by a unit known as the Severance
rhyolite that is sandwiched between the range front fault to the northeast and
older Tertiary tuffs, flows and volcaniclastic sediments to the southwest.

Structure on the property is dominated by northwest and northeast trending
faults. Major fault offsets occur along the range-front fault system and these
are offset by the northeast trending structures. Recent alluvium is offset by
the range front faults.

Based on a third-party technical study completed by Snowden Mining Industry
Consultants of Vancouver, British Columbia, the Mountain View project contains
approximately 27.7 million tons of mineralized material with an average grade of
0.017 ounces of gold per ton at a cut-off grade of 0.006 ounces of gold
per ton.

HYCROFT MINE

The Hycroft mine and related facilities are located 54 miles west of Winnemucca,
Nevada. The Corporation acquired the Lewis mine in early 1987 and completed
construction of the adjacent Crofoot mine project in April 1988. Mining
operations at the Hycroft mine were suspended in December 1998, and the site was
placed on care and maintenance. Gold production, from continued leaching and
rinsing of the heap leach pads, continued in 2000 and 2001. In 2002 the amount
of gold recovered was not material, as expected. The mine is currently on care
and maintenance.

14

OPERATING STATISTICS

Operating statistics for the Hycroft mine for the period 1998 to 2002 were as
follows:

- ------------------------

(1) Ore processed means ore placed on pads but not necessarily leached during
the year.

(2) Cash operating costs are composed of all direct mining expenses including
inventory changes, refining and transportation costs, less by-product silver
credits.

GEOLOGY AND ORE RESERVES

The Hycroft mine is located on the western flank of the Kamma Mountains. The
deposit is hosted in a volcanic eruptive breccia and conglomerates associated
with the Tertiary Kamma Mountain volcanics. The volcanics are mainly acidic to
intermediate tuffs, flows and coarse volcaniclastic rocks. Fragments of these
units dominate the clasts in the eruptive breccia. Volcanic rocks have been
block-faulted by dominant north-trending structures, which have affected the
distribution of alteration and mineralization. The Central Fault and East Fault
control the distribution of mineralization and subsequent oxidation. A
post-mineral range-front fault separates the orebody from the adjacent
Pleistocene Lahontan Lake sediments in the Black Rock Desert. The geological
events have created a physical setting ideally suited to the open-pit,
heap-leach mining operation at the Hycroft mine. The heap leach method is widely
used in the southwestern United States and allows the economical treatment of
oxidized low-grade ore deposits in large volumes.

The known gold mineralization within the Crofoot and Lewis properties extends
for a distance of three miles in a north-south direction by 1.5 miles in an
east-west direction. Mineralization extends to a depth of less than 330 feet in
the outcropping to near-outcropping portion of the deposit on the northwest side
to over 990 feet in the Brimstone deposit in the east. Not all the
mineralization is oxidized and the depth of oxide ore varies considerably over
the area of mineralization.

The Crofoot and Lewis properties together comprise approximately 12,230 acres.
The Crofoot property, originally held under two leases, covers approximately
3,544 acres. The Lewis property, which virtually surrounds the Crofoot property,
is held through a lease that covers approximately 8,686 acres. The mine is
accessible by road and has access to adequate supplies of water and power.

The leasehold interest in the Lewis property extends until January 1, 2013 or
for so long thereafter as commercial mining operations continue on the property.
The Lewis lease provides for the payment to the lessor of a 5% net smelter
return royalty on gold production. The royalty increases for ore grades above
0.05 ounce per ton and is offset by annual advance minimum royalties. The
Corporation has the right to commingle the ore from the Lewis property with ore
from the adjoining Crofoot property under an agreement with the lessor of the
Lewis property.

Gold production from the Brimstone deposit, the largest ore deposit at the
Hycroft mine, had consistently exceeded projections. During 1999 and 2000, the
Corporation conducted a $0.6 million exploration program to determine the
reasons for the excess gold production, and to re-estimate the grade and tons of
the reserves in the Brimstone deposit. Mineral Resources Development, Inc.
("MRDI"), an independent

15

consultant was retained to assist with the evaluation and to provide an
independent review of the recalculated mineable reserves. During the period 1996
through 1998, gold mined from the north end of the Brimstone deposit exceeded
planned production by 47,090 ounces, or 26%. The excess gold production was a
result of mining 13% more ore tons at a 12% higher average grade than predicted
in the exploration reserve model.

To evaluate the potential for a similar favorable variance in the remaining
Brimstone mineralized material, nine diamond drill holes for a total of
4,870 feet and 11 reverse-circulation drill holes for a total of 5,540 feet were
completed in the unmined southern portion of the Brimstone deposit. Seventeen of
the 20 holes were twin holes, which were used to establish an adjustment
(upgrade) factor for the remaining Brimstone mineralized material. Working with
MRDI engineers, a gold-grade enhancement of 25% was estimated. Based on
technical study completed by MRDI, Brimstone contains 56.0 million tons at an
average grade of 0.0184 ounces of gold per ton, using a cut-off grade of
0.007 ounces per ton.

In 2000, the Corporation completed a study of the ore reserves in the Brimstone
deposit. Proven and probable reserves contained within the Brimstone mineralized
material described above, total 23,791,000 tons of ore with an average gold
content of 0.0204 ounces per ton, containing 486,000 ounces of gold. Ore reserve
calculations were based upon a gold price of $300 per ounce and an economic
cut-off grade equivalent to 0.007 ounces per ton.

Extraction dilution at the Hycroft mine is negligible due to the large size of
the pit and the continuity of the ore body. Metallurgical recovery of gold from
run-of-mine leaching of the Brimstone ore is projected to be 57% and the planned
pit would have a stripping ratio of 1.2-to-1.

EXPLORATION

There is significant potential to extend the oxide mineralization to the south,
along strike, at both the Central Fault and Brimstone deposits, but the greatest
upside lies in the largely unexplored sulfide mineralization below the Brimstone
deposit, as well as higher grade intercepts along the Central Fault.

Current mineralized material at Brimstone is limited to the oxide cap of an
apparently large but previously unexplored gold-bearing sulfide system. Two
diamond drill holes, drilled in 1996 and earlier, have intercepted mineralized
sulfides averaging 0.023 ounces per ton gold and 0.5 ounces per ton silver over
intervals exceeding 500 feet in thickness. In 1996, the Corporation also
intercepted 30 feet of gold mineralization in drill hole 95-2728. This intercept
assayed 0.155 ounces per ton gold at a true depth of 310 feet below surface. The
hole terminated in this mineralization; the true width of the mineralization is
not known.

LONG VALLEY

The Long Valley gold project is located in the Inyo National Forest, about
7 miles east of the town of Mammoth Lakes, in Mono County, California. The
property consists of 95 contiguous, unpatented mining claims that cover an area
of approximately 1,800 acres.

The Corporation has an option to acquire 100% of the Long Valley project from
Standard Industrial Minerals, Inc. (Standard). Under the terms of the option
agreement, the Corporation would pay Standard $750,000 over five years, with
annual payments to be due as follows: $100,000 due on each of January 15, 2003,
2004, and 2005; $200,000 due on January 15, 2006, and $250,000 due on
January 15, 2007. The Corporation has made the January 2003 payment (see
Consolidated Financial Statements--Note 20). The Corporation retains the right
to terminate the agreement at any time, and has no work commitments on
the project.

During the period of 1994 through 1997, Royal Gold, Inc. (Royal) drilled 615
reverse circulation and 10 core holes at the Long Valley property. During this
time, Royal also completed metallurgical investigations, preliminary engineering
studies, including resource estimations, and initiated baseline-type

16

environmental studies of the biological, water, and archeological resource of
the area. The Corporation has acquired all related data from Royal in exchange
for a 1% net smelter return royalty to Royal. The database contains 896 drill
holes, totaling 268,275 feet. The majority of holes were drilled using reverse
circulation methods. Gold was primarily analyzed by fire assay, with grade
determinations by atomic absorption.

GEOLOGY

The Long Valley project claims are contained entirely within the early
Pleistocene-age Long Valley Caldera, which has been dated at about
760,000 years old. The caldera is an elongated east-west oval depression
measuring some 10 miles by 20 miles and is related to eruption of the Bishop
Tuff, which are covered by younger rocks within the caldera.

The Long Valley gold mineralization is located near the center of the caldera
and is underlain by lithologic units related to the caldera formation and its
subsequent resurgence. Associated with resurgent doming is a sequence of
interbedded volcaniclastic sedimentary rocks which were deposited in a
lacustrine setting within the caldera. These rocks consist of sediment
(siltstones through conglomerates) and debris-flow deposits, with local deposits
of intercalated silica sinter and rhyolite flows and dikes. All of these
lithologies have been altered and/or mineralized to variable degrees. Intruding
the generally flat-lying lake sediments are several rhyolite domes that have
been dated form 200,000 to 300,000 years in age.

The north-south trending Hilton Creek fault zone appears to define the eastern
limit of the resurgent dome within the central part of the Long Valley Caldera
and extends outside the caldera to the south. Offset along this fault appears to
be variable and suggests that fault activity along this zone may be episodic
in nature.

Gold and silver mineralization at Long Valley appears to fall under the general
classification of an epithermal, low sulfidation type deposit. Several areas,
termed the North, Central, South, Southeast, and Hilton Creek zones, on the Long
Valley property are mineralized with low grades of gold and silver. The
mineralized zones are generally north-south trending, up to 8,000 ft in length
with widths ranging from 500 ft to 1,500 ft. The tabular bodies are generally
flat-lying or have a shallow easterly dip. Mineralization is typically from 50
to 200 ft thick and, in the South and Southeast zones, is exposed at or very
near the surface. The top of the Hilton Creek zone is covered by 20 to 50 feet
of alluvium. The majority of the mineralization discovered to date is located in
the Hilton Creek zone.

Gold and silver mineralization is quite continuous throughout the zones and is
well defined above a cut-off grade of 0.010 ounces per ton. Within the
continuous zones of low-grade gold mineralization (above 0.010 ounces per ton)
are numerous zones of higher grade mineralization above 0.050 ounces per ton,
particularly in the Hilton Creek zone, which may relate to zones of enhanced
structural preparation. Mineralized zones are typically correlated with zones of
more intense clay alteration or argillization and/or silicification.

Based on a third-party technical study by Mine Development Associates of Reno,
Nevada, the Long Valley project contains approximately 101.2 million tons of
mineralized material with an average grade of 0.018 ounces of gold per ton at a
cut-off grade of 0.010 ounces of gold per ton.

PAREDONES AMARILLOS

Paredones Amarillos is located 65 km southeast of the city of La Paz, in the
Mexican state of Baja California Sur. The project area covers over
13,784 acres.

The Corporation acquired 100% of the project on August 29, 2002 from Viceroy
Resource Corporation (Viceroy). To acquire the project, the Corporation paid
cash of Cdn $1.0 million and issued 303,030 equity units to Viceroy; on
August 29, 2003 the Corporation will pay Viceroy an additional Cdn $0.5 million
(see also Consolidated Financial Statements--Notes 3 and 20).

17

The Paredones Amarillos project has been a significant exploration target since
the 1980s. In 1996, Echo Bay Mines Limited (EBM), completed a bankable
feasibility study for an open pit mine on the project. The study was completed
using a $375 per ounce gold price and included a proven and probable reserve of
approximately 49 million tons with an average gold grade of 0.031 ounces per
ton, containing approximately 1.5 million ounces. As a result of the subsequent
decline in gold prices, start-up was postponed. EBM holds a 2% net profits
interest on the project. The Corporation intends to review the principal
operating assumptions upon which the EBM study was based to identify
opportunities to improve the economics of this project.

The project holds environmental authorizations for the purpose of: project
development including access road, power line, telephone communications, and
infrastructure to supply water; construction and operation of a tailings dam;
and disposal of tailings, construction of a mill, and installation of three
pumping stations.

GEOLOGY

General geology consists of diorite roof pendants intruded by a granodiorite
batholith with local low and high-angle fault zones. A north-east striking,
south-east dipping low angle fault zone is the main host of gold mineralization
at Paredones Amarillos. Movement along this structure has been characterized as
reverse, resulting from compression. Secondary, high angle faulting is thought
to control the higher-grade mineralization at the project.

The known gold mineralized material occupies an inverted U-shaped block with an
approximate strike length of 3,600 feet east-west, a width of approximately
1,000 feet north-south, and a thickness of approximately 100 feet. The apex of
the "U" is near the center of EBM's proposed pit with the legs forming the east
and west pit lobes.

Based on a third-party technical study completed by Snowden Mining Industry
Consultants of Vancouver, British Columbia the Paredones Amarillos project
contains approximately 67.4 million tons of mineralized material with an average
grade of 0.030 ounces of gold per ton at a cut-off grade of 0.015 ounces of gold
per ton.

AMAYAPAMPA

The Amayapampa project is located 186 miles southeast of La Paz in the Chayanta
Municipality, Bustillos Province, Department of Potosi, in southwestern Bolivia.
Access is via 167 miles of paved road from La Paz to Machacamarca near Oruro,
followed by 62 miles of gravel road to Lagunillas, then nine miles of dirt road
to Amayapampa. The Amayapampa property is situated within the moderately rugged
Eastern Cordilleran region of Bolivia with elevations at the property varying
from 12,300 to 13,450 feet above sea level. Amayapampa consists of 24 mining
concessions covering 1,989 acres plus an additional 16,803 acres in regional
exploration and exploitation concessions. The project is currently on care
and maintenance.

GEOLOGY AND ORE RESERVES

The Amayapampa deposit underlies a north-northwest trending ridge approximately
0.3 miles east of the town of Amayapampa. The deposit is defined by about
48 diamond drill holes; 96 reverse-circulation drill holes; and 315 underground
channel samples totaling 17,585 feet from more than 200 accessible cross-cuts in
43 different levels and sub-levels extending over a vertical distance of
682 feet. The deposit is approximately 1,970 feet in strike length, 98 to
230 feet in width and has an overall dip of the mineralized envelope of 80 to 90
degrees west. The depth extent of continuous mineralization is in excess of
656 feet to about the 12,795-foot elevation, although some mineralization is
present below this depth. Gold occurs free and associated with sulfides in a
structural zone in which quartz veins were emplaced then sheared prior to
introduction of sulfides and gold mineralizing solutions.

18

The host rocks are composed of Ordovician black shales, sandstones, and
siltstones, which were weakly metamorphosed to argillites, quartzites, and
siltites, respectively. The Amayapampa project is located along the east flank
of a north-south trending regional anticline near the top of the Ordovician
sequence. Bedding dips are steep at 60 to 80 degrees west, with the east limb of
the anticline being overturned and thus, also dipping steeply west.

The mineralized envelope is best described as a structural zone, in which quartz
vein were emplaced along a preferential fracture direction.

Most faults, shears and fractures are north-northeast to north-northwest
trending and steeply dipping, both east and west, at 60 to 90 degrees. Quartz
veins predominantly dip east. Locally, within the zone of mineralization, flat,
thrust-like faults are present, which have offset quartz veins to a minor
extent. These flat faults, commonly west-dipping at 40 to 45 degrees, are not
generally mappable outside of the main structural zone, which hosts the gold
mineralization. A west dipping, 45-degree fault projects into the pit on the
northeast side of the deposit and was intersected by two vertical, geotechnical
core holes. The base of mineralization may also be slightly offset by a similar
west-dipping, 45-degree fault.

Oxidation effects are pervasive from the surface to depths of 66 to 98 feet,
with only partial oxidization below those depths. Hydrothermal alteration
effects evident in fresh rock are minor, and occur as coarse sericite
(muscovite) in thin (0.08 to 0.20 inch) selvages along some quartz veins. In
addition, chlorite is present in and adjacent to some quartz veins, but this
presence may be a product of low-grade metamorphism. Alteration effects are
minimal overall, except for surface oxidization.

Mineralization is composed of quartz veins and sulfides and both constitute a
visual guide to ore. Quartz veins are a locus for gold mineralization. Quartz
veins are typically a few centimeters to two feet in width and commonly occur as
sub-parallel vein sets. The strike extent can be 164 to 246 feet or more for any
one vein or vein set, but the dip extent is not as well established and probably
ranges up to 66 to 98 feet. Multiple vein sets are present in the overall
mineralized envelope and veins commonly pinch and swell along strike and
down dip.

Sulfide mineralization, hosted by multiple fractures is composed of
predominantly pyrite within and adjacent to quartz veins. The total sulfide
concentration for the overall mineralized zone is estimated at 3% to 5%.
Petrographic examination of the sulfide mineralization shows pyrite to dominate
at plus 95% of the total sulfides; arsenopyrite is also present, as are minor
amounts of chalcopyrite, galena, sphalerite, stibnite and tetrahedrite. Gold is
present as free gold in association with pyrite, on fractures within pyrite and
attached to the surface of pyrite and is often visible as discrete grains on
fractures in quartz and argillite. Gold grains exhibit a large size-range, with
much of the gold being relatively coarse at 40 to 180 microns. All gold grains
display irregular shapes with large surface areas. No gold was noted to be
encapsulated in either quartz or sulfide. The content of gold grains was
verified as over 97% gold by scanning-electron-microprobe analysis.

District-scale exploration potential exists for defining styles of gold
mineralization similar to Amayapampa, which could be developed as satellite ore
bodies. In addition, at least 15 drill holes beneath the planned Amayapampa pit
suggest the presence of four higher-grade shoots.

In 2000 an update and additional optimization study was completed on a
feasibility study originally completed in 1997. Based on a technical study
completed by Mine Reserve Associates, Inc., an independent consultant, total
mineralized material is 14.2 million tons with an average grade of 0.047 ounces
of gold per ton. Included in this mineralization are proven and probable
reserves of 10.2 million tons grading 0.051 ounces per ton, containing
526,000 ounces of gold. The reserve calculation is based on a gold price of
$300 per ounce. Reserves include extraction dilution of 5% of the tons and 1% of
the total ounces. Extraction dilution does not result in any losses of
recoverable gold.

19

ITEM 3. LEGAL PROCEEDINGS.

Except as described below, the Corporation is not aware of any material pending
or threatened litigation or of any proceedings known to be contemplated by
governmental authorities which is, or would be, likely to have a material
adverse effect upon the Corporation or its operations, taken as a whole.

ESTANISLAO RADIC

In April 1998, a legal dispute was initiated in Bolivia by a Mr. Estanislao
Radic ("Radic") who brought legal proceedings in the lower penal court against
Mr. Raul Garafulic ("Garafulic") and the Corporation, questioning the validity
of the Garafulic's ownership of the Amayapampa property. Garafulic sold
Amayapampa to a wholly owned subsidiary of the Corporation. In May 1998, a judge
in the Bolivian penal court found there was no justifiable case. In June 1998, a
judge of the superior court of the district of Potosi dismissed the appeal of
the case and indicated that there could be no further appeals on the matter in
the Bolivian penal courts. In 1999, this time in civil court, Radic filed a
second lawsuit against Garafulic, in Potosi, and Garafulic filed a civil lawsuit
for damages against Radic in La Paz. Garafulic appealed to the Court to have
both cases combined under the jurisdiction of a judge in La Paz. Finally, in
January 2001, the Court decreed that the lawsuits should be combined and heard
in Potosi. The Corporation never has and does not now have direct ownership of
the disputed property and is therefore uncertain as to why it was a named
defendant in this lawsuit. The court in Potosi agreed with this assessment and
annulled the case in June 2001. In September 2001, Radic appealed to the Supreme
Court. The Corporation does not anticipate that there will be any material
adverse impact on the Corporation or the value of its holdings in Bolivia.

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS.

No matters were submitted to a vote of security holders, through the
solicitation of proxies or otherwise, by Vista Gold during the quarter ended
December 31, 2002.

EXECUTIVE OFFICERS OF THE CORPORATION

The executive officers of the Corporation as of March 19, 2003, together with
their age, length of service and business experience, are listed below.

There are no family relationships by blood, marriage or adoption among any of
the above executive officers of the Corporation. None of the above executive
officers has entered into any arrangement or understanding with any other person
pursuant to which he was or is to be elected as an executive officer of Vista
Gold or a nominee of any other person.

20

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

PRICE RANGE OF COMMON SHARES

The Common Shares of Vista Gold are listed on the American Stock Exchange and
The Toronto Stock Exchange under the symbol VGZ. The following table sets out
the reported high and low sale prices on the American Stock Exchange and on The
Toronto Stock Exchange for the periods indicated as reported by the exchanges.
All prices give effect to the Corporation's June 19, 2002 1-for-20 share
consolidation.

On March 19, 2003, the last reported sale price of the Common Shares of Vista
Gold on the American Stock Exchange was $3.21 and on The Toronto Stock Exchange
was Cdn $4.80. As at March 19, 2002, there were 12,411,725 Common Shares issued
and outstanding, and the Corporation had 868 registered shareholders of record.

DIVIDENDS

The Corporation has never paid dividends. While any future dividends will be
determined by the directors of the Corporation after consideration of the
earnings, financial condition and other relevant factors, it is currently
expected that available cash resources will be utilized in connection with the
ongoing acquisition, exploration and development programs of the Corporation.

EQUITY COMPENSATION PLAN INFORMATION

The information in the table below is as of December 31, 2002. See also the
Consolidated Financial Statements--Note 10.

21

Under the current terms of the Corporation's Stock Option Plan, a maximum of
225,000 common shares may be issued. The Board of Directors has proposed an
increase in the plan to 1 million shares and has approved the issuance of
489,500 options under the proposed increase, subject to shareholder approval
which will be sought at the Corporation's Annual General Meeting.

EXCHANGE CONTROLS

There are no governmental laws, decrees or regulations in Canada that restrict
the export or import of capital, including foreign exchange controls, or that
affect the remittance of dividends, interest or other payments to non-resident
holders of the securities of Vista Gold, other than a Canadian withholding tax.
See "Item 5. Certain Canadian Income Tax Considerations for Non-Residents
of Canada".

CERTAIN CANADIAN INCOME TAX CONSIDERATIONS FOR NON-RESIDENTS OF CANADA

Canadian withholding tax at a rate of 25% (subject to reduction under the
provisions of any relevant tax treaty) will be payable on dividends paid to a
holder of Common Shares who is not resident in Canada. The rate of withholding
tax applicable to dividends paid on the Common Shares to a resident of the
United States who beneficially holds such Common Shares would generally be
reduced to 15% or, if the non-resident holder is a corporation that owns at
least 10% of the Common Shares, to 5%. It is the Canada Customs and Revenue
Agency's present published policy that entities (including certain limited
liability companies) that are treated as being fiscally transparent for United
States federal income tax purposes will not qualify as residents of the United
States under the provisions of the Canada-United States Income Tax Convention.

Upon a disposition or deemed disposition of Common Shares, a capital gain (or
loss) will generally be realized by a non-resident holder to the extent that the
proceeds of disposition are greater (or less) than the aggregate of the adjusted
cost base of the Common Shares to the non-resident holder thereof immediately
before the disposition and any reasonable costs of disposition. Capital gains
realized on a disposition of Common Shares by a non-resident shareholder will
not be subject to Canadian tax unless the non-resident holder and/or persons
with whom the non-resident holder did not deal at arm's length, at any time
within the five-year period before the disposition, owned 25% or more of the
issued Common Shares of any class or series of Common Shares of Vista Gold.
Under the Canada-United States Income Tax Convention, a resident of the United
States who does not carry on a business from a permanent establishment or fixed
base in Canada and who realizes a capital gain on the disposition of Common
Shares that is otherwise subject to tax in Canada, will be exempt from Canadian
income tax. It is the Canada Customs and Revenue Agency's present published
policy that entities (including certain limited liability companies) that are
treated as being fiscally transparent for United States federal income tax
purposes will not qualify as residents of the United States under the provisions
of the Canada-United States Income Tax Convention.

RECENT SALES OF UNREGISTERED SECURITIES

On December 27, 2002, the Corporation completed a private placement financing in
which it issued 1,000,000 equity units at a price of $2.35 per unit, for an
aggregate offering price of $2,350,000. All of the purchasers in the placement
were "accredited investors" as such term is defined in Rule 501 of Regulation D
under the Securities Act of 1933, as amended (the "Securities Act"). Each unit
consisted of one common share and one warrant, exercisable over a two-year
period from the issuance date, to purchase one common share for $3.04 during the
first year and $3.45 during the second year. The securities were issued in
reliance upon the exemption from the registration requirements of the Securities
Act specified by the provisions of Section 4(2) of the Securities Act and
Rule 506 of Regulation D promulgated thereunder. See also the Consolidated
Financial Statements--Note 8.

22

ITEM 6. SELECTED FINANCIAL DATA.

The selected financial data in Table below have been selected in part, from the
consolidated financial statements of the Corporation, which have been prepared
in accordance with accounting principles generally accepted in Canada. The
selected financial data should be read in conjunction with those financial
statements and the notes thereto.

Had the consolidated financial statements of the Corporation been prepared in
accordance with accounting principles generally accepted in the United States,
certain selected financial data would have been reported as follows (see also
Note 19 of the Consolidated Financial Statements).

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

INTRODUCTION

This discussion should be read in conjunction with the consolidated financial
statements of the Corporation for the three years ended December 31, 2002 and
the related notes thereto, which have been prepared in accordance with generally
accepted accounting principles ("GAAP") in Canada. Differences from United
States GAAP are described in Note 19 to the consolidated financial statements.

23

RESULTS OF OPERATIONS

SUMMARY

The Corporation's 2002 net loss was $2.8 million ($0.41 per share), compared to
the 2001 net loss of $3.3 million ($0.72 per share). The improvement in 2002 is
a result of reduced holding costs at the Hycroft mine; lower depreciation and
amortization costs; and a 2001 non-recurring charge of $0.8 million for
settlement of a law suit, net of related $0.2 million cost recoveries in 2002;
offset by an expense to increase the provision for reclamation at Hycroft.

GOLD PRODUCTION AND REVENUE

The Hycroft mine is on care and maintenance. Mining activities were suspended at
Hycroft in 1998 and, as expected, gold production has declined steadily since
that time. Currently, solution is being circulated over the heap leach pads to
enhance evaporation. As the solution is circulated over the heap leach pads, it
is passed through a carbon plant, where small amounts of gold are adsorbed onto
activated carbon. Subsequently the gold is stripped from the carbon, refined and
sold. Effective at the beginning of fiscal 2002, gold production was considered
incidental to the activities at the Hycroft mine and reporting the associated
sales proceeds as revenue was no longer warranted. Accordingly, gold sales
proceeds of approximately $0.6 million in 2002 have been accounted for as an
offset to exploration, property evaluation and holding costs. Gold revenues in
2002 therefore were nil, compared to $0.9 million in 2001. The 2001 gold
revenues were a result of 3,232 ounces of gold production.

Gold production in 2001 was 3,232 ounces compared to 13,493 ounces in 2000; 2001
gold revenues of $0.9 million were down, as expected, from $3.8 million in 2000.
The decline in gold revenues in 2001 reflects the decrease in gold production
from 2000. Of this $2.9 million reduction in revenue, substantially the entire
difference resulted from lower gold production in 2001. Slightly lower gold
prices in 2001 ($275 per ounce average vs. $278 average in 2000) accounted for
approximately $10,000 of the $2.9 million reduction in revenue.

COSTS AND EXPENSES

As discussed above, effective at the beginning of fiscal 2002, gold production
was considered incidental to the activities at the Hycroft mine, accordingly
gold production costs, which approximately offset the $0.6 million proceeds
received from gold sales, are no longer recorded as production costs, but are
accounted for as exploration, property evaluation and holding costs. Recorded
2002 production costs are therefore nil.

Production costs at the Hycroft mine decreased to $0.7 million ($210 per ounce)
in 2001 from $2.6 million ($183 per ounce) in 2000. The decrease in costs was
primarily due to the progressive reduction of leach solution volume processed at
the Hycroft mine, with related reductions in manpower, in consumption of
materials and supplies, and in electrical power. The increase in per ounce costs
was due to the reduction in gold production.

Depreciation, depletion and amortization costs at Hycroft were $0.1 million in
2002 compared to $0.3 million in 2001 and $0.8 million in 2000. This downward
trend reflects the fact that a significant portion of the Hycroft property plant
and equipment has been sold, and a substantial portion of the remaining
equipment has been fully depreciated.

Consistent with Bureau of Land Management, Nevada State Office mandated
procedures, in 2002 the Corporation commissioned a third-party comprehensive
review of the estimated reclamation costs at the Hycroft mine. Based on this
review, the Corporation increased by $1.0 million its obligation accrued to
December 31, 2002. No such adjustments were made in 2001 and 2000.

24

Exploration, property evaluation and holding costs were $0.6 million in 2002,
compared to $1.2 million in 2001. Holding costs at Hycroft comprise
substantially all of the $0.6 million exploration, property evaluation and
holding costs in 2002, and it accounts for $1.1 million of the 2001 costs,
Amayapampa accounted for the remaining $0.1 million in 2001. The 2002 Hycroft
cost reductions resulted principally from manpower reductions and generally
lower levels of activity at the Hycroft site. 2002 net holding costs at
Amayapampa are negligible as a result of the collection of royalties accruing
from the sale in 2000 of the Capa Circa mine.

Exploration, property evaluation and holding costs of $1.2 million in 2001
compared to $1.9 million in 2000. Of these amounts, Hycroft accounted for
1.1 million in 2001, and a similar amount in 2000. Holding costs for Amayapampa
were $0.1 million, compared to $0.7 million in 2000. This reduction is mainly a
result of manpower reductions effected in April 2001, and resulting reduced
office and administration costs in Bolivia.

Corporate administration and investor relations costs were $1.3 million in 2002,
slightly higher than the $1.2 million in 2001. The increase reflects investor
relations and business development programs, consistent with its increased level
of gold project acquisition and private placement financings in 2002. Corporate
administration and investor relations costs were $1.2 million in 2001, similar
to the $1.2 million incurred in 2000, as expected.

The Corporation incurred $14,000 in interest expense in 2002, in connection with
its convertible debenture issuance, which closed on March 19, 2002. The
debentures had an annual interest rate of 1% and were converted automatically,
pursuant to their terms, on September 19, 2002 (see Consolidated Financial
Statements--Note 8). 2001 interest expense of $21,000 was lower than
$0.1 million incurred in 2000 because the Corporation repaid most of its debt in
the first quarter of 2001.

Net gains from disposals of Hycroft equipment in 2002 totalled $30,000, compared
to net gains of $0.1 million in 2001. 2002 net gains from disposals of assets
include a gain of $53,000 from the disposal of Canadian exploration claims. Net
gains from disposal in 2000 were $41,000. A gain on the sale of marketable
securities of $0.3 million was realized in 2000; no similar gain was realized or
realizable in 2001.

In 2001, the Corporation recorded a non-recurring provision of $0.8 million for
the settlement of the USF&G lawsuit as discussed in Consolidated Financial
Statements--Note 5. There was no similar provision in 2000.

The Corporation received from Golden Phoenix Minerals, Inc. ("GPMI"), the
current owner of the Mineral Ridge Mine, 628,931 common shares in consideration
for benefits GPMI received as a direct result of the Corporation's facilitation
of the USF&G settlement. These shares had a fair value of $220,000 when
received. In addition, the final settlement amount for the USF&G lawsuit was
approximately $20,000 less than provided for.

An $85,000 write-down to fair value has been made to reflect an estimated
$135,000 fair value of the GPMI shares.

Management regularly reviews the carrying values of its long-lived assets. In
2000, based on these reviews, management wrote down the Amayapampa property in
Bolivia by $10.6 million, and certain Hycroft assets by $0.3 million. No similar
write-downs were deemed necessary in 2002 and 2001. The $10.6 million write-down
of the Amayapampa project in Bolivia in 2000 resulted from a carrying value
review wherein the previously assumed long-term gold price of $325 per ounce, as
assumed in 1999, was reduced to $300 per ounce in 2000, consistent with industry
practice. The $25 per ounce change in the gold price assumption resulted in a
reduction of approximately $10 million in expected future cash flows from the
Amayapampa project. Accordingly an impairment loss was recognized.

25

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2002, the Corporation had $3.5 million in working capital
compared to a working capital deficiency of $0.2 million as of December 31,
2001. The principal component of working capital is cash. The Corporation's
consolidated cash balance at December 31, 2002 was $3.4 million, an increase of
$2.7 million from the end of 2001. This increase resulted from the two private
placement financings, which provided $6.8 million in net proceeds (see
Consolidated Financial Statements--Note 8). In addition, the Corporation raised
$0.2 million from the sale of Hycroft mining equipment and Canadian mining
claims. The Corporation used $1.5 million as partial consideration in acquiring
gold projects (see Consolidated Financial Statements--Note 3), $0.8 million to
settle the USF&G lawsuit (see Consolidated Financial Statements--Note 5),
and $2.0 million was used in operating activities. In 2001 the Corporation
raised no cash from financings, used $0.7 million to repay debt; made no
acquisitions of property, plant and equipment, raised $3.0 from the sale of idle
mining equipment and used $1.7 million in operating activities.

Subsequent to December 31, 2002, the Corporation completed a private placement
equity unit financing for net proceeds of $3.0 million (see Consolidated
Financial Statements--Note 21).

Cash consumed in operating activities in 2001 was $1.7 million, compared to
$2.8 million in 2000. The $1.1 million improvement in 2001 is comprised mainly
of the reduction in reclamation and mine closure costs: $0.2 million compared to
$1.0 million in 2001 and 2000 respectively. The remainder of the cash
improvement reflects the Corporation's successful cost reduction efforts, offset
by a reduction in gold revenues. The Corporation made no capital expenditures in
2001, and no material capital expenditures in 2000.

OUTLOOK

Management has estimated that the Corporation's $3.5 million of working capital
as of December 31, 2002, will be adequate to meet its corporate administrative
and property obligations for the coming year. In 2003, the Corporation is
committed to approximately $300,000 in capital expenditures relating to
exploration and land holding costs for those projects acquired in 2002.

The Corporation expects that emphasis on gold project acquisition will continue
in the future. In support of this strategy, the Corporation has available, in
addition to its current working capital, approximately $3.0 million net
proceeds, from a financing completed subsequent to December 31, 2002.

The Corporation does not currently generate operating cash flows. Subject to
sustained higher gold prices, management expects that it can generate revenues
and cash flows, in the future, from its portfolio of gold projects by several
means, including, but not limited to: options or leases to third parties, joint
venture arrangements with other gold producers, outright sale for cash and/or
royalties. The Corporation does not have adequate cash to begin development of
any its projects, and would need to seek additional financing in order to
construct and operate a gold mine. Although the Corporation has been successful
in obtaining such financing in the past, there can be no assurance that it will
be able to do so in the future.

The Corporation has provided a surety bond in the amount of $5.1 million to
ensure reclamation obligations under an approved reclamation plan at the Hycroft
mine. The Bureau of Land Management, Nevada State Office, has requested an
additional bond of $443,279 for interim fluid management and it is probable that
the State will request that the Corporation increase the total surety bond
amount to an estimated $6.7 million, inclusive of the interim fluid management
bond. Furthermore, the Corporation has been requested to pledge collateral in
order to provide this surety bond. The amount and the nature of the collateral
will be subject to negotiation. There can be no assurance that the Corporation
will be successful in providing acceptable collateral and thus posting the
surety bond.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

At December 31, 2002, the registrant was a "small business issuer" as such term
is defined in Rule 12b-2 of the Exchange Act, and accordingly is not required to
provide the information under this Item.

26

ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL INFORMATION

To the Shareholders of Vista Gold Corp.

The consolidated financial statements are the responsibility of the Board of
Directors and management. The accompanying consolidated financial statements of
the Corporation have been prepared by management based on information available
through February 28, 2003; these consolidated financial statements are in
accordance with Canadian generally accepted accounting principles, and have been
reconciled to United States generally accepted accounting principles as
presented in Note 19.

A system of internal accounting and administrative controls is maintained by
management in order to provide reasonable assurance that financial information
is accurate and reliable, and that the Corporation's assets are safeguarded.
Limitations exist in all cost-effective systems of internal controls. The
Corporation's systems have been designed to provide reasonable but not absolute
assurance that financial records are adequate to allow for the completion of
reliable financial information and the safeguarding of its assets. The
Corporation believes that the systems are adequate to achieve the stated
objectives.

The Audit Committee of the Board of Directors is comprised of three outside
directors, and meets regularly with management and the independent auditors to
ensure that management is maintaining adequate internal controls and systems and
to recommend to the Board of Directors approval of the annual and quarterly
consolidated financial statements of the Corporation. The committee also meets
with the independent auditors and discusses the results of their audit and their
report prior to submitting the consolidated financial statements to the Board of
Directors for approval.

The consolidated financial statements have been audited by
PricewaterhouseCoopers LLP, Chartered Accountants, who were appointed by the
shareholders. The auditors' report outlines the scope of their examination and
their opinion on the consolidated financial statements.

/s/ RONALD J. MCGREGOR /s/ JOHN F. ENGELE
---------------------------- ----------------------------
Ronald J. McGregor John F. Engele
President and Vice President Finance and
Chief Executive Officer Chief Financial Officer

27

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders of Vista Gold Corp.

We have audited the consolidated balance sheets of Vista Gold Corp. as of
December 31, 2002 and 2001 and the consolidated statements of loss, deficit and
cash flows for the years ended December 31, 2002, 2001 and 2000. These
consolidated financial statements are the responsibility of the Corporation's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards
in Canada and the United States of America. Those standards require that we plan
and perform an audit to obtain reasonable assurance whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all
material respects, the consolidated financial position of the Corporation as of
December 31, 2002 and 2001 and the consolidated results of its operations and
cash flows for the years ended December 31, 2002, 2001 and 2000 in accordance
with Canadian generally accepted accounting principles.

/s/ PRICEWATERHOUSECOOPERS LLP
- ----------------------------
Chartered Accountants
Vancouver, British Columbia, Canada
February 28, 2003

28

VISTA GOLD CORP.
CONSOLIDATED BALANCE SHEETS

Approved by the Board of Directors

/s/ C. THOMAS OGRYZLO /s/ JOHN M. CLARK
-------------------------- --------------------------
C. Thomas Ogryzlo John M. Clark
Director Director

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.

29

VISTA GOLD CORP.
CONSOLIDATED STATEMENTS OF LOSS

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.

30

VISTA GOLD CORP.
CONSOLIDATED STATEMENTS OF DEFICIT

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.

31

VISTA GOLD CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.

32

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THE TABULAR INFORMATION SET OUT BELOW IS IN THOUSANDS OF UNITED STATES DOLLARS,
EXCEPT AS OTHERWISE STATED.

1. NATURE OF OPERATIONS

The Corporation operates in the gold mining sector; it does not currently
produce gold in commercial quantities. The Corporation evaluates, acquires and
improves gold exploration and potential development projects. The Corporation's
approach to acquisitions of gold projects has generally been to seek projects
within political jurisdictions with well established mining, land ownership and
tax laws, which have adequate drilling and geological data to support the
completion of a third-party review of the geological data and to complete an
estimate of measured and indicated gold mineralization. In addition, the
Corporation looks for opportunities to improve the value of its gold projects
through exploration drilling, and/or reengineering the operating assumptions
underlying previous engineering work.

Although the Corporation has reviewed and is satisfied with the title for all
mineral properties in which it has a material interest, there is no guarantee
that title to such concessions will not be challenged or impugned.

Management has estimated that the Corporation will have adequate funds from
existing working capital and from the private placement subsequent to the
year-end (Note 21) to meet its corporate administrative and property obligations
for the coming year. If the Corporation is to advance or develop its mineral
properties further, it will be necessary to obtain additional funding. Although
in the past the Corporation has been successful in obtaining financing, there
can be no assurance that it will be successful in the future.

The Corporation has provided a surety bond in the amount of $5.1 million to
ensure reclamation obligations under an approved reclamation plan at the Hycroft
mine. The Bureau of Land Management, Nevada State Office has requested an
additional bond of $443,279 for interim fluid management and it is probable that
the State will request that the Corporation increase the total surety bond
amount to an estimated $6.7 million, inclusive of the interim fluid management
bond. Furthermore, the Corporation has been requested to pledge collateral in
order to provide this surety bond. The amount and the nature of the collateral
will be subject to negotiation. Although in the past the Corporation has been
successful in arranging bonding, there can be no assurance that the Corporation
will be successful in providing acceptable collateral and thus posting the
surety bond.

2. SIGNIFICANT ACCOUNTING POLICIES

(a) GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

The consolidated financial statements of the Corporation and its subsidiaries
have been prepared in accordance with accounting principles generally accepted
in Canada. For the purposes of these financial statements these principles
conform, in all material respects, with generally accepted accounting principles
in the United States, except as described in Note 19.

33

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

THE TABULAR INFORMATION SET OUT BELOW IS IN THOUSANDS OF UNITED STATES DOLLARS,
EXCEPT AS OTHERWISE STATED.

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(b) PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Corporation
and its subsidiaries. All material intercompany transactions and balances have
been eliminated. The Corporation's subsidiaries and percentage ownership in
these entities as of December 31, 2002 are:

(c) USE OF ESTIMATES

The preparation of consolidated financial statements in accordance with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent liabilities at the date of the consolidated financial
statements and the reported amount of revenues and expenses during the reporting
period. Significant areas requiring the use of estimates include mine closure
and reclamation obligations, useful lives for asset depreciation purposes, and
impairment of mineral properties. Actual results could differ from these
estimates.

(d) FOREIGN CURRENCY TRANSLATION

The Corporation has restated the financial statements and transferred an amount
of $1.485 million from the currency translation adjustment (CTA) account to
deficit. This amount represents the cumulative exchange gains and losses arising
on the translation of the assets and liabilities of the Corporation's Canadian
self-sustaining operations. The Corporation has determined that it had
liquidated substantially all of the assets held within Canadian entities prior
to the periods presented in these financial statements. The Corporation believes
that this adjustment is not material as it has no impact on net income or cash
flows for any of the periods presented.

A significant portion of the Corporation's expenses, and while in production,
revenue from gold sales, are denominated in U.S. dollars. The Corporation's
executive office is located in Littleton, Colorado. The U.S. dollar is the
principal currency of the Corporation's business. Accordingly, all amounts in
these consolidated financial statements of the Corporation are expressed in
U.S. dollars, unless otherwise stated.

34

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

THE TABULAR INFORMATION SET OUT BELOW IS IN THOUSANDS OF UNITED STATES DOLLARS,
EXCEPT AS OTHERWISE STATED.

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The accounts of self-sustaining foreign operations are translated using the
current rate method. Under this method, assets and liabilities are translated at
the rate of exchange on the balance sheet date, and revenue and expenses at the
average rate of exchange during the period. Exchange gains and losses are
deferred and shown as a currency translation adjustment in shareholders' equity
until transferred to earnings when the net investment in the foreign operation
is reduced or settled.

The accounts of integrated foreign operations are translated using the temporal
method. Under this method, monetary assets and liabilities are translated at the
year-end rate of exchange, non-monetary assets and liabilities are translated at
the rates prevailing at the respective transaction dates, and revenue and
expenses, except for depreciation, are translated at the average rate of
exchange during the year. Translation gains and losses are reflected in the loss
for the year.

(e) REVENUE RECOGNITION

Gold production has gradually declined since mining activities were suspended at
the Hycroft mine in 1998. Effective at the beginning of fiscal 2002, gold
production is considered incidental to the activities at the Hycroft mine, and
reporting the associated sales proceeds as revenue is no longer warranted.
Accordingly, proceeds from gold sales, are netted against costs. In 2001 and
2000, the Corporation recognized revenue upon adsorption of gold onto carbon.

(f) CASH EQUIVALENTS

Cash equivalents are investments in short-term funds consisting of highly liquid
debt instruments such as certificates of deposit, commercial paper, and money
market accounts purchased with an initial maturity date of less than three
months. The Corporation's policy is to invest cash in conservative, highly rated
instruments and limit the amount of credit exposure to any one institution.

(g) INVENTORIES

Materials and supplies inventories are valued at the lower of average cost and
net replacement value.

The Corporation recovered more gold than anticipated from the heap leach pads at
the Hycroft mine; accordingly heap leach pad inventory has been fully recognized
in prior years.

(h) MARKETABLE SECURITIES

Marketable securities are stated at the lower of cost or fair value, with
unrealized losses included in net loss.

(i) MINERAL PROPERTIES

Acquisition cost and exploration and development expenditures incurred on
non-producing mineral properties identified as having development potential, are
deferred until the viability of the property is determined.

Option payments received are treated as a recovery of mineral property costs.
Option payments are at the discretion of the optionee and accordingly are
accounted for on a cash basis or when receipt is reasonably assured.

35

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

THE TABULAR INFORMATION SET OUT BELOW IS IN THOUSANDS OF UNITED STATES DOLLARS,
EXCEPT AS OTHERWISE STATED.

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Holding costs to maintain a property on a care and maintenance basis are
expensed as incurred.

Management reviews the carrying value of the Corporation's interest in each
property quarterly. Where information and conditions suggest impairment, these
properties are written down to net recoverable amount, based on estimated future
cash flows. Management's estimates of gold price, recoverable proven and
probable reserves, operating, capital and reclamation costs are subject to risks
and uncertainties affecting the recoverability of the Corporation's investment
in property, plant and equipment. Although management has made its best estimate
of these factors based on current conditions, it is possible that changes could
occur in the near term that could adversely affect management's estimate of net
cash flows expected to be generated from its operating properties and the need
for possible asset impairment write-downs.

Where estimates of future net cash flows are not available and where other
conditions suggest impairment, management assesses if carrying value can
be recovered.

Property acquisition and development costs are carried at cost less accumulated
amortization and write-downs. Amortization during production is provided on the
units-of-production method based on proven and probable reserves.

(j) PLANT AND EQUIPMENT

Plant and equipment are recorded at cost and depreciated using the straight-line
method over estimated useful lives. The cost of normal maintenance and repairs
is charged to expense as incurred. Significant expenditures, which increase the
life of an asset, are capitalized and depreciated over the remaining estimated
useful life of the asset. Upon sale or retirement of assets, the costs and
related accumulated depreciation or amortization are eliminated from the
respective accounts and any resulting gains or losses are reflected
in operations.

(k) PROVISION FOR FUTURE RECLAMATION AND CLOSURE COSTS

Minimum standards for mine site reclamation and closure have been established by
various government agencies that affect certain operations of the Corporation.
The Corporation calculates its estimates of reclamation liability based on
current laws and regulations and the expected future costs to be incurred in
reclaiming, restoring and closing its operating mine sites. It is possible that
the Corporation's estimate of its reclamation, site restoration and closure
liability could change in the near term due to possible changes in laws and
regulations and changes in cost estimates.

During mine production, a provision for reclamation and mine closure is charged
to earnings over the mine life on a units-of-production basis.

(l) LOSS PER SHARE

Loss per share is calculated by dividing the loss for the year by the weighted
average number of common shares outstanding during the year. Basic and diluted
losses per share are the same because inclusion of common share equivalents
would be anti-dilutive.

36

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

THE TABULAR INFORMATION SET OUT BELOW IS IN THOUSANDS OF UNITED STATES DOLLARS,
EXCEPT AS OTHERWISE STATED.

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(m) STOCK-BASED COMPENSATION

The Corporation has a stock-based compensation plan, which is described in
Note 10. On January 1, 2002, the Corporation adopted the new recommendations of
the Canadian Institute of Chartered Accountants, CICA 3870, for the recognition,
measurement and disclosure of stock-based compensation and other stock-based
payments made in exchange for goods and services. As permitted under the
recommendations, the Corporation has elected not to follow the fair value method
of accounting for stock options granted to directors and employees, and follows
the intrinsic value method. Any consideration paid by directors, employees and
non-employees on the exercise of stock options or the purchase of stock is
credited to capital stock. Stock-based compensation on options granted to
non-employees is recorded as an expense at the earlier of completion of
performance or vesting of the options granted, based upon the estimated fair
value on the grant date.

(n) WARRANTS

Warrants issued as consideration for mineral properties are recorded at fair
value. The value of equity units, consisting of common shares and warrants,
issued in a cash financing is assumed to be substantially attributable to the
value of the common shares; no portion of the amount paid is assigned to
the warrants.

3. MINERAL PROPERTIES

37

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

THE TABULAR INFORMATION SET OUT BELOW IS IN THOUSANDS OF UNITED STATES DOLLARS,
EXCEPT AS OTHERWISE STATED.

3. MINERAL PROPERTIES (CONTINUED)

The recoverability of the carrying values of the Corporation's mineral
properties is dependent upon the successful start-up and commercial production
from or sale of these properties. Further development and/or start-up of any of
these projects will depend, among other things, on management's ability to raise
additional capital for these purposes. Although the Corporation has been
successful in raising such capital in the past, there can be no assurance that
it will be able to do so in the future.

MAVERICK SPRINGS

The Maverick Springs gold and silver project, southeast of Elko, Nevada, was
acquired on October 7, 2002 from Newmont USA Limited (Newmont). The total cost
for the Maverick Springs project included cash payments of $250,000; the
issuance of 141,243 equity units, each unit comprised of one common share and a
two year warrant, valued at $500,000 (Notes 8 and 9); and the issuance of
$500,000 in common shares in October 2003, together with an equivalent number of
two year warrants which will be valued as an additional cost at the time of
issue (Note 6). The Corporation is committed to completing 20,000 feet of
drilling on this project before October 7, 2004 and an additional 30,000 feet of
drilling before October 7, 2006. Newmont retains a 1.5% net smelter returns
royalty or the right to acquire 51% of the project after four years by paying
the Corporation cash equaling 200% of the aggregate expenditures made by the
Corporation on the project.

Maverick Springs is subject to a lease agreement with the underlying
leaseholder, Artemis Exploration Company, which includes payments of advanced
minimum royalties of $50,000 on October 1, 2003 and $100,000 on October 1, 2004
and each year thereafter while the agreement is in effect and a net smelter
returns royalty based on a sliding scale ranging from 2% to 6%, depending on
gold and silver prices at the time of production.

In November, 2002, the Corporation granted to Silver Standard Resources Inc.,
subject to the terms of the Newmont agreement, an option to acquire the silver
resources hosted in the Maverick Springs project in exchange for aggregate
future cash payments on $1.5 million (Note 20).

MOUNTAIN VIEW

The Mountain View gold project, located west of the Hycroft mine, was acquired
on October 7, 2002 from Newmont Capital Limited (NCL). The total cost for the
Mountain View project included cash payments of $50,000, the issuance of 56,497
equity units, each unit comprised of one common share and a two year

38

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

THE TABULAR INFORMATION SET OUT BELOW IS IN THOUSANDS OF UNITED STATES DOLLARS,
EXCEPT AS OTHERWISE STATED.

3. MINERAL PROPERTIES (CONTINUED)
warrant, valued at $200,000 (Notes 8 & 9). The Corporation is committed to
completing 4,000 feet of drilling on this project before October 7, 2003 and an
additional 4,000 feet of drilling before October 7, 2004. NCL retains a 1.5% net
smelter returns royalty or the right to acquire 51% of the project after four
years by paying the Corporation cash equaling 200% of the aggregate expenditures
made by the Corporation on the project.

LONG VALLEY

The Corporation has a letter agreement with Standard Industrial Minerals, Inc.
(Standard), to acquire Standard's 100% interest in the Long Valley gold project
in east central California, for an aggregate purchase price of $750,000 which
would be made over a five-year period, with annual payments to be due as
follows: $100,000 due on each of January 15, 2003, 2004, and 2005; $200,000 due
on January 15, 2006, and $250,000 due on January 15, 2007 (Note 21). The
Corporation retains the right to terminate the agreement at any time.

HYCROFT MINE

The Corporation acquired the Hycroft gold mine, west of Winnemucca, Nevada, in
1987. Mining activities at the Hycroft mine were suspended in 1998. The mine is
being held on care and maintenance pending a sustained improvement in gold
prices. Holding costs are expensed.

The Crofoot property at the Hycroft mine is subject to a 4% net profit royalty
and the Lewis property at the Hycroft mine is subject to a 5% net smelter
royalty.

PAREDONES AMARILLOS

The Corporation acquired the Paredones Amarillos gold project in Mexico from
Viceroy Resource Corporation on August 29, 2002 (Note 20). The total cost of
this project included cash payments of $786,000 for acquisition and related
costs, the issuance of 303,030 equity units with a fair value of $1,211,000
(Notes 8 and 9) and a future cash payment of $320,000 due August 29, 2003.

The Paredones Amarillos project is subject to a 2% net profits interest retained
by a former owner.

AMAYAPAMPA

The Corporation acquired the Amayapampa gold project, in Bolivia, in 1996. The
project is being held on care and maintenance pending a sustained improvement in
gold prices. Holding costs are expensed.

39

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

THE TABULAR INFORMATION SET OUT BELOW IS IN THOUSANDS OF UNITED STATES DOLLARS,
EXCEPT AS OTHERWISE STATED.

4. PLANT AND EQUIPMENT

5. CURRENT LIABILITIES

On April 23, 2002, the Corporation settled the USF&G lawsuit, for which it had
previously provided approximately $814,000.

6. PAYABLES TO BE SETTLED WITH EQUITY

Pursuant to the terms of the acquisition agreement with respect to the Maverick
Springs project, in October, 2003 the Corporation will issue common shares with
an approximate market value of $500,000, together an equivalent number of two
year warrants. The warrants will be valued at the time of issue. (Note 3).

Pursuant to an agreement with Endeavour Financial Corporation Inc., Endeavour is
to provide financial advisory services to the Corporation for a monthly fee of
$10,000, which is payable by the issuance to Endeavour of a convertible
promissory note, which is automatically converted into common shares of the
Corporation (Note 8). As of December 31, 2002, payment for the month of December
had not been made.

7. ACCRUED RECLAMATION AND CLOSURE COSTS

The Corporation's aggregate obligation accrued to December 31, 2002, net of the
actual cost of reclamation activities performed to December 31, 2002, is
$4.1 million (2001: $3.1 million). Substantially all of this estimate relates to
final reclamation and closure of the Hycroft mine. Consistent with Bureau of
Land Management, Nevada State Office mandated procedures, in 2002 the
Corporation commissioned a third-party comprehensive review of the estimated
reclamation costs at the Hycroft mine and increased the obligation accrued by
$1.0 million (Note 13).

Estimated reclamation and mine closure costs are determined using management's
best estimates of the scope and the cost of required activities. These estimates
are subject to change, based on future changes in operations, regulatory
requirements or costs to complete the reclamation activity. Estimated
reclamation

40

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

THE TABULAR INFORMATION SET OUT BELOW IS IN THOUSANDS OF UNITED STATES DOLLARS,
EXCEPT AS OTHERWISE STATED.

7. ACCRUED RECLAMATION AND CLOSURE COSTS (CONTINUED)
and closure costs had been charged to earnings over the life of the mine on a
units-of-production basis; after mining was suspended in 1998, adjustments to
the estimate have been reflected in net loss.

8. CAPITAL STOCK

COMMON SHARES ISSUED AND OUTSTANDING

On June 19, 2002, the Corporation effected a 1-for-20 consolidation of its
common shares. The number of common shares outstanding, on a pre-consolidation
basis, at December 31, 2001, of 90,715,040 has been restated as 4,535,752
shares, giving effect to the consolidation. All references in this document to
common shares, loss per share and value per share or value per unit, are on a
post-consolidation basis, unless otherwise indicated.

PRIVATE PLACEMENT FEBRUARY-MARCH 2002, NET

The Corporation effected a two-step private placement financing in February and
March 2002. In the first step of the private placement, completed in February,
the Corporation issued 1,000,000 units at a price of $1.026 per unit for an
aggregate purchase price of $1,026,000. Each unit consisted of one common share
and one share purchase warrant (Note 9) exercisable for one additional common
share at $1.50, until February 1, 2007. The Corporation also issued 80,000 units
to an agent as consideration for its services in connection with the unit
offering. In the second step of the private placement, completed in March, the
Corporation issued $2,774,000 aggregate principal amount of convertible
debentures. The debentures were convertible into debenture units at a price of
$1.026 per debenture unit, each consisting of one common share and one 5-year
warrant entitling the holder to purchase one common share at a price of $1.50
until March 18, 2007, with the common share component representing substantially
all of the unit value. The Corporation issued to an agent special warrants
exercisable for 216,296 units, with each unit consisting of one common share and
one warrant with the same terms as the share and warrant components,
respectively, of the debenture units. The Corporation incurred approximately
$207,000 in direct costs connected with both steps of this private placement.

On September 19, 2002, a Registration Statement on Form S-3 filed under the
Securities Act of 1933 for the registration for resale of 7,999,974 common
shares (including shares already issued as well as shares to be issued, all in
connection with the private placement), was declared effective by the SEC. As a
result of

41

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

THE TABULAR INFORMATION SET OUT BELOW IS IN THOUSANDS OF UNITED STATES DOLLARS,
EXCEPT AS OTHERWISE STATED.

8. CAPITAL STOCK (CONTINUED)
this registration statement becoming effective, the Corporation's $2,774,000
convertible debentures issued in the second step of the private placement were
automatically converted, pursuant to their terms, into 2,703,690 common shares
and the same number of debenture warrants. The registration included 3,999,986
shares issuable upon the exercise of warrants (Note 9), including the warrants
issued in the first step of the private placement and the debenture warrants,
having the respective expiration dates as noted in the preceding paragraph.

WARRANTS EXERCISED FROM FEBRUARY-MARCH 2002 PRIVATE PLACEMENT

As of December 31, 2002, 679,736 of the warrants issued in the Private placement
February-March 2002 have been exercised, for an aggregate purchase price of
$1,019,604 (Note 9).

PRIVATE PLACEMENT DECEMBER 2002, NET

On December 27, 2002, the Corporation completed a private placement financing in
which the Corporation issued 1,000,000 equity units at a price of $2.35 per
unit, for an aggregate purchase price of $2,350,000. Each equity unit consisted
of one common share and one warrant (Note 9), exercisable over a two-year period
from the issuance date, to purchase one common share for $3.04 during the first
year and $3.45 during the second year. As of December 31, 2002, none of these
warrants have been exercised. The Corporation incurred approximately $115,000 in
direct costs connected with this private placement.

SHARES ISSUED FOR ACQUISITION OF GOLD PROPERTIES, NET

On August 29, 2002, the Corporation issued 303,030 equity units priced at Cdn
$4.95 (approximately U.S.$3.17) with each unit comprised of one common share and
one two-year warrant to purchase one common share at a price of Cdn $6.88
(approximately U.S.$4.40), as partial consideration for the acquisition of the
Paredones Amarillos gold project (Note 3 and 20). The fair value of the equity
units was Cdn $1.9 million (approximately U.S. $1.2), with Cdn $1.5 million
(approximately U.S. $962,000) attributed to common shares and Cdn $390,000
(approximately U.S. $250,000) attributed to warrants (Note 9). As of
December 31, 2002, none of these warrants have been exercised. The Corporation
incurred approximately $18,000 in direct costs connected with the issuance of
these shares.

On October 7, 2002, the Corporation issued 197,740 equity units priced at $3.54
with each unit including one common share and one two-year warrant to purchase
one common share at a price of $4.43, as partial consideration for the
acquisition of the Maverick Springs and Mountain View gold projects (Note 3).
The fair value of the equity units was $700,000, with $605,000 attributed to
common shares and $95,000 attributed to warrants (Note 9). As of December 31,
2002, none of these warrants have been exercised. The Corporation incurred
approximately $22,000 in direct costs connected with the issuance of
these units.

SHARES ISSUED FOR SERVICES, NET

Pursuant to an agreement with Endeavour Financial Corporation Inc. (Endeavour).
Endeavour is to provide financial advisory services to the Corporation for a
monthly fee of $10,000. The monthly fee is payable by the issuance to Endeavour
of a non-transferable convertible promissory note, which is automatically
converted into common shares of the Corporation at a price per share equal to
the weighted average closing price of the shares on the American Stock Exchange
on the last 10 trading days of the month prior to the business day on which the
fee becomes due. As of December 31, 2002, the Corporation

42

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

THE TABULAR INFORMATION SET OUT BELOW IS IN THOUSANDS OF UNITED STATES DOLLARS,
EXCEPT AS OTHERWISE STATED.

8. CAPITAL STOCK (CONTINUED)
had issued 10,869 common shares valued at $35,000 to Endeavour under the terms
of this agreement. The Corporation incurred approximately $15,000 in direct
costs connected with the issuance of shares under this agreement.

9. WARRANTS

Further to Note 8, warrants granted and outstanding in 2002 are summarized in
the following table.

(1) Each warrant entitles the holder to purchase one common share

(2) The exercise price increases to $3.45 in December 2003

43

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

THE TABULAR INFORMATION SET OUT BELOW IS IN THOUSANDS OF UNITED STATES DOLLARS,
EXCEPT AS OTHERWISE STATED.

10. OPTIONS TO PURCHASE SHARES

COMMON SHARE OPTIONS ISSUED TO NON-EMPLOYEES

Under the Corporation's Stock Option Plan, 20,000 fully vested stock options
were granted to non-employee consultants of the Corporation in December 2002 and
have been recorded at estimated fair value of $24,602 using the Black-Scholes
option pricing model.

COMMON SHARE OPTIONS

Under the Corporation's Stock Option Plan (the Plan), the Corporation may grant
options to directors, officers, employees and consultants of the Corporation or
its subsidiaries, for up to 225,000 common shares. In addition, in
January 2003, the Board of Directors approved, subject to regulatory and
shareholder approvals, an increase to the Plan of 775,000 options. Under the
Plan, the exercise price of each option shall not be less than the market price
of the Corporation's stock on the date preceding the date of grant, and an
option's maximum term is 10 years or such other shorter term as stipulated in a
stock option agreement between the Corporation and the optionee. Options and
vesting periods under the Plan are granted from time to time at the discretion
of the Board of Directors. Options granted under the proposed 775,000 option
increase may not be exercised until after regulatory and shareholder approvals
have been acquired.

At December 31, 2002, 662,000 common shares were reserved for issuance under
options granted to directors, officers, employees and non-employees. These
options expire as follows:

The following tables summarize information about stock options under the Plan:

44

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

THE TABULAR INFORMATION SET OUT BELOW IS IN THOUSANDS OF UNITED STATES DOLLARS,
EXCEPT AS OTHERWISE STATED.

10. OPTIONS TO PURCHASE SHARES (CONTINUED)

Under the Corporation's Stock Option Plan, 10,000 stock options (200,000 on a
pre-consolidation basis) were issued to directors of the Corporation in
March 2002. In addition, subject to regulatory and shareholder approval, 619,500
stock options (all on a post-consolidation basis) were issued to directors,
officers and employees in July 2002, half of which were vested immediately and
half of which will vest in July 2003. Had compensation been recorded using the
fair-value method for these stock option grants, the Corporation's loss and loss
per share for Canadian GAAP would have been adjusted to the pro forma amounts
indicated below:

The fair value of each option grant is estimated on the date of the grant using
the Black-Scholes option pricing model with the following weighted average
assumptions used for the grants:

(1) Options granted to non-employees

45

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

THE TABULAR INFORMATION SET OUT BELOW IS IN THOUSANDS OF UNITED STATES DOLLARS,
EXCEPT AS OTHERWISE STATED.

11. GOLD SALES AND PRODUCTION COSTS

Gold production has gradually declined since mining activities were suspended at
the Hycroft mine in 1998. Effective at the beginning of fiscal 2002, gold
production is considered incidental to the activities at the Hycroft mine, and
reporting the associated sales proceeds as revenue is no longer warranted.
Accordingly, proceeds from gold sales of approximately $0.6 million, are netted
against 'Exploration, property evaluation and holding costs.' Similarly, gold
production costs, which approximately offset the proceeds from gold sales, are
included in 'Exploration, property evaluation and holding costs.'

12. COST RECOVERIES RELATED TO USF&G LAWSUIT

The Corporation received from Golden Phoenix Minerals, Inc. (GPMI), the current
owner of the Mineral Ridge Mine, 628,931 common shares, valued at $220,000 at
the time of receipt, in consideration for benefits GPMI received as a direct
result of the Corporation's facilitation of the USF&G settlement (Note 5). In
addition, the final settlement amount for the USF&G lawsuit was approximately
$20,000 less than originally estimated and provided for.

13. COMMITMENTS AND CONTINGENCIES

The Corporation has provided a surety bond in the amount of $5.1 million to
ensure reclamation obligations under an approved reclamation plan at the Hycroft
mine. The Bureau of Land Management, Nevada State Office has requested an
additional bond of $443,279 for interim fluid management and it is probable that
the State will request that the Corporation increase the total surety bond
amount to an estimated $6.7 million, inclusive of the interim fluid management
bond. Furthermore, the Corporation has been requested to pledge collateral in
order to provide this surety bond. The amount and the nature of the collateral
will be subject to negotiation. There can be no assurance that the Corporation
will be successful in providing acceptable collateral and thus posting the
surety bond.

The $6.7 million surety bond estimate for the Hycroft mine includes scope of
work and pricing estimates which assume execution of the reclamation work under
the direction of the Bureau of Land Management. However, the Corporation assumes
that it will complete this reclamation itself after mining has been completed
and, based on this assumption, estimates that the work will be completed to
mandated standards for a total cost of $4.1 million as accrued in these
financial statements (Note 7).

14. FINANCIAL INSTRUMENTS

The recorded value of the Corporation's cash and cash equivalents, accounts
receivable and accounts payable and accrued liabilities and other, approximate
their fair values due to the relatively short periods to maturity. At
December 31, 2002, the fair value of marketable securities is $135,000.

46

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

THE TABULAR INFORMATION SET OUT BELOW IS IN THOUSANDS OF UNITED STATES DOLLARS,
EXCEPT AS OTHERWISE STATED.

15. SUPPLEMENTAL CASH FLOW DISCLOSURE AND MATERIAL NON-CASH TRANSACTIONS

As of December 31, 2002 and 2001, all of the Corporation's cash was held in
liquid bank deposits.

(1) Included in PAYABLES TO BE SETTLED WITH EQUITY

(2) Included in ACCRUED LIABILITIES AND OTHER

There were no significant non-cash transactions during the year's ended
December 31, 2001 and 2000.

16. INCOME TAXES

(a) A reconciliation of the combined Canadian federal and provincial income
taxes at statutory rates and the Corporation's effective income tax expenses
(recovery) is as follows:

47

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

THE TABULAR INFORMATION SET OUT BELOW IS IN THOUSANDS OF UNITED STATES DOLLARS,
EXCEPT AS OTHERWISE STATED.

16. INCOME TAXES (CONTINUED)
(b) Future 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. The significant
components of the company's future tax assets as at December 31, are as follows:

(c) The Corporation has available income tax losses of $43.8 million, which
may be carried forward and applied against future taxable income when earned.

The losses expire as follows:

17. RETIREMENT PLANS

The Corporation sponsors a qualified tax-deferred savings plan in accordance
with the provisions of Section 401(k) of the U.S. Internal Revenue Code, which
is available to permanent U.S. employees. The Corporation makes contributions of
up to 4% of eligible employees' salaries. The Corporation's contributions were
as follows: 2002--$20,796; 2001--$28,764; and 2000--$56,000.

48

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

THE TABULAR INFORMATION SET OUT BELOW IS IN THOUSANDS OF UNITED STATES DOLLARS,
EXCEPT AS OTHERWISE STATED.

18. SEGMENT INFORMATION

The Corporation's core business is evaluating, acquiring, exploring and
improving gold exploration and potential development projects. These activities
are focused principally in North and South America. Substantially all related
costs are derived in the United States. The Corporation reported no revenues in
2002; all 2001 and 2000 revenues were earned in the United States. Geographic
segmentation of capital assets is provided in Notes 3 and 4.

19. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES

The significant differences between generally accepted accounting principles
(GAAP) in Canada and in the United States, as they relate to these financial
statements are as follows:

(a) Under Canadian corporate law, the Corporation underwent a capital
reduction in connection with the amalgamation of Granges and Hycroft
whereby share capital and contributed surplus were reduced to eliminate
the consolidated accumulated deficit of Granges as of December 31, 1994,
after giving effect to the estimated costs of the amalgamation. Under
U.S. corporate law, no such transaction is available and accordingly is
not allowed under U.S. GAAP.

(b) In 2000 the carrying values of certain long-lived assets exceeded their
respective undiscounted cash flows. Following Canadian GAAP, the carrying
values were written down using the undiscounted cash flow method. Under
U.S. GAAP, the carrying values were written down to their fair values
using the discounted cash flow method, giving rise to a difference in the
amounts written down.

Amortization when properties are in production, following Canadian GAAP,
would be reduced to reflect the difference in the amounts written down
following U.S. GAAP.

(c) Under U.S. GAAP, items such as unrealized gains and losses on marketable
securities are required to be shown separately in the derivation of
comprehensive income.

(d) In 2000 and 2001 the Corporation recognized revenue upon adsorption of
gold onto carbon. In accordance with U.S. GAAP, revenue is not recorded
before title is passed. In 2002, proceeds from gold sales of $150,000
were recognized for U.S. GAAP and credited to 'Exploration, property
evaluation and holding costs'.

(e) Special warrants issued to the agent as compensation for its services in
connection with the March 2002 Debenture Offering (Note 8) are valued and
included as a financing cost of the related debentures. The conversion
feature of the Debenture Offering (the Beneficial Conversion Feature) was
in the money at the date of issue. The debentures were fully converted on
September 19, 2002 (Note 8); accordingly the fair value of the Beneficial
Conversion Feature is recognized as a charge to net loss and as an
addition to contributed surplus.

(f) As described in note 2(d), the Corporation has reclassified an amount of
$1.485 million from accumulated other comprehensive loss to deficit. The
Company believes that this adjustment is not material as it has no impact
on net income or cash flows for any of the periods presented.

(g) In accordance with U.S. GAAP, exploration, mineral property evaluation,
holding costs, option payments and related acquisition costs for mineral
properties acquired under an option agreement are expensed as incurred.
When proven and probable reserves are determined for a property and a
bankable feasibility study is completed, then subsequent exploration and

49

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

THE TABULAR INFORMATION SET OUT BELOW IS IN THOUSANDS OF UNITED STATES DOLLARS,
EXCEPT AS OTHERWISE STATED.

19. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES (CONTINUED)
development costs on the property would be capitalized. Total capitalized
cost of such properties is measured periodically for recoverability of
carrying value under SFAS No. 144.

The significant differences in the consolidated statements of loss relative to
U.S. GAAP were:

The significant differences in the consolidated balance sheets as at
December 31, 2002 and 2001 relative to U.S. GAAP were:

CONSOLIDATED BALANCE SHEETS

50

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

THE TABULAR INFORMATION SET OUT BELOW IS IN THOUSANDS OF UNITED STATES DOLLARS,
EXCEPT AS OTHERWISE STATED.

19. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES (CONTINUED)
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY UNDER U.S. GAAP

The Corporation applies Accounting Principles Board Opinion No. 25 and related
interpretations in accounting for its plans in its U.S. GAAP presentations. If
compensation cost for the Corporation's stock-based compensation plans had been
determined based on the fair value at the grant dates for awards under the plans
consistent with the method described in SFAS No. 123, the Corporation would have
recorded compensation expense of $486,000, $20,000 and $15,000 in 2002, 2001 and
2000 respectively. Accordingly, the consolidated net loss and loss per share
under U.S. GAAP would have increased to the pro forma amounts indicated below:

The fair value of each option grant is estimated on the date of grant for all
plans using the Black-Scholes option-pricing model with the following weighted
average assumptions used for grants in 2002, 2001 and 2000:

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

The FASB has issued SFAS No. 143, "Accounting for Asset Retirement Obligations."
This statement addresses financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. It requires that the fair value of a liability for an
asset retirement obligation be recognized in the period in which it is incurred
if a reasonable estimate of

51

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

THE TABULAR INFORMATION SET OUT BELOW IS IN THOUSANDS OF UNITED STATES DOLLARS,
EXCEPT AS OTHERWISE STATED.

19. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES (CONTINUED)
fair value can be made. The associated asset retirement costs are capitalized as
part of the carrying amount of the long-lived asset. The corporation is
analyzing the impact of SFAS No. 143 and expects that the impact on the
Corporation's consolidated financial position or result of operations will not
be material when the company adopts the standard on January 1, 2003.

The CICA has approved, subject to written ballot, a new Handbook section, "Asset
Retirement Obligations," to replace the current guidance on future removal and
site restoration costs included in the CICA accounting standard 3061, "Property,
Plant and Equipment." The standard, which is similar to SFAS 143, is effective
for years beginning on or after January 1, 2004. The standard requires
recognition of a liability at its fair value for the obligation associated with
the retirement of a tangible long-lived asset. A corresponding asset retirement
cost would be added to the carrying amount of the related asset and amortized to
expense over the useful life of the asset. The company is analyzing the impact
of this new standard, which will be adopted on January 1, 2003.

The Accounting Standards Board of the Canadian Institute of Chartered
Accountants (CICA) has issued CICA 3063 "Impairment of Long-Lived Assets". This
statement establishes standards for the recognition, measurement and disclosure
of the impairment of long-lived non-monetary assets, including property, plant
and equipment, intangible assets with finite useful lives, deferred
pre-operating costs and long-term prepaid assets. The corporation does not
expect that the implementation of these guidelines will have a material impact
on its consolidated financial position or results of operations.

20. RELATED PARTY TRANSACTIONS

PAREDONES AMARILLOS

In August 2002, the Corporation acquired 100% of the shares of Minera Paredones
Amarillos S.A. de C.V. from Viceroy Resource Corporation (Viceroy). The
Corporation and Viceroy had a common director at the time of the transaction.
The Corporation paid to Viceroy Cdn $1.0 million (approximately U.S. $641,000)
at closing, together with 303,030 equity units priced at Cdn $4.95
(approximately U.S. $3.17), being 90% of the weighted average closing price of
the Corporation's common shares on the five trading days immediately preceding
the date of the definitive purchase agreement, with each unit comprised of one
common share and one two-year warrant to purchase one common share at a price of
Cdn $6.88 (approximately U.S. $4.40), or 125% of the weighted average closing
price of the Corporation's common shares on the five trading days immediately
preceding the date of the definitive purchase agreement. A final cash payment of
Cdn $0.5 million (approximately U.S. $320,000) is due in August 2003.

MAVERICK SPRINGS

In November, 2002, the Corporation entered into a non-binding letter of intent
to grant to Silver Standard Resources Inc., (Silver Standard) an option to
acquire the Corporation's interest in the silver resources hosted in the
Maverick Springs project in Nevada. The Corporation and Silver Standard have a
common director. Under the terms of the proposed agreement, which is subject to
regulatory approvals and the completion of a definitive agreement, the
Corporation will retain its 100% interest in the gold resources, Silver Standard
will pay the Corporation $1.5 million over four years including a cash payment
of $300,000 at closing. The remaining $1.2 million will be used to fund
exploration programs, land holding costs and option payments on the Maverick
Springs project. An amount of $188,890 in exploration programs has been incurred
by the Corporation in 2002, which will be recoverable from Silver Standard on
completion of this agreement. Silver Standard and the Corporation will jointly
manage exploration of the Maverick

52

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

THE TABULAR INFORMATION SET OUT BELOW IS IN THOUSANDS OF UNITED STATES DOLLARS,
EXCEPT AS OTHERWISE STATED.

20. RELATED PARTY TRANSACTIONS (CONTINUED)
Springs project through a management committee, with the Corporation as
operator. The Corporation will have 45% of the vote on the committee, Silver
Standard will have a 55% vote. After Silver Standard has completed its
$1.5 million in payments to the Corporation, costs will be shared by the two
corporations on the same ratio as established for operation of the management
committee, subject to standard dilution provisions. The definitive agreement has
not yet been finalized.

21. SUBSEQUENT EVENTS

(A) LONG VALLEY ACQUISITION

On January 22, 2003, the Corporation paid to Standard the first $100,000
installment for the purchase of the Long Valley project (Note 3).

(B) PRIVATE PLACEMENT

On February 7, 2003, the Corporation completed a $3.4 million private placement
financing. The gross proceeds were placed in escrow pending shareholder
approval. On February 27, 2003, at a Special General Meeting of the
Shareholders, shareholders voted in favor of the financing and on February 28,
2003, the gross proceeds were released to the Corporation from escrow.

Through the private placement, the Corporation raised proceeds, net of
commissions and costs, of approximately $3.0 million. The private placement
consisted of the sale of 1.4 million special warrants, each priced at $2.43. The
special warrants were automatically converted into equity units upon shareholder
approval. Each equity unit consists of one common share and a warrant,
exercisable over a four-year period, to purchase one common share for $3.14
during the first year, $3.56 during the second year, $3.92 during the third year
and $4.28 during the fourth year. Starting on the second anniversary of the
closing of this private placement, if the common shares of the Corporation trade
at a value of 150% or more of the respective exercise price for a period of 15
consecutive trading days on the American Stock Exchange, then the Corporation
has the option to request that the warrants be exercised. If the warrants are
not exercised within 15 business days following this request, they will be
cancelled. A 10% cash finder's commission was paid in connection with the
private placement.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

None.

53

PART III

ITEM 10. DIRECTORS AND OFFICERS OF REGISTRANT.

Information concerning the Corporation's directors will be contained in the
Corporation's definitive Proxy Statement to be filed pursuant to Regulation 14A
promulgated under the Securities Exchange Act of 1934 for the 2003 Annual
General Meeting of Shareholders (the "Proxy Statement") under the caption
"Particulars of Matters to be Acted Upon--Election of Directors" and is
incorporated herein by reference.

Information concerning the Corporation's executive officers is furnished in
Part I hereof under a separate unnumbered caption ("Executive Officers of the
Corporation").

Information concerning certain filing obligations under the federal securities
laws applicable to directors and executive officers of the Corporation, and
holders of more than 10% of the Corporation's common shares, will be contained
in the Proxy Statement under the caption "Section 16(a) Beneficial Ownership
Reporting Compliance" and is incorporated herein by reference.

ITEM 11. COMPENSATION OF DIRECTORS AND OFFICERS.

Information concerning this item will be contained in the Proxy Statement under
the caption "Executive Compensation" and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

Except as to the information concerning securities authorized for issuance under
equity compensation plans, which is furnished in Item 5 of Part II hereof under
the caption "Equity Compensation Plan Information", the information concerning
this item will be contained in the Proxy Statement under the caption "Ownership
of the Corporation's Common Shares" and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Information concerning this item will be contained in the Proxy Statement under
the captions "Interest of Management and Others in Material Transactions" and
"Indebtedness of Directors and Senior Officers" and is incorporated herein by
reference.

ITEM 14. CONTROLS AND PROCEDURES.

(A) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.

Based on their evaluation as of a date within 90 days prior to the filing date
of this Annual Report on Form 10-K, the Corporation's principal executive
officer and principal financial officer have concluded that the Corporation's
disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c)
under the Securities Exchange Act of 1934 (the "Exchange Act")) are effective to
ensure that information required to be disclosed by the Corporation in reports
that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in Securities and
Exchange Commission rules and forms.

(B) CHANGES IN INTERNAL CONTROLS.

There were no significant changes in the Corporation's internal controls or in
other factors that could significantly affect these controls subsequent to the
date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

54

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

DOCUMENTS FILED AS PART OF REPORT

FINANCIAL STATEMENTS

The following consolidated financial statements of the Corporation are filed as
part of this report:

1. Report of Independent Accountants dated February 28, 2003.

2. Consolidated Balance Sheets--At December 31, 2002 and 2001.

3. Consolidated Statements of Loss--Years ended December 31, 2002, 2001, and
2000.

4. Consolidated Statements of Deficit--Years ended December 31, 2002, 2001 and
2000.

5. Consolidated Statements of Cash Flows--Years ended December 31, 2002, 2001,
and 2000.

6. Notes to Consolidated Financial Statements.

See "Item 8. Consolidated Financial Statements and Supplementary Data".

FINANCIAL STATEMENT SCHEDULES

No financial statement schedules are filed as part of this report because such
schedules are not applicable or the required information is shown in the
consolidated financial statements or notes thereto. See "Item 8. Consolidated
Financial Statements and Supplementary Data".

55

EXHIBITS

The following exhibits are filed as part of this report:

REPORTS ON FORM 8-K

The following reports were filed under cover of Form 8-K during the quarter
ended December 31, 2002:

1. Report dated October 8, 2002, as amended under cover of Form 8-K/A filed as
of October 31, 2002, pursuant to Item 5, regarding the completion of the
acquisition of the Maverick Springs and Mountain View gold projects.

2. Report dated November 5, 2002, pursuant to Item 5, regarding the completion
of technical studies on the Maverick Springs and Mountain View gold
projects.

3. Report dated November 7, 2002, pursuant to Item 5, regarding the letter of
intent to grant an option for the silver resources at the Maverick Springs
project.

4. Report dated November 20, 2002, pursuant to Item 5, regarding acquisition of
an option to acquire the Long Valley gold project; the Corporation's third
quarter results; and resignation of a director.

5. Report dated December 16, 2002, pursuant to Item 5, regarding a
$2.3 million private placement.

6. Report dated December 16, 2002, pursuant to Item 5, regarding the results of
exploration drilling at the Maverick Springs project.

59

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

VISTA GOLD CORP.
Dated: March 19, 2003 By: /S/ RONALD J. MCGREGOR
---------------------------------------------
Ronald J. McGregor,
President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the date indicated:

Dated: March 19, 2003 By: /S/ RONALD J. MCGREGOR
---------------------------------------------
Ronald J. McGregor,
President and Chief Executive Officer
(Principal Executive Officer)

Dated: March 19, 2003 By: /S/ JOHN F. ENGELE
---------------------------------------------
John F. Engele
Vice President Finance and Chief Financial
Officer (Principal Financial and Accounting
Officer)

Pursuant to a Power of Attorney dated March 10, 2003, the undersigned by signing
his name hereby signs this report in the name and on behalf of the foregoing
directors.

/S/ RONALD J. MCGREGOR
- --------------------------------------------
RONALD J. MCGREGOR

60

CERTIFICATION

I, Ronald J. McGregor, certify that:

1. I have reviewed this annual report on Form 10-K of Vista Gold Corp.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of
the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officer and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Dated: March 19, 2003 /s/ RONALD J. MCGREGOR
-----------------------------------------------------------
Ronald J. McGregor,
President and Chief Executive Officer
(Principal Executive Officer)

61

CERTIFICATION

I, John F. Engele, certify that:

1. I have reviewed this annual report on Form 10-K of Vista Gold Corp.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of
the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officer and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Dated: March 19, 2003 /s/ JOHN F. ENGELE
-----------------------------------------------------------
John F. Engele,
Vice President Finance and Chief Financial Officer
(Principal Financial and Accounting Officer)