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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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, 2003

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

VISTA GOLD CORP.

(Exact Name of Registrant as Specified in its Charter)

Securities 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 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:    / /

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act):    Yes    / /    No    /x/

Aggregate market value of outstanding Common Shares held by non-affiliates:

As of June 30, 2003, 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 $30,000,000.

Outstanding Common Shares: As of March 17, 2004, 14,755,078 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 2004 Annual General Meeting of Shareholders. See Part III.

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., Idaho Gold Resources LLC, and Mineral Ridge Resources Inc.

"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.

"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." or "HRDI" means Hycroft Resources & Development, Inc.

"Hycroft Lewis" means Hycroft Lewis Mine, Inc.

"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.

"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

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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.

"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.

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

"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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USE OF NAMES

In this report, the terms "Vista Gold" and the "Corporation" unless the context otherwise requires, mean Vista Gold Corp. and its subsidiaries.

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 forward-looking statements concerning, among other things, 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 "Part I—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 is currently engaged in the evaluation, acquisition and exploration 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 11 gold properties: the Maverick Springs, Mountain View, Hasbrouck, Three Hills, Wildcat projects and the Hycroft mine, all in Nevada; the Long Valley project in California; the Yellow Pine project in Idaho; the Paredones Amarillos and Guadalupe de los Reyes projects in 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 2003, 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.

Vista Gold Corp. 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, 2003, the Corporation had nine full-time employees, of whom four were employed at the Hycroft mine and five were employed at the Corporation's executive office in Littleton. The Corporation uses consultants with specific skills to assist with various aspects of its project evaluation, due diligence, acquisition initiatives, corporate governance and property management.

Segment Information

Segment information is provided in the Consolidated Financial Statements—Note 17.

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Significant Developments in 2003

Private Placement Financing

In 2003, the Corporation completed a $3.4 million equity private placement financing which netted $2.9 million to the Corporation, and which was approved by vote at a Special General Meeting of shareholders of the Corporation on February 27, 2003. See the Consolidated Financial Statements—Note 8.

Acquisitions and Payments on Properties

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 continued its efforts to build a portfolio of gold projects through a strategy that includes evaluation, acquisition and exploration of gold exploration and potential development projects with the aim of adding value to the projects. In addition, the Corporation continued its efforts to improve the value of its gold projects through exploration drilling, and reengineering the operating assumptions underlying previous engineering work. As discussed under "Item 2. Properties", the Corporation acquired six gold projects in 2003 and continued with payments on the four gold projects acquired in 2002. These acquisitions and payments are described below.

Paredones Amarillos

On August 29, 2002 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; and on August 29, 2003 the Corporation paid Viceroy the remaining Cdn $0.5 million due pursuant to the acquisition contract.

Maverick Springs and Mountain View

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 ("Newmont Capital"). To acquire the Maverick Springs project, the Corporation paid $250,000 and issued 141,243 equity units, each unit consisting of one Common Share and one two-year warrant, to Newmont, and on October 7, 2003 the Corporation issued 122,923 Common Shares and 122,923 warrants to purchase Common Shares to Newmont. To acquire the Mountain View project the Corporation paid cash of $50,000 and issued 56,497 equity units, each unit comprised of one Common Share and one two-year warrant, to Newmont Capital.

On June 9, 2003, the Corporation entered into an agreement granting Silver Standard Resources Inc. ("SSRI") an option to acquire the Corporation's interest in the silver mineralized material hosted in the Maverick Springs project. The Corporation will retain its 100% interest in the gold mineralized material. The agreement with SSRI is subject to the terms of the purchase agreement between Newmont and the Corporation. Under the agreement, SSRI will pay the Corporation $1.5 million over four years. A payment of $300,000 was made to the Corporation in 2003. The remaining $1.2 million will be used by the Corporation to fund exploration programs, land holding costs and option payments. SSRI and the Corporation will jointly manage exploration of the Maverick Springs project. (See also Consolidated Financial Statements—Notes 4 and 19).

Long Valley

The Corporation executed an option agreement on January 22, 2003, 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. As of December 31,

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2003, the Corporation has paid the first installment of $100,000. The second installment of $100,000 was paid in January 2004.

Hasbrouck and Three Hills

On May 23, 2003, the Corporation executed a purchase agreement with Newmont Capital which includes the Hasbrouck property and the Three Hills property. Terms of the purchase include a $50,000 cash payment on signing, and $200,000 or, at the Corporation's discretion, the equivalent in the Corporation's Common Shares on May 23, 2004. Newmont Capital, at its option, will retain either: (a) a 2% net smelter returns royalty in each project together with the right to a $500,000 cash payment at the start of commercial production at either project and a further $500,000 cash payment if, after the start of commercial production, the gold price averages $400 per ounce or more for any three-month period; or (b) the right to acquire 51% of either or both projects. The latter right would be exercisable only after the later of four years or the time when the Corporation has incurred aggregate expenditures of $1.0 million to acquire, explore and hold the projects.

Guadalupe de los Reyes

On August 1, 2003, the Corporation executed an agreement to acquire a 100% interest in the Guadalupe de los Reyes gold project in Sinaloa State, Mexico and a data package associated with the project and general area, for aggregate consideration of $1.4 million and a 2% net smelter returns royalty. The Corporation has paid $300,000 as of August 1, 2003. On August 1, 2004, the Corporation will pay a further $500,000 in cash or Common Shares at the discretion of the Corporation. An additional $500,000 in cash will be paid by way of $100,000 payments on each of the second through sixth anniversaries of the signing of the formal agreement, with the outstanding balance becoming due upon commencement of commercial production. The Corporation has the right to terminate the agreement at any time.

Wildcat

During September and October 2003, the Corporation acquired the Wildcat project and the associated exploration data in three separate transactions. The total consideration for these transactions was 50,000 Common Shares of the Corporation and $250,000 paid on signing, $300,000 payable by August 15, 2004, $50,000 payable by October 12, 2004, and an additional $500,000 payable at commencement of commercial production.

Yellow Pine

On November 7, 2003, Idaho Gold Resources LLC ("Idaho Gold"), an indirect, wholly-owned subsidiary of the Corporation, entered into an Option to Purchase Agreement with Bradley Mining Company for a nine year option to purchase 100% of the Yellow Pine project for $1,000,000. Idaho Gold made an option payment of $100,000 upon execution of the agreement and the agreement calls for Idaho Gold to make nine yearly payments of $100,000 on or before each anniversary date of the agreement, for a total option payment price of $1,000,000. If Idaho Gold exercises its option to purchase the project, all option payments shall be applied as a credit against the purchase price of $1,000,000. The subsidiary has the right to terminate the agreement at any time without penalty.

Agreement to Sell Amayapampa

On December 11, 2003, the Corporation reached an agreement to sell the Amayapampa project to Luzon Minerals Ltd. ("Luzon") of Vancouver, British Columbia, Canada. Completion of the transaction is subject to the receipt of all regulatory and other approvals, and completion of due diligence satisfactory to Luzon by June 1, 2004. Luzon issued the Corporation 50,000 common shares initially, and during the due diligence period, Luzon will pay the Corporation $10,000 per month for the first four months, then $15,000 per month for the fifth and sixth months. At completion of the due diligence period by June 1, 2004,

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provided Luzon elects to proceed, Luzon will pay the Corporation $930,000 and issue the Corporation 2,000,000 common shares. At the earlier of start of construction or January 1, 2006, Luzon will pay the Corporation $4,000,000 or at the Corporation's election, a combination of shares and cash based on Luzon's share price, not to exceed 5,200,000 shares or $4,000,000 cash.

Agreement for New Bond for Hycroft

In December 2003, the Corporation's wholly-owned subsidiary, Hycroft Resources & Development, Inc. ("HRDI") reached an agreement in principle with member companies of American International Group, Inc. to replace the existing bond coverage for the Hycroft mine with a new bond package which includes an insurance component and covers all existing reclamation liability at the Hycroft mine. On January 30, 2004, the final bond package agreement was executed. The new bond package calls for an initial payment of $4.0 million and two additional payments of $1.3 million each due July 22, 2004, and December 22, 2004, respectively. Pending approval of the new bonding instrument by the U.S. Bureau of Land Management, Nevada State Office, the new insurance/assurance bonding instrument will replace the existing bond, the letters of credit and the existing indemnity agreement between HRDI and the Corporation. The bond package allows for future increases when the Hycroft mine resumes production.

Corporate Organization Chart

The name, place of incorporation, continuance or organization, and percent of voting securities owned or controlled by Vista Gold as of December 31, 2003, for each subsidiary of Vista Gold is set out below.

(1)

The Corporation is in the process of dissolving Mineral Ridge Resources Inc.

Property Interests and Mining Claims

In the United States, most of the Corporation's exploration activities are conducted in the state of Nevada, with additional activities in California and Idaho. Mineral interests may be owned in these states by (a) the United States, (b) the state itself, or (c) 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

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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 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 U.S. Bureau of Land Management or U.S. 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. A new bond was put in place, subject to approval by the U.S. Bureau of Land Management, Nevada State Office, and payments aggregating $6.6 million will be made during 2004 which will cover reclamation costs for the existing disturbance at the Hycroft mine. See "—Significant Developments in 2003."

Government Regulation

Mining operations and exploration activities are subject to various national, state, provincial and local laws and regulations in the United States, Bolivia, Mexico, Canada 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, Bolivia, Mexico, Canada and the other jurisdictions in which the Corporation operates. There are no current orders or directions relating to the Corporation 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

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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 2003, 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 current fiscal year.

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 a high degree of risk. The risks described below are not the only ones facing the Corporation or otherwise associated with an investment in Vista Gold's Common Shares. 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 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, and gold production is incidental to solution recirculation on the heaps.

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 or joint venture of some of these properties. The value of these gold reserves and mineralized material, and the value of any

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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.

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, California, and Idaho in the United States, as well as 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, Nevada State Office. 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 U.S. 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

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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 U.S. 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 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 U.S. 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.

California Laws

A new mining operation in California, such as the Long Valley project, which is on Federal unpatented mining claims within a National Forest, would require obtaining various Federal, State and local permits. Mining projects require the establishment and presentation of environmental baseline conditions for air, water, vegetation, wildlife, cultural, historical, geological, geotechnical, geochemical, soil, and socioeconomic parameters. An Environmental Impact Statement ("EIS") would be required for any mining activities proposed on public lands. A Plan of Operations/Reclamation Plan would be required. Also required would be permits for waste-water discharge and wetland disturbance (dredge and fill); a county mining plan and reclamation plan; a county mining operations permit; special use permits from the U.S. Forest Service; and possibly others. In addition, compliance must be demonstrated with the Endangered Species Act and the National Historical Preservation Act consultation process. Possible county zoning and building permits and authorization may be required. Baseline environmental conditions 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

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the start of production. In addition, on December 12, 2002, California adopted a "Backfilling Law" requiring open-pit surface mining operations for metallic minerals to back-fill the mines. While the Corporation has determined that the geometry of its Long Valley project would lend itself to compliance with this law, future adverse changes to this law could have a corresponding adverse impact on the Corporation's financial performance and results of operations, for example, by requiring changes to operating constraints, technical criteria, fees or surety requirements.

Idaho Laws

Permitting a mining operation, such as Yellow Pine, located on patented mining claims within a National Forest in Idaho would require obtaining various Federal, State and local permits under the coordination of the Idaho Joint Review Process ("JRP"). Mining projects require the establishment and presentation of environmental baseline conditions for air, water, vegetation, wildlife, cultural, historical, geological, geotechnical, geochemical, soil and socioeconomic parameters. An Environmental Impact Statement would be required for any mining activities proposed on public lands. Permits would also be required for storm-water discharge; wetland disturbance (dredge and fill); surface mining; cyanide use, transport and storage; air quality; dam safety (for water storage and/or tailing storage); septic and sewage; water rights appropriation; and possibly others. In addition, compliance must be demonstrated with the Endangered Species Act and the National Historical Preservation Act consultation process. Possible county zoning and building permits and authorization may be required. Baseline environmental conditions 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.

Bolivia Laws

The Corporation is required under Bolivian laws and regulations to acquire permits and other authorizations before it can 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. While the Corporation has all the necessary permits to place the Amayapampa project into production, when a production decision is reached, these permits will need to be re-affirmed and there can be no assurance that the Corporation will be able to acquire updates to necessary permits or authorizations on a timely basis. Delays in acquiring any permit or authorization update 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 ("EEIA"), which the Corporation submitted in 1997 and was subsequently approved. 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.

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Mexico Laws

The Corporation is required under Mexican laws and regulations to acquire permits and other authorizations before the Paredones Amarillos or Guadalupe de los Reyes projects can be developed and mined. Since the passage of Mexico's 1988 General Law on Ecological Equilibrium and Environmental Protection, a sophisticated 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 Secretariat of Environment and Natural Resources of Mexico ("SEMARNAT"). While the Corporation has the necessary permits to place the Paredones Amarillos project into production, there can be no assurance that the Corporation will be able to acquire updates to necessary permits or authorizations on a timely basis. Likewise, there can be no assurance that the Corporation will be able to acquire the necessary permits or authorizations on a timely basis to place the Guadalupe de los Reyes project into production. Delays in acquiring any permit, authorization or updates could increase the development cost of the Paredones Amarillos project or the Guadalupe de los Reyes project, or delay the start of production.

The most significant environmental permitting requirements, as they relate to the Paredones Amarillos and the Guadalupe de los Reyes projects 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 or the Guadalupe de los Reyes projects are 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 maintain and advance its existing property positions and to acquire new 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.

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Some of the Corporation's directors may have conflicts of interest as a result of their involvement with other natural resource companies.

Some of Vista Gold's directors are directors or officers of other natural resource or mining-related companies. Robert A. Quartermain is President and a director of Silver Standard Resources Inc., and is a director of Canplats Resources Corporation, Radiant Resources, Inc., IAMGold Corporation, Rare Element Resources Ltd., Esperanza Silver Corporation and Strathmore Minerals Corp. C. Thomas Ogryzlo is the Executive Vice President and CEO of Polaris Energy Corp., and is a director of Tiomin Resources Inc., Birim Goldfields Inc. and Plata Peru Mining Inc. Michael B. Richings is a director of IMC Ventures, which holds interests in mineral properties. John Clark is a director of Impact Energy Inc. (a Canadian oil and gas exploration company) and Polaris Energy Corp. 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.

The Corporation 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

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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.

The market price of the Corporation's Common Shares could decrease as a result of the impact of the significant increase in the number of outstanding Common Shares that may result from exercise of warrants issued pursuant to its equity issuances in 2002 and 2003.

At March 17, 2004, the Corporation had outstanding 14,755,078 Common Shares. An additional 4,062,518 shares are issuable upon exercise of warrants, including warrants issued upon conversion of debentures, all as acquired from the Corporation in private placement transactions in 2002 and 2003, as described in previous filings with the U.S. Securities and Exchange Commission including its Annual Report on Form 10-K for the year ended December 31, 2002. If all of the warrants are exercised, the number of currently outstanding Common Shares would increase by approximately 27.5%, to 18,817,576. The impact of the issuance of a significant amount of Common Shares from these warrant exercises may place substantial downward pressure on the market price of the Corporation's Common Shares.

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, and the Long Valley, Paredones Amarillos, Amayapampa, Hasbrouck, Three Hills, Guadalupe de los Reyes, Wildcat, and Yellow Pine projects. The Corporation holds the Maverick Springs, Mountain View, Long Valley, Hasbrouck, Three Hills, and Wildcat projects through its indirect wholly-owned subsidiary, Vista Nevada Corp.; the Hycroft mine is held through its indirect wholly-owned subsidiary, Hycroft Lewis Mine, Inc.; Paredones Amarillos and Guadalupe de los Reyes are held through its wholly-owned subsidiary, Minera Paredones Amarillos S.A. de C.V.; Amayapampa is held through its indirect wholly-owned subsidiary, Minera Nueva Vista S.A., and the Yellow Pine project is held through its indirect wholly-owned subsidiary, Idaho Gold Resources LLC. 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 from Newmont Mining Corporation ("Newmont") and the Mountain View gold project (described below) from Newmont's wholly-owned subsidiary Newmont Capital Limited. To acquire the interest in Maverick Springs, the Corporation paid cash of $250,000 and issued 141,243 equity units to

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Newmont, each unit comprised of one Common Share and one two-year warrant. Newmont retained a 1.5% net smelter returns royalty, and on October 7, 2003, the Corporation issued to Newmont 122,923 Common Shares and 122,923 warrants to purchase Common Shares. 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 Maverick Springs 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 4).

Maverick Springs is subject to a lease agreement (the "Artemis lease"), between Newmont and Artemis Exploration Company. 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 (this has been paid) and advanced minimum royalties of $100,000 on October 1 in 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 (the 2002 and 2003 commitments have been met), a preliminary economic evaluation 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 June 9, 2003, the Corporation entered into an agreement granting Silver Standard Resources Inc. ("SSRI") an option to acquire the Corporation's interest in the silver mineralized material hosted in the Maverick Springs project. The Corporation will retain its 100% interest in the gold mineralized material. The agreement with SSRI is subject to the terms of the purchase agreement between Newmont and the Corporation. Under the agreement, SSRI will pay $1.5 million over four years. A payment of $300,000 was paid to the Corporation in 2003. The remaining $1.2 million will be used by the Corporation to fund exploration programs, land holding costs and option payments. SSRI and the Corporation have formed a committee to jointly manage exploration of the Maverick Springs project. The Corporation is the operator and has a 45% vote on the committee, and SSRI has 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 Gold 45% / SSRI 55%, subject to standard dilution provisions. (See also Consolidated Financial Statements—Notes 4 and 19).

In November 2002, the Corporation completed a 7,020-foot drill program on the 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.

In October 2003, the Corporation completed a 14-hole reverse circulation program totaling 14,020 feet. Intercepts indicate the potential for bulk-mineable gold-silver mineralization.

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° 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.

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Mineralization consists of micron-sized silver and gold with related pyrite, stibnite and arsenic sulfides. 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 sulfides 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 on December 17, 2002 by Snowden Mining Industry Consultants of Vancouver, British Columbia, the Maverick Springs project contains approximately 29.2 million tons of mineralized material with an average grade of 0.012 ounces of gold per ton and 0.97 ounces of silver per ton at a cut-off grade of 0.005 ounces of gold per ton. A technical study including results of the 2003 drilling program to update estimates of mineralized material is planned for 2004 using an independent consulting firm.

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 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 in the Mountain View property, the Corporation paid cash of $50,000 and issued 56,497 equity units, each unit comprised of one Common Share and a two-year warrant, to Newmont Capital, and Newmont Capital retains a 1.5% net smelter returns royalty. In addition, the Corporation was required to complete 4,000 feet of drilling before October 7, 2003 (this work was completed), and must complete an additional 4,000 feet of drilling before October 7, 2004. The Corporation may terminate this agreement at any time. After October 7, 2006, Newmont Capital 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 Capital exercises this right, Newmont Capital will relinquish its 1.5% net smelter returns royalty (see also Consolidated Financial Statements—Note 4).

Newmont Capital's interest in the Mountain View property is subject to an underlying lease and two other royalty arrangements, the principal terms of which are: the underlying 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 of the underlying lease. A 1% net smelter returns royalty also applies to certain other claims.

The Corporation completed a five-hole reverse circulation program totaling 4,330 feet in November 2003. The results indicate the presence of a new zone of bulk mineralization approximately 400 feet east of the known core of mineralization. Also, drill hole MV03-19 intercepted 20 feet assaying 0.112 ounces per ton gold that is 300 feet above an earlier drill hole that also intercepted higher grade mineralization, suggesting that this higher-grade zone is larger than previously known.

The Corporation expects to complete 4,000 feet of drilling in 2004.

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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 December 17, 2002 by Snowden Mining Industry Consultants of Vancouver, British Columbia, the Mountain View project contains approximately 23.2 million tons of mineralized material with an average grade of 0.013 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 and 2003, the amount of gold recovered was not material, as expected. The mine is currently on care and maintenance. From inception in 1987 until suspension of mining operations in December 1998, the Hycroft mine produced over 1 million ounces of gold.

Operating Statistics

Operating statistics for the Hycroft mine for the period 1999 to 2003 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

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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, is owned by the Corporation subject to a 4% net profits interest retained by the former owners, and 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 returns 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 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 a technical study completed by MRDI, Brimstone contains 41.9 million tons at an average grade of 0.020 ounces of gold per ton and 0.166 ounces of cyanide-soluble silver per ton, using a cut-off grade of 0.007 ounces of gold per ton. Cyanide-silver assays are a measure of the amount of silver that readily dissolves in a cyanide solution and reflect less than the total silver present.

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 on a gold price of $300 per ounce and an economic cut-off grade equivalent to 0.007 ounces of gold per ton. Silver was not reported.

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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

The Corporation believes 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, 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.

In 2004, the Corporation plans to complete a technical study using an independent third-party consultant to update mineralization estimates taking into account higher gold prices and updated production cost estimates to position the property for possible restart of production.

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 and January 2004 payments (see Consolidated Financial Statements—Note 4). 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 environmental studies of the biological, water and archeological resources of the area. The Corporation has acquired all related data from Royal in exchange for a 1% net smelter returns 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 is covered by younger rocks within the caldera.

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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 from 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 feet in length with widths ranging from 500 feet to 1,500 feet. The tabular bodies are generally flat-lying or have a shallow easterly dip. Mineralization is typically from 50 to 200 feet 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 gold ounces per ton. Within the continuous zones of low-grade gold mineralization (above 0.010 gold ounces per ton) are numerous zones of higher grade mineralization above 0.050 gold ounces per ton, particularly in the Hilton Creek zone, which may relate to zones of enhanced structural preparation. Mineralized zones typically correlate with zones of more intense clay alteration or argillization and/or silicification.

Based on a third-party technical study completed February 20, 2003 by Mine Development Associates of Reno, Nevada, the Long Valley project contains approximately 68.3 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.

The Corporation is planning a drilling and mineralized material review program in 2004 to potentially upgrade the quality of the mineralized material.

Paredones Amarillos

Paredones Amarillos is located 40 miles 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, and on August 29, 2003 the Corporation paid Viceroy the remaining Cdn $0.5 million due pursuant to the acquisition contract (see also Consolidated Financial Statements—Note 4).

The Paredones Amarillos project has been a significant exploration target since the 1980s. In 1997, Echo Bay Mines Ltd. ("EBM") completed a final feasibility study for an open pit mine on the project. As a result of the subsequent decline in gold prices, start-up was postponed. EBM holds a 2% net profits interest on certain concessions of the project, subject to a cap of $2 million. Additionally, Minera Tepmin, S.A. de C.V., holds a 1% net smelter returns royalty on two concessions. 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.

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

On December 30, 2003, Resource Development Inc. ("RDi") of Denver, Colorado, an independent engineering firm, completed a study commissioned by the Corporation to review metallurgical test work and the bankable feasibility study completed by EBM to evaluate whether a revised flow sheet could lead to a reduction in capital and/or operating costs. RDi reported that by changing the flow sheet from whole-ore leaching to gravity and production of a flotation concentrate with subsequent leaching of the flotation concentrate, a reduction in both capital and operating costs could be achieved. Cash operating costs are forecast at $196 per gold ounce, down 13% from the previous EBM study and total costs are estimated at $279 per gold ounce, a reduction of 11% from EBM's previous work.

The Corporation plans to commission a metallurgical test program in 2004 to confirm the viability of the revised process flow sheet, and also plans to study the mining portion of EBM's final feasibility study to determine if estimated costs can be lowered further through optimization of EBM's mine design and operating parameters.

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 on August 20, 2002, the Paredones Amarillos project contains approximately 61.4 million tons of mineralized material with an average grade of 0.031 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.

On December 11, 2003, the Corporation reached an agreement to sell the Amayapampa project to Luzon Minerals Ltd. ("Luzon") of Vancouver, British Columbia, Canada. Completion of the transaction is subject to the receipt of all regulatory and other approvals, and completion of due diligence satisfactory to Luzon by June 1, 2004. During this due diligence period, Luzon has agreed to update the feasibility study, complete a technical report in compliance with Canadian National Instrument 43-101, and seek the required financing for the project. Luzon issued the Corporation 50,000 common shares at the start of the due-diligence process, and during the due diligence period, Luzon will pay the Corporation $10,000 per

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month for the first four months, then $15,000 per month for the fifth and sixth months. At completion of the due diligence period, provided Luzon elects to proceed, Luzon will pay the Corporation $930,000 and issue the Corporation 2,000,000 common shares. At the earlier of start of construction or January 1, 2006 Luzon will pay the Corporation $4,000,000 or at the Corporation's election, a combination of shares and cash based on Luzon's share price, not to exceed 5,200,000 shares or $4,000,000 cash. Luzon will grant the Corporation a 3% net smelter returns royalty where the price of gold is less than $450 per ounce of gold and a 4% net smelter returns royalty where the price of gold is $450 per ounce of gold or more.

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.

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 veins 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, can not generally be mapped outside of the main structural zone that 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,

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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 were 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.

Hasbrouck

The Hasbrouck property is located in southwestern Nevada about 5 miles south-southwest of the town of Tonopah in Esmeralda County, Nevada, adjacent to U.S. Highway 95 and approximately half-way between Reno and Las Vegas. The property consists of 22 patented lode mining claims and 61 unpatented lode claims that cover an area of approximately 1,300 acres.

On May 23, 2003, the Corporation executed a purchase agreement with Newmont Capital Limited ("Newmont Capital"), a subsidiary of Newmont Mining Corporation, which includes both the Hasbrouck property and the Three Hills property, which lies approximately 4.5 miles to the north-northwest. Terms of the purchase include a $50,000 cash payment on signing and $200,000 or, at the Corporation's discretion, the equivalent in the Corporation's Common Shares one year after signing. The value of the Common Shares will be based on the average AMEX closing price of the Common Shares over the ten-trading-day period ending one day before the first anniversary of the agreement. Newmont Capital, at its option, would retain either: (a) a 2% net smelter returns royalty in each project together with the right to a $500,000 cash payment at the start of commercial production at either project and a further $500,000 cash payment if, after the start of commercial production, the gold price averages $400 per ounce or more for any three-month period; or (b) the right to acquire 51% of either or both projects. The latter right would be exercisable only after the later of four years or the time when the Corporation has incurred aggregate expenditures of $1.0 million to acquire, explore and hold the projects and would include Newmont Capital paying the Corporation cash equaling 200% of the expenditures made by the Corporation on the related property. In this event, Newmont Capital would become operator of a joint venture with the Corporation, and both parties would fund the project through to a production decision. The Corporation's contribution to the joint venture during this period is capped at $5.0 million, $3.0 million of which Newmont Capital would finance for the Corporation and recover, with interest, exclusively from related project cash flows. The Corporation would also grant Newmont a right of first offer with respect to subsequent sale of the projects by the Corporation. An additional 1.5% net smelter royalty on the Hasbrouck property is held by a private party.

Geology

The property is located on Hasbrouck Mountain, which is thought to lie along the western edge of a caldera. The mountain is underlain by gently dipping ash-flow, air-fall and waterlain tuffs and volcaniclastic sediments of the Miocene Siebert Formation. Several occurrences of chalcedonic sinter deposits occur

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near the summit of the mountain. Gold and silver mineralization in the Hasbrouck deposit appears to have formed relatively close to the paleo-surface in an epithermal, hot spring environment. The mineralization is concentrated in the Siebert Formation, in units stratigraphically below the chalcedonic sinter deposits that are exposed near the top of Hasbrouck Mountain. Two zones of mineralization are presently defined. The "Main" zone includes the bulk of mineralization at Hasbrouck, while the small "South Adit" zone lies 700 to 1000 feet to the south of the "Main" zone.

A third-party technical study was completed for the Corporation by Mine Development Associates of Reno, Nevada on August 29, 2003. The Hasbrouck study was developed using data from 54,339 feet of drilling, principally comprised of 105 reverse circulation holes totaling 44,400 feet and 22 rotary drill holes totaling 8,980 feet. The drilling database was compiled from work performed by FMC Gold Co., Cordex Syndicate and Franco Nevada Inc. between 1974 and 1988. Based on this study, mineralized material above a cut-off of 0.010 ounces of gold per ton is 20.3 million tons with an average grade of 0.023 ounces of gold per ton and 0.32 ounces of silver per ton.

Three Hills

Three Hills is located in southwestern Nevada about 1 mile west of the town of Tonopah in Esmeralda County, Nevada, and about 4.5 miles northwest of the Hasbrouck property described above. Three Hills consists of 15 unpatented lode claims totaling approximately 201 acres.

On May 23, 2003, the Corporation executed a purchase agreement with Newmont Capital Limited, a subsidiary of Newmont Mining Corporation, which included both the Hasbrouck property and the Three Hills property. The terms of this agreement are detailed under the Hasbrouck description above.

Geology

Three Hills is located in the Walker Lane structural domain of the Basin and Range physiographic province. It is in an area of structural disruption resulting from a series of orogenic events occurring in Paleozoic, Mesozoic and Cenozoic times. Basin and Range high-angle normal faults control the mineralization at Three Hills, where they cut the Siebert Formation. Gold mineralization occurs in a zone of pervasive silicification and in the Siebert Formation and the upper 10 to 30 feet of the Fraction Tuff. The contact between these two units contains consistently higher grades of gold and is more commonly argillized than silicified.

Mine Development Associates of Reno, Nevada, completed a third-party technical study for the Corporation on August 29, 2003. The Three Hills study included data from 62,874 feet of drilling, comprised of 183 reverse circulation holes totaling 54,657 feet, 45 air-track and rotary holes totaling 6,320 feet and 9 diamond drill holes totaling 1,897 feet. The drilling was completed by Echo Bay Mines Ltd., Eastfield Resources, Saga Exploration and Cordex Syndicate between 1974 and 1996. Based on this study, mineralized material above a cut-off of 0.010 ounces of gold per ton is 5.7 million tons with an average grade of 0.023 ounces of gold per ton.

Guadalupe de los Reyes

Guadalupe de los Reyes is located in the western foothills of the Sierra Madre Occidental mountain range, approximately 68 miles by air (124 miles by road) north of the coastal city of Mazatlán, and 19 miles by road southeast of the town of Cosalá in Sinaloa State, Mexico. The mineral concessions include two titled concessions for exploitation and three titled concessions for exploration, all covering about 1,475 acres.

On August 1, 2003, the Corporation executed an agreement to acquire a 100% interest in the Guadalupe de los Reyes gold project and a data package associated with the project and general area, for aggregate consideration of $1.4 million and a 2% net smelter returns royalty. During a due diligence period leading up to the signing of the purchase agreement, the Corporation made payments to the owner, Sr. Enrique

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Gaitan Maumejean, totaling $100,000, and upon exercising its option to complete the purchase, paid an additional $300,000. On August 1, 2004, the Corporation will pay a further $500,000 in cash or Common Shares at the discretion of the Corporation. An additional $500,000 in cash will be paid by way of $100,000 payments on each of the second through sixth anniversaries of the signing of the formal agreement, with the outstanding balance becoming due upon commencement of commercial production. A 2% net smelter returns royalty will be paid to the previous owner and may be acquired by the Corporation at any time for $1.0 million. The Corporation retains the right to terminate the agreement at any time.

Geology

Guadalupe de los Reyes occurs in a late Cretaceous–to Tertiary-age volcanic sequence of rocks. Gold and silver mineralization has been found along a series of northwesterly and west-northwesterly trending structural zones. Mineralization in these zones is typical of low sulfidation epithermal systems. Eight main target areas have been identified along three major structural zones. Several of these targets have bulk tonnage potential which may be amenable to open-pit mining, including the El Zapote, San Miguel, Guadalupe Mine, Tahonitas, and Noche Buena zones. The El Zapote target occurs in the Mariposa-El Zapote-Tahonitas structural zone on the western side of the project area and has been mapped for a distance of 2 miles. The El Zapote deposit is one of three deposits found along this structural zone, with the inactive underground Mariposa Mine 0.6 miles to the northwest and the Tahonitas prospect 0.3 miles to the southeast. The Guadalupe zone occurs as the northwest extension of the mineralized structures that were developed by underground mining along approximately 3,280 feet of the veins and to some 1,300 feet deep. The Guadalupe zone is found in the northeast portion of the area and has produced the majority of precious metals within the district. The San Miguel and Noche Buena zones are enclosed by the same northwestern trending structure in between the El Zapote-Mariposa and the Guadalupe structures.

A third-party technical study was performed for the Corporation and reported on July 17, 2003 by Pincock, Allen & Holt, of Denver, Colorado, using assay data from 381 reverse circulation drill holes totaling 118,633 feet. The drilling was performed by Northern Crown Mines Limited from 1993 to 1997. Based on this study, mineralized material above a cutoff grade of 0.016 ounces of gold per ton is 7.0 million tons averaging 0.040 ounces of gold per ton and 0.67 ounces of silver per ton.

Wildcat

Wildcat is located about 35 miles northwest of Lovelock and 26 miles south of the Corporation's Hycroft mine in Pershing County, Nevada. The project consists of 74 unpatented claims and 4 patented claims.

During September and October 2003, the Corporation concluded due diligence reviews and executed formal purchase agreements to acquire the Wildcat project and the associated exploration data in three separate transactions. On September 23, 2003, the Corporation purchased 71 unpatented mining claims from Monex Exploration, a partnership, for $200,000 on signing and $300,000 on or before August 15, 2004. On commencement of commercial production, the Corporation will make a one-time production payment in the amount of $500,000. Under the terms of the agreement, the Corporation has the right to terminate the agreement at any time prior to the August 15, 2004 payment without penalty. Thirteen of the claims are subject to an underlying 0.4% net smelter returns royalty, and the remaining 58 claims are subject to an underlying 1% net smelter returns royalty.

On October 12, 2003, the Corporation purchased a 100% interest in the Vernal unpatented mining claim from David C. Mough and Jody Ahlquist Mough for $50,000 on signing and $50,000 on or before October 12, 2004, for a total consideration of $100,000. Under the terms of the agreement, the Corporation has the right to terminate the agreement at any time prior to the second payment without penalty.

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On October 28, 2003, the Corporation purchased four patented mining claims and exploration data from Sagebrush Exploration, Inc. ("Sagebrush") for 50,000 Common Shares of the Corporation issued and delivered to Sagebrush upon the closing of the transaction. The 4 patented claims are subject to an underlying net smelter returns royalty of 1% for gold production between 500,000 and 1,000,000 ounces, increasing to 2% on production in excess of 1,000,000 ounces.

Geology

Wildcat lies in the Seven Troughs Range which is underlain by Triassic and Jurassic sedimentary rocks and has been intruded by Cretaceous granodiorite. Volcanic domes and plugs of rhyolite, quartz latite, trachyte, and andesite have been emplaced by Tertiary volcanism. Tertiary flows of pyroclastic debris, and vitrophyres of rhyolite, quartz latite, trachyte, and andesite composition blanket much of the area. The property contains structurally controlled epithermal gold and silver mineralization identified in four areas: Hero/Tag, Main, Northeast and Knob 32. The four areas have generally similar geology and mineralization with precious metals mineralization spatially associated with the contact between granodiorite and overlying tuff. Gold mineralization occurs with low-temperature silica, chalcedony and pyrite. The Main, Northeast, and Knob 32 deposits appear to be part of the Hero/Tag deposit, though structurally displaced.

The principal low-grade zone that essentially encompassed all the mineralization is tabular and dips gently to the southeast. There appear to be two main styles of mineralization based on mapping, sampling, and statistics. There is a broad, low-grade zone surrounding higher-grade material. The principal host is the tuff in which the low-grade precious metal mineralization is represented by pervasive and intense silicification. The underlying granodiorite also contains a low-grade disseminated style of mineralization with higher grade silicified breccias occurring generally as stockwork within it. Generally, the granodiorite has higher grade and is not silicified. Any silicification is restricted to adjacent veins and veinlets, occasionally being discrete veins as were exploited historically, but also resulting in a large-tonnage stockwork. All of the tuff was altered by epithermal solutions; however, much of the granodiorite is unaltered. High-grade material includes multi-episodic chalcedonic silica veins and breccias.

On November 11, 2003, Mine Development Associates of Reno, Nevada completed a third-party technical study for the Corporation. Using data from one underground channel sample, 245 reverse circulation drill holes and 11 diamond drill holes totaling 95,466 feet, mineralized material above a cut-off grade of 0.010 ounces of gold per ton was estimated at 38.1 million tons grading 0.018 ounces of gold per ton and 0.16 ounces of silver per ton.

Yellow Pine

The Yellow Pine gold project, consisting of 17 patented mining claims and covering about 304 acres, is located in central Idaho, 60 miles east of McCall in Valley County.

On November 7, 2003, the Corporation, through Idaho Gold Resources LLC ("Idaho Gold"), an indirect, wholly-owned subsidiary of the Corporation, entered into an Option to Purchase Agreement with Bradley Mining Company for a nine year option to purchase 100% of Yellow Pine for $1,000,000. Idaho Gold made an option payment of $100,000 upon execution of the agreement and the agreement calls for Idaho Gold to make nine yearly payments of $100,000 on or before each anniversary date of the agreement, for a total option payment price of $1,000,000. If Idaho Gold exercises its option to purchase the project, all option payments shall be applied as a credit against the purchase price of $1,000,000. Idaho Gold has the right to terminate the agreement at any time without penalty. Eleven of the claims are subject to an underlying 5% net smelter returns royalty.

Geology

The Yellow Pine Mining District is located within the Cretaceous age Idaho Batholith, near its eastern border and adjacent to the Meadow Creek fault zone. The gold deposits of the Yellow Pine district are

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hosted primarily in the quartz monzonites of the Idaho batholith and within the major shear and fault zones that transect the district. Ore deposits also occur in the metasediments of a large roof pendant within the granitic rocks. Historic mining of the Yellow Pine and the Homestake open pits on the Yellow Pine property has depleted the oxide gold mineralization, but significant sulfide gold mineralization remains unmined.

Gold and antimony occur principally in veinlets, stockworks, fissure-fillings, and massive lenses. Gold appears to be associated with pyrite and arsenopyrite whereas silver is associated with antimony. The primary gold mineralization occurs within a zone of stockwork sulfide veinlets also containing stibnite, pyrite and arsenopyrite. The principal antimony mineral is stibnite. Tungsten occurs in the mineral scheelite. Deposits are characterized by argillic and sericitic alteration with some silicification.

The Meadow Creek fault and its subsidiary structures trend north and northeast across the district and are a major controlling factor on the regional mineralization. The Yellow Pine mine, the largest mineralized area, is located in the Meadow Creek fault hanging wall, where the fault strike changes from northerly to northeasterly and a zone of stockwork sulfide veining occurs. The mineralized zone is about 2,000 feet long by 700 feet wide with a vertical extent of up to about 1,000 feet. It is cone shaped with the narrower, bottom area of the cone indicating possible continuity of the mineralization at depth both down dip along the hanging wall of the Meadow Creek fault and to the northwest.

The Homestake area appears as a continuation to the northeast of the Yellow Pine zone. The two zones have some similarities as well as differences. The Homestake sulfide zone is also directly associated with the Meadow Creek fault. It appears however to have a somewhat different structural style from the Yellow Pine area. The mineralized zone is about 1,500 feet long by 600 feet wide and up to 350 feet vertically. It has an overall tabular shape with a true width of about 100 to 200 feet. Drill hole information indicates that the mineralization at Homestake is encountered in both the hanging wall of the Meadow Creek fault zone as well as the footwall. Gold grades tend to be quite a bit lower than at the Yellow Pine area. The Yellow Pine and Homestake sulfide zones may be interconnected.

Pincock, Allen & Holt, of Denver, Colorado, completed a third-party technical study for the Corporation on November 17, 2003. At an assay database for 538 drill holes totaling 120,922 feet of drilling was used to estimate mineralized material in the Yellow Pine and Homestake sulfide zones using a cutoff grade of 0.025 ounces of gold per ton. Mineralized material is estimated at 33.8 million tons averaging 0.066 ounces of gold per ton.

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. Further information is contained in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2002. The Corporation does not anticipate that this dispute will result in any material adverse impact on the Corporation or the value of its holdings in Bolivia; however, in the interest of full disclosure, this matter is reported herein.

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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, 2003.

EXECUTIVE OFFICER OF THE CORPORATION

As of March 17, 2004, the Corporation had one executive officer, namely Ronald J. McGregor, President and Chief Executive Officer. Information as to Mr. McGregor is set forth below.

The above executive officer has not entered into any arrangement or understanding with any other person pursuant to which he was or is to be appointed or elected as an executive officer of Vista Gold or a nominee of any other person.

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PART II

ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

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 17, 2004, the last reported sale price of the Common Shares of Vista Gold on the American Stock Exchange was $5.22 and on the Toronto Stock Exchange was Cdn $6.95. As at March 17, 2004, there were 14,755,078 Common Shares issued and outstanding, and the Corporation had 792 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, 2003. See also the Consolidated Financial Statements—Note 10.

Under the current terms of the Corporation's Stock Option Plan, a maximum of 1,000,000 Common Shares may be issued.

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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 "—Certain Canadian Income Tax Considerations for U.S. Residents," below.

Certain Canadian Income Tax Considerations for U.S. Residents

The following is a general summary of certain Canadian federal income tax consequences of the ownership and disposition of Common Shares generally applicable to holders of Common Shares who (i) are residents of the United States for the purposes of the Canada-United States Income Tax Convention (1980), as amended (the "Convention"), (ii) are not resident in Canada for the purposes of the Canadian Tax Act (as defined below), (iii) hold their common shares as capital property, (iv) deal at arm's length with the Corporation, and (v) do not use or hold, and are not deemed to use or hold, their common shares in a business carried on in Canada. In this summary, these holders of Common Shares are referred to as U.S. Residents.

It is the CCRA's published policy that certain 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 Convention.

This summary is based upon the current provisions of the Income Tax Act (Canada) and the regulations enacted thereunder (collectively referred to as the Canadian Tax Act) and the Convention as in effect on the date hereof as well as a current understanding of the current published administrative and assessing policies of the Canada Customs and Revenue Agency (the "CCRA"). This summary is not exhaustive of all possible Canadian federal income tax consequences and does not take into account provincial, territorial or foreign income tax considerations, nor does it take into account or anticipate any changes in law, whether by judicial, governmental or legislative decision or action except the specific proposals (the "Tax Proposals") to amend the Canadian Tax Act publicly announced by or on behalf of the Minister of Finance (Canada) before the date hereof. No assurance can be given that the Tax Proposals will be enacted into law in the manner proposed, or at all.

This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any holder or prospective holder of Common Shares and no representations are made with respect to the Canadian federal income tax consequences to any particular holder or prospective holder of Common Shares. Accordingly, holders or prospective holders of Common Shares should consult their own tax advisors for advice with respect to their particular circumstances. The discussion below is qualified accordingly.

Disposition of Common Shares

A U.S. Resident will not be subject to tax under the Income Tax Act (Canada) (the "Canadian Tax Act") in respect of any capital gain realized by such U.S. Resident on a disposition of Common Shares unless the Common Shares constitute "taxable Canadian property" (as defined in the Canadian Tax Act) of the U.S. Resident at the time of disposition. As long as the Common Shares are listed on a prescribed stock exchange (which currently includes the Toronto Stock Exchange and American Stock Exchange), the Common Shares generally will not constitute taxable Canadian property of a U.S. Resident unless, at any time during the 60-month period immediately preceding the disposition, the U.S. Resident, persons with whom the U.S. Resident did not deal at arm's length, or the U.S. Resident together with all such persons, owned or was considered to own 25% of more of the issued shares of any class or series of shares of the capital stock of the Corporation.

If the Common Shares are taxable Canadian property to a U.S. Resident at the time of disposition, any capital gain realized on the disposition of such Common Shares will, according to the Convention,

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generally not be subject to Canadian federal income tax unless the value of the shares of the Corporation at the time of the disposition is derived principally from "real estate situated in Canada" within the meaning set out in the Convention. A U.S. Resident whose Common Shares are taxable Canadian property should consult their own advisors.

Taxation of Dividends on Common Shares

Under the Canadian Tax Act, dividends on common shares paid or credited, or deemed to be paid or credited, to a U.S. Resident will be subject to Canadian withholding tax at a rate of 25% (subject to reduction under the provisions of the Convention) of the gross amount of the dividends. Currently, under the Convention, the rate of Canadian withholding tax applicable to dividends paid or credited to a U.S. Resident is: (i) 5% of the gross amount of the dividends if the beneficial owner of the dividends is a company that is a resident of United States which owns at least 10% of the Corporation's voting stock, or (ii) 15% of the gross amount of the dividends if the beneficial owner of such dividends is any other resident of the United States. In addition, under the Convention, dividends may be exempt from Canadian non-resident withholding tax if paid to certain U.S. Residents that are qualifying religious, scientific, literary, educational or charitable tax-exempt organizations and qualifying trusts, companies, organizations or arrangements operated exclusively to administer or provide pension, retirement or employee benefits that are exempt from tax in the United States and that have complied with specific administrative procedures.

ITEM 6.    SELECTED FINANCIAL DATA.

The selected financial data in the 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.

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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 18 of the Consolidated Financial Statements).

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

The following discussion and analysis should be read in conjunction with the consolidated financial statements of the Corporation for the three years ended December 31, 2003 and the related notes thereto, which have been prepared in accordance with generally accepted accounting principles ("GAAP") in Canada. Reference to Note 18 to the consolidated financial statements should be made for a discussion of differences between Canadian and United States GAAP and their effect on the financial statements. All amounts stated herein are in U.S. dollars, unless otherwise noted.

Overview

Vista Gold is engaged in the evaluation, acquisition, exploration and advancement of gold exploration and potential development projects with the aim of adding value to the 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 or introducing technological innovations. The Corporation expects that emphasis on gold project acquisition and improvement will continue in the future.

The Corporation currently owns or controls eleven gold properties: the Maverick Springs, Mountain View, Hasbrouck, Three Hills and Wildcat projects and the Hycroft mine, all in Nevada; the Long Valley project in east central California; the Yellow Pine project in Idaho; the Paredones Amarillos and the Guadalupe de los Reyes projects in Mexico; and the Amayapampa project in Bolivia. 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's significant activities during 2003 include the Corporation acquiring interests in six gold properties through purchases or option to purchase agreements; posting letters of credit for $1.7 million with the U.S. Bureau of Land Management, Nevada State Office, to cover increases in the reclamation bonding at the Hycroft mine for revised reclamation costs; and completion of a drilling program for the

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Maverick Springs project in October 2003 indicating further expansion of gold-silver mineralization. In December 2003, the Corporation, through its HRDI subsidiary, signed a letter of intent to provide a new bond package for the Hycroft mine to include an insurance component and cover all existing reclamation liability at the Hycroft mine. In February 2003, a private placement for $3.4 million was completed with shareholder approval, providing net proceeds of $2.9 million. An option agreement to sell the Amayapampa gold project was entered into in December 2003 with a due diligence period expiring on June 1, 2004.

Outlook

Gold prices started 2003 at $344 per ounce and finished the year at $416 per ounce. Management believes that this trend will continue for several years to come and as a result, the properties that are owned and controlled by the Corporation which contain mineralized material could gain in value. However, there is no assurance that gold prices will continue to rise (see "Part I—Item 1, Business—Risk Factors—The price of gold is subject to fluctuations...".).

At the end of 2002, the Corporation owned or controlled five properties containing mineralized material. At the end of 2003, six new properties had been added through the use of funds raised through private placements and the exercise of warrants. The Corporation expects that emphasis on gold project acquisition will continue in the future. In addition, through exploration drilling and engineering studies, management believes that additional value can be added to most of the projects by advancing them closer to a production decision.

The Corporation does not currently generate operating cash flows. Subject to sustained gold prices, management expects to generate revenues and cash flows in the future. The Corporation may generate revenues and cash flows 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 sales for cash and/or royalties, or project development and operation.

The Corporation's working capital of $6.1 million at December 31, 2003, is not sufficient to cover the total 2004 cash requirements of $8.8 million which includes the $6.6 million for bond payments for Hycroft and $2.2 million for general operations, exploration activities and land holding costs. This raises substantial doubt with respect to the Corporation's ability to continue as a going concern. Subsequent to year end 2003, warrants have been exercised which reduced the expected shortfall, and there are still outstanding warrants that, if exercised, would provide proceeds aggregating approximately $10.4 million for the Corporation. There are, however, no assurances that the balance of the warrants will be exercised during 2004 and the Corporation may find it necessary to raise additional funds through private placements. While the Corporation has been successful in raising money by private placements in the past, there are no guarantees that the Corporation will be successful in the future. Management believes, however, that absent sufficient funding through warrant exercises or a private placement, sale or joint venture of one or more of the Corporation's current projects will generate sufficient revenue to cover any shortfall in 2004.

With respect to the Corporation's current property holdings, aggregate expenditures for purchase installments, to maintain options and conduct exploration activities are currently anticipated to be approximately $527,600 in 2005 and $627,600 in 2006. At present, the Corporation would anticipate raising funds to meet these long-term obligations through equity private placements, or joint venture efforts or sale of properties currently controlled. In subsequent years, the Corporation anticipates that it will need to raise additional capital to meet property purchase installment obligations and scheduled payments on those properties that the Corporation decides to retain under option. Further, additional capital would be necessary to acquire properties and conduct exploration drilling and re-engineering studies on current and newly acquired properties. However, there can be no assurance that the Corporation will be successful in efforts to raise additional capital.

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Results from Operations

Summary

The Corporation's 2003 consolidated net loss was $2.7 million or $0.22 per share compared to the 2002 consolidated net loss of $2.8 million or $0.41 per share for a net decrease of $0.1 million. The improvement of $0.1 million in 2003 includes a 2002 non-recurring charge of $1.0 million for a reclamation obligation increase; offset by increased holding costs at the Hycroft mine of $0.3 million; increased holding costs at the Amayapampa property of $0.1 million; increased general and administrative costs of $0.2 million; increased investor relations costs of $0.2 million; and increased depreciation of $0.1 million.

As compared to a consolidated net loss of $3.3 million or $0.72 per share in 2001, the 2002 consolidated net loss decreased by $0.5 million. The improvement in 2002 is a result of reduced holding costs at the Hycroft mine of $0.6 million; lower depreciation and amortization costs of $0.2 million; and a 2001 non-recurring charge of $0.8 million for settlement of a lawsuit, net of related $0.2 million cost recoveries in 2002; offset by a $1.0 million expense to increase the provision for reclamation at Hycroft; and a $0.1 million increase in general and administrative expenses.

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 and extract gold through carbon stripping processes. The extracted gold is then 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 $0.3 million in 2003 and $0.6 million in 2002 have been accounted for as an offset to exploration, property evaluation and holding costs. Gold revenues in 2003 and 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.

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 are offset by proceeds received from gold sales of $0.3 million in 2003 and $0.6 million in 2002, are no longer recorded as production costs, but are accounted for as exploration, property evaluation and holding costs. Recorded 2003 and 2002 production costs are therefore nil.

Exploration, property evaluation and holding costs

Exploration, property evaluation and holding costs increased approximately $0.4 million from $0.6 million in 2002 to $1.0 million in 2003. The increase in net holding costs for the Hycroft mine of approximately $0.3 million primarily contributes to the overall increase noted. Actual holding costs for the Hycroft mine did not in fact increase from the prior year, but rather, gold recovery from the heap leach pads decreased from 2002 resulting in the net increase in costs.

Holding costs for the Amayapampa project increased during 2003 by approximately $0.1 million with the addition of legal, accounting and land services not provided in 2002, as well as the absence of offsetting royalties collected in 2002 from the sale of the Capa Circa mine occurring in 2000. The sale agreement for Capa Circa calls for a continued royalty payment which is not being honored by new management at the mine. The Corporation is taking the necessary steps to try and rectify this situation.

Corporate administration and investor relations

Corporate administrative and investor relations costs were $1.6 million in 2003 compared to $1.2 million in 2002, representing an increase of $0.4 million. This increase is the result of a more comprehensive investor relations program, the cost of which increased $0.2 million from 2002, and a $0.2 million increase in

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general expenses and payroll costs with the addition of personnel and the use of consultants during the year. Management believes these additional personnel and consultants played a significant role in the acquisition of properties that occurred in 2003.

Corporate administration and investor relations costs were $1.23 million in 2002, slightly higher than the $1.16 million in 2001. The increase reflects new investor relations and business development programs, consistent with the increased level of gold project acquisition and private placement financings in 2002.

Depreciation, depletion and amortization

Depreciation, depletion and amortization increased in 2003 by approximately $0.1 million to $0.2 million in 2003 from $0.1 million in 2002. This increase is primarily the result of plant and equipment at the Hycroft mine being depreciated in 2003 over the full year where depreciation was not calculated as a result of write-downs to salvage value in prior years.

Depreciation, depletion and amortization costs at Hycroft were $0.1 million in 2002 compared to $0.3 million in 2001. This decrease is because 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.

Other Income and Expenses

Provisions for reclamation and mine closure costs

During 2003, the Corporation increased its accrued mine closure costs by $14,000 for employee severance accruals. With consideration given to this increase, the accrued reclamation obligation and mine closure costs at year-end 2003 was $4.17 million as compared to $4.16 million in 2002.

As previously noted, the Corporation has adopted the new accounting standard for asset retirement obligations, CICA 3130. Management regularly reviews the fair value of reclamation obligation estimates where any increase in the fair value of the estimate will be recorded in the period in which the increase is incurred. The application of this standard did not result in an increase in the reclamation obligations during the year 2003.

Consistent with the U.S. 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 its accrued reclamation obligation by $1.04 million in 2002 to $4.16 million from $3.12 million. No such adjustments were made in 2001.

Provision for settlement and cost recoveries related to USF&G lawsuit

In 2001, the Corporation recorded a non-recurring provision of $0.8 million for the settlement of the USF&G lawsuit. Subsequently, the Corporation settled the lawsuit for approximately $20,000 less than provisioned. Further related to the settlement, the Corporation received marketable securities valued at approximately $220,000 million at the time of receipt.

There were no similar provisions or recoveries in 2003 or 2002.

Stock-based compensation

During 2003, the Corporation granted 10,000 stock options to non-employees valued at $28,941 compared to 20,000 options granted to non-employees in 2002 valued at $24,602. The Corporation valued the granted options in both 2003 and 2002 using the Black-Scholes model. The Corporation did not grant stock options to non-employees during 2001.

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Gain on disposal of marketable securities

Gain on disposal of marketable securities increased in 2003 as $149,000 in gains were realized in 2003 compared to no realized gain during the same period in 2002. No gains were realized in 2001, either.

In 2002, the Corporation received 628,931 common shares of Golden Phoenix Minerals, Inc. ("GPMI") in consideration for benefits GPMI received as a direct result of the Corporation's facilitation of the USF&G settlement noted above. These shares had a fair-market value of $220,000 when received. An $84,000 write-down to fair value was made to reflect an estimated $136,000 fair-market value of the GPMI shares at December 31, 2002.

In March of 2003, a $33,000 write-down to fair-market value was made to reflect an estimated $103,000 fair-market value of the GPMI shares. During the remainder of 2003, the Corporation liquidated the 628,931 shares of GPMI resulting in a gain of $92,000.

Additionally, the Corporation obtained 385,000 common shares of Esperanza Minerals ("Esperanza") valued at $39,755 in February 2003. As of December 31, 2003, the Corporation held 300,000 of the Esperanza shares with a book value of $31,000. A gain of $57,000 on the sale of 85,000 Esperanza shares was realized in 2003.

In aggregate, the Corporation realized gains on the sale of marketable securities during 2003 of $149,000. No similar gains were realized in 2002 or 2001.

At December 31, 2003, the Corporation held marketable securities available for sale with a book value of $31,000. The Corporation purchased the securities for investing purposes with the intent to hold the securities until such time that it would be advantageous to sell the securities at a gain. Although there can be no reasonable assurance that a gain will be realized from the sale of the securities, the Corporation monitors the market status of the securities consistently in order to mitigate the risk of loss on the investment.

Gain on disposal of assets

No net gains or losses on the disposal of assets were recorded in 2003 as compared to a net gain of $83,000 in 2002. Net gains from disposals of assets in 2002 included a gain of $53,000 from the disposal of Canadian exploration claims and gains from sales of Hycroft equipment totaling $30,000.

Net gains on disposal of assets for 2002 totaled $0.83 million compared to net gains of $0.1 million in 2001.

Loss on foreign currency translation

Foreign currency translation losses occurring in 2002 and 2001 were reclassified to corporate administration costs as the amounts were negligible and are not reflected separately in the corresponding statements of loss reported by the Corporation in 2003.

Loss on foreign currency translation for the year 2003 totaled $44,000 compared to $19,000 in 2002. The increase of $25,000 is related to exchange differences realized between property obligation accruals in 2002 and related payments in 2003. These transactions include the accrual of a Cdn $500,000 liability for the purchase of the Paredones Amarillos project in 2002 and the subsequent payment of the liability in 2003 resulting in a transactional loss of $29,000.

The foreign currency loss in 2001 was $7,000 as compared to $19,000 in 2002. The comparative difference of $12,000 is in direct relation to increased foreign exchange volume during the year and is not attributed to any one significant transaction.

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Other income and expense

During 2003, the Corporation incurred no interest expense as it had no commercial debt during 2003. 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. Interest expense of $21,000 in 2001 related to debt was higher than the $14,000 incurred in 2002.

During 2003, the Corporation accumulated $40,000 in interest income from investing within a liquid savings account as compared to $22,000 in 2002. This difference is attributed to additional cash of approximately $8.1 million being raised from the completed private placement in February 2003, the residual exercise of warrants related to the 2002 and 2003 private placements and the exercise of stock options.

Financial Position, Liquidity and Capital Resources

Cash used in Operations

Cash used in operations was $3.0 million in 2003 compared to cash uses of $2.8 million in 2002 and $1.7 million in 2001.

The increase of $0.2 million in 2003 from 2002 can be attributed to the addition of one employee, administrative costs, property acquisitions and professional fees incurred during the year related to the completed private placement.

The increase of $1.1 million in 2002 from 2001 is primarily the result of repayment of debt in 2001 of $0.7 million. The remainder of the cash improvement reflects the Corporation's successful cost reduction efforts, offset by a reduction in gold revenues.

Investing Activities

Net cash used in investing activities in 2003 was $3.0 million compared to $1.2 million in 2002 and cash provided in 2001 of $3.0 million from the sale of equipment.

Cash used for property expenditures was $1.5 million in 2003 compared to $1.5 million in 2002 and nil in 2001. Cash property expenditures for 2003 included the acquisition costs of $646,000 for the Maverick Springs, Long Valley, Wildcat, Hasbrouck, Three Hills, Yellow Pine and Guadalupe de los Reyes projects. Options payments contributed $842,000 to the cash usage along with $961,000 for exploration and land holding costs. These cash expenditures are offset by cost recoveries during 2003 of $970,000 pursuant to the Maverick Springs gold/silver joint venture and option payments received from a third party for the potential acquisition of Amayapampa.

Proceeds from the disposal of fixed assets and supplies were nil in 2003, $0.2 million in 2002 and $3.0 million in 2001. The Corporation raised $0.2 million from the sale of Hycroft mining equipment and Canadian mining claims in 2002 as compared to $3.0 million from the sale of idle mining equipment at the Hycroft mine in 2001.

Other cash usages in 2003 consisted of plant and equipment acquisitions of $61,000 for mobile equipment at the Hycroft mine and computer hardware and software purchases for the corporate offices. During 2002 and 2001, no expenditures for additions to plant and equipment occurred.

In 2003, the Corporation invested $40,000 for the acquisition of marketable securities and received proceeds of $260,000 from related sales of marketable securities acquired in prior years. There were no investing activities related to marketable securities in 2002 or 2001.

In addition, $1.7 million cash was set aside in a restricted account for increased bond requirements at Hycroft in 2003, which was not required in 2002 or 2001.

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Financing Activities

The Corporation received net cash from financing activities of $8.1 million in 2003 compared to $6.8 million in 2002 and a net cash use of $0.7 million in 2001. Cash provided by financing activities in 2003 includes a net of $2.9 million from private placements, $4.9 million from the exercise of warrants and $0.3 million from the exercise of options.

The Corporation completed a $3.4 million private placement financing in February 2003 consisting of 1,400,000 special warrants, each priced at $2.43. The special warrants were automatically converted into equity units upon shareholder approval, which occurred in February 2003. Each equity unit consisted of one Common Share and one warrant (See Note 8). These gross proceeds were offset by a 10% cash finder's commission totaling $340,200 paid in connection with the private placement and direct costs connected with this private placement of $188,000. Net proceeds of $2.9 million from the February 2003 private placement were $2.9 million less than the February 2002 and December 2002 private placements completed in the prior year which together netted $5.8 million.

Warrants exercised during 2003 produced cash proceeds of $4.9 million compared to $1.0 million in 2002. During 2003, $0.6 million in cash proceeds were from the February 2003 private placement warrants, $1.5 million was from the February 2002 private placement warrants and $2.8 million was from the December 2002 private placement warrants. During 2002, warrants exercised from the February 2002 private placement provided $1.0 million in cash proceeds.

The exercise of stock options produced cash of $339,000 during 2003 as compared to $34,000 in 2002.

In 2001, the Corporation raised no cash from completed financings, warrant exercises or stock option exercises. During 2001, the Corporation used $0.7 million to repay debt in financing activities.

Liquidity and Capital Resources

At December 31, 2003, the Corporation's total assets were $26.5 million as compared to $20.7 million and $13.9 million for 2002 and 2001, respectively. Long-term liabilities as of December 31, 2003 totaled $4.2 million as compared to $4.2 million in 2002 and $3.1 million in 2001. At the same date in 2003, the Corporation had working capital of $6.1 million compared to $3.5 million in 2002 and a deficit of current assets to current liabilities of $0.2 million in 2001.

The Corporation's working capital of $6.1 million as of December 31, 2003, increased from 2002 by $2.6 million as compared to an increase from 2001 to 2002 of $3.3 million. The principal component of working capital for both 2003 and 2002 is cash and cash equivalents of $5.5 million and $3.4 million, respectively. Other components include marketable securities (2003—$31,000; 2002—$135,000), accounts receivable (2003—$642,000; 2002—$185,000) and other liquid assets (2003—$292,000; 2002—$342,000). The difference of $2.6 million in working capital from 2003 to 2002 relates to cash proceeds received from the exercise of warrants in December 2003 and a receivable of approximately $407,000 outstanding at year-end 2003. At December 31, 2003, the Corporation held no debt with banks or financial institutions and had a future liability of $200,000 due in 2004 for the purchase of the Hasbrouck and Three Hills

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projects. Remaining amounts for liabilities at year-end 2003 are related to trade and corporate administration.

Major cash commitments in 2004 are related to corporate administration and operations of approximately $1.8 million, property options and expenditure commitments of approximately $1.9 million, and bonding package cash requirements of $6.6 million for an aggregate cash usage of approximately $10.5 million. However, the total bonding package requirements will be offset by cash currently classified as restricted in the amount of $1.7 million reducing the 2004 cash requirements to $8.8 million.

Although the Corporation maintains a strong working capital position, the Corporation does not have sufficient working capital to satisfy cash requirements of $8.8 million for fiscal 2004 commitments. Current timing of 2004 commitments indicates the Corporation will be able to satisfy its cash commitments through June 2004.

The Corporation is investigating the possibility of raising additional capital through private placements and although management has been successful in the past, there can be no assurance that it will be able to raise additional capital in the future. The Corporation continues to actively pursue options to monetize its assets and attract other investors.

As of December 31, 2003, warrants outstanding to purchase Common Shares of the Corporation totaled 4,242,518 with a weighted average exercise price of $2.46 and potential gross proceeds of $10.4 million. Although the Corporation has received significant cash proceeds from the exercise of warrants issued in private placements, there can be no assurance that cash proceeds from the exercise of warrants will be received in the future to offset the working capital shortfall. Through February 16, 2004, however, the Corporation has received additional cash proceeds totaling $940,935. These proceeds are made up of $533,800 from the exercise of warrants, and a cash payment of $407,135 for a receivable recorded at year-end.

Transactions with Related Parties

Global Resource Investments Ltd.

On February 7, 2003, the Corporation completed a $3.4 million private placement financing of Special Warrants as discussed in Financial Statements—Note 8. The Corporation retained Global Resource Investments Ltd. ("Global") to find investors to purchase the Special Warrants and paid Global a cash commission of $340,200, equal to 10% of the proceeds of the Special Warrant Offering as consideration for Global's services as finder. In addition, the Corporation agreed to pay reasonable legal costs incurred by Global in connection with the Special Warrant Offering up to a maximum of $15,000. The Corporation understands that all of the shares of Global are beneficially owned by an individual that beneficially owned approximately 19.4% of the Common Shares of the Corporation as at February 7, 2003.

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Maverick Springs

In June 2003, the Corporation formalized an agreement to grant to Silver Standard Resources Inc., ("SSRI") an option to acquire the Corporation's interest in the silver mineralized material hosted in the Maverick Springs project in Nevada. The Corporation and SSRI have a common director. Under the terms of the agreement, the Corporation will retain its 100% interest in the gold mineralized material, SSRI 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 by the Corporation to fund exploration programs, land holding costs and option payments on the Maverick Springs project. At the time the transaction was completed, SSRI paid the Corporation $488,891, comprised of the required $300,000 payment due at closing plus $188,891 in exploration costs incurred through December 31, 2002. As of December 31, 2003, included in current assets is a receivable amount due from SSRI in the amount of $407,135 (2002—nil) to reimburse the Corporation for exploration expenditures incurred on the Maverick Springs project.

Subsequent Events

Agreement for New Bond for Hycroft

In December 2003, the Corporation's wholly-owned subsidiary, Hycroft Resources & Development, Inc. ("HRDI") reached an agreement in principle with member companies of American International Group, Inc. to replace the existing bond coverage for the Hycroft mine with a new bond package which includes an insurance component and covers all existing reclamation liability at the Hycroft mine. On January 30, 2004, the final bond package agreement was executed. The new bond package calls for an initial payment of $4.0 million and two additional payments of $1.3 million each due July 22, 2004, and December 22, 2004, respectively. The Corporation has remitted payment of $2.3 million and assigned letters of credit for $1.7 million to be applied to the initial payment amount. Pending approval of the new bonding instrument by the U.S. Bureau of Land Management, Nevada State Office, ("BLM"), the new insurance bonding instrument will replace the existing bond made up of a $5.1 million non-cash collaterized bond from American Home Assurance Company, letters of credit of $1.7 million posted directly with the BLM and the existing indemnity agreement between HRDI and the Corporation.

Agreement to Sell Amayapampa

In December 2003, the Corporation reached an agreement with Luzon Minerals Ltd. ("Luzon") to sell the Amayapampa project in Bolivia. Completion of the transaction is subject to the receipt of all regulatory and other approvals, and completion of due diligence satisfactory to Luzon by June 1, 2004. During this due diligence period, Luzon has agreed to update the feasibility study, complete a technical report, and seek the required financing for the project. Luzon issued the Corporation 50,000 common shares initially, and during the due diligence period, Luzon will pay the Corporation $10,000 per month for the first four months, then $15,000 per month for the fifth and sixth months. At completion of the due diligence period, provided Luzon elects to proceed, Luzon will pay the Corporation $930,000 and issue the Corporation 2,000,000 common shares. At the earlier of start of construction or January 1, 2006, Luzon will pay the Corporation $4,000,000 or at the Corporation's election, a combination of shares and cash based on Luzon's share price, not to exceed 5,200,000 shares or $4,000,000 cash. Luzon will grant the Corporation a 3% net smelter returns royalty where the price of gold is less than $450 per ounce and a 4% net smelter returns royalty where the price of gold is $450 per ounce or more.

The Corporation has completed a carrying value analysis for the Amayapampa project as it relates to the agreement reached with Luzon. The fair value of the Amayapampa property has been evaluated through a discounted future cash flow methodology. The methodology required the use of feasibility studies completed in 1997 and 2000, terms from the recent Option-to-Purchase agreement, assumptions for probable outcomes derived from the Option-to-Purchase agreement and estimates and assumptions for future gold prices. The results of the carrying value assessment for the Amayapampa project under the

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assumptions and estimates noted above led to the determination that no impairment to the current carrying value has occurred.

Significant Accounting Policies and Changes in Accounting Policies

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.

Mineral properties

Mineral property acquisition costs and exploration and development expenditures are recorded at cost and are deferred until the viability of the property is determined. General overhead, administrative and holding costs to maintain a property on a care and maintenance basis are expensed in the period they are incurred. If a project would be put into production, capitalized costs would be depleted on the unit of production basis.

Option payments and reimbursements 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.

Management of the Corporation regularly reviews the net carrying value of each mineral property. Where information and conditions suggest impairment, estimated future cash flows are calculated using estimated future prices, proven and probable reserves, weighted probable outcomes and operating capital and reclamation costs on an undiscounted basis. A reduction in the carrying value of each property would be recorded if the net book value exceeds the estimated future cash flows. Where estimates of future net cash flows are not available and where other conditions suggest impairment, management assesses if carrying values can be recovered.

Provision for future reclamation and closure costs

On January 1, 2003, the Corporation adopted the new accounting standard for asset retirement obligations, CICA 3110. The standard 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 fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. The adoption of this standard did not have any impact on the Corporation's financial position or results.

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

The Corporation is engaged in the acquisition of gold projects and related activities including exploration engineering, permitting and the preparation of feasibility studies. The value of the Corporation's properties is related to gold price and changes in the price of gold could affect the Corporation's ability to generate revenue from its portfolio of gold projects.

Gold prices may fluctuate widely from time to time and are affected by numerous factors, including the following: expectations with respect to the rate of inflation, exchange rates, interest rates, global and regional political and economic circumstances and governmental policies, including those with respect to gold holdings by central banks. The demand for, and supply of, gold affect gold prices, but not necessarily

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in the same manner as demand and supply affect the prices of other commodities. The supply of gold consists of a combination of new mine production and existing stocks of bullion and fabricated gold held by governments, public and private financial institutions, industrial organizations and private individuals. The demand for gold primarily consists of jewelry and investments. Additionally, hedging activities by producers, consumers, financial institutions and individuals can affect gold supply and demand. While gold can be readily sold on numerous markets throughout the world, its market value cannot be predicted for any particular time.

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 16, 2004; 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 18.

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, meets regularly with management to ensure that management is maintaining adequate internal controls and systems and meets regularly with the independent auditors prior to recommending 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.

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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, 2003 and 2002 and the consolidated statements of loss, deficit and cash flows for the years ended December 31, 2003, 2002 and 2001. 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, 2003 and 2002 and the consolidated results of its operations and cash flows for the years ended December 31, 2003, 2002 and 2001 in accordance with Canadian generally accepted accounting principles.

/s/ PricewaterhouseCoopers LLP

Chartered Accountants
Vancouver, British Columbia, Canada
February 16, 2004

Comments by the Auditors for U.S. Readers on Canada-U.S. Reporting Differences

In the United States, reporting standards for auditors require the addition of an explanatory paragraph (following the opinion paragraph) when the financial statements are affected by conditions and events that cast substantial doubt on the Corporation's ability to continue as a going concern such as those described in Note 1 of the consolidated financial statements. Our report to the shareholders dated February 16, 2004, is expressed in accordance with Canadian reporting standards, which do not permit a reference to such conditions and events in the auditors' report when these are adequately disclosed in the financial statements.

/s/ PricewaterhouseCoopers LLP

Chartered Accountants
Vancouver, British Columbia, Canada
February 16, 2004

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VISTA GOLD CORP. (An Exploration Stage Enterprise)
CONSOLIDATED BALANCE SHEETS

Approved by the Board of Directors

The accompanying notes are an integral part of these consolidated financial statements.

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VISTA GOLD CORP. (An Exploration Stage Enterprise)
CONSOLIDATED STATEMENTS OF LOSS

The accompanying notes are an integral part of these consolidated financial statements.

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VISTA GOLD CORP. (An Exploration Stage Enterprise)
CONSOLIDATED STATEMENTS OF DEFICIT

The accompanying notes are an integral part of these consolidated financial statements.

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VISTA GOLD CORP. (An Exploration Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS

Supplemental cash flow disclosure and material non-cash transactions—Note 14

The accompanying notes are an integral part of these consolidated financial statements.

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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 and going concern

(a)

Nature of operations

The Corporation evaluates, acquires and explores gold exploration and potential development projects. As such, the Corporation is considered an Exploration Stage Enterprise. 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 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.

Gold production has gradually declined since mining activities were suspended at the Hycroft mine in 1998. Effective January 1, 2002, gold production is considered incidental and the Corporation stopped reporting the associated sales proceeds as revenue.

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.

(b)

Going concern

These consolidated financial statements have been prepared on a going concern basis, which assumes that the Corporation will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. At December 31, 2003, the Corporation holds working capital of $6.1 million which is not sufficient to satisfy current general and administrative activities, bonding requirements (Note 20) and property obligations of $8.8 million for the 2004 fiscal year. Therefore, there is substantial doubt about the Corporation's ability to continue as a going concern.

The Corporation is investigating the possibility of raising additional capital through private placements and, although management has been successful in the past, there can be no assurance that it will be able to raise additional capital in the future. The Corporation continues to actively pursue options to monetize its assets and attract other investors. Additional liquid cash assets have been obtained since the balance sheet date through the date of the independent audit report, February 16, 2004, consisting of approximately $533,800 from the exercise of warrants issued during previous private placements.

The ability of the Corporation to continue as a going concern and to realize the carrying values of its assets and discharge its liabilities and obligations when due, is dependent upon the successful completion of the planned actions or other options noted above. Management believes successful completion of raising additional capital will mitigate the adverse conditions and events which raise doubt about the validity of the going concern assumption used in preparing these financial statements. These financial statements do not give effect to any adjustments, which may be necessary should the Corporation be unable to continue as a going concern and such adjustments may be material.

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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 18.

(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, 2003 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's executive office is located in Littleton, Colorado, where 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.

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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, the Corporation recognized revenue upon adsorption of gold onto carbon.

(f)

Cash and cash equivalents

Cash and cash equivalents is considered to include cash on hand, demand balances held with banks, money market funds, certificates of deposit and highly liquid deposits with maturities of three months or less when purchased.

(g)

Inventories

Materials and supplies inventories are carried at the lower of average cost and net realizable value.

(h)

Marketable securities

Marketable securities are categorized as available for sale and are carried at the lower of cost or quoted market value.

(i)

Mineral properties

Mineral property acquisition costs and exploration and development expenditures are recorded at cost and are deferred until the viability of the property is determined. General overhead, administrative and holding costs to maintain a property on a care and maintenance basis are expensed in the period they are incurred. If a project would be put into production, capitalized costs would be depleted on the unit of production basis.

Option payments and reimbursements 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.

Management of the Corporation regularly reviews the net carrying value of each mineral property. Where information and conditions suggest impairment, estimated future cash flows are calculated using estimated future prices, proven and probable reserves, weighted probable outcomes and operating capital and reclamation costs on an undiscounted basis. Reduction in the carrying value of each property is recorded when the net book value exceeds the estimated future cash flows.

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

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Management's estimates of gold prices, recoverable proven and probable reserves, probable outcomes, operating capital and reclamation costs are subject to risks and uncertainties that may affect the recoverability of mineral property costs. 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 and the need for possible asset impairment write-downs.

(j)

Plant and equipment

Plant and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives, ranging primarily from three to ten years. 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

On January 1, 2003, the Corporation adopted the new accounting standard for asset retirement obligations, CICA 3110. The standard requires that the fair value of a liability for an asset retirement obligation to be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. The adoption of this standard did not have any impact of the Corporation's financial position or results.

(l)

Loss per share

Loss per share is calculated by dividing the period's loss by the weighted average number of Common Shares outstanding during the year. The effect of potential issuances of Common Share equivalents under options and warrants would be anti-dilutive and therefore, the basic and diluted losses per share are the same. Information regarding securities that could potentially dilute earnings per share in the future is presented in Notes 9 and 10.

(m)

Stock-based compensation

The Corporation has a stock option plan which is described in Note 10. Stock-based compensation on options granted to non-employees is recorded as an expense at the earlier of the completion of performance or vesting of the options granted, based upon the estimated fair value on that date. The Corporation does not record any compensation cost on the granting of stock options to employees and directors using the intrinsic value method, as the exercise price is equal or greater than the market price at the date of the grant. Consideration paid on exercise price is credited to capital stock. Additional disclosures for options granted to employees and directors, including disclosure of pro-forma earnings and pro-forma earnings per share as if the fair value based accounting method had been used to account for employees' stock options, are presented in Note 10.

(n)

Warrants

Warrants issued as consideration for mineral properties are recorded at fair value.

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3. Restricted Cash

The Corporation has pledged cash as collateral for irrevocable standby letters of credit totaling $1,684,007 to the U.S. Bureau of Land Management, Nevada State Office, to cover increased reclamation cost estimates at the Hycroft mine (Note 7). Subsequent to December 31, 2003, the letters of credit were applied towards new bonding arrangements (Note 20).

4. Mineral Properties

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