4. Other Investments

Midas Gold Corp. Combination

In April 2011, Vista completed a combination (the “Combination”) with Midas Gold, Inc. As part of the Combination, each party contributed their respective interests in gold assets in the Yellow Pine-Stibnite District in Idaho to form a new Canadian private company named Midas Gold Corp. (“Midas Gold”). In exchange for the contribution of its equity interests in Idaho Gold Holding Company, Vista Gold U.S., Inc. (“Vista US”) was issued 30,402,615 common shares in the capital of Midas Gold. Concurrently with the Combination, Midas Gold completed a private placement of 6,129,800 shares (the “Private Placement”). We purchased 1,400,000 shares through the Private Placement for an aggregate purchase price of C$3,500 ($3,632 based on the exchange rate on April 6, 2011). Following completion of the Combination and the Private Placement, Vista and Vista US together held 31,802,615 Midas Gold shares.

Upon initial recognition of its investment in the Midas Gold shares, Vista elected to apply the fair value option, and as such, the investment is recorded at fair value in the Consolidated Balance Sheets (Note 14). Subsequent changes in fair value are recorded in the Consolidated Statements of Income/(Loss) and Comprehensive Income/(Loss) in the period in which they occur. The difference between the fair value of the 30,402,615 Midas Gold shares and the carrying value of our Yellow Pine assets has been recorded as a gain on disposal of mineral property given that Vista ceased to have a controlling financial interest in the Yellow Pine gold project upon completion of the Combination.

The Combination with Midas Gold, Inc. was a tax-free reorganization for U.S. tax purposes. However, upon completion of the Combination, Vista US received Midas Gold shares with a fair value that was determined to be $78,872. The corresponding estimated deferred tax expense of $29,675 at the time of the Combination exceeded the valuation allowance of $6,086 for Vista US. Therefore, the valuation allowance against Vista US’s deferred tax asset was released upon receipt of the Midas Gold shares. During the nine months ended September 30, 2012, we recorded an unrealized loss on the Midas Gold shares of $13,184 with a corresponding US tax benefit of $5,124. The tax calculation is based on an effective rate of 38.87% (US Federal – 35% and state – 3.87%). As of September 30, 2012, the fair value of the Midas Gold shares we hold was $106,666.

As of September 30, 2012, the Company has reclassified its investment in Midas Gold from long-term assets to current assets as the restrictions on the sale of Midas Gold share expire in less than one year.

As of June 30, 2012, which represents Midas Gold’s latest available financial data as of the filing date of this quarterly report, Midas had 114,466,936 common shares outstanding of which Vista owns 31,802,615 common shares or 27.8%. Summarized financial information for Midas Gold as of June 30, 2012 and December 31, 2011 and for the six months ended June 30, 2012 and 2011, which are prepared in accordance with International Financial Reporting Standards for interim financial statements is as follows.

Midas Gold Condensed Consolidated Interim Statements of Financial Position


		June 30, 2012		December 31, 2011

Total current assets	$	48,543	$	37,341
Total non-current assets		147,528		119,126
Total current liabilities		5,570		3,654
Total non-current liabilities		382		563
Total equity		190,119		152,250

Midas Gold Condensed Consolidated Statements of Net Loss


		Six months ended June 30,
		2012		2011

Operating expense	$	4,794	$	4,331
Net loss		4,415		4,378