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Amayapampa Interest
 9 Months Ended
Sep. 30, 2012
Amayapampa Interest [Abstract]  
Amayapampa Interest

7. Amayapampa Interest 

 

On April 7, 2008, we entered into an agreement to dispose of our wholly-owned subsidiary Vista Gold (Antigua) Corp. (“Vista Gold Antigua”) to Republic Gold Limited (“Republic”). Vista Gold Antigua indirectly held our interest in the Amayapampa gold project in Bolivia. Under the terms of the transaction, Republic agreed to pay to us a total amount of $3,000 in three payments of $1,000. The first of these payments will be due and payable upon the start of commercial production (as defined in the purchase and sale agreement) at the Amayapampa gold project followed by $1,000 payments on each of the first and second anniversaries of the start of commercial production.  In addition, Republic agreed to pay to us a net smelter return (“NSR”) royalty on the gold produced by or on behalf of Republic from the Amayapampa gold project in varying percentages depending on the price of gold per ounce. The NSR is capped at 720,000 gold equivalent ounces.  To date, no amount has been paid or is payable to the Company under this agreement.  

 

On February 3, 2012, Republic announced that it has suspended operations in Bolivia at the Amayapampa gold project pending regulatory and policy certainty specifically related to the nationalization of mining assets and the implications of the Bolivian Draft Mining Code.  On June 4, 2012, Republic announced that it intended to sell its interest in the Amayapampa gold project (the “Sale Transaction”), which is currently in the due diligence process.  As of September 30, 2012, we evaluated the carrying amount of the Amayapampa interest based upon the probability-weighted cash flows taking into account a higher probability that the project may never go into production or that commercial production may be delayed in part due to the proposed Sale Transaction and also due to the political risks described above.  Based upon the upward trend in long-term gold prices and higher estimated gold production specified in third party technical reports, we concluded that there was no change in fair value as of September 30, 2012. 

 

The Amayapampa interest is considered a financial instrument and as such has been accounted for at its fair value of $4,813 based on probability-weighted cash flow scenarios and assumptions, including future gold prices, estimated gold production and the expected timing of commercial production commencement (Note 14).