Management's Discussion and Analysis ("MD&A") of the consolidated operating results and financial condition of Vista Gold Corp. for the three and nine months ended September 30, 2008 has been prepared based on information available to us as of October 21, 2008. This MD&A should be read in conjunction with the consolidated financial statements of the Corporation for the three years ended December 31, 2007 and the related notes thereto, which have been prepared in accordance with generally accepted accounting principles ("GAAP") in Canada. Reference to Note 17 to the consolidated annual 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 in thousands, except per share and per ounce amounts, unless otherwise noted.

Results from Operations

Our consolidated net loss for the three-month period ended September 30, 2008, was $2,823 or $0.08 per share compared to a consolidated net loss of $2,035 or $0.06 per share for the same period in 2007. Our consolidated net loss for the nine-month period ended September 30, 2008, was $6,994 or $0.20 per share compared to a consolidated net loss of $5,417 or $0.17 per share for the same period in 2007. For the three-month period, the increase in the consolidated loss of $788 from the respective prior period is primarily due to an increase in interest expense of $617, an increase in income tax expense of $279, an increase in the loss on currency translation of $184 and a decrease in interest income of $102, which are partially offset by a decrease in costs of $528 related to the completion in May 2007 of the Plan of Arrangement involving Vista, Allied Nevada Gold Corp. ("Allied Nevada") and the Pescios. The increase in the consolidated net loss of $1,577 for the nine-month period from the prior year period is largely due to an increase in corporate administration and investor relations costs of $956, an increase in interest expense of $1,386, an increase in income tax expense of $994, an increase in the loss on disposal of marketable securities of $225, an increase in the loss on currency translation of $215, an increase in fees associated with the disposal of our Amayapampa project of $132 and a decrease in interest income of $580. These amounts are offset by the decrease in costs related to the Plan of Arrangement of $2,880, as noted above.

Exploration, property evaluation and holding costs

Exploration, property evaluation and holding costs were $245 for the three-month period ended September 30, 2008 and $742 for the nine-month period ended September 30, 2008, approximately level with $204 and $682 for the same periods in 2007. For both the three-month and nine-month periods, there were no significant variances as we continue to move our projects towards development decisions.

Corporate administration and investor relations

Corporate administration and investor relations costs increased to $1,739 during the three-month period ended September 30, 2008, approximately level with $1,688 for the same period in 2007. The increase of $51 was primarily due to an increase in employee compensation costs of $96 which is a result of higher employee benefit costs and salaries and additional personnel.

Corporate administration and investor relations costs increased to $4,279 for the nine-month period ended September 30, 2008, compared to $3,323 for the same period in 2007. The increase of $956 from the respective prior period is primarily due to the following:

† Stock-based compensation expense increased by $238, for the nine-month period ended September 30, 2008. This is due to an increase in the number of options granted during the third quarter of 2008 as compared to the same period in 2007 as well as an increase in options granted during the prior year and vesting over time as compared to the prior period.

† Employee costs increased by $241, for the nine-month period ended September 30, 2008. These costs reflect higher employee benefit costs and salaries.

† Prior to the completion of the Plan of Arrangement on May 10, 2007, Vista allocated a portion of it's corporate administration and investor relations costs to Allied Nevada. Since May 10, 2008 such allocation is no longer made. As a result our corporate administration and investor relations costs increased by $317 for the nine-month period ended September 30, 2008.

Depreciation and amortization

Depreciation and amortization expense increased to $44 during the three-month period ended September 30, 2008 and $123 for the nine-month period ended September 30, 2008, compared to $27 and $80 for the same periods in 2007. The increases of $17 and $43 from the respective prior periods are mostly due to capital expenditures at the Mt. Todd gold project during 2007 that have begun to be depreciated.

Other income and expense

Gain/(loss) on disposal of marketable securities

There were no gains or losses on the disposal of marketable securities for the three-month period ended September 30, 2008, compared to a gain of $18 for the same period in 2007. The gain for the 2007 period resulted from the sale of securities that had a book value of $22.

For the nine-month period ended September 30, 2008, we realized a loss on the disposal of marketable securities of $67 compared to a gain on the disposal of marketable securities of $158 ($219 prior to the allocation to Allied Nevada) for the same period in 2007. The loss for the 2008 period resulted from the sale of securities that had a book value of $157 and the gain for the 2007 period resulted from the sale of securities that had a book value of $38.

At September 30, 2008, we held marketable securities available for sale with a quoted market value of $9,519. With the exception of our shares of Allied Nevada common stock, as discussed herein, we purchased the securities for investing purposes with the intent to hold the securities until such time 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, we monitor the market status of the securities consistently in order to mitigate the risk of loss on the investment. At September 30, 2008, also included in marketable securities were 1,529,848 shares of Allied Nevada at a quoted market value of $8,751. These shares are "restricted securities" as defined in Rule 144 under the Securities Act of 1933 (the "Securities Act") and cannot be resold by us in the absence of registration under the Securities Act unless an exemption from registration is available. On November 15, 2007, the SEC adopted proposed revisions to Rule 144, the most commonly available exemption for resales. Among other things, these revisions shortened the one-year holding period under Rule 144 to six months as to restricted securities issued by companies that are subject to the reporting requirements of the U.S. Securities Exchange Act of 1934, such as Allied Nevada. The revisions to Rule 144 became effective on February 15, 2008. Since we acquired our Allied Nevada shares in May 2007, we have met the required six-month holding period and can commence resales in reliance on the Rule 144 exemption. We will hold these shares until such time that it would be advantageous to sell the securities at a gain.

Interest income

During the three months ended September 30, 2008 we realized $137 in interest income as compared to $239 for the same period in 2007. During the nine months ended September 30, 2008 we realized $417 in interest income as compared to $997 for the same period in 2007. The decreases of $102 and $580, from the respective prior periods are primarily attributable to a decrease in interest earned on our liquid savings accounts as compared to the same period in 2007. This decrease is due to Vista's decision to no longer purchase short-term commercial paper due to the declining interest rates in the market.

Interest expense

During the three-month period and nine-month period ended September 30, 2008, interest expense was $617 and $1,386, respectively. Of these amounts, $262 and $577, respectively, are attributable to the accretion of the debt discount and $355 and $809, respectively, are attributable to interest expense. These amounts are approximately 47% of the full interest expense associated with the issuance of the Notes (as defined under "Financing Activities" below). We are able to capitalize the remaining 53% as additions to mineral properties in accordance with SFAS No. 34 and our accounting policy.

Income tax (benefit)/expense

Effective September 30, 2008, the Corporation adopted the Emerging Issues Committee Abstract 172 ("EIC 172"), "Income Statement Presentation of a Tax Loss Carryforward Recognized Following an Unrealized Gain in Other Comprehensive Income." EIC 172 provides guidance on whether the tax benefit from the recognition of previously unrecognized tax loss carryforwards consequent to the recording of unrealized gains in other comprehensive income, such as unrealized gains on available-for-sale financial assets, should be recognized in net income or in other comprehensive income. EIC 172 should be applied retrospectively, with restatement of prior periods from January 1, 2007, the date of adoption of CICA 3855.

During the three-month period and nine-month period ended September 30, 2008, income tax expense was $114 and $207, respectively, as compared to an income tax benefit of $165 and $787 for the respective three and nine-month periods during 2007. The increases in expense as compared to the benefits from prior periods is attributable to the declining market during 2008, in which we have had more unrealized losses as compared to 2007 where we had more unrealized gains.

Financial Position, Liquidity and Capital Resources

Cash used in operations

Net cash used in operating activities was $1,706 for the three-month period ended September 30, 2008, compared to $956 for the same period in 2007. The increase of $750 is the result of an increase in the consolidated net loss of $788 and an increase in cash used for prepaids and other of $341, an increase in cash used for accounts payable, accrued liabilities and other of $331, which is partially offset by an increase in non-cash items of $806.

Net cash used in operating activities was $4,985 for the nine-month period ended September 30, 2008, compared to $3,662 for the same period in 2007. The increase of $898 is mostly the result of the interest payment of $842 on June 15, 2008 for the Notes, an increase in cash used for prepaids and other of $160, which is partially offset by an increase in cash received for receivables of $214.

Investing activities

Net cash used in investing activities increased to $3,342 for the three-month period ended September 30, 2008, from $1,301 for the same period in 2007. The increase of $2,041 is due to an increase in the additions to mineral properties of $2,122, which is mostly the result of an increase in expenditures at the Paredones Amarillos project as we move towards a production decision; an increase in expenditures at the Mt. Todd project for a drilling program during the third quarter; and an increase in the additions to plant and equipment of $427, which is mostly the result of an increase in equipment purchases at the Paredones Amarillos project and the Mt. Todd project; which has been offset by $350 received from Republic as repayment of the loan made during the second quarter 2008 (see Consolidated Financial Statements - Note 3).

Net cash used for investing activities decreased to $24,650 for the nine-month period ended September 30, 2008, from $29,526 for the same period in 2007. The decrease of $4,876 is mostly the result of a decrease of $24,517 in the cash transferred to Allied Nevada in conjunction with the completion of the Plan of Arrangement in May 2007, which has been offset by the following:

† An increase in additions to plant and equipment of $16,737. On March 4, 2008, with the completion of a brokered private placement of $30,000 principal amount of the Notes (see "Financing activities" below) we used $16,000 of the proceeds towards the purchase of gold processing equipment to be used at our Paredones Amarillos project. The aggregate purchase price was approximately $16,000, which included the costs of relocating the equipment to Edmonton, Alberta, Canada. The purchase was finalized in April 2008 with the completion of the relocation of the major equipment components to Edmonton. There were no similar purchases during the 2007 period.
† An increase in the acquisition of mineral properties of $452. On January 24, 2008, we completed the acquisition of interests in various mineral properties adjacent to our Guadalupe de los Reyes project in Mexico. The consideration paid by Vista for the acquisition of these interests included cash payments totalling $452 and the issuance of a total of 213,503 common shares of Vista (with an aggregate fair value of $1,000) to various parties.
† An increase in the additions to mineral properties of $2,386. During the third quarter, the Corporation undertook a drilling program at the Mt. Todd project.

Financing activities

Net cash provided by financing activities was $70 for the three-month period ended September 30, 2008, as compared to net cash provided by financing activities of $1,902 for the same period in 2007. During the three-month period ended September 30, 2008 cash was provided by financing activities due to the exercise of employee stock options. For the same period in 2007, cash was provided by financing activities due to proceeds received from the exercise of warrants as well as from the exercise of stock options.

Net cash provided by financing activities was $31,470 for the nine-month period ended September 30, 2008, as compared to $3,414 for the same period in 2007. This increase is primarily the result of the completion of a brokered private placement on March 4, 2008 in which we offered and sold $30,000 in aggregate principal amount of senior secured convertible notes (the "Notes") (see unaudited Consolidated Financial Statements - Note 7). Proceeds to Vista after legal and other fees were $28,390. There were no similar transactions during the 2007 period.

There were no warrant exercises during the three-month period ended September 30, 2008 as compared to $1,394 for the same period in 2007. Warrant exercises during the nine-month period ended September 30, 2008 produced cash proceeds of $2,941 as compared to $2,889 for the same period in 2007.

Liquidity and Capital Resources

At September 30, 2008, our total assets were $79,020 compared to $51,346 at December 31, 2007, representing an increase of $27,674. At September 30, 2008, we had working capital of $27,176 compared to $27,254 at December 31, 2007, representing a decrease of $78. This decrease relates primarily to an increase in cash balances from year end as a result of the completion of the

brokered private placement of Notes as discussed below, which is offset by a decrease in our marketable securities balances due to declining market conditions.

The principal component of working capital at both September 30, 2008 and December 31, 2007, is cash and cash equivalents of $18,227 and $16,686, respectively. Other components include marketable securities (September 30, 2008 - $9,519; December 31, 2007 - $10,882) and other liquid assets (September 30, 2008 - $755; December 31, 2007 - $380).

As a result of the delay in the issuance of the Change of Land Use Permit at the Paredones Amarillos project and the current uncertainty in the resource and financial markets, management has adopted a revised plan and budget for the last quarter of 2008 and the year 2009. The plan continues those programs necessary to expedite the development of the Paredones Amarillos project, while minimizing expenditures in other areas. The budget estimates that in the event that financing for the Paredones Amarillos project is not available on acceptable terms in 2009, Vista has sufficient working capital to fund its planned operations at least through the end of 2009, without additional financing. We will continue to examine potential funding alternatives for the project, which may include project financing, debt financing or equity financing.

On March 4, 2008, we completed a private placement in which we issued and sold $30 million in aggregate principal amount of the Notes. The Notes mature at face value on March 4, 2011 (the "Maturity Date"). The Notes pay interest of 10% per annum. Interest is payable each year in two installments on June 15 and December 15 and the principal is payable on the Maturity Date.

The Notes are convertible at the holder's or issuer's discretion in accordance with the terms of the Notes. The holder can convert all or part of the debt at any time prior to the Maturity Date or the business day immediately preceding the Redemption Date at a price of $6.00 per common share, subject to adjustment in certain circumstances. The Redemption Date represents the date that the Notes will be redeemed in the event that we redeem the Notes.

We can convert all, but not part, of the Notes after March 4, 2009 if the weighted-average price of our shares as quoted on the American Stock Exchange ("AMEX") has been equal to or greater than $9.00 per share for 15 consecutive trading days. The notice of conversion must occur within 10 days of any such 15-day period and the share price must be equal to or greater than $9.00 on the date the notice is delivered. The conversion price is $6.00 per common share subject to adjustment in certain circumstances.

The conversion price will be adjusted on March 4, 2009, being the first anniversary of the issuance of the Notes, to the lesser of the current conversion price or 120% of the 20-day weighted-average price of the common shares as quoted on AMEX. The conversion price will also be adjusted in certain circumstances, such as issuance of warrants, additional common shares or distribution of assets. The conversion price shall not be adjusted below $4.80 per common share.

The Notes have been accounted for in accordance with EIC 164, "Convertible and other Debt Instruments with Embedded Derivatives". Under EIC 164, the fair value of the conversion feature is recorded as equity. The issuance date fair value of the conversion feature was originally estimated to be $11.5 million and was classified as the equity component of convertible notes with the residual balance of $18.5 million being recorded as long-term debt. However, subsequent to the initial estimation and recognition of the equity component it was determined that a risk-free rate of return would provide a more conservative estimate of the expected return an investor would expect to receive as compared to the expected return on Vista's common shares, which was originally used. This "risk neutral" approach was applied and the issuance date fair value of the convertible feature was revised. The revised issuance date fair value of the conversion feature was estimated to be $6.8 million and the residual balance of $23.2 million was recorded as the fair value of Vista's obligation to make principal and interest payments and has been classified as long-term debt. This change in estimate has been applied on a prospective basis by adjusting the carrying values of the equity component and long-term debt on the balance sheet.

We used approximately $16.0 million of the proceeds from the sale of the Notes for advance payments towards the purchase of gold processing equipment to be used at our Paredones Amarillos project. The remaining balance of the funds raised from the private placement will be used for ongoing operations at the Paredones Amarillos project.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements required to be disclosed in this Quarterly Report on Form 10-Q.

Contractual Obligations



                                                        Payments due by period (in thousands)
                                                    Less than                                          More than
Contractual Obligations               Total          1 year       1 to 3 years      3 to 5 years        5 years
Long-term debt obligations(1)      $     30,000    $         -    $      30,000    $            -    $           -
Purchase obligations(2)            $        500    $       200    $         300    $            -    $           -
Operating lease obligations        $         84    $        84    $           -    $            -    $           -
Total                              $     30,584    $       284    $      30,300    $            -    $           -

(2) Purchase obligations include option payments totaling $500 on the Guadalupe de los Reyes and Long Valley projects. For the Guadalupe de los Reyes Project, we still have outstanding $100, which is to be paid in less than a year and. For the Long Valley project, we still have outstanding $400, of which $100 is to be paid in less than a year and $300 is to be paid in 1 to 3 years.

Other

Disposal of Amayapampa project

On April 7, 2008, we announced 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 has agreed to pay Vista $3.0 million in three payments of $1.0 million. The first of these payments is due and payable upon the start of Commercial Production (as defined in the purchase and sale agreement) at Amayapampa followed by $1.0 million payments on each of the first and second anniversaries of the start of Commercial Production. In addition, Republic has agreed to pay Vista a net smelter return royalty ("NSR") on the gold produced by or on behalf of Republic from the Amayapampa project in varying percentages depending on the price of gold per ounce. When gold is between $500.01 and $650.00 per ounce, a 2% NSR is payable, when the price of gold is between $650.01 and $750.00 per ounce, a 3% NSR is payable, and when the price of gold is $750.01 per ounce and above, an NSR of 3.5% is payable. The NSR is capped at 720,000 gold equivalent ounces and no NSR payments are due to Vista if the gold price is below $500 per ounce.

Vista will retain a first right of refusal in the event Republic decides to sell the property and will also retain a right to re-acquire the property if Republic or Vista Gold Antigua have not moved to close a financing under a project financing facility within five years. Under the terms of the transaction, Vista agreed to lend $350 to Republic for ongoing expenses on the Amayapampa gold project. The loan was completed on April 7, 2008. Interest on the loan accrues and is payable at the rate of 10% per annum, payable monthly. On September 30, 2008, we received $367 from Republic, which included $350 principal and $17 in accrued interest.

The fair value of the consideration received on disposal of the Amayapampa project has been calculated as of September 30, 2008 using probability weighted cash flow scenarios and assumptions including future gold prices, estimated gold production and the timing of commencement of commercial production. These inputs in the "income approach" valuation model used by Vista are considered to be level three unobservable inputs as defined by SFAS No. 157, "Fair Value Measurements." These are Vista's own assumptions based on our best estimates and the best information available at the time.

Prime Corporate Finance Pty Limited ("PCF") of West Perth, Australia served as corporate advisor to Vista in connection with the above transaction. In compensation for the advisory services provided by PCF, Vista had agreed to pay PCF a success fee of 5% of the face value of any completed transaction. On April 8, 2008, Vista and PCF agreed that the success fee payable to PCF was $165 such amount being equivalent to Cdn. $167. In addition, on April 8, 2008, PCF and Vista agreed that the success fee would be payable in Common Shares of Vista. Based on the market price of Vista's Shares at the close of business on April 7, 2008 of Cdn. $4.47 per common share, 37,318 Vista Shares were issuable to PCF. Completion of the issuance occurred on June 17, 2008.

Updated Report on Status of Change of Land Use Permit for Paredones Amarillos Project and Expected Development Timetable

On April 30, 2008, Vista announced that it had received correspondence from the local La Paz office of the Mexican Environmental and Natural Resource Service ("SEMARNAT") which indicates that staff in that office are of the opinion that the Change of Land Use Permit approved by SEMARNAT in 1997 in relation to Vista's Paredones Amarillos Project in Baja California Sur ("BCS"), Mexico, is no longer valid. This permit is necessary for the development of the Paredones Amarillos Project to proceed. Vista's advisors and counsel in Mexico have advised Vista that they believe that the permit remains valid. Vista's legal counsel in Mexico has advised Vista to proceed with a judicial appeal of the opinion issued by the BCS office of SEMARNAT to preserve certain legal rights, but has also recommended that a new application is likely to be the most expeditious way to obtain the necessary approvals.

On July 2, 2008, Vista reported that it has taken steps to preserve its right to proceed with a judicial appeal of the opinion issued by the BCS office of SEMARNAT and has also completed a number of prerequisite steps to submitting an application for a new Change of Land Use Permit. As well, we plan to submit an application for an interim Change of Land Use Permit for the drilling program. Changes in the law governing the Change of Land Use Permit require Vista to demonstrate that it has the right to use the surface affected by the permit. Vista received a certificate from the General Direction of Mines in the Ministry of Economy verifying that Vista's Mexican subsidiary, Minera Paredones Amarillos S.A. de C.V. ("MPA"), is the rightful holder of valid mineral rights for the Paredones Amarillos Project. Vista also received an official appraisal of the surface land in the project area from the National Institute for the Appraisal and Administration of National Property confirming that the surface overlying a significant part of these mineral rights (including the proposed pit and most of the dumps) is federal land. Under Mexican mining statutes, MPA has the constitutional right to use the surface for mining activities, subject to applicable environmental permits and federal authorizations. This position has been further confirmed in the foregoing certificate issued by the General Direction of Mines of the General Coordinator of Mines in

the Ministry of Economy. One of the mechanisms for authorizing the use of federal land for mining activities is a Temporary Occupation Permit (lasting the . . .