Vizsla Silver arranges $65 million bought deal financing
Vizsla Silver Corp [VZLA-TSXV, NYSE, 0G3 Frankfurt] has announced details of a $65 million bought deal financing, and said proceeds are earmarked for the company’s 100% owned Panuco silver-gold project in Sinaloa, Mexico.
The company said an underwriting syndicate has pledged to purchase 25 million common shares of the company priced at $2.60 per share. Vizsla said it has granted the underwriters an over-allotment option to purchase up to an additional 15% of the offering to cover over-allotments, if any. That option is exercisable for 30 days after and including the date of closure, which is expected to occur on September 19, 2024. If the over-allotment option is exercised in full, total gross proceeds from the offering will increase to $74.75 million.
Vizsla silver shares moved lower on the news, easing 12.9% or 38 cents to $2.56. The shares trade in a 52-week range of $3.02 and $1.33.
The newly-consolidated Panuco gold-silver project is an emerging high-grade discovery located in southern Sinaloa, near the city of Mazatlan.
A preliminary economic assessment for Panuco envisages a 3,300 tonnes per day production rate for the first three years, expanding to 4,000 tonnes per day in year four, producing silver-gold dore with an initial mine life of 10.6 years.
The PEA forsees life of mine average payable production of 15.2 million ounces of AgEq annually (9.2 million ounces of silver and 78,000 ounces of gold.
On January 8, 2024, Vizsla Silver announced an updated mineral resource estimate for Panuco. It includes an estimated in-situ indicated resource of 155.8 million ounces of silver equivalent (AgEq) and an in-situ inferred resource of 169.6 million ounces of AgEq.
This year, the company budgeted for over 30,000 metres of resource/discovery-based drilling designed to upgrade and expand the mineral resource, as well as test other high priority targets across the district.
Vizsla Silver recently said it has completed over 368,000 metres of drilling at Panuco, leading to the discovery of several new high-grade veins
Vizsla Silver was in the news recently when the company said it had received final TSX Venture Exchange approval for a previously announced plan to reorganize its business, including the spin-off of its wholly-owned subsidiary, Vizsla Royalties Corp. [VROY-TSXV].
Vizsla Royalties currently holds, indirectly a net smelter royalty on any potential future mineral production from Vizsla’s 100% owned Panuco project. The shares recently began trading on the TSX Venture Exchange.
The royalty consists of a 2.0% net smelter return royalty on certain unencumbered Panuco concessions, and an 0.5% net smelter return royalty on certain unencumbered concessions on the project, which have a pre-existing 3.0% net smelter royalty.
Under the spin-out plan, Vizsla Silver pledged to transfer to Vizsla Royalties the right to purchase one half of the underlying royalty, and grant Vizsla Royalties the right to acquire a royalty on any future projects acquired by Vizsla Silver for two years after the spinout is completed.