Vizsla Copper agrees to acquire Alaska projects from Agnico-Eagle

Vizsla Copper Corp. [VCU-TSXV, VCUFF-OTCQB, 97E0-Frankfurt] said it has agreed to acquire a 100% interest in the Delta base and precious metal project and the Helm Bay gold project from a subsidiary of Agnico-Eagle Mines Ltd. [AEM-TSX, AEM-NYSE].

The transaction adds two 100%-owned projects to Vizsla Copper’s Alaska portfolio, alongside the Palmer VMS project, creating a broader pipeline of base and precious metals projects. On closing, Agnico-Eagle is expected to initially hold approximately 19.9% of the issued and outstanding shares of Vizsla Copper, rising to 22%. In addition, Agnico will be issued warrants permitting it to acquire up to 3.04 million common shares.

Delta is a volcanogenic massive sulphide (VMS) project located near the Alaska Highway in central Alaska. It is known to host VMS lenses and a historical inferred resource of 15.4 million tonnes of average grade 0.6% copper, 1.6% lead, 3.8% zinc, 62 g/t silver and 1.7 g/t gold. The project also hosts several kilometres of electromagnetic conductors which have not been drill-tested.

Helm Bay is an orogenic gold project located near tidewater in southeastern Alaska. Previous exploration has identified multiple gold-bearing quartz veins across the project, including high-grade veins associated with a small amount of historical production.

The transaction will be completed through the acquisition by Vizsla Copper of all the issued and outstanding membership interests of Delta Project LLC, a Delaware limited liability company and unit of Angico that holds the State of Alaska mining claims covering the Delta and Helm Bay projects.

Under the agreement, Vizsla will issue 22.5 million common shares (initial consideration shares) representing 19.9% of the issued and outstanding shares of Vizsla Copper as at the date of the purchase agreement. It will also issue 2.9 million common shares (deferred consideration shares) following the receipt of shareholder approval.

In addition, Agnico will receive 3.04 million common share purchase warrants, each of which can be used to acquire one common share at an exercise price of $1.95 per share for two years from the date of issuance.

Agnico-Eagle will also receive a 2.0% net smelter return royalty on Delta and a 3.0% net smelter return royalty on Helm Bay at closing. Vizsla Copper will hold the right to purchase 50% of each of the NSRs at any time for $5.0 million.

The consideration shares will be issued at a deemed price of $1.26 per common share for an aggregate value of $32.04 million. In Addition, Vizsla Copper has agreed to make $20 million worth of milestone payments in relation to the Delta project, with the final payment coming once Delta has received commercial production. These milestone payments can be satisfied, at the election of the company in cash or common shares subject to certain limitations set out in the agreement.

Vizsla Copper shares were unchanged at $1.57 and trade in a 52-week range of $2.68 and 75 cents.