By Peter Kennedy
Vizsla Resources Corp.’s [VZLA-TSXV] shares were up by almost 80% Wednesday October 9 following a resumption of trading that came after the company said it had received conditional approval from the TSX Venture Exchange to acquire Canam Alpine Ventures Ltd., a company that holds underlying options on the Copala-Panuco silver district in Sinaloa, Mexico.
The October 8, 2019, announcement comes almost one month after Vizsla said it had entered into a definitive share purchase agreement to acquire an option over the consolidated mineral rights, infrastructure and processing facilities comprising the large-scale Copala-Panuco precious metals camp.
“Panuco is one of the best opportunities I’ve ever seen in my career,” said Vizsla Chairman Craig Parry. “We have option over one of the largest, most important historic mining districts in Mexico – consolidated for the first time ever in history.”
Vizsla is a company that was formed to acquire metal projects in Canada and Mexico. Its portfolio includes the 20,265-hectare Blueberry Project, which lie on a copper-porphyry trend southwest of Houston, British Columbia.
Following the resumption of trading on Wednesday, Vizsla jumped 78% or 21 cents to 48 cents on volume of almost 1.96 million. The shares were previously trading in a 52-week range of 13 cents and 33 cents.
Under a definitive share purchase agreement dated September 13, 2019, Vizsla has pledged to acquire all of the outstanding shares of Canam Alpine Ventures Ltd., which holds options to acquire a 100% interest in the Panuco mining concessions and related infrastructure and processing facilities.
“Upon closing of the transaction, we are very excited to investigate the high-grade potential of the prolific Copala-Panuco silver district,” said Vizsla President and CEO Michael Konnert.
The Panuco district has been producing since the 1500s, but has never seen systematic modern exploration due to fragmentation of ownership. Vizsla has the option to explore the 10,500-hectare district and may elect to purchase the existing production infrastructure onsite, including a mill, tailings, power, road and over 35 kilometres of workings.
In a September 17, 2019 press release, Vizsla said active and historical surface mapping implies that there is more than 75 kilometres of cumulative vein strike on the property and more than 31 active historic mines within the veins. Historic production from these mines has not been recorded.
However, reportable historic drilling includes a diamond-drill intercept from one of these veins containing 2,235 g/t silver and 9.5 g/t gold over a 4.23-metre true width.
“We see significant exploration potential that, if confirmed, will lead us to exercise our option to acquire the mining and milling operations of the Panuco camp,” Konnert said.
The company said exploration work will commence immediately with a view to be drilling within three months. Vizsla hopes to complete a maiden resource later in 2020.
The company went on to say that several high-grade silver and gold zones have been uncovered and it looks forward to drilling these zones in the coming months.
As previously stated, Vizsla said it will acquire Canam for a total consideration of 18 million common shares. The first 6.0 million will be issued on closing of the acquisition. Another 6.5 million will be issued upon definition of a resource greater than 200,000 ounces of gold equivalent ounces. The final 5.5 million shares will be issued once the options are exercised.
For its part, Canam can exercise the option by completing US$3.4 million in work commitments and making payments of US$43 million over a 72-month period. Once the option is exercised, Canam can then have the rights to the previously mentioned mining infrastructure.
Having completed an oversubscribed private placement June 2019 that raised $1.9 million, Vizsla said it is fully funded to make the first option payment and continue the initial work commitment at Panuco.
Subject to the approval of the TSX Venture Exchange, Vizsla said it will pay a finder’s fee of 750,000 shares to Doug Seaton of Nakusp, B.C. The shares will be paid out in a series of increments. The first 250,000 is payable on signing, a second batch of 200,000 will be paid upon definition of a resource greater than 250,000 gold equivalent ounces, and the final 250,000 shares will be paid once the options are exercised.