Vizsla Silver unlocks potentially massive silver-gold district – Here’s what it means for investors

Vizsla Silver Corp. (TSXV: VZLA) (NYSE: VZLA) (Frankfurt: 0G3) has successfully completed its acquisition of the La Garra-Metates District, a past-producing silver-gold region in the Panuco – San Dimas corridor. The acquisition, initially announced on March 28, 2024, is a key strategic move to expand the company’s mining portfolio in Mexico.

The purchase was finalised through a share purchase agreement dated March 27, 2024, with the sellers being unaffiliated with Vizsla Silver. The transaction includes cash payments of US$3.075 million and the issuance of 5,555,555 common shares at a price of US$1.26 per share, spread over a 24-month period from the acquisition’s closing date.

Financial Commitment and Payment Schedule

The agreed structure includes the following:

• Cash Payments: Totaling US$3,075,000 over 24 months.
• Share Issuance: 5,555,555 shares at a deemed price of US$1.26 each.

The issued shares include restrictions: 90% are subject to voluntary resale restrictions staggered over 12, 24, and 36 months.

Additionally, Vizsla Silver has settled US$1,606,500 in back taxes associated with the La Garra-Metates concessions. The sellers were granted a 1% net smelter returns (NSR) royalty, with an option for the company to repurchase this for US$750,000. A 2% NSR royalty was also awarded to Asteria Mining Services S.A.P.I. de C.V., an independent Mexican entity, as a finder’s fee.

Geological Significance and Exploration Potential

The La Garra-Metates District features north-northwest trending silver-gold veins similar to the geological conditions at Vizsla’s Panuco Project. Two main vein systems—La Garra (with a 2.6 km strike length) and Cerro Verde – Las Playas (1.8 km)—show promise for further exploration. Vizsla’s geologists suggest that the district has substantial potential, especially with its location in the prolific Panuco – San Dimas corridor.

During a site visit in December 2023, Vizsla Silver collected 37 samples, reporting silver equivalent grades surpassing 200 g/t in 14 rock-chip samples. The results indicate favourable grades of silver and gold with minimal base metals and deleterious elements. The samples were analysed at SGS Lab, Durango.

Panuco Project – A High-Grade Discovery Hub

Vizsla Silver’s flagship Panuco silver-gold project, located in Sinaloa, Mexico, continues to be a cornerstone for the company. The project spans 7,189.5 hectares and features 86 km of veins and 35 km of underground mines. An updated resource estimate revealed an in-situ indicated resource of 155.8 Moz AgEq and an inferred resource of 169.6 Moz AgEq as of January 2024.

For 2024, the company plans over 65,000 metres of drilling at Panuco, focusing on upgrading resources and exploring new targets.

Expert Insights

Experts suggest that Vizsla’s acquisition of La Garra-Metates could significantly enhance its asset portfolio. Given the geological similarities and high grades found in initial sampling, the district could become another high-value asset akin to Panuco. Analysts highlight that the strategic alignment with the broader Panuco – San Dimas corridor offers immense exploration and development potential.