Vizsla Silver to acquire 100% of Panuco district
VANCOUVER, BC, July 21, 2021 / CNW / – Vizsla Silver Corp. (TSXV: VZLA) (OTCQB: VIZSF) (Frankfurt: 0G3) (“Vizsla“or the”Company“) is pleased to announce that it has signed a binding amending agreement (the”Panuco Amending Agreement“) with Minera Rio Panuco SA de CV (“Minera Rio Panuco“) and executed a binding option exercise notice (“Copala Exercise notice“) with Silverstone Resources SA de CV (“Silver stone“), which together will constitute the acceleration and exercise of the Company’s option to acquire 100% of Panuco-Copala silver-gold quarter (“Panuco district“or the”Project“) situated in Sinaloa, Mexico.
Panuco Modification Agreement
Under the Amending Agreement, Vizsla and Minera Rio Panuco agreed to amend the terms of the original Panuco option agreement in order to expedite the exercise by the Company of its option on the Panuco property (the “Panuco property“). Upon closing of the transactions contemplated by the Panuco Modification Agreement, Vizsla will acquire a 100% interest in the Panuco property (comprising 43 mining concessions with a combined area of 3,839 Ha) and the” El Coco “(the”Mill“) in return for:
A cash payment of US $ 4,250,000 payable to Minera Rio Panuco upon signing of the amending agreement;
Deliverance to Minera Rio Panuco of 6,245,902 ordinary shares of Vizsla at a price of CA $ 2.44 per share (for a total value of 12,000,000 USD) at the end of the transfer of the Panuco property at the latest August 10, 2021; and
A cash payment of 6,100,000 USD on or before February 1, 2022, following the reclamation and transfer of ownership of the plant which is to take place on or before December 31, 2021.
The mining concessions that make up the Panuco property include the Napoleon Lode Corridor – which has seen the majority of Vizsla’s exploration – and are royalty free.
Copala exercise notice
Pursuant to Copala’s exercise notice, Vizsla and Silverstone agreed to change the terms of the original Copala option contract in order to accelerate the exercise by the Company of its option on the Copala property (the “Copala property“). A final agreement on these changes should be signed no later than August 3, 2021 (the “Copala Modification Agreement“and, together with the Panuco Amending Agreement, the”Amending AgreementsUpon closing of the transactions contemplated by the Copala Modification Agreement, Vizsla will acquire a 100% interest in the Copala property (comprising 64 mining concessions with a combined area of 5,547 Ha) in consideration for:
A cash payment of $ 9,607,212.50 payable to Silverstone upon completion of the transfer of ownership from Copala at the latest August 3, 2021; and
The issue to Silverstone of 5,000,475 ordinary shares of Vizsla at a price of CA $ 2.44 per share (for a total value of $ 9,607,212.50) at the end of the transfer of ownership of Copala.
Table 1: Summary of Amending Agreements1
President and CEO of Vizsla, Michael konnert, commented : “The acceleration of options and full ownership of the entire district within 20 months of signing is a major achievement for Vizsla Silver and a testament to our confidence in the Panuco district. The exercise of options in accordance with these conditions enables us to preserve approximately CA $ 27,000,000 in cash which we intend to use in the most profitable activities for the Company. In addition, the new structure shows the strong conviction of the sellers in the potential of this asset. We are delighted to welcome them as shareholders, to take full control of the property and to unleash its full potential. “
All common shares issued under the Amending Agreements will be subject to a statutory hold period of 4 months in accordance with Canadian securities laws. Amending Agreements are subject to the approval of the TSX Venture Exchange. The closing of the operations envisaged by the amending agreements should be finalized after obtaining this approval.
After the signing of the Amending Agreements, Vizsla will continue to be well funded with more than $ 57,000,000 on the bank and ten drilling rigs currently in operation on the project.
About the Panuco project
Following the transactions contemplated by the amending agreements, Vizsla will own 100% of the Panuco district of 9,386.5 hectares in the south of Sinaloa, Mexico, near the city of Mazatlán. The project includes more than 75 kilometers of total vein extent, a 500 ton per day plant, 35 kilometers of underground mines, tailings ponds, roads, electricity and permits.
The district contains epithermal silver and gold deposits of intermediate to low sulphidation associated with siliceous volcanism and crustal extension of the Oligocene and Miocene. The host rocks are mainly continental volcanic rocks correlated with the Tarahumara Formation.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
1 CAD USD exchange rate: $ 1.27
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release includes certain “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” under applicable Canadian securities laws. When used in this press release, the words “anticipate”, “believe”, “estimate”, “expect”, “target”, “plan”, “foresee”, “could”, “would be “,” could “,” schedule “and similar words or phrases identify forward-looking statements or information. These forward-looking statements or information concern, among others: the acceleration and exercise of the Company’s option to acquire 100% of the Panuco district, the execution of the Copala Amending Agreement and the exploration, future mining development and production at Pancuo Quartier.
Forward-looking statements and forward-looking information relating to any future mineral production, liquidity, improved value and capital market profile of Vizsla, the potential for future growth of Vizsla and its businesses, and future exploration plans are based on management’s reasonable assumptions, estimates and expectations, analyzes and opinions, which are based on management’s experience and perception of trends, current conditions and expected developments, and other factors that management considers relevant and reasonable under the circumstances, but which may prove to be incorrect. Assumptions have been made regarding, among other things, the price of silver, gold and other metals; no escalation in severity of the COVID-19 pandemic; exploration and development costs; the estimated development costs of exploration projects; Vizsla’s ability to operate safely and efficiently and its ability to obtain financing on reasonable terms.
These statements reflect Vizsla’s respective current views with respect to future events and are necessarily based on a number of other assumptions and estimates which, while considered reasonable by management, are inherently subject to significant uncertainties and business, economic, competitive, political and social contingencies. Many factors, known and unknown, could cause actual results, performance or achievements to differ materially from the results, performance or achievements which are or may be expressed or implied by such forward-looking statements or forward-looking information and Vizsla has made assumptions and estimates based on or related to many of these factors. Such factors include, but are not limited to: the Company’s dependence on a mining project; volatility of precious metal prices; risks associated with the conduct of the Company’s mining activities in Mexico; regulatory, consent or authorization deadlines; risks related to dependence on the Company’s management team and external subcontractors; risks relating to mineral resources and reserves; the inability of the Company to obtain insurance to cover all risks, on a commercially reasonable basis or not at all; currency fluctuations; risks associated with the inability to generate sufficient operating cash flow; risks related to project financing and share issues; the risks and uncertainties inherent in all mining projects, including inaccuracy of reserves and resources, metallurgical recoveries and the capital and operating costs of such projects; disputes over title to property, in particular title to undeveloped property; laws and regulations governing the environment, health and safety; the capacity of the communities in which the Company operates to manage and cope with the implications of COVID-19; the economic and financial implications of COVID-19 for Society; operating or technical difficulties linked to extraction or development activities; employee relations, social unrest or unavailability; the Company’s interactions with surrounding communities and artisanal miners; the Company’s ability to successfully integrate the assets acquired; the speculative nature of exploration and development, including the risks of decreasing quantities or grades of reserves; volatility of stock markets; conflicts of interest between certain directors and officers; lack of liquidity for the shareholders of the Company; risk of litigation; and the factors identified under the heading “Risk Factors” in Vizsla’s management discussion and analysis. Readers are cautioned against assigning undue certainty to forward-looking statements or forward-looking information. Although Vizsla has attempted to identify significant factors that could cause actual results to differ materially, other factors may prevent results from being anticipated, estimated or wanted. Vizsla does not intend, and assumes no obligation, to update such forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other event affecting such statements or information, except as as required by applicable law.
SOURCE Vizsla Silver Corp.
View original content to download multimedia: http://www.newswire.ca/en/releases/archive/July2021/21/c6474.html