The newly consolidated Panuco silver-gold project is an emerging high-grade discovery located in southern Sinaloa, Mexico, near the city of Mazatlán
Vizsla Silver Corp. (TSX-V: VZLA) (NYSE: VZLA) (Frankfurt: 0G3) (“Vizsla” or the “Company”) is pleased to announce it has entered into non-binding letter of intent (the “LOI”) with Prismo Metals Inc. (CSE: PRIZ) (“Prismo”), a company co-founded and advised by Dr. Peter Megaw. Pursuant to the LOI, the Company intends to make a strategic investment (the “Strategic Investment”) with a right of first refusal (the “ROFR”) to purchase the Palos Verdes project from Prismo (the “Project”), and 4,000,000 units of Prismo (the “Prismo Units”), for aggregate consideration of C$2,000,000.
“Since day one, the Vizsla team has believed that the Panuco-Copala district would become a major, well-endowed precious metals camp,” commented Michael Konnert, President and CEO. “Over the last couple of years, in addition to announcing our large maiden resource, Vizsla has worked to consolidate our land position and has continued to acquire both small inlier and outlier concessions in the area. We are the first company to deploy systematic, large scale, modern exploration techniques in this area because we believe that we have barely scratched the surface of potential district-scale discovery. Vizsla believes Prismo has made a meaningful discovery at Palos Verdes and the strategic investment and right of first refusal over the Palos Verdes concessions indicates our commitment to the long-term future of the Vizsla’s Panuco-Copala district.”
The consideration for the Strategic Investment will consist of a cash payment of C$500,000 at closing and 1,000,000 common shares of Vizsla (the “Consideration Shares”). The Consideration Shares will be subject to a statutory hold period of four months and one day from the closing date, and a voluntary escrow period of 24 months with 25% of the securities released every six months following the closing date.
Each Prismo Unit will consist of one common share of Prismo (a “Prismo Share”) and one-half of one common share purchase warrant (a “Prismo Warrant”). Each Prismo Warrant will entitle Vizsla to purchase one additional Prismo Share for a period of two years from the closing date at a price of $0.75.
Following completion of the Strategic Investment, Vizsla will own or beneficially control approximately 12.04% of the issued and outstanding Prismo Shares on a basic basis or 17.03% on a partially diluted basis.
In connection with the Strategic Investment, Prismo and Vizsla have agreed to form a technical committee to pursue district-scale exploration of the Panuco silver-gold district.
The LOI forms the basis for finalizing definitive agreements in respect of the Strategic Investment (the “Definitive Agreements”). It is expected that the Definitive Agreements will be entered into on or about December 16, 2022 and the Strategic Investment is expected to close shortly thereafter. The closing of the Strategic Investment is subject to the satisfaction of customary closing conditions for transactions of this nature, including execution of the Definitive Agreements and receipt by Vizsla and Prismo of all necessary regulatory approvals.
About the Palos Verdes concession
The Palos Verdes concession sits in the eastern area of Vizsla’s Panuco district and covers 700 meters of strike length of the Palos Verdes vein, a member of the north-easterly trending vein family located in the eastern part of the district outside of the area of modern exploration. Shallow drilling (<100m) conducted in 2018 on the Palos Verdes Vein was targeted 30 to 50 meters beneath largely barren vein outcrops and cut a well mineralized multistage vein two to seven metres wide with narrow intervals of high-grade precious metal values and subordinate base metals. This mineralization is open in all directions and the currently planned drilling program is designed to follow it along strike and to depth.
Recent drilling at the concession has intercepted a wide vein structure, and past drilling has returned encouraging results, with the best being 2,336 g/t Ag and 8.42 g.t Au over a true width estimated at 0.8 meters within a larger mineralized interval with 1,098 g/t Ag and 3.75 g/t Au over a true width of 2.3 meters.
Source: Company Press Release