Vizsla Silver (TSXV: VZLA, NYSE: VZLA, FRA: 0G3) is a mining exploration company focused on the Panuco silver-gold project in Sinaloa, Mexico. Vizsla Silver shared in mid-December that its 100%-owned flagship project returned high gold and silver grade on extensive widths. The company’s stock price, down -40% Year-over-Year, represents an opportunity to invest safely with a potential upside in 2023.

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Company Overview

Vizsla Silver (TSXV: VZLA, NYSE: VZLA, FRA: 0G3) is focused on advancing its 100-owned Panuco silver-gold project located in Sinaloa, Mexico. To date, the flagship project witnessed more than 140,000 meters of drilling, leading to the discovery of several new high grade veins, as showed the news release shared on December 14. For 2022 only, the company budgeted +120,000 meters of resource/discovery-based drilling, expanded the maiden resource, and tested other high priorities across the district. The project is located along a prolific silver trend in Western Mexico and only 80 km away from First Majestic’s flagship San Dimas mine. The Panuco project covers 6,754 hectares and has a long history. The area has been producing since the 1500s and has returned to steady production, enhanced over the last several decades.

There is still a lot to discover there. Only 33% of the known targets at Panuco have been drill tested, and all recent explorations provided significant results. As proof of example, the Tajitos-Copala resource area returned 2,093 grams per tonne (g/t) silver equivalent (AgEq) over 10.20 meters true width (mTW) (1,404 g/t silver and 10.94 g/t gold, including 36,195 g/t AgEq over 0.38 mTW (23,058 g/t silver and 205.00 g/t gold). But this is not just it. At the Napoleon vein, the company intercepted d 1,241 grams per tonne (g/t) silver equivalent (AgEq) over 3.90 meters true width (mTW) (913 g/t silver, 5.28 g/t gold, 0.15% lead and 0.2 % zinc).

“The Copala structure continues to impress with high precious metals grades over very broad widths”. “Infill drilling within the Tajitos-Copala resource area continues to highlight exceptional mineral continuity marked by multiple intervals grading well over 1,000 grams per tonne, while expansionary drilling to the north and southeast demonstrate a growing highgrade footprint.

Michael Konnert, President and CEO

The company also announced on November 24 it would make a strategic investment in Prismo Metals and receive a Right of First Refusal on the Palos Verdes concessions. Vizsla would purchase the project for $2M, totalling 4M shares. Once the transaction is finalized, Vizsla will own approximately 12.04% of the issued and outstanding shares of Prismo and 17.03% on a partially diluted basis. The Palos Verdes concession is situated in the Eastern area of Vizsla’s Panuco district and covers 700m of strike length of the Palos Verdes vein. 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 meters wide with narrow intervals of high-grade precious metal values and subordinate base metals. Recent drilling provided promising results, with the best being 2,336 g/t Ag and 8.42 g/t Au over an actual 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 basic width of 2.3 meters.

Share structure/ Financials

Vizsla Silver benefits from a robust share structure. 45% of the structure is held by institutions, while 16% is owned by the management, directors & advisors, and high-net wealth investors detain 14%. It leaves room for a small float as retailers only constitute 25% of the structure. Considering 75% is locked, a tight float enables investors to witness broader fluctuations in the stock price. 155M shares are issued and outstanding (data from November 4, 2022), for a total of 186M shares fully diluted. The company also has 16M warrants (avg. price: $3.06) and 12.7M options (avg. price: $1.55). Shortly after the financials were shared, Vizsla released that it closed approximately $35M of bought deal financing. The prospectus consists of 23.8M shares of the company at a price of $1.45 per share. Each share is entitled to a one-half warrant, enabling the holder to acquire one share at $2. Regarding the stock price, it “recovered” from the private placement as it is currently traded above $1.60. Over the year, investors witnessed a 52-week low of $1.19 and a 52-week high of $3.25. The stock price still has a lot of room. Many analysts cover the stock, and out of the 6, 4 give a price target of above $3, with the highest price target assigned by Kevin MacKenzie (Canaccord Genuity) with a price of $3.75). We can mention a rising demand for silver from the green energy sector and increased physical demand (bar and coin). The increased demand and modest producing growth resulted in a physical deficit in 2021, the first deficit in 6 years. The silver price also rose, passing from $5/oz to $18/oz, proving its higher interest.

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“I expect Vizsla will have a transformative year in 2023. I am particularly excited about the upcoming resource update, which will feature new mineralization at the Copala area. The Copala vein is a game changer for the company and one of the most significant precious metals discoveries in recent times. The Panuco district is massively under-explored; our resource area represents less than 10% of the cumulative vein strike in the district. We are seeing a potential major precious metals complex unfold in real time as we develop the project.”

Michael Konnert, CEO

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Bottom Line

Vizsla Silver (TSXV: VZLA, NYSE: VZLA, FRA: 0G3) combines a highly-potential project with an experienced team that gathers over 185 years of experience. The flagship project delivered high-grade silver and gold results while only 33% of the property has been explored. The company closed a $35M bought deal financing, and 4 analysts gave a $3+ share price.

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