Vizsla Silver Corp. (VZLA TSX.V and NYSE)
The life of a speculative investor in the junior mining space involves reading through many power point presentations, and at any conference by mid afternoon the eyeballs start to glaze over from the information overload. Most of them seem to follow a distressingly similar template, with certain buzzwords (world class management team) being used by almost every presenter. If I had a nickel for every time I've been pitched highly prospective land, I'd be renting space in the Money Bin from Scrooge McDuck. But there's prospective land, and there's prospective land. Hold that thought for now.
When Vizsla Silver presented their business strategy for 2024, it seemed to offer a full plate of progress on the 6900 + hectare Panuco district in Sinaloa Mexico. After kicking off the year with the latest resource update of 325 million ounces of indicated and inferred silver equivalent ounces, investors are looking forward to a royalty company spinout, a test mine of the high grade Napoleon and Copala veins, the PEA along with another resource update later this year. All this against a drilling program design to expand and de risk this high grade resource, on a land package that has only fully explored 10 - 15% of the known vein extent. CEO Mike Konnert said there would be a few surprises for shareholders this year, and last week Vizsla announced they have a deal in place for an additional land package called La Garra - Metates.
From the press release:
Highlights
• Large property package at 16,962 Ha (more than 2x the area of the Company’s Panuco project).
• While this district has seen past production dating back centuries, the La Garra-Metates District
has seen minimal exploration and no drilling.
• Vizsla Silver’s sampling demonstrated multi-kilo silver equivalent grades over several kilometers
of strike.
• Epithermal vein systems trending N-NNW in a geological setting akin that of the Panuco Project
and First Majestics Silver Corp.’s San Dimas project (“San Dimas”).
• Potential for high-grade shoots along-strike and at depth on two known vein systems with
estimated strike length of 2.6 km and 1.8 km, respectively.
• Significant potential to discover new veins given the underexplored nature of the district.
• The La Garra-Metates District has been acquired for less than 3% of Vizsla Silver’s market
capitalization
After five years and 325 million ounces and climbing, it's fair to say that the world class management team (this time I mean it) at Vizsla Silver can be described as experts in this part of Mexico. More than tripling the land package, when the exploration of the original Panuco district is adding 100 million ounces per year of high grade silver equivalent is an exciting development. Chairman Craig Parry sounded over the top when he started talking about a billion ounces at the Panuco district, but with two thirds of the land relatively unexplored, and surface samples of over 1000 gpt silver equivalent, his call keeps looking better. Going 32 kilometers from the Panuco project the team at Vizsla is clearly looking to duplicate the fantastic success on a much larger scale.
The price has to be considered a bargain, less than a quarter of what Vizsla paid for the much smaller Panuco district a few years ago and it repositions Vizsla as a potential large scale multi asset mining operator with long lifespan mineral assets. The process of completely exploring and mining the totality of this expanded land package is now certainly a multidecade process for Vizsla.
The fundamental value proposition for Vizsla shareholders continues to improve. With the resource containing roughly 30% gold, high grade mineralization close to surface with highway access, power to the site, water, permitting and indigenous relationships all in hand, Vizsla is well on the way to being a large scale, highly productive and profitable mining company within a few years. Valuations in this sector remain largely in the basement of course, but 80% of the time the price of silver follows the price of gold which is reaching multiple new all time high prices so far this year. Vizsla has done better than most, but the current market cap of around $400 million for this amount of silver equivalent with most of the exploration yet to come is simply a bear mining market bargain.
There is no doubt in my mind that Vizsla's management team has the ability to successfully advance this project, and in a legitimate silver bull market there is always the prospect of a takeover by a major mining company in a world where a billion ounce or even multibillion ounce primary silver project stands taller and taller. Vizsla silver is my top holding, and I am far from alone in following and participating fully in an exciting story that continues to improve.
I have a beneficial long position in the shares of one or more of the companies discussed in this article, either through stock ownership, options, or other derivatives. I wrote this article without external assistance, and it expresses my personal opinions. I was not compensated for this article, and I have no business relationship with any company whose stock is mentioned in this article.
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