In the strongest precious metals bull markets silver has a strong tendency to vastly outperform gold. In 2011, as gold was on its way to all-time highs at nearly US$2,000/oz, silver led the charge by rising from $18/oz in August 2010 to nearly $50/oz eight months later:

Silver (2010/2011)

A strong silver price trajectory is often the final key ingredient for the most powerful junior mining bull markets. We have recently begun to see silver take the baton from gold with a strong advance during the month of May which saw silver vastly outperform gold at a magnitude of nearly 10x gold’s performance:

Gold (blue) vs. Silver (red) May 1st 2020 - June 1st 2020

Silver has recently pulled back roughly 10% after nearly reaching $19 per ounce. However, I believe that silver could be on the verge of a major long term chart breakout. Let's take a look at the weekly chart of silver dating back to 2012:

Silver (Weekly - 8 Year)

The red shaded area represents long term resistance ($18.50-$19.00) that has been tested multiple times over the last 3+ years. One of the tried and true principles of technical analysis is that the more times a level is tested, the more likely price is to eventually break-through that level.

Silver could be on the verge of a major upside breakout with prices rising above the 2016 highs (~$21 per ounce). If silver rises to $20+ over the next several months the biggest upside leverage will be delivered by junior miners focused on developing the best silver projects in the world.

One of the companies that is at the top of my list of silver explorers/developers is Vizsla Resources (TSX-V:VZLA, OTC:VIZSF), a silver explorer/developer focused on a district-scale project in Mexico (the Panuco Project). VZLA boasts strong insider ownership and a relatively thin trading float (relative to its total shares outstanding):

I recommend reviewing VZLA's updated investor presentation here.

The VZLA news flow went relatively quiet during March/April primarily due to COVID-19 forcing the company to stop drilling and then also to ship drill core samples to labs in Canada as Mexico went into full lockdown mode. However, Vizsla was still busy during March and April as the company renegotiated option agreements on its Panuco Project.

The renegotiation saves VZLA US$4.1 million between now and early 2022. This is a big deal for a company that is doing its best to make every dollar stretch as far as possible during this critical early stage of advancing Panuco to the point where a decision can be made to move towards production and make the much bigger payments in the "purchase phase" of the agreement beginning in 2022.

Today, VZLA announced that it has resumed drilling at Panuco - CEO Michael Konnert offered the following comment in this morning's NR:

"Vizsla is very pleased to have the drill turning again at the Panuco project. In the month of May 2020, the Company announced the extension of the exploration period of the options, returned its exploration team to the Project and announced a bought deal financing for gross proceeds of approximately C$4 million. The Company is now in a position to execute its exploration program at the underexplored district-scale project and create shareholder value."

Vizsla has tested only five of the initially identified twenty targets and will continue with two drill rigs to ensure the remaining 10,861 meters of planned drilling is completed this year.

The renegotiated option terms make things a lot more comfortable for Vizsla and I anticipate that once this financing is complete the company might expand the current drill program in excess of 14,500 meters.

Technically speaking, VZLA has strong chart support in the C$.40 area and I anticipate that once this C$.43 financing (with no warrants) is complete we will see VZLA shares move back above C$.60 on anticipation of drill results, in addition to silver bull market tailwinds.

VZLA.V (Daily)

I am adding to my VZLA position today and I anticipate a quick close to the financing. 

Disclosure: The author of this article owns VZLA shares and may choose to buy or sell at any time without notice. The author has also been compensated for marketing and market awareness services by Vizsla Resources Corp.

DISCLAIMER: The work included in this article is based on current events, technical charts, company news releases, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. This publication is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Junior resource companies can easily lose 100% of their value so read company profiles on www.SEDAR.com for important risk disclosures. It’s your money and your responsibility.