Vizsla raising US$100M to develop Panuco project

Canadian miner Vizsla Silver (TSX, NYSE: VZLA) is raising about US$100 million ($138 million) to advance the exploration, drilling and development of its flagship Panuco project in western Mexico. The stock plunged.

A group of underwriters has agreed to purchase about 33.3 million common shares at US$3 apiece via a bought deal, Vizsla said Monday in a statement. An over-allotment option gives the group the option to buy 15% more stock, which would boost gross proceeds to about US$115 million if it was exercised in full.

The offering is expected to close on or about Thursday. Canaccord Genuity is the sole bookrunner.

Vancouver-based Vizsla is conducting a 10,000-metre drill program – started late last year – to test several veins in five priority targets across the Panuco district.

Panuco sits in southern Sinaloa, near the city of Mazatlán. The 72-sq.-km district has more than 86 km of total vein extent, 35 km of underground mines, roads, power and permits.

Vizsla is working to deliver a feasibility study for Panuco in the second half of the year. It’s targeting first production in late 2027.

Panuco hosts an estimated 12.96 million measured and indicated tonnes in grading 307 grams silver per tonne, 2.49 grams gold, 0.27% lead and 0.85% zinc, Vizsla said in January. Expressed in silver-equivalent ounces, measured and indicated resources increased 43% over a January 2024 estimate, the company said.

A preliminary economic assessment released last July gave Panuco a US$1.1 billion after-tax net present value (at a 5% discount rate), an 86% after-tax internal rate of return and a nine-month payback period. The mine could cost US$224 million to build, Vizsla said at the time.

Shares of Vizsla dropped about 8.8% to $4.15 in Toronto Monday morning, giving the company a market capitalization of about $1.2 billion. The stock has traded between $2.27 and $5 over the past year.