Vizsla Silver shares surge on 43% resource boost

Vizsla Silver (NYSE: VZLA; TSX: VZLA) saw double-digit share price gains on Monday after reporting a 43% increase in the mineral resource for its main Panuco project in Mexico.

The project in Sinaloa is now estimated to contain 12.96 million tonnes in measured and indicated resources grading 307 grams silver per tonne, 2.49 grams gold, 0.27% lead and 0.85% zinc. This equates to 222.4 million oz. of silver-equivalent compared with 155.5 million oz. previously. 

Shares of Vizsla Silver shot up 12% by Monday afternoon in Toronto to $2.75 apiece, approaching a 52-week high of $2.84. The Vancouver-headquartered precious metals miner has a market capitalization of $766.6 million.

“Growing resource size and increasing grade at the same time is typically difficult to achieve,” Canaccord Genuity mining analyst Peter Bell said in a note on Monday. “We view this update as highly positive and expect these results to bode well for the company’s upcoming feasibility study on Panuco.”

The project also has 10.5 million tonnes of inferred resources grading 219 grams silver, 1.96 grams gold, 0.3% lead and 1.01% zinc, for 138.7 million silver-equivalent ounces. This is slightly down from the last estimate, as a large portion has been upgraded to the measured and indicated categories.

Measured resource

The update marks the first time that a measured resource has been calculated for Panuco, totalling 46 million oz. silver-equivalent at an average grade of 640 grams silver-equivalent. A majority of this resource category is attributed to the Copala resource area that is designated for the first few years of mining.

This resource estimate follows the inclusion of 157 new infill/expansion holes (69,754 metres) completed by Vizsla in the 12 months after September 2023. It comes five years after the initial Napoleon discovery, and represents only about 10% of the known cumulative vein strike (86 km) at the 170-sq.-km Panuco property.

“This update reflects the excellent mineralized continuity that exists at Copala,” Vizsla CEO Michael Konnert said in the release. “Reducing the space between drill holes at Copala to 25 metres has resulted in a significantly higher-grade profile in the upper levels of the resource and PEA mine plan.”

$1.1B NPV 

The preliminary economic assessment released last summer for Panuco outlined an initial 10.6-year mine with 15.2 million oz. silver-equivalent of annual production. It has an after-tax net present value (at 5%% discount) of US$1.1 billion, an 86% internal rate of return, and a 9-month payback.

To advance the project through its target first production of 2027, Vizsla is planning to implement a dual-track approach of mine development and district scale exploration at the same time. Ongoing initiatives include a fully funded and permitted test mine program, a feasibility study and a 10,000-metre discovery-based drill campaign.

Depending on exploration success, the company said it plans to publish a further update to the resource estimate in the second half of 2025.