/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
VANCOUVER, Sept. 17, 2019 /CNW/ - Vizsla Resources Corp.
(TSX-V: VZLA) ("Vizsla" or the "Company") is
pleased to announce that it has entered into a definitive share
purchase agreement to acquire an option over the consolidated
minerals rights, infrastructure and processing facilities
comprising the large-scale Panuco-Copala
("Panuco") precious metals
camp in Sinaloa, Mexico.
Active and historical surface mapping implies that there are
more than 75 kilometres of cumulative vein strike on the property
and more than 31 active and historic mines within the veins.
Historic production from these mines has not been recorded.
Reportable historic drilling includes a diamond-drill intercept
from one of these veins containing 2,235 g/t silver and 9.5 g/t
gold over a 4.23 metre true width (Christopher and Sims, 2008).
Exploration work by the target will commence immediately with a
view to be drilling within three months and completing a maiden
resource later in 2020. Press releases reporting exploration
results should be anticipated regularly over the coming weeks and
months, subject to receiving the necessary regulatory
approvals.
Under the definitive share purchase agreement dated September 13, 2019, Vizsla has agreed to acquire
(the "Acquisition") all of the outstanding shares of Canam
Alpine Ventures Ltd. ("Canam"). Canam holds options (the
"Options") to acquire a 100% interest in the Panuco mining concessions and related
infrastructure and processing facilities. Title to the property is
currently held by the optionees.
"This transformative acquisition offers shareholders exposure
to the potential of multiple high-grade silver and gold discoveries
in a prolific district that has seen extremely limited modern
exploration," commented Michael
Konnert, President and Chief Executive Officer of
Vizsla.
"The deal provides the Company with an option to acquire all
of the assets within the district including over 35 kilometres of
known underground workings, a mill, multiple tailings facilities, a
significant road network, power and associated permits. We see
significant exploration potential that, if confirmed, will lead us
to exercise our option to acquire the mining and milling operations
of the Panuco camp."
Acquisition Highlights
- Consolidation of a district scale land package,
comparable in size and geology to First Majestic's San Dimas mine and Silvercrest's Las Chispas
project, containing more than 20 veins, several of which have
demonstrated high silver and gold grades
- High-Grade Silver and Gold: With a total greater than 75
km of cumulative vein strike, Panuco hosts high grade silver and gold
- Very Limited Modern Exploration: This is the first time
the entire district will be consolidated, and it has seen only
sparse past exploration
- Production Facilities on Site: Canam has an option on
the mill, mining equipment and tailings facilities on site
- Significant Infrastructure in Place: The district scale
camp has substantial infrastructure including roads, permits, power
and a skilled workforce in neighboring towns
- Location: Situated off a major highway, in the Sierra
Madre epithermal belt, 80 km from First Majestic's San Dimas mine
- Accelerated Pathway to Production: Vizsla can exercise
the Options after a two-year exploration period
Craig Parry, Chairman of the
Board, stated, "Panuco is one
of the best opportunities I've seen in my career. We have an option
over one of the largest, most important historic mining districts
in Mexico – consolidated for the
first time ever in its history.
Our immediate objective is to delineate a resource that will
support the decision to exercise our option over the existing mill
and all the infrastructure and to advance the project into
production, should the technical feasibility and economic viability
be established. Exploration targets are being explored by our team
now. Several high-grade silver and gold zones have been uncovered
and we look forward to drilling these zones in the coming
months."
Panuco District Overview
The district-scale Panuco
silver-gold epithermal vein project is the consolidation of mining
concessions totaling 10,542 hectares in a producing mining camp
outside of Concordia, Sinaloa. The
area's first silver production occurred in the 1500's and has been
producing intermittently ever since, with steady production over
the last several decades.
Vizsla believes there may be significant high-grade silver and
gold discovery potential at Panuco. This is the first time the entire
district will be explored as a consolidated region which has not
seen modern exploration except for a small drill campaign between
2006 to 2008 on a portion of the district.
On multiple site visits, company representatives observed
shallowly to steeply dipping quartz-carbonate veins with workings
defining both steeply plunging and sub-horizontal ore shoots.
Mineralization occurs as pyrite, silver sulphides, native gold,
electrum, argentite and native silver with generally minor galena,
sphalerite and rare chalcopyrite. Alteration is not well
understood though large zones of strong disseminated pyrite
alteration extends over one kilometre away from major veins.
In 2004 Capstone Mining Corp. optioned approximately 40% of the
Panuco district from Grupo Minero Bacis and undertook exploration
around historical workings at two of the more than twenty veins
mapped on their property. Capstone drilled along the Animas
and La Colorada veins between 2006
and 2008.
Significant intersections from this historic drilling program
include (Christopher and Sims, 2008);
- Hole CC-06-26 intersecting 4.23 metres true width grading 2,235
g/t silver and 9.5 g/t gold from 46.5 metres downhole at El
Muerto,
- Hole SC-07-72 intersecting 11.33 metres true width grading 288
g/t silver and 1.65 g/t gold from 22.5 metres downhole at
Clemens-El Muerto, and
- Hole SCC-07-09 intersecting 2.0 metres true width grading 1,634
g/t silver and 10.38g/t gold from 22 metres downhole at
La Colorada.
The Qualified Person (as defined below) has reviewed some of the
intercepts still preserved in the coreshack, diamond drill records,
survey records and the assay records. It is her opinion that
the information disclosed in Christopher and Sims (2008) is
verifiable. Additional drilling will be required to fully
verify the historic data, and Vizsla is in the process of planning
these studies.
Historical Estimates
Initial resource estimates were prepared for Clemens-El Muerto
and La Colorada by Christopher and
Sim (2008). For Clemens-El Muerto, they estimated an
indicated resource of 656,000 tonnes grading 204 g/t Ag and 1.11
g/t Au using a 90 g/t Ag cut-off grade. Additional inferred
resources at this cut-off were 345,000 tonnes grading 145 g/t Ag
and 0.79 g/t Au. For La
Colorada, an inferred mineral resource of 2,527,000 tonnes
of material containing 80.2 g/t Ag and 0.38 g/t Au using a 20 g/t
silver-equivalent cut-off grade was estimated. At the time of
that report, silver equivalent grade was calculated by taking the
silver grade and adding to it the gold grade multiplied by
57. While these estimates were prepared to NI43-101
standards, and the work could be relied on in 2008, Vizsla is not
treating these estimates as current mineral resources. Clemens-El
Muerto has been partially mined out by owner Silverstone de Mexico
S.A. de C.V., and La Colorada
requires additional drilling to confirm the historic results.
A qualified person has not done sufficient work to classify the
above historical estimates as current mineral resources or mineral
reserves. At this time the Company is unaware of how much of the
above historical estimates has been exploited.
Due to the fragmented property ownership, very little systematic
modern exploration has been completed on the project, however,
local miners are currently producing at several mine sites in the
district. The over 75 km cumulative strike extent of veins on the
project as well as the numerous historical and current workings
indicate significant exploration upside that will be the focus of
Vizsla's upcoming exploration program.
Exploration Program
Canam has commenced an exploration program with a view to
completing a maiden drilling program in the next three months. The
current focus is on validating historic data with the collection of
new remote sensing datasets, re-processing of a historic airborne
magnetic survey and ground-truthing historic non-compliant sampling
results from surface outcrops and underground works.
The sampling and mapping program are focused in defining both
high priority drill targets surrounding active and historic mining
areas and understanding the formation of the known deposits to
generate new targets on the multiple untested veins at Panuco.
Acquisition Terms
Vizsla will acquire Canam for a total staged consideration of
18,000,000 common shares of Vizsla (the "Shares") as
follows: (a) 6,000,000 Shares will be issued on closing of the
Acquisition (the "Payment Shares"), (b) 6,500,000 Shares
will be issued upon definition of a resource greater than 200,000
gold equivalent ounces, and (b) 5,500,000 Shares will be issued
upon exercise of the Options.
The Payment Shares will be subject to voluntary pooling
restrictions, with 12.5% released each quarter.
The Acquisition is subject to a number of conditions precedent,
including: completion of confirmatory due diligence by Vizsla,
receipt of all applicable regulatory, shareholder and third party
approvals, including approval of the TSX Venture Exchange (the
"Exchange"); and confirmation of no adverse material change
of Canam or Vizsla.
Subject to approval of the Exchange, a finder's fee of 750,000
Shares will be paid to Doug Seaton
of Nakusp, BC in the following
increments, 250,000 Shares at signing, 250,000 Shares upon
definition of a resource greater than 200,000 gold equivalent
ounces, and 250,000 Shares upon exercise of the Options.
Canam is at arm's length to Vizsla and no Non-Arm's Length
Parties of Vizsla have any direct or indirect interest in
Canam.
Following closing of the Acquisition, current shareholders of
Vizsla will own approximately 85% of the outstanding Shares and the
former shareholder of Canam will own approximately 15% of the
outstanding Shares.
Option Terms
Following is a summary of the terms of exercising the
Options:
Milestone
|
Work Commitment
(USD)
|
Payment
(USD)
|
On signing
|
|
$700,000
|
12 month anniversary
of signing
|
|
$450,000
|
24 month anniversary
of signing
|
$3,423,000
|
$5,184,500
|
36 month anniversary
of signing
|
|
$6,846,000
|
48 month anniversary
of signing
|
|
$8,557,500
|
60 month anniversary
of signing
|
|
$9,269,000
|
72 month anniversary
of signing
|
|
$11,907,425
|
Total
|
$3,423,000
|
$43,000,000
|
Canam has the right to accelerate exercise of the Options at any
time during the option period. Small scale production by the
optionors may continue in select areas until the exercise of the
Options. Canam has the right of way and priority with an area of
exclusion of 50 metres from any new discoveries.
Upon exercise of the Options, Canam will have rights to the
following:
- Existing mining operations including a mill and 35 km of
underground mine workings
- Grid power to site
- Tailings facilities
- 60 km of road infrastructure
- Mine permits
- Mining equipment
- Ejido agreements
Vizsla Share Structure and Treasury
Vizsla will have approximately 39,300,000 Shares outstanding
after the issuance of the Payment Shares. Approximately 17% of the
Shares currently outstanding are held by insiders and an additional
10% are subject to a 3-year escrow period.
The Company completed an oversubscribed private placement in
June 2019 for $1,900,000 and is fully funded to make the first
option payment and continue the initial work program on
Panuco.
About Vizsla Resources
Vizsla is a mineral exploration company engaged in the business
of the acquisition, exploration and development of mineral resource
properties. Vizsla's common shares trade under the symbol "VZLA" on
the TSX-V.
References
Christopher, P. and Sim, R., 2008, Technical Report on the
Copala Project, Sinaloa State, Mexico; Silverstone Resources Corp., 100
p.
Qualified Person
The scientific and technical information in this news release
has been prepared in accordance with the Canadian regulatory
requirements set out in National Instrument 43-101 (Standards of
Disclosure for Mineral Projects) and reviewed and approved on
behalf of the Company by Michelle
Robinson, MASc. P.Eng. a Qualified Person as defined by NI
43-101 (the "Qualified Person"). Core drilling,
surveying, logging, sample preparation, analytical and quality
control procedures (including the insertion of blind standards,
blanks, pulp and field duplicates into the sample stream) used to
produce the results mentioned in the text of this news release are
documented in detail in Christopher and Sims, (2008). The
assaying was done by ALS Chemex using fire-assay methods with a
gravimetric finish for gold and four-acid digest for silver
followed by fire assaying with both a gravimetric finish and
ICP-AES finish. The Qualified Person's opinion is that the
drilling and assaying done by Capstone and reported on by
Silverstone is reliable information and can be used to guide
exploration decisions.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
This news release includes certain "Forward‐Looking Statements"
within the meaning of the United States Private Securities
Litigation Reform Act of 1995 and "forward‐looking information"
under applicable Canadian securities laws. When used in this news
release, the words "anticipate", "believe", "estimate", "expect",
"target", "plan", "forecast", "may", "would", "could", "schedule"
and similar words or expressions, identify forward‐looking
statements or information. These forward‐looking statements or
information relate to, among other things: closing of the
Acquisition; anticipated benefits of the Acquisition to Vizsla and
its shareholders; the timing and receipt of required approvals for
the Acquisition; the ability of Vizsla and Canam to satisfy the
other conditions to, and to complete, the Acquisition; the
development of Panuco; anticipated
timing of future press releases; future mineral exploration,
development and production including the commencement of drilling;
timing of completion of a maiden drilling program and a maiden
resource; liquidity, enhanced value and capital markets profile of
Vizsla; future growth potential for Vizsla and its business;
estimates regarding future production and future profitability; and
completion of financing.
Forward‐looking statements and forward‐looking information
relating to any future mineral production, liquidity, enhanced
value and capital markets profile of Vizsla, future growth
potential for Vizsla and its business, and future exploration plans
are based on management's reasonable assumptions, estimates,
expectations, analyses and opinions, which are based on
management's experience and perception of trends, current
conditions and expected developments, and other factors that
management believes are relevant and reasonable in the
circumstances, but which may prove to be incorrect. Assumptions
have been made regarding, among other things, the price of silver,
gold and other metals; costs of exploration and development; the
estimated costs of development of exploration projects; Vizsla's
ability to operate in a safe and effective manner and its ability
to obtain financing on reasonable terms.
These statements reflect Vizsla's respective current views with
respect to future events and are necessarily based upon a number of
other assumptions and estimates that, while considered reasonable
by management, are inherently subject to significant business,
economic, competitive, political and social uncertainties and
contingencies. Many factors, both known and unknown, could cause
actual results, performance or achievements to be materially
different from the results, performance or achievements that are or
may be expressed or implied by such forward‐looking statements or
forward-looking information and Vizsla has made assumptions and
estimates based on or related to many of these factors. Such
factors include, without limitation: satisfaction or waiver of all
applicable conditions to closing of the Acquisition including,
without limitation, receipt of all necessary approvals or consents
and lack of material changes with respect to Vizsla and Canam and
their respective businesses, all as more particularly set forth in
the Acquisition agreement; the synergies expected from the
Acquisition not being realized; business integration risks;
fluctuations in general macro‐economic conditions; fluctuations in
securities markets and the market price of Vizsla's common shares;
and the factors identified under the caption "Risk Factors" in
Vizsla's management discussion and analysis. Readers are cautioned
against attributing undue certainty to forward‐looking statements
or forward-looking information. Although Vizsla has attempted to
identify important factors that could cause actual results to
differ materially, there may be other factors that cause results
not to be anticipated, estimated or intended. Vizsla does not
intend, and does not assume any obligation, to update these
forward‐looking statements or forward-looking information to
reflect changes in assumptions or changes in circumstances or any
other events affecting such statements or information, other than
as required by applicable law.
SOURCE Vizsla Resources Corp.