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Mexico-focused Vizsla Silver (TSXV: VZLA) (NYSE: VZLA) has entered into a non-binding letter of intent with Prismo Metals (CSE: PRIZ) for a strategic investment totalling C$2 million. In exchange, Vizsla would receive a right of first refusal to purchase the Palos Verdes project from Prismo as well as 4 million units of Prismo.
The consideration will consist of cash payment of C$500,000 and 1 million common shares of Vizsla. Each Prismo unit acquired will consist of one common share of Prismo and one-half of a common share purchase warrant exercisable at C$0.75 for two years.
Following completion of the investment, Vizsla will own or beneficially control approximately 12.04% of the issued and outstanding Prismo shares on a basic basis, or 17.03% on a partially diluted basis.
Prismo is co-founded and advised by Dr. Peter Megaw, a consulting geologist from the University of Arizona with more than 30 years of relevant experience focused on silver and gold exploration in Mexico. He is currently chief exploration officer at MAG Silver.
Megaw and his team have been credited with the significant discoveries at Platosa, Durango (Excellon Resources), Juanicipio-Fresnillo, Zacatecas (Fresnillo/MAG Silver), Pozo-Seco/Cinco de Mayo, Chihuahua (MAG Silver).
“Since day one, the Vizsla team has believed that the Panuco-Copala district would become a major, well-endowed precious metals camp,” Vizsla CEO Michael Konnert said in a news release. “Over the last couple of years, in addition to announcing our large maiden resource, Vizsla has worked to consolidate our land position and has continued to acquire both small inlier and outlier concessions in the area.”
With this in mind, Vizsla believes Prismo has made what it considers a “meaningful discovery” at Palos Verdes, and the strategic investment and right of first refusal over the Palos Verdes concessions indicates the company’s commitment to the long-term future of the Panuco-Copala district.
The Palos Verdes concession sits in the eastern area of Vizsla’s Panuco district and covers 700 metres of strike length of the Palos Verdes vein, a member of the northeasterly trending vein family located in the eastern part of the district outside of the area of modern exploration.
Recent drilling at the concession has intercepted a wide vein structure, and past drilling has returned encouraging results, with the best being 2,336 g/t silver and 8.42 g/t gold over a true width estimated at 0.8 metres within a larger mineralized interval with 1,098 g/t silver and 3.75 g/t gold over a true width of 2.3 metres.
The newly consolidated Panuco silver-gold project is an emerging high-grade discovery located in southern Sinaloa, Mexico, near the city of Mazatlán. The 6,761-hectare, past-producing district benefits from over 86 km of total vein extent, 35 km of underground mines, roads, power and permits.
To date, Vizsla has completed over 210,000 metres of drilling at Panuco, leading to the discovery of several new high-grade veins. The property currently hosts an estimated in-situ indicated mineral resource of 61.1 million oz. silver-equivalent and an in-situ inferred resource of 45.6 million oz. silver-equivalent.
