Vizsla Silver completes acquisition of La Garra-Metates gold-silver district in Mexico

Vizsla Silver has announced the completion of its acquisition of the past-producing La Garra-Metates district, in the heart of the gold and silver-rich Panuco-San Dimas corridor in Sinaloa state, northwest Mexico. 

The acquisition was initially announced in March of this year.

The transaction was completed under a share purchase agreement dated March 27, 2024, according to a company statement.

BNamericas reached out to Vizsla Silver's director in Mexico, Hernando Rueda, to discuss the implications of the purchase for the company's future in the country, but he did not respond immediately.

Vizsla agreed to make payments totaling US$3mn in cash and issuing 5,555,555 common shares in the company at an estimated price of US$1.26 per share.

The cash payments and share issuance will be made over a 24-month period following the closing of the acquisition.

The sellers agreed that 90% of the restricted consideration shares will be subject to voluntary resale restrictions as follows: 33% of them will be restricted for a period of 12 months after the closing date, another 33% for a period of 24 months and the remaining 33% for 36 months after the closing date.

The company also revealed that it has paid US$1.61mn in outstanding taxes owed on the concessions comprising the La Garra-Metates district. It also granted the sellers a 1% net smelter return (NSR) royalty on the district. Vizsla retains the right to buy back the NSR at any time for a consideration of US$750,000.

Vizsla also granted Asteria Mining Services, an independent Mexican company, a 2% NSR royalty on La Garra as a broker fee related to the acquisition.

The La Garra-Metates district area contains silver and gold-rich veins in a geological setting similar to the Panuco and San Dimas projects owned by First Majestic Silver, located just 80km away.

Panuco

Vizsla Silver’s Panuco silver and gold project, now 100% owned and recently consolidated, is an emerging high-grade discovery located in southern Sinaloa, near the city of Mazatlán. The 7,190ha producing district benefits from more than 86 kilometers of total vein strike, 35 kilometers of underground mines, roads, power, and permits, according to Vizsla.

On January 8 of this year, the Vancouver-based company announced an updated mineral resource estimate for Panuco, which includes an estimated in situ indicated mineral resource of 156Moz gold equivalent and an inferred in situ resource of 170Moz gold equivalent.