Vizsla Resources (TSXV: VZLA) has closed a bought deal private placement for around 16 million units of the company at a price of C$1.87 per unit for gross proceeds of C$30 million (about $22m) and includes the exercise in full of the underwriters’ over-allotment option.
Each unit consists of one common share in the company and one common share purchase warrant, with each warrant entitling the holder to purchase one common share for C$2.40 per share.
Under the deal, 2176423 Ontario, a company controlled by Eric Sprott, acquired around 5 million units for a total consideration of C$10 million. Following the acquisition, Sprott owns or controls 6.06% of the issued and outstanding common shares of the company on a non-diluted basis and 11.42% on a partially diluted basis, the company reports.
“We are pleased to see Mr. Sprott take such a meaningful stake in the Company to welcome investment from other key strategic and institutional investors,” Michael Konnert, the company’s director and CEO, said in a press release.
“We have approximately C$34,000,000 in cash and are fully funded for continuous exploration drilling for the next two years.
Concurrent with the bought deal, the company also completed a non-brokered private placement for 240,000 units for gross proceeds of C$448,000.
The company says that total proceeds from the two offerings will be used to advance its Panuco project and for working capital and general corporate purposes. Panuco is a district-scale silver-gold project totalling 9,386.5 hectares, located approximately 33 km northeast of Concordia in Sinaloa, Mexico.
According to Vizsla, the project is about 80 km south from First Majestic Silver’s (TSX: FR) San Dimas silver-gold mine, which produced over 25 million oz. of silver equivalent in 2019.
In a July 8 press release, the company reported the latest drilling results from the Napoleon vein at Panuco. The highlight included drill hole NP-20-7, which intersected 6 metres grading 1,808.2 grams silver per tonne, 66.8 grams gold (8,078 grams silver equivalent), and 2.99% lead, and 3.3% zinc starting from 69 metres downhole.
The also included a high-grade core of 3.7 metres grading 2,889.2 grams silver, 107.9 grams gold (12,992 grams silver equivalent), 4.8% lead, and 4.56% zinc from 69.5 metres downhole.
To date, 11 holes have been drilled at the Napoleon vein over 150 metres of strike, which remains open to the north, south, and at depth, the company reports.
“The Company now has four drill rigs turning on the underexplored Panuco silver district. Vizsla will now look to drill over 31,000 metres in 2020,” Konnert said.
Midday Friday, Vizsla’s stock was up 4% on the TSXV. The company has a C$164 million market capitalization.
(This article first appeared in The Northern Miner on July 31)