Vizsla Resources (TSXV: VZLA) has closed a bought deal private placement for 16 million units of the company at a price of $1.87 per unit for gross proceeds of $30 million 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 $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 $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 chief executive officer, said in a press release. “We have approximately $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 $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 94 sq. km., located 33 km northeast of Concordia in Sinaloa, Mexico.
According to Vizsla, the project is 80 km south from First Majestic Silver’s (TSX: FR) San Dimas silver-gold mine, which produced over 25 million oz. silver-equivalent in 2019.
In a July 8 press release, the company reported the drilling results from the Napoleon vein at Panuco. Highlights include 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 4 metres grading 2,889.2 grams silver, 107.9 grams gold (12,992 grams silver-equivalent), 4.8% lead, and 4.56% zinc from 70 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.
At press time in Toronto, Vizsla was trading at $2.34 per share within a 52-week trading range of 19¢ and $2.94. The company has 68 million common shares outstanding for a $168.6-million market capitalization.