VIZSLA SILVER ANNOUNCES UPDATE ON ROYALTY SPINOUT

Rhea-AI Summary

Vizsla Silver Corp. announces the intention to spin out its subsidiary, Vizsla Royalties Corp., to distribute shares and warrants to its shareholders. The spinout involves a net smelter royalty on future mineral production at the Panuco project in Mexico.

Insights

Market Research Analyst

From a market research perspective, the strategic move by Vizsla Silver Corp. to spin out its royalty business into a separate entity, Vizsla Royalties Corp. (Spinco), holds significance for both the company and its shareholders. This type of corporate restructuring can unlock value and provide shareholders with direct exposure to a specific segment of the business, potentially leading to an increase in shareholder value. By distributing shares and warrants of Spinco to existing shareholders, Vizsla Silver is effectively transferring a portion of the future revenue potential from its Panuco silver-gold project's net smelter royalty to the shareholders.

The success of such a spinout often depends on the underlying value of the assets and the market's perception of the standalone business's potential. In the case of Vizsla Silver, the Panuco project's performance and the silver and gold market dynamics will be critical factors influencing Spinco's valuation. Shareholders will need to consider the prospects of the minerals market, alongside the operational efficiency and exploration success of the Panuco project when evaluating the potential benefits of the Spinout.

Financial Analyst

Financially, the announcement of the Spinout by Vizsla Silver could have several implications. The distribution of Spinco shares and warrants is akin to a dividend in kind, which could be seen as a positive signal about the company's confidence in its royalty business. However, the impact on Vizsla Silver's stock price will depend on how the market values the separate entities post-Spinout. There is a possibility of an initial increase in volatility as investors adjust to the new structure and re-evaluate their positions.

Investors will need to conduct a thorough analysis of the transaction details once they are released, including the valuation of Spinco, the terms of the warrants and the record date for share distribution. This information will be crucial for understanding the financial implications of the Spinout, such as the potential for dilution of Vizsla Silver Shares and the immediate and long-term financial health of both entities. It is also important to monitor the liquidity of Spinco's shares post-Spinout, as it could affect shareholders' ability to realize value.

Legal Expert

Legally, the arrangement between Vizsla Silver Corp. and Spinco must comply with corporate and securities laws. The Spinout will likely require approval from the board of directors, shareholders and regulatory bodies, ensuring that it meets all legal standards and disclosure requirements. Shareholders should pay attention to the arrangement agreement once it's finalized, as it will contain critical legal terms that govern the Spinout, including the rights and obligations of both Vizsla Silver and Spinco shareholders.

Additionally, the legal structure of the Spinout will determine tax implications for shareholders. The manner in which shares and warrants are distributed could affect the tax treatment of the transaction. Shareholders should consult with tax advisors to understand the personal tax consequences of receiving Spinco shares and warrants. Furthermore, the legal expertises will be essential in navigating any cross-border regulatory issues, given that Vizsla Silver is listed on multiple stock exchanges and the Panuco project is located in Mexico.

NYSE: VZLA TSX-V: VZLA

VANCOUVER, BC, Feb. 12, 2024 /PRNewswire/ - Vizsla Silver Corp. (TSXV: VZLA) (NYSE: VZLA) (Frankfurt: 0G3) ("Vizsla Silver" or the "Company") is pleased to announce that, further to its news release dated January 17, 2024, it intends to enter into an arrangement agreement with its wholly-owned subsidiary Vizsla Royalties Corp. ("Spinco") within 45 days of this news release in respect of the spinout of the shares of Spinco to the Company's shareholders (the "Spinout"). Spinco currently holds, indirectly, a net smelter royalty on any future mineral production at Vizsla Silver's flagship, 100% owned Panuco silver-gold project located in Mexico.

The Company further announces that holders of its common shares (the "Vizsla Silver Shares") will be entitled to 1/3 of a common share of Spinco and 1/3 of a common share purchase warrant of Spinco for each Vizsla Silver Share held on the share distribution record date.

Additional details regarding the Spinout, including the share distribution record date, will be disclosed as they become available.

Shareholders are invited to contact Vizsla Silver via email at info@vizslasilver.ca for additional information regarding the Spinout.

About the Panuco Project

The newly consolidated Panuco silver-gold project is an emerging high-grade discovery located in southern Sinaloa, Mexico, near the city of Mazatlán. The 7,189.5 hectare, past producing district benefits from over 86 kilometres of total vein extent, 35 kilometres of underground mines, roads, power, and permits.

The district contains intermediate to low sulfidation epithermal silver and gold deposits related to siliceous volcanism and crustal extension in the Oligocene and Miocene. Host rocks are mainly continental volcanic rocks correlated to the Tarahumara Formation.

On January 8, 2024, the Company announced an updated mineral resource estimate for Panuco which includes an estimated in-situ indicated mineral resource of 155.8 Moz AgEq and an in-situ inferred resource of 169.6 Moz AgEq.

About Vizsla Silver

Vizsla Silver is a Canadian mineral exploration and development company headquartered in Vancouver, BC, focused on advancing its flagship, 100%-owned Panuco silver-gold project located in Sinaloa, Mexico. To date, Vizsla Silver has completed over 350,000 metres of drilling at Panuco leading to the discovery of several new high-grade veins. For 2024, Vizsla Silver is focused on de-risking the resource base located in the western portion of the district ahead of a development decision. Additionally, Vizsla Silver has budgeted +65,000 metres of resource/discovery-based drilling designed to upgrade and expand the Project's mineral resource, as well as test other high priority targets across the district.

In accordance with NI 43-101, Jesus Velador, Ph.D. MMSA QP, Vice President of Exploration, is the Qualified Person for the Company and has validated and approved the technical and scientific content of this news release.

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

The information contained herein contains "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation. "Forward-looking information" includes, but is not limited to, statements with respect to the activities, events or developments that the Company expects or anticipates will or may occur in the future, including, without limitation, planned exploration activities. Generally, but not always, forward-looking information and statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or the negative connotation thereof or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative connotation thereof. Forward-looking statements in this news release include, among others, statements relating to: timing, structure and completion of the Spinout; the terms of the Spinout; and exploration, development, and production at Panuco.

Forward‐looking statements and forward‐looking information relating to any future mineral production, liquidity, enhanced value and capital markets profile of the Company, future growth potential for the Company 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; no escalation in the severity of public health crises; costs of exploration and development; the estimated costs of development of exploration projects; the Company's ability to operate in a safe and effective manner and its ability to obtain financing on reasonable terms.

These statements reflect the Company'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 the Company has made assumptions and estimates based on or related to many of these factors. Such factors include, without limitation: the Company's dependence on one mineral project; precious metals price volatility; risks associated with the conduct of the Company's mining activities in Mexico; regulatory, consent or permitting delays; risks relating to reliance on the Company's management team and outside contractors; risks regarding mineral resources and reserves; the Company's inability to obtain insurance to cover all risks, on a commercially reasonable basis or at all; currency fluctuations; risks regarding the failure to generate sufficient cash flow from operations; risks relating to project financing and equity issuances; risks and unknowns inherent in all mining projects, including the inaccuracy of reserves and resources, metallurgical recoveries and capital and operating costs of such projects; contests over title to properties, particularly title to undeveloped properties; laws and regulations governing the environment, health and safety; the ability of the communities in which the Company operates to manage and cope with the implications of public health crises; the economic and financial implications of public health crises to the Company; operating or technical difficulties in connection with mining or development activities; employee relations, labour unrest or unavailability; the Company's interactions with surrounding communities and artisanal miners; the Company's ability to successfully integrate acquired assets; the speculative nature of exploration and development, including the risks of diminishing quantities or grades of reserves; stock market volatility; conflicts of interest among certain directors and officers; lack of liquidity for shareholders of the Company; litigation risk; ongoing military conflicts around the world; general economic factors; and the factors identified under the caption "Risk Factors" in the Company's management discussion and analysis and other public disclosure documents.

Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information or implied by forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking statements or information. The Company undertakes no obligation to update or reissue forward-looking information as a result of new information or events except as required by applicable securities laws.

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SOURCE Vizsla Silver Corp.

FAQ

What is the latest announcement from Vizsla Silver Corp. regarding its subsidiary?

Vizsla Silver Corp. intends to enter into an arrangement agreement with its subsidiary, Vizsla Royalties Corp., for a spinout of shares and warrants to its shareholders.

Where is Vizsla Silver Corp.'s flagship project located?

Vizsla Silver Corp.'s flagship project, the Panuco silver-gold project, is located in Mexico.

How will shareholders benefit from the Spinout?

Shareholders of Vizsla Silver Corp. will receive 1/3 of a common share of Spinco and 1/3 of a common share purchase warrant of Spinco for each Vizsla Silver Share held on the share distribution record date.

How can shareholders get more information about the Spinout?

Shareholders can contact Vizsla Silver via email at info@vizslasilver.ca for additional information regarding the Spinout.