Is This Co. A Compelling Junior Silver Exploration Investment?

Source: John Newell 07/31/2024

John Newell of RSD Discovery Group shares why he believes Vizsla Silver Corp. (VZLA:TSX.V; VZLA:NYSE) stands out as a strong candidate for speculative investment in silver.

Vizsla Silver Corp. (VZLA:TSX.V; VZLA:NYSE), under the leadership of CEO Michael Konnert, is making waves in the silver exploration industry, particularly in Mexico.

The company’s recent Preliminary Economic Assessment (PEA) has shown promising results, making it a notable consideration for investors looking to speculate in junior silver companies.

Project Overview

The Panuco Project is set to be a high-margin, long-life underground mine with low initial capital requirements. The PEA, based on conservative metals prices (US$26/oz silver and US$1,975/oz gold), forecasts substantial silver-gold production, totaling 162.1 million silver-equivalent ounces over an initial ~11-year mine life.

This robust economic performance underscores Panuco’s potential as a world-class development project.

1. Spectacular PEA Results:

Vizsla Silver’s recent PEA revealed a manageable capital expenditure (capex) of about $250 million. This is significantly lower compared to many other projects requiring billion-dollar investments.

The project boasts a high Internal Rate of Return (IRR) of approximately 85%, with a payback period of just nine months. These figures are exceptionally rare in the mining industry and indicate a highly profitable venture.

1. Location Advantage:

Vizsla Silver’s project is located in Mexico, a region known for its rich epithermal vein clusters. These clusters often contain high concentrations of precious metals and can lead to substantial discoveries.

The company’s project includes the Copala and Napoleon veins, which have already shown high-grade mineralization. The potential for discovering more veins within the district is significant.

1. Expansion Potential:

The PEA represents only a small portion of the overall district, suggesting substantial room for growth. The company’s ongoing exploration efforts aim to uncover additional high-grade veins across the district.

Vizsla Silver has tripled its land package recently, further increasing the potential for future discoveries and expansion.

1. Experienced Leadership and Team:

Michael Konnert and his team bring a wealth of experience to Vizsla Silver. Notable members include Chairman Craig Perry and COO Simon Smick, both of whom have extensive backgrounds in mine building and operations.

The involvement of Eduardo Luna, who has significant experience in the Mexican mining sector, adds to the credibility and potential success of the project.

1. Strategic Vision:

Vizsla Silver aims to become one of the world’s largest single-asset primary silver producers. The company’s strategy focuses on manageable capex, high early cash flow, and minimizing shareholder dilution.

The commitment to building a multi-generational asset indicates a long-term vision that could lead to sustained growth and profitability.

Investment Consideration

Vizsla Silver’s combination of a high IRR, low capex, and significant expansion potential makes it an attractive investment for those interested in junior silver exploration companies.

The company’s strategic location in Mexico, coupled with its experienced leadership and clear vision, positions it well for future success.

Why Invest in Vizsla Silver?

1. High Profitability: The PEA results indicate a highly profitable project with a quick payback period and a high IRR.
2. Expansion Opportunities: The significant land package and ongoing exploration efforts suggest substantial room for growth.
3. Experienced Team: The leadership team’s extensive experience in mine building and operations enhances the company’s credibility.
4. Strategic Location: Mexico’s rich mining history and the project’s location in a prolific silver district add to the investment appeal.
5. Long-term Vision: Vizsla Silver’s commitment to becoming a leading silver producer aligns with a long-term growth strategy, reducing the risk for investors.

Technical Picture

The shares broke out above $2.20 and quickly rose, before pulling back to support and then went on to meet its first target.

With excellent fundamentals the path of the shares seems to be back to previous highs and the second target. Then the potential of going to the third target and all-time new highs may be in reach over time.

Conclusion

Vizsla Silver presents a compelling case for investment in the junior silver exploration sector. With its impressive PEA results, strategic location, experienced leadership, and clear vision for growth, the company stands out as a strong candidate for speculative investment in silver.

As always, potential investors should conduct thorough due diligence and consult with financial advisors before making investment decisions.

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Important Disclosures:

1. John Newell: I determined which companies would be included in this article based on my research and understanding of the sector.
2. Statements and opinions expressed are the opinions of the author and not of Streetwise Reports, Street Smart, or their officers. The author is wholly responsible for the accuracy of the statements. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Any disclosures from the author can be found below. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
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John Newell Disclaimer

As always it is important to note that investing in precious metals like silver carries risks, and market conditions can change violently with shock and awe tactics, that we have seen over the past 20 years. Before making any investment decisions, it’s advisable consult with a financial advisor if needed. Also the practice of conducting thorough research and to consider your investment goals and risk tolerance.

( Companies Mentioned: VZLA:TSX.V; VZLA:NYSE, )