Elemental Secures Panuco Silver-Gold Royalty in US$239 Million Vizsla Deal

Elemental Royalty (TSX:ELE,NASDAQ:ELE) has inked a US$239 million deal to acquire Vizsla Royalties (TSXV:VROY,OTCQX:VROYF), securing long-life exposure to the Panuco silver-gold project.

The acquisition grants Elemental an uncapped 2 to 3.5 percent net smelter return royalty on the Mexico-based asset, which is one of the world's largest high-grade silver developments.

The transaction values Vizsla Royalties at C$4.13 per share, a 31 percent premium to its unaffected closing price.

Under the court-approved arrangement, Vizsla Royalties shareholders can elect to receive 0.15 Elemental shares, C$4.13 in cash or a combination of both, subject to a total cash cap of approximately C$82 million.

“This is an opportunity to add a high-grade, large-scale, silver-gold asset to our portfolio, allowing us to benefit, both in the near and longer-term, from a meaningful royalty with untapped exploration potential,” Elemental CEO David M. Cole said. “We expect Panuco to become a cornerstone asset in the Elemental portfolio, and to deliver significant value to our shareholders over its life of mine," he added in a Thursday (May 14) press release.

The consolidation provides Elemental with immense upside on an asset slated to become one of the top five primary silver mines globally by production. According to a 2025 feasibility study, Panuco, which is located in the Sierra Madre Occidental, is projected to deliver 17.4 million silver equivalent ounces annually over an initial 9.4 year mine life.

For Elemental, this translates to an estimated revenue uplift of 7,500 gold equivalent ounces per year once commercial production begins, targeted for the second half of 2027.

The deal consolidates value for Vizsla Royalties, which was spun out in 2024 specifically to unlock the royalty potential of the Panuco district while Vizsla Silver (TSXV:VZLA,NYSEAMERICAN:VZLA) advanced the physical mine development.

Despite the robust deal, the Panuco project has recently faced tragedy.

In late January, Vizsla Silver confirmed a security incident at the project site that resulted in the kidnapping of 10 individuals; nine subsequently died, while one person remains missing.

The incident temporarily heightened concerns regarding operating risks in the Sinaloa region. However, Elemental emphasized that it has conducted extensive due diligence and reviewed regional security conditions before proceeding.

A test mine on site is already stockpiling high-grade ore and generating vital metallurgical and geotechnical data.

Furthermore, significant exploration upside remains, with Vizsla Silver reporting that 70 percent of the 9,800 hectare land package remains unmapped.

For Elemental, the acquisition bolsters its recently enhanced capital markets profile, arriving just weeks after the company graduated to the Toronto Stock Exchange's main board.

Elemental now commands a portfolio of over 200 royalties, heavily anchored by 18 producing assets that generated US$24.3 million in revenue during the March quarter.

Don't forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.