Vizsla Silver Corp V.VZLA

Analyst initiates coverage...

[zack50]

Seeing the resource at its Panuco project in Mexico as “world-class and growing rapidly,” Stifel analyst Stephen Soock initiated coverage of Vizsla Silver Corp. with a “buy” recommendation.

“We see the deposits supporting mid-tier level production with a high margin (14Moz AgEq/yr at an AISC of $9.57/oz) over an 11 year mine life producing site-level FCF of $129-million per year,” he said. “The wide vein width, high grades, and proximity to infrastructure will likely keep capital intensity and per ounce costs low. With only 12 per cent of the total known vein length explored on 1/3rd of the property, we expect additional discoveries from the company. We believe the Vizsla team has an excellent track record of value creation in the resource space.”

He set a target for shares of the Vancouver-based company of $3.50, below the $4.12 average.

“Given the project is just 45 minutes from a major port town, along a paved highway with power lines on the property, we expect low initial capital requirements and reduced operating unit costs compared to more remote sites. This would put Vizsla as a high margin, mid-tier silver producer, and we expect the commiserate re-rate to follow. The production profile and buildable nature of Panuco should also make it an attractive target for major silver producers,” he added.