Vizsla Copper (TSXV: VCU; US-OTC: VCUFF) agreed to buy Agnico Eagle Mines’ (TSX, NYSE: AEM) Delta and Helm Bay projects in Alaska for shares valued at $32 million (US$23.3 million), making the senior gold miner Vizsla’s largest shareholder.
The deal announced Tuesday adds Delta, a polymetallic sulphide project 60 km southwest of Tok and roughly 700 km northwest of Juneau, Alaska’s capital, and Helm Bay, a gold project 35 km north of Ketchikan. Agnico would own 19.9% of Vizsla at closing and 22% after disinterested shareholders approve the creation of Agnico as a new control person. That vote is due Nov. 18.
“Delta is expected to become an important project in our portfolio given its historical resource estimate, multiple mineralized lenses and broader district-scale exploration potential,” Vizsla Copper CEO and chairman Craig Parry said in a release.
The structure gives Agnico continuing exposure to the projects through its Vizsla stake, warrants, royalties and as much as $20 million in milestone payments, while shifting most of the exploration spending and development risk to the junior. Vizsla, in turn, adds the properties without paying cash, although the share consideration dilutes existing investors.
Shares in Vizsla Copper were unchanged at $1.57 apiece in Toronto by Wednesday morning, down 16% over the past year. They’ve traded between 94¢ and $2.68 over that period, valuing the company at $141.5 million.
Delta resource
Delta carries a 2006 historical inferred estimate of 15.4 million tonnes grading 0.6% copper, 1.6% lead, 3.8% zinc, 62 grams silver per tonne and 1.7 grams gold. Vizsla calculates the estimate contains 204 million lb. copper, 543 million lb. lead, 1.29 billion lb. zinc, 30.7 million oz. silver and 840,000 oz. gold.
The company said verification, confirmation drilling and updated geological modelling may be required before it can publish a current estimate.
Previous operators spent more than $20 million and drilled more than 25,000 metres at Delta, which covers 161 sq. km in 249 state claims. Several mineralized lenses remain open and kilometres of responsive electromagnetic targets have yet to be drilled.
Helm Bay
Helm Bay covers 675 state and federal claims near tidewater in southeast Alaska. Previous work recorded 17 gold occurrences along more than 10 km of quartz veins.
The Upper and Lower Gold Standard mines produced less than 10,000 oz. gold before the Second World War, while historical samples from the workings averaged 11.2 and 10.4 grams gold per tonne, respectively. Vizsla has not independently verified those results.
Deal terms
Vizsla will issue 22.5 million shares to Agnico at closing and another 2.9 million after disinterested shareholder approval. The shares carry a deemed price of $1.26 each. Agnico will also receive 3.04 million two-year warrants exercisable at $1.95, although it cannot exercise them if doing so would lift its ownership to 19.9% or more at the time.
Agnico will retain a 2% net smelter return royalty on Delta and 3% on Helm Bay. Vizsla can buy half of either royalty for $5 million.
Delta could trigger another $20 million in payments. Vizsla would owe $5 million after publishing a resource containing at least 300,000 tonnes of copper-equivalent metal, $5 million after completing a feasibility study and $10 million if Delta reaches commercial production. Vizsla can make the payments in cash or shares, subject to ownership and exchange limits.
Agnico rights
Agnico will gain the right to nominate one Vizsla director while it maintains set ownership levels, rising to two directors if Vizsla expands its board to at least eight members. It can also join future financings to maintain a stake of as much as 19.9%.
The miner has committed as much as $5 million to Vizsla’s first equity financing after the agreement, provided the junior raises at least $30 million by Dec. 31.
Vizsla expects to close the acquisition in the fourth quarter, subject to TSX Venture Exchange approval. It plans to ask shareholders on Nov. 18 to approve the deferred shares.
If they remain unissued by Jan. 31, Vizsla must instead give Agnico a non-interest-bearing note for their cash-equivalent value.
Palmer drilling
Vizsla is drilling 12,250 metres at Palmer with two rigs, giving the company a more advanced Alaska base as it adds Delta and Helm Bay.
A January 2025 resource estimate outlines 4.77 million indicated tonnes grading 1.69% copper, 5.17% zinc, 0.14% lead, 28.4 grams silver per tonne and 0.29 gram gold. That material contains 178 million lb. copper, 543 million lb. zinc, 14.2 million lb. lead, 4.35 million oz. silver and 43,900 oz. gold.
Inferred resources add 12 million tonnes grading 0.57% copper, 3.92% zinc, 0.47% lead, 66.3 grams silver and 0.33 gram gold, containing 152 million lb. copper, 1.04 billion lb. zinc, 125 million lb. lead, 25.6 million oz. silver and 128,000 oz. gold.
Source: https://www.mining.com/agnico-takes-22-of-vizsla-in-32m-alaska-deal/
