Vizsla Silver: High-Grade Pure Play Silver Developer Advancing to Production

• Vizsla Silver is developing one of Mexico's highest-grade undeveloped silver projects in Sinaloa, with over 360 million ounces of silver equivalent in total resources.
• The project benefits from existing highways, power lines, and water resources, significantly reducing capital requirements and development risks.
• Led by former Ausenco COO, Simon Cmrlec, the company employs rigorous engineering methodology focused on risk mitigation and return on investment.
• With test mining already underway and permitting in progress, Vizsla is targeting production by late 2027.
• Recent drilling has increased measured & indicated resources to 222 million ounces, with grades improving by nearly 5% across the property and 10% in the critical early mining areas.

Introduction to Vizsla Silver

Vizsla Silver Corp stands out in the mining sector as a pure-play silver developer with a focus on bringing its flagship project in Sinaloa, Mexico into production. Simon Cmrlec, the company's Chief Operating Officer, brings substantial expertise to the venture, having spent 15 years at Ausenco, a globally respected mining services firm, where he ultimately served as COO before joining Vizsla Silver full-time. Cmrlec sets the stage for what makes Vizsla stand out: 

"We're a pure play silver company, silver developer, focused on developing our project in Sinaloa in Mexico. It's one of the greatest undeveloped silver projects that certainly I've seen in my career."

Cmrlec's background provides crucial insights into his approach at Vizsla. With early experience as a metallurgical engineer in operations followed by a decade in construction, he developed a comprehensive understanding of project development. "I was at Ausenco for 15 years, finished there as the Chief Operating Officer at the end of 2023," he explains. "Over my career with Ausenco, I think we developed more than 40 projects for our clients all over the world. And it let me see the good and the bad and the ugly of project development."

This wealth of experience is now being applied to advance Vizsla's silver project through study phases toward construction while building out the necessary team and maintaining exploration momentum. The transition from board member to executive role highlights his confidence in the project's potential.

Interview with Chief Operating Officer, Simon Cmrlec

Metallurgical Testing & Project Development

The metallurgical testing program at Vizsla Silver reveals a methodical approach to de-risking the project before construction. The company has completed four comprehensive testing programs, with the most recent running for over 15 months and encompassing more than 40 composite samples.

"Initially we really focused on selecting composites in line with the areas that we thought we would be mining first," explains Cmrlec, describing how they used early test work to determine the optimal flow sheet and evaluate concentrate versus doré production options. As testing progressed, they've expanded to multiple zones, particularly as the resource grew beyond the initial Napoleon discovery to include the Copala zone.

A conservative engineering philosophy guides these decisions. "We've taken that test work and we've tried to be ultra conservative with it," Cmrlec notes. For example, while test work indicates a 70-micron grind size, the company has discovered that "it doesn't make a terrible difference in terms of recovery," potentially allowing for coarser grinding and increased throughput during actual operations.

This testing supports the company's planned incremental processing capacity increase from 3,300 to 4,000 tonnes per day. By incorporating contingencies like a flotation circuit that may prove unnecessary and conservative grind sizes, the company positions itself for upside potential:

"We've got it in the flow sheet, we've sized it conservatively...and now we have the optionality about when and where we use it."

Mining Methodology & Dilution Management

The mining approach at Vizsla's project balances practical conservatism with optimization opportunities. The Preliminary Economic Assessment (PEA) established a production rate of 3,300 tonnes per day, which Cmrlec characterizes as deliberately moderate:

"Being ultimately a conservative engineer in your first mine with a new crew, with new contractors and those sorts of things, we didn't really want to push it past that."

Since completing the PEA, the company has continued engineering work to optimize the mine plan while supporting permitting requirements. "It seems like there's been a pause between the PEA and the feasibility study, but in reality there hasn't. We've just continued to engineer," says Cmrlec. This ongoing work focuses on refining mining dimensions and methods to reduce dilution while maintaining production targets.

The company utilizes both longhole and drift-and-fill mining methods depending on the vein characteristics and location. For example, under the town of Copala, where the vein is more flat-lying, drift-and-fill mining will be employed to minimize surface disturbance. Cmrlec emphasizes the value of the test mine in gathering real-world data:

"It's great that we're building this test mine now because we're getting the opportunity to evaluate things like the seismic effect of blasting...which may help us optimize the crown pillars."

Geotechnical Considerations & Rock Mass Classification

Vizsla's attention to geotechnical detail illustrates its risk-mitigation approach. The company is conducting approximately 20,000 meters of geotechnical drilling with oriented core, primarily focused on the early years of mining in the Copala zone before extending to Napoleon for later mining phases.

This data collection serves multiple purposes beyond feasibility study requirements. As Cmrlec explains, "In the PEA, we were very conservative around all sorts of things, everything essentially. But in terms of the mine design...we took a very conservative view of the geotech based on the limited information that we had at the time."

The ongoing test mine provides invaluable real-world insights beyond what drilling alone can offer: "Not only the information you can get through a drill hole is fantastic, but the information you can get actually tunneling through the rocks is even more valid." This hands-on experience is already yielding confirmatory data about rock behavior under development conditions.

Cmrlec emphasizes the critical importance of this work:

"The reality is that in the first couple of years of the mine, you make or break it. If you don't hit your production, then...we've seen the effect of that on a lot of other companies."

Even more significantly, poor early decisions can permanently "sterilize" high-grade material targeted in the initial years. The company's extensive geotechnical program aims to "reduce the risk of those things happening."

Tailings Management & Environmental Considerations

Vizsla's decision to employ conventional wet tailings management rather than dry stack or paste backfill reflects a pragmatic assessment of site conditions. While acknowledging that dry tailings can recover 10-15% more water, Cmrlec explains that successful dry stack tailings require treating the operation as a "geotechnical construction," maintaining stable heaps as they progress.

The monsoonal climate of Sinaloa presents specific challenges: "When you're in an environment like we are, where you have a lot of monsoonal rains for part of the year, maintaining the integrity of that heap becomes more difficult." Historical performance data and the assessment of consultants suggest higher risks with dry stack under these conditions.

By contrast, the site offers advantages for well-designed wet tailings facilities:

"The area lends itself to very, very contained wet tailing dams that can be well and truly away from any of the major water courses, towns and those sorts of things."

Modern tailings dam design, coupled with good quality control, provides confidence in this approach, especially given that water conservation is not a critical concern as "we actually have for a lot of the year a positive water balance around the project to deal with."

Environmental testing of the tailings and surrounding areas shows encouraging results. "All of the testing that we've done from water around the project to feed into the permit actually shows very, very good qualities," Cmrlec notes, adding that historical mining operations in the immediate vicinity processing similar material have not demonstrated acid drainage or heavy metal contamination issues.

Infrastructure & Logistics of the Project

Perhaps one of Vizsla Silver's most compelling advantages is its exceptional infrastructure position. Unlike many remote mining projects that require extensive capital investment in basic infrastructure, the company's Sinaloa project benefits from existing transportation, power, and water resources.

"We're situated between two major highways," explains Cmrlec, highlighting the accessibility. "I regularly drive from Mazatlan to site, I leave at six o'clock in the morning and I'm out on site for the 6.45 pre-start meeting every morning." This ease of access dramatically reduces logistical challenges for equipment delivery, personnel transportation, and product shipment.

Power infrastructure is equally advantageous:

"We've got two high voltage power lines that run immediately across the project."

The chosen plant location sits almost directly beneath one of these lines, minimizing connection distances and costs. While the PEA conservatively allowed for power access within a five-kilometer radius, actual implementation is likely to be within 50 meters.

Water management also presents fewer challenges than typical mining operations. Although the PEA included river water usage during certain parts of the year, subsequent work has increased confidence in self-sufficiency:

"We're very confident with the work that we've done now that will be self-sufficient in terms of water, both from capture of rainfall through parts of the year, but also the underground water."

These infrastructure advantages were immediately apparent to Cmrlec when he first visited in 2018: "The first thing that jumped out at me not being a geologist and they were wildly excited about the rocks was the infrastructure and the thought that, maybe we could make a discovery right here on a highway."

Market Dynamics & Project Advancement

Despite recent temporary safety precautions due to regional cartel activities, Vizsla continues to make steady progress toward production. Cmrlec explains the company's "abundance of caution" approach to a brief operational pause: "We were getting feedback from those local communities that they were seeing more activity" related to tensions between factions of the Sinaloa cartel following the capture of a key leader.

Importantly, this cautionary measure is not expected to impact overall project timelines:

"We're at the stage where it doesn't have an impact really in terms of our schedule or our budget."

The company anticipates resuming full activities within a matter of weeks.

The impressive January 2024 resource update demonstrates significant progress since the 2023 PEA. The company exceeded its resource conversion targets, achieving "nearly 40 million ounces in the measured category, 222 million ounces measured and indicated" compared to the approximately 170 million ounces planned for production in the PEA.

Critically, grade improvements accompanied this resource growth:

"The grade across the property improved by nearly 5%. In Copala in the early years of mining, was closer to 10%."

This combination of resource conversion success and grade improvement positions the forthcoming feasibility study to potentially outperform PEA projections.

Future Outlook & Production Timeline

Vizsla Silver is advancing methodically toward production with a clear timeline. "If the permits came in the first quarter of next year, we'll be finishing the back half of 2027 and producing," states Cmrlec, outlining the 16-18 month construction period following permit approvals.

The company has submitted its environmental permit application (MIA), with statutory approval timeframes of six months. While Mexico has historically exceeded these timeframes, Cmrlec notes "some really good support" from federal environmental authorities, providing confidence in the permitting process.

Financing discussions are progressing in parallel:

"The financing is becoming much clearer and there's a lot of interest in supporting the project from some of the usual banks and funds that operate in that space."

With the test mine already in construction using permanent infrastructure specifications, Vizsla is effectively already in the early construction phase.

Cmrlec expresses confidence in meeting projected milestones: "We've been talking about this now for almost two years and we've hit all the milestones along the way. And I'm pretty confident that we'll continue to do that."

Investment Thesis for Vizsla Silver

• High-Grade Silver Resource: With 222 million ounces of silver equivalent in measured and indicated categories and improving grades, Vizsla offers significant leverage to silver prices.
• Infrastructure Advantage: Exceptional access to roads, power, and water reduces capital requirements and development risks compared to peers.
• Technical Leadership: Management includes former Ausenco COO Simon Cmrlec, bringing world-class engineering expertise and a track record of successful project delivery.
• De-Risked Development: The company's conservative approach to engineering, detailed metallurgical testing, and ongoing test mining reduces operational risks.
• Clear Path to Production: With permitting underway, financing discussions advancing, and a defined 16-18 month construction timeline, production by late 2027 provides a near-term catalyst.
• Exploration Upside: The addition of 50 million ounces to the resource while focusing primarily on infill drilling suggests significant potential for further discoveries.

Silver Market Dynamics: An Emerging Supply-Demand Imbalance

The global silver market is approaching a critical inflection point that could significantly benefit pure-play silver developers like Vizsla Silver. Unlike gold, which is primarily an investment and monetary metal, silver's dual role as both a precious metal and industrial commodity creates unique supply-demand dynamics that appear increasingly favorable for prices.

Industrial demand for silver continues to accelerate, driven by several structural growth trends. The renewable energy transition represents perhaps the most significant driver, with photovoltaic solar panel production requiring substantial silver inputs that cannot be easily substituted. The International Energy Agency projects solar capacity additions to nearly triple by 2030, creating sustained demand growth. Similarly, the electrification of transportation depends on electrical systems using silver components, while emerging technologies in 5G telecommunications, IoT devices, and medical applications further expand the industrial demand base.

Simultaneously, silver supply faces constraints. Primary silver mines represent just 27% of global silver production, with most supply coming as a by-product of base metal mining. This creates inelasticity in supply response to silver price movements, as production decisions are typically based on primary metals like copper, zinc, or lead. Additionally, several major silver-producing regions face challenges including resource nationalism, regulatory obstacles, and declining grades at aging operations.

The silver market has experienced persistent physical deficits in recent years, with the Silver Institute reporting a global supply shortfall of 142.1 million ounces in 2023 – the third consecutive annual deficit. Investment demand, which has been relatively subdued during recent years of rising interest rates, shows signs of revival as central banks potentially pivot toward looser monetary policy. Historically, silver has outperformed gold in precious metals bull markets, offering higher beta exposure to sector trends.

Within this macro context, companies bringing new dedicated silver production online – particularly from high-grade deposits with strong margins – stand to benefit disproportionately. Vizsla Silver's project in Mexico, with its exceptional grade profile and infrastructure advantages, positions the company to potentially achieve production during what may prove to be an exceptionally favorable silver price environment.

This convergence of rising industrial demand, constrained supply, and the potential return of investment interest suggests that the timing of Vizsla's development path could align fortuitously with strengthening silver market fundamentals by its targeted 2027 production date.