Vizsla Silver's Positive Feasibility Study & the Investment Case for a High-Margin Re-Rate in the Silver Developer Space

• Vizsla Silver's Feasibility Study for the Panuco Project outlines sector-leading economics, including a US$1.8 billion after-tax net present value at a 5% discount rate, 111% internal rate of return, and 7-month payback period, placing the project among the most profitable undeveloped silver assets globally.
• The study confirms high grades averaging 416 grams per tonne silver equivalent and a low all-in sustaining cost of US$10.61 per ounce, positioning Panuco firmly in the top quartile of global primary silver operations on cost.
• Structural silver supply deficits, driven by solar photovoltaic installations, electric vehicles, and grid infrastructure demand, create macro tailwinds for high-grade, near-term developers with clear production pathways.
• A low net initial capital requirement of US$173 million combined with Vizsla's cash position of US$200 million as of November 2025, plus in-the-money options, reduces near-term dilution risk and improves financing clarity for institutional investors evaluating the capital stack.
• As the sector typically rewards developers upon construction decisions and first production, Vizsla's transition toward a second-half 2027 production target provides a credible re-rate pathway, particularly given its current 0.56x price-to-net asset value discount relative to producing peers averaging 1.59x.

Silver Market Repricing Meets a Rare High-Margin Development Opportunity

Silver's evolving demand profile has transformed the metal from a primarily monetary and industrial commodity into a critical input for energy transition technologies. Since 2020, photovoltaic demand used in solar panel manufacturing has grown 21% annually, while semiconductor manufacturing and electric vehicle charging infrastructure add incremental consumption pressure. Concurrently, aggregate silver supply has declined 0.9% annually since 2020 as aging deposits face falling head grades and rising extraction costs.

This supply-demand imbalance has intensified capital allocation scrutiny across the development pipeline. Investors increasingly favor permitted, high-grade, capital-efficient projects in established mining jurisdictions that demonstrate clear pathways to production within multi-year timeframes. The challenge for institutional allocators lies in identifying developers that combine robust economics with execution certainty, a combination that remains scarce in the current market environment.

Vizsla Silver's Feasibility Study, released November 2025, for its Panuco Project in Sinaloa, Mexico represents a case study in this selective capital deployment thesis. With after-tax economics exceeding US$1.8 billion in net present value, all-in sustaining costs in the bottom quartile globally, and a 7-month payback period, Panuco exemplifies the type of high-margin, near-term production asset that attracts financing and strategic interest in capital-constrained environments.

Why High-Grade Silver Developers Are Receiving Renewed Investor Focus

Capital allocation frameworks in the precious metals sector have undergone structural adjustment since 2022. Rising interest rates, elevated construction cost inflation, and increased financing scrutiny have shifted institutional preferences toward development projects that demonstrate capital efficiency, short payback periods, and resilient economics across commodity price scenarios.

Since 2020, aggregate silver supply has fallen 0.9% annually while demand has grown 3.6% annually, driven primarily by photovoltaic applications. This deficit trajectory creates fundamental price support independent of monetary policy or investment demand fluctuations.

Construction cost inflation across mining jurisdictions has fundamentally altered project financing dynamics. Projects requiring US$400-600 million in initial capital typically necessitate multiple equity raises during permitting and construction phases, often at disadvantageous valuations during market weakness. In contrast, projects requiring net initial capital below US$200 million, particularly those capable of generating pre-production revenue, attract more favorable financing terms and streamlined capital stacks.

The Panuco Feasibility Study as a Transformational De-Risking Event

The completion of a bankable Feasibility Study represents the most significant technical milestone in a mining development's progression from exploration to production. For Vizsla Silver, the Panuco FS delivered economics that position the project among the top-tier undeveloped silver assets globally.

The study outlines after-tax economics of US$1.8 billion in net present value at a 5% discount rate and a 111% internal rate of return based on conservative metal price assumptions of US$28.50 per ounce silver and US$2,300 per ounce gold. These figures exclude any value contribution from Inferred Mineral Resources, which represent additional optionality for mine life extension beyond the base case scenario.

Panuco's projected all-in sustaining cost of US$10.61 per ounce silver equivalent compares favorably to the 2024 average all-in sustaining cost of US$19.80 among top silver primary producers. This cost advantage derives primarily from the project's exceptional reserve grade of 416 grams per tonne silver equivalent.

The production profile targets average annual output of 17.4 million ounces silver equivalent over a 9.4-year initial mine life, with early years exceeding 20 million ounces annually. This front-loaded production schedule accelerates cash flow generation and supports the project's 7-month payback period, among the shortest in the development-stage precious metals sector.

The feasibility study's confidence in early production economics reflects systematic de-risking work conducted throughout 2025, with exploration teams prioritizing areas destined for initial mining. Jesus Velador, VP of Exploration, outlined this strategic focus:

"We started focusing on de-risking the mineral resource and particularly in the Copala area where we envision the first years of production for the Panuko project."

This targeted approach delivered measurable resource growth where it matters most for near-term cash flow generation:

"What we essentially ended up releasing is an updated mineral resource with a substantial increase of 43% in the measure and indicated category and for the first time we put out a measure resource in the core of the high-grade central portion of Copala where we are going to have our initial production years."

How Panuco's Grade, Geometry & Mining Methods Support High Margins

The economic performance outlined in the Feasibility Study derives from specific geological and operational characteristics that differentiate Panuco from peer development projects.

Panuco's Proven and Probable Mineral Reserves, with an effective date of November 4, 2025, total 12.81 million tonnes at 416 grams per tonne silver equivalent, comprising 162 million ounces silver equivalent. This reserve estimate employs conservative metal price assumptions, providing downside protection in the event of price weakness during development or early production phases.

The Panuco operation integrates two distinct mining areas, the Copala Mine and Napoleon Mine, into a unified production strategy that shares processing infrastructure while allowing independent mining schedules. Mining will employ long-hole stoping as the primary extraction method, a proven technique for narrow, steeply-dipping vein systems that maximizes ore recovery while controlling dilution.

The processing flowsheet employs whole-ore cyanide leaching to produce doré bars containing both silver and gold, achieving high recoveries of 92.3% for silver and 93.8% for gold. The simplicity of this process reduces operational risk during commissioning and ramp-up phases.

Capital Efficiency & Funding Pathway

Panuco's Feasibility Study estimates pre-production capital expenditure of US$238.7 million. However, the project generates pre-production revenue of US$65.7 million from ore extracted during mine development phases, reducing the net initial capital requirement to US$173 million.

This net capital figure places Panuco among the most capital-efficient silver development projects globally. The modest capital intensity reduces financing complexity and dilution risk compared to projects requiring US$400-600 million in initial capital.

As of November 2025, Vizsla Silver held US$200 million in cash plus in-the-money options. The company has identified total financing capacity of approximately US$450 million, combining existing treasury resources with an estimated debt facility of US$220 million and equity positions of US$30 million. Chris Adams, former head of Mining Finance at Macquarie Group, serves as debt advisor.

Vizsla Silver currently trades at 0.56x price-to-net asset value compared to an average of 1.59x for producing silver companies. This valuation discount reflects standard market treatment of development-stage companies. Historical analysis demonstrates that valuation multiples typically expand through distinct phases: construction decision, first production, and achievement of nameplate capacity.

Risk Analysis: Stress Testing Under Lower Prices & Higher Costs

At 50% lower prices, US$17.75 per ounce silver and US$1,550 per ounce gold, the project maintains an after-tax net present value of US$461 million at a 5% discount rate and generates a 42.4% internal rate of return. At an all-in sustaining cost of US$10.61 per ounce, the project maintains operating margins exceeding US$7 per ounce even at US$17.75 silver prices.

Operating cost sensitivity analysis indicates that a 20% increase in all-in sustaining costs results in an after-tax net present value of US$1.689 billion and an internal rate of return of 105%. Similarly, a 20% increase in initial capital expenditure produces a net present value exceeding US$1.6 billion.

Applications for the Environmental Impact Assessment were submitted to SEMARNAT in the first quarter of 2025 and are currently under review. The company has secured 30-year operating agreements with all five local Ejidos covering the project footprint for exploration, construction, operation, and closure phases.

Development Timeline: 2024-2027 Milestones

Vizsla commenced a fully permitted test mine program in Q4 2024 to validate mining methods and metallurgical assumptions under operational conditions. This dual-track strategy allows technical validation to proceed in parallel with permitting and financing activities, reducing execution risk. Velador described the operational commitment to the initial mining areas:

"We started already with a test mine and developing of the decline to access the high-grade mineralization in Copala. That part is pretty much already decided to be developed."

The company is targeting a construction decision upon receipt of required approvals, subject to completion of detailed engineering, financing arrangements, and all required permits. Initial production is targeted for the second half of 2027, subject to timely receipt of environmental permits, completion of project financing, and execution of construction activities.

Initial processing plant throughput is planned at 3,300 tonnes per day, with expansion to 4,000 tonnes per day by Year 4 as underground development advances. Early production years target average annual output exceeding 20 million ounces silver equivalent, substantially above the life-of-mine average.

District Potential Beyond the Reserve Base

Vizsla has consolidated over 40,000 hectares of concessions along the San Dimas-Panuco corridor. The company has completed more than 390,000 meters of drilling across this land package, yet has tested only approximately less than 30% of identified vein targets.

The exploration opportunity extends well beyond what's captured in the current reserve base, representing significant optionality for investors evaluating long-term asset value. Velador quantified the untapped target inventory:

"Just within that area we have over 150 vein targets that we have either mapped or discovered… of which we have drilled only approximately 30."

This systematic approach to district-scale exploration follows a clear strategic objective that could materially expand project economics:

"Our second objective is to continue exploring with the objective of finding a discovery of an additional center of mass or a mineralized center in the project."

The geological indicators support confidence in discovery potential beyond the existing Copala-Napoleon resource concentration:

"We are convinced that based on all the evidence that we see on surface veins and silver values on rock samples, we are convinced that there is a high possibility of finding another mineralized center like the one we already have in Copala-Napoleon."

This exploration inventory provides significant optionality beyond the current reserve base. Discovery of additional high-grade centers could support expansion of processing capacity, extension of mine life, or development of satellite deposits that feed the central processing infrastructure.

The Investment Thesis for Vizsla Silver

• Investors evaluating exposure to the silver development sector should consider projects that combine robust base-case economics with structural defensibility against adverse commodity price or cost scenarios.
• Panuco's high-grade reserve base provides margin stability. The 416 grams per tonne silver equivalent reserve grade generates all-in sustaining costs of US$10.61 per ounce, enabling positive free cash flow generation even during severe price weakness.
• The US$1.8 billion after-tax net present value and 111% internal rate of return compare favorably to peer developers, while the 7-month payback period demonstrates rapid capital recovery that enhances financing terms.
• Capital efficiency reduces dilution. The US$173 million net initial capital requirement combined with Vizsla's treasury position reduces the need for multiple equity raises during construction, preserving shareholder value through the critical development phase.
• Macro tailwinds from persistent silver deficits and rapid industrial demand growth create a conducive environment for high-margin producers entering the market during 2027-2028. Re-rate potential exists as the company transitions from developer to producer, with room for normalization toward the 1.59x average for producing silver companies.
• Strong management and jurisdiction reduce execution risk through proven leadership, secured community agreements for 30-year operations, and location in a mining district with regional infrastructure and skilled labor availability.
• District-scale exploration optionality provides asymmetric upside potential beyond the base case reserve. With 150 identified vein targets and only 30 tested through drilling, successful discovery of additional high-grade centers could materially extend mine life or support processing capacity expansion.

A Feasibility Study That Resets the Investment Outlook for Vizsla Silver

The completion of Panuco's Feasibility Study establishes the project as a combination of scale, grade, and capital efficiency in the global silver development pipeline. With after-tax economics delivering US$1.8 billion in net present value, a 111% internal rate of return, and a 7-month payback period, Panuco ranks favorably among undeveloped precious metals assets globally.

The combination of high productivity from 416 grams per tonne reserve grades, bottom-quartile all-in sustaining costs of US$10.61 per ounce, and short capital recovery timelines positions Vizsla competitively against both development-stage peers and existing producers. As the company progresses through permitting approvals, construction decision, and first production, these milestones define a multi-year re-rate pathway consistent with historical developer-to-producer valuation transitions.

For investors seeking exposure to a tightening silver market driven by industrial demand growth and declining mine supply, Panuco's economics and development trajectory represent a fundamentally supported opportunity.

TL;DR

Vizsla Silver's Panuco Feasibility Study establishes sector-leading economics: US$1.8 billion after-tax NPV, 111% IRR, and a 7-month payback period at conservative metal prices. The project's 416 g/t silver equivalent reserve grade drives bottom-quartile all-in sustaining costs of US$10.61/oz, maintaining profitability even at 50% lower metal prices. With only US$173 million net initial capital required and US$200 million cash on hand, the company minimizes dilution risk through 2027 production. The feasibility study confirms Panuco as a rare combination of high margin, capital efficiency, and near-term production in a structurally tight silver market. Currently trading at 0.56x P/NAV versus 1.59x for producers, Vizsla offers clear re-rate potential as development milestones progress.

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