Vizsla Copper (TSXV: VCU) has agreed to buy two Alaskan exploration properties from Agnico Eagle Mines (TSX: AEM). The arrangement will see Vizsla pay for the assets entirely in paper, turning the gold producer into its largest shareholder.
Under a purchase agreement dated September 8, Vizsla is to acquire a 100% interest in the Delta polymetallic volcanogenic massive sulphide project and the Helm Bay gold project from Agnico’s US subsidiary.
Delta sits in central Alaska across 249 state claims covering 16,123 hectares. A historical estimate put it at 15.4 million tonnes grading 0.6% copper, 1.6% lead, 3.8% zinc, 62 g/t silver and 1.7 g/t gold. Several of the massive sulphide lenses appear open, and kilometres of electromagnetic conductors have never been drilled.
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Helm Bay is a different proposition, a southeast Alaska property near tidewater that spans 33 state and 642 unpatented federal claims, hosting 17 documented gold occurrences over more than 10 kilometres of quartz vein strike. The Upper and Lower Gold Standard mines produced under 10,000 ounces before the Second World War, with historical sampling averaging 10.4 g/t and 11.2 g/t gold.
“Delta and Helm Bay add two new assets to our portfolio and expand our presence in Alaska and the U.S., where domestic sources of critical minerals remain a strategic focus,” said chief executive officer and chairman Craig Parry.
Consideration is 25,426,773 common shares at a deemed price of C$1.26, or roughly C$32.0 million, split between 22,523,283 shares issued at closing and 2,903,490 deferred shares that require shareholder approval at a November 18 meeting.
That leaves Agnico Eagle holding about 19.99% of Vizsla on closing and roughly 22.0% once the deferred shares are out. It also picks up 3,041,480 warrants exercisable at C$1.95 for two years, which cannot be exercised past the 19.99% threshold.
The seller keeps a 2.0% net smelter return royalty on Delta and a 3.0% royalty on Helm Bay, half of each repurchasable for C$5 million. Delta carries three contingent payments, including C$5 million on disclosure of a resource of at least 300,000 tonnes of copper equivalent, C$5 million on a completed feasibility study, and C$10 million upon commercial production.
Agnico Eagle also gains a board nomination, anti-dilution participation rights and registration rights. It has committed to take the lesser of C$5 million or 10% of gross proceeds in Vizsla’s first equity financing after closing, provided the raise totals at least C$30 million and closes before year-end.
The deal requires TSX Venture Exchange approval and is expected to close in the fourth quarter.
Vizsla Copper last traded at $1.57 on the TSX Venture.
