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Vizsla Silver Breaking Out Right Now!

Vizsla is breaking out of a tight trading range a could run to regain it’s correlation to Silver.

Vizsla Silver Corp. (TSX-V: VZLA) (NYSE: VZLA) is an amazing junior silver exploration company we first wrote about in December 2022 in Vizsla Silver: A Monster in the Making. As we noted, we think that VZLA offers a compelling investment thesis for anyone looking to add a high beta, limited risk position in the silver sector. The thing is, there is a disconnect at the moment that offer an opportunity.

 

In December we wrote that:

 

Exploration at Panuco led to the discovery of the high-grade Napoleon and Tajitos ore bodies and a Maiden Resource Estimate centering on the western portion of the project was released in March 2022.

 

Highlights included:

  • 24.7M ounces of Silver
  • 45.5M ounces of silver equivalent total resources
  • 57% of project resources are classified as Indicated
  • 95% of project resources are precious metals 
  • Total all-in exploration cost of US$0.23/oz discovered

 

We also noted that:

 

Going into 2023, Vizsla Silver is positioned to deliver shareholder value following the exercise of the property option, now controlling 100% of the Panuco district. The company also has $11M in cash and no debt. To date only 30% of the known targets at Panuco have been drilled and, of the 9 drill rigs in operation, 3 are dedicated to exploration. The continued exploration potential bolsters the already strong investment thesis based on the current undervaluation compared to the peer group.

 

At the time of publication the stock was trading at $1.46. Since the beginning of December, the stock has based out for the rest of the month and until this Friday. As we can see below, there was a strong close on Friday January 13 at $1.77 to push it out is the zone of congestion.

 

 

However, as we said above, we think that there is a disconnect at the moment that could be capitalized on. VZLA has in the past been highly correlated to the price of silver which, in the chart below is the orange line. The correlation broke down around the end of November for one reason or another. If one were to wager that VZLA is going to regain the correlation and close the gap, then there could be an opportunity for the stock to appreciate 30% to the $2.40 zone.

 

 

 

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