Elemental Royalty (NASDAQ:ELE) said it plans to acquire Vizsla Royalties in a friendly transaction valued at approximately C$327 million, adding a major royalty over the Panuco silver-gold project in Mexico to its portfolio.
The acquisition centers on Vizsla Royalties’ key asset: a 2% to 3.5% net smelter return royalty covering the main deposit areas of Vizsla Silver’s Panuco project. Elemental Chief Executive David Cole said the asset would add “meaningful cornerstone silver gold” exposure and fit with the company’s broader strategy of increasing ownership of prospective mineral rights through royalties.
Transaction Terms
Under the proposed deal, Vizsla Royalties shareholders may elect to receive 0.15 of an Elemental share for each Vizsla Royalties share, C$4.13 in cash, or a mix of both, subject to proration and a C$82 million cash cap. The total consideration is based on Elemental’s May 12 closing share price.
The transaction has unanimous approval from both companies’ boards. Support agreements have been signed by Vizsla Royalties officers and directors, as well as certain shareholders, including Vizsla Silver, representing about 23% of the register. The companies expect the deal to close in the third quarter of 2026, subject to shareholder approvals, regulatory approvals and Mexican antitrust clearance.
Michael Konnert, executive chairman of Vizsla Royalties, said the transaction allows Vizsla Royalties shareholders to crystallize value while maintaining exposure to Panuco through a larger and more diversified royalty platform.
“Vizsla Royalties successfully created substantial value through the consolidation and advancement of world-class royalty package at Panuco, which is now being crystallized in this transaction,” Konnert said.
Panuco Royalty to Become Cornerstone Asset
The companies described Panuco as a scarce Tier 1 silver-gold asset with scale, grade, near-term production visibility and exploration upside. According to the presentation, the royalty is uncapped, includes no buybacks and no step-downs, and covers 100% of the defined resources, with less than 30% of known targets explored.
Michael Pettingell, CEO of Vizsla Royalties, said the royalty package covers approximately 6,000 hectares of the initial contiguous Panuco district. He said the 3.5% NSR area hosts 148 million measured and indicated ounces and approximately 90% of the proposed production in Vizsla Silver’s recently published feasibility study. The 2% NSR area includes additional exploration upside.
In total, Pettingell said the area includes more than 220 million ounces of high-grade measured and indicated mineralization, plus an additional 138 million ounces of high-grade inferred mineralization. He also said the November mineral reserve estimate included 171 million proven and probable ounces, based on commodity price assumptions below C$30 silver and C$2,400 gold.
Expected Impact on Elemental
Elemental said the acquisition would increase its scale, revenue visibility and capital markets relevance. The presentation stated that Elemental’s 2026 guidance was upgraded to 17,000 to 21,000 gold equivalent ounces, and that Panuco could lift illustrated pro forma near-term gold equivalent ounces to approximately 35,000 ounces based on the first year of the three-year average from the Panuco feasibility study.
The companies said Panuco’s first production remains targeted for the end of 2027. Vizsla Silver was described as fully funded for construction, with key permitting applications already advanced.
Konnert said Vizsla Royalties shareholders who take Elemental shares would gain diversification away from a single-asset royalty company and into Elemental’s broader portfolio of more than 200 royalty assets. He also highlighted Elemental’s dual listings on Nasdaq and the TSX and its quarterly dividend program.
Questions Focus on Diligence, Security and Permitting
During the question-and-answer portion of the call, Elemental President and Chief Operating Officer Frederick Bell said the company had conducted diligence on Panuco, including technical and security reviews. Bell said Elemental used consultants and industry contacts in Mexico and had team members familiar with the project and site.
Asked about recent security concerns, Konnert said Vizsla Silver is working with Mexican authorities and believes the project timeline is “likely still intact.” He added that the company expects permitting to move forward in a “relative short period of time,” citing the underground nature of the project and its location in previously disturbed areas.
Bell said the Panuco royalty consists of two royalties: the Rio Panuco royalty at 2% and the Silverstone royalty at 3.5%. He said the 3.5% royalty is “front-ended” on production, making it meaningful for Elemental.
Cole closed the call by saying the transaction would further Elemental’s transformation into what he called a premier mid-tier royalty company.
About Elemental Royalty (NASDAQ:ELE)
Elemental Royalties (NASDAQ: ELE) is a publicly traded company that acquires and manages royalty and streaming interests in the mining sector. The firm focuses on securing long‑lived, low‑cost interests that provide ongoing, contractually defined payments or metal deliveries from producing and near‑term development mineral projects. By targeting royalties and streams rather than operating mines, the company seeks exposure to commodity price upside while avoiding the capital intensity and operating risks of miners.
Elemental Royalties’ activities include sourcing and negotiating royalty and stream transactions, performing technical and commercial due diligence on potential assets, and actively managing a diversified portfolio of interests.
