Elemental Royalty (TSX: ELE)(NASDAQ: ELE) is acquiring Vizsla Royalties (TSX-V: VROY) (OTCQX: VROY) in a $239 million (C$327 million) deal, offering a 31% premium as the company continues consolidating the royalty sector and adds exposure to the Panuco silver-gold project in Mexico.
Vizsla Royalties shareholders can elect to receive 0.15 Elemental common shares per share, C$4.13 in cash, or a combination of both, subject to a maximum cash consideration of C$82 million.
The acquisition gives Elemental a 2%-3.5% uncapped net smelter return royalty on Vizsla Silver’s Panuco development project in Jalisco state, with no buyback or step-down provisions. The royalty includes a 3.5% NSR on the Silverstone concessions and 2% on the Rio Panuco concessions. Vizsla Royalties projects the asset could contribute about 7,500 oz. of gold equivalent annually once production begins.
The transaction is the largest in Elemental’s history and its first since the November 2025 merger between EMX Royalties and Elemental Altus Royalties. Elemental has pursued several royalty-sector acquisitions in recent years as companies seek greater scale and diversification.
“This is an opportunity to add a high-grade, large-scale, silver-gold asset to our portfolio, allowing us to benefit, both in the near and longer-term, from a meaningful royalty with untapped exploration potential,” Elemental CEO David M. Cole said in the statement. “We expect Panuco to become a cornerstone asset in the Elemental portfolio.”
Safety issues
The deal comes against a difficult backdrop for the Panuco district. In late January, Vizsla Silver confirmed a security incident near the project in which 10 individuals were kidnapped, nine of whom later died while another remains missing.
The episode briefly raised concerns about operating risk in the region, though Vizsla Silver has continued advancing permitting, awarding EPCM contracts and stockpiling high-grade ore from its test mine.
Elemental said it conducted extensive due diligence on the project, including reviews of technical data, security conditions, community relations and ESG considerations.
Vizsla Royalties chair Michael Konnert called the transaction the “natural culmination” of the company’s strategy to unlock royalty value at Panuco.
Over 200 royalties
Elemental now holds more than 200 royalties, including 18 producing assets and 28 advanced-stage projects.
The company said on Wednesday it produced 4,983 oz. of gold equivalent in the March quarter, mainly from royalties on Karlawinda, Bonikro, Timok and Caserones. It reported net earnings of $1.1 million on revenue of $24.3 million and ended the quarter with $69.1 million in cash.
Elemental also declared its inaugural annual dividend of 12¢ per share, payable quarterly, and expanded liquidity through a $150 million revolving credit facility with a $50 million accordion feature.
Panuco’s 2025 feasibility study outlined annual production of 17.4 million oz. silver-equivalent over an initial 9.4-year mine life. Vizsla Silver has said the project is fully financed for construction and in April awarded an engineering, procurement and construction management contract to M3 Engineering. The board of Vizsla Royalties unanimously recommended shareholders approve the deal, while holders representing about 23% of outstanding shares, including Vizsla Silver, signed voting support agreements. The companies expect to close the transaction in the third quarter of 2026, subject to shareholder, court and regulatory approvals.
Shares of Elemental initially rose on the announcement before slipping almost 1.5% in early Toronto trading to C$26.18, valuing the company at about C$1.73 billion. Vizsla Royalties shares jumped nearly 20% and were last trading at C$3.93, booting its worth to almost C$263 million.
