US$239 Million Silver Royalty Deal Puts Major Mexico Asset at Center of Takeover Push

Vizsla Royalties Corp. (VROY:TSX.V) and Elemental Royalties Corp. (ELE:TSX.V; ELEMF:OTCMKTS) announced that they entered into a definitive arrangement agreement on May 13, 2026, under which Elemental will acquire all issued and outstanding shares of Vizsla Royalties through a court-approved plan of arrangement. The transaction carries a total consideration of approximately CA$327 million, or US$239 million, equal to CA$4.13 per Vizsla Royalties share on a fully diluted basis.

Under the agreement, Vizsla Royalties shareholders may elect to receive for each share either 0.15 common shares of Elemental, CA$4.13 in cash, or a combination of both, subject to rounding and proration. The agreement includes a maximum total cash consideration of approximately CA$82 million. According to the release, the transaction price represented a 31% premium to the unaffected closing price and a 22% premium to the 20-day volume-weighted average trading price of Vizsla Royalties shares as of May 12, 2026.

The transaction centers on Vizsla Royalties' 2.0% to 3.5% net smelter return royalty interests on the Panuco silver-gold project in Mexico. The royalty structure includes life-of-mine royalties with no caps, step-downs, or buyback provisions.

Elemental Chief Executive Officer David M. Cole stated in a company news release: "As the first major transaction for our company since the merger with EMX, and the largest single-asset transaction in our history, we are excited to announce the acquisition of 2.0%-3.5% NSR royalties on the Panuco silver-gold project."

Vizsla Royalties Chief Executive Officer Michael Pettingell stated in a company news release: "Since the initial spinout of Vizsla Royalties in 2024, we have focused on value creation for shareholders and providing long-term exposure to the world's largest, high-grade silver primary resource at Panuco."

The Panuco Project covers approximately 9,800 hectares and includes the Copala and Napoleon deposits. The companies stated that the Panuco royalties cover most of the district through a 3.5% NSR on Silverstone concessions and a 2.0% NSR on Rio Panuco concessions.

Completion of the transaction remains subject to shareholder, court, exchange, and regulatory approvals, including approval from the National Antitrust Commission of Mexico. The companies stated the transaction is expected to close in the third quarter of 2026.

Precious Metals Markets Navigated Inflation Pressures, Interest Rates, and Diverging Signals

According to a May 14 analysis from The Sharpe Quest, activity across the precious metals sector reflected a combination of silver price movement, mining cost trends, and broader market positioning. The report stated that "new all-time highs... coincided with a new push in silver," while also noting that silver had "closed near US$84."

The report also reviewed operational metrics within the silver industry and stated that all-in sustaining cost remained a closely watched measure. According to the analysis, mining operations were running at approximately "US$12.86/oz of silver," which it described as "well below peers." The report further stated that by-product contributions from lead and zinc reduced overall operating costs, writing that "the by-products pay more than the cost of operating the mine."

The Sharpe Quest analysis also examined broader supply conditions and reported that "the silver market has already accumulated a deficit for the sixth consecutive year," describing the trend as a "structural tailwind." The report additionally stated that options activity indicated "investor positioning is optimistic," while market participants appeared "positioned to let a long position run."

Broader macroeconomic conditions later introduced pressure across precious metals markets. According to a May 15 Bloomberg report by Yvonne Yue Li and Jack Ryan, inflation concerns and rising borrowing costs weighed on commodities as investors reassessed inflation expectations and monetary policy conditions. The report stated that "higher borrowing costs tend to cool the economy and weaken demand for metals."

Bloomberg also cited ANZ Group Holdings analysts Daniel Hynes and Soni Kumari, who wrote that "Inflation expectations, higher yields and a stronger dollar are likely to keep gold under pressure in the near term."

Kitco Media similarly reported on May 15 that Treasury yields, inflation data, and U.S. dollar strength affected market sentiment. The publication stated that "every move higher" in gold prices had been "capped by hotter inflation data, higher yields and a stronger dollar." Marc Chandler of Bannockburn Global Forex also commented that "Surging interest rates and an appreciating greenback weighed on gold prices at the end of the week."

Market participants presented differing views on near-term conditions. Adrian Day of Adrian Day Asset Management stated that "gold will likely continue to be quite volatile as short-term competing forces each take the upper hand in turns," while adding that "steady buying from central banks and others" remained part of the broader backdrop. Daniel Pavilonis of RJO Futures stated that "It's just not going to be an easy trade like it was a few months ago," and added that markets had become "kind of jittery" as investors reacted to inflation and Treasury activity.

On May 16, Muhammad Umair reported that inflation concerns expanded beyond energy markets into broader economic conditions. The report stated that "Inflation is back on the upswing" and noted that pricing pressure had begun affecting wider market expectations. It further stated that "inflation pressure is spreading beyond energy," contributing to higher Treasury yields and continued U.S. dollar strength.

The report stated that gold continued to receive support from "higher inflation, geopolitical risk and trade uncertainty," while rising yields and dollar strength remained sources of pressure. Silver was also described as benefiting from demand for hard assets and inflation-related themes, although "higher yields and strong U.S. dollar" continued to limit momentum.

Royalty Deal Spotlighted Panuco Scale, Exploration Potential, and Transaction Terms

According to a May 14 Silver Advisor report from Peter Krauth and Ted Butler, Elemental Royalty's proposed acquisition of Vizsla Royalties was discussed in connection with royalty exposure to the Panuco silver-gold project. The report stated that under the agreement, "Vizsla Royalties shareholders get a flexible, value-rich choice of 0.15 Elemental shares, CA$4.13 in cash, or a blended mix," and noted that the transaction valued the business at approximately CA$327 million.

The May 14 report also wrote that the transaction would combine "Vizsla's high-grade Panuco silver-gold royalty with Elemental's diversified, cash-flowing royalty portfolio, creating a more powerful platform with near-term revenue and long-term growth upside." It further described the Panuco Project as "a large-scale 9,800-hectare silver-gold district expected to become a major production asset," with "potential output of around 17.4 million silver-equivalent ounces annually and strong life-of-mine royalty rates of 2.0%-3.5% NSR."

The report also discussed exploration activity at Panuco, stating that "the project still holds significant exploration upside, with most of the land underexplored, extensive drilling already completed, and additional discovery potential remaining open along strike and at depth."

Silver Advisor also addressed trading activity following the announcement and wrote that "Vizsla Royalties shares are up 17% on this news, which is excellent but remain below the CA$4.13 offer." The report stated that "the market may be holding out to see if this deal gets approved and finalized, or if a superior bid comes along."