National Bank Financial has reduced its rating on Vizsla Silver Corp (NYSE:VZLA) from Outperform to Sector Perform after reassessing the company’s near-term outlook in light of recent security developments at the Panuco project in Mexico. The move was communicated by analyst Don Demarco, who said his team adjusted their model and reweighted Panuco’s valuation based on the limited details available from the company and media reports.
The downgrade comes as Vizsla’s shares have experienced sharp volatility. According to InvestingPro data, the stock declined about 17% over the last week and is down roughly 25% year-to-date, though it continues to trade near its Fair Value estimate.
Events at the Panuco site have driven investor concern. Reports indicate that 10 individuals were taken from the project location in Concordia, Mexico on January 28. In a February 9 announcement, Vizsla said that several of those people who had been taken were later found deceased. National Bank Financial said the company is prioritizing support for the affected people and is cooperating with government agencies and other parties while investigations continue.
In describing the situation, the research firm emphasized that conditions remain uncertain and that it is "working to better understand the risks and mitigating factors" that underpin its model estimates for the silver-mining company. The analyst noted that, given the constrained public information, they revised assumptions tied to Panuco in their valuation work.
Despite the operational and security-related turbulence, available financial metrics suggest Vizsla retains a strong liquidity position. InvestingPro data cited by the research firm shows a current ratio of 33.44 and more cash than debt on the balance sheet. The company, however, is not expected to report profitability for the current year.
Adding to the capital-markets activity around Vizsla, the company announced the pricing of a $250 million offering of convertible senior notes due in 2031. Those notes are initially convertible at a 25% premium to a recent closing price. Vizsla indicated that net proceeds are earmarked for exploration and development activities at the Panuco Project, potential future acquisitions, and general corporate purposes.
Market views on Vizsla remain mixed. Cantor Fitzgerald has initiated coverage with a Buy rating, pointing to the Panuco Silver-Gold Project’s high-grade resources and expansion opportunities and characterizing Vizsla as a mine developer with substantial upside potential. At the same time, National Bank Financial’s downgrade reflects heightened near-term uncertainty tied directly to the security incident and the limited information available to market participants and analysts.
Both the downgrade and the convertible note transaction underscore the dynamic environment that surrounds Vizsla Silver Corp. The company has reiterated its focus on supporting those affected by the incident and on advancing its strategic objectives while investigations continue. Until additional clarity emerges, analysts and investors face a mix of operational risks and capital structure developments to weigh when assessing the company.
Contextual note - The coverage and transactions described came amid active reporting and limited official detail; observers and analysts have adjusted models and ratings accordingly.