Mr. Craig Gibson of Prismo Metals reports

VIZSLA SILVER TO MAKE STRATEGIC INVESTMENT IN PRISMO METALS AND RECEIVE RIGHT OF FIRST REFUSAL ON THE PALOS VERDES CONCESSION

Prismo Metals Inc. has signed a non-binding letter of intent (LOI) with Vizsla Silver Corp. Pursuant to the LOI, Vizsla intends to make a strategic investment for four million units of Prismo for aggregate consideration of $2-million, with Vizsla acquiring a right of first refusal (ROFR) to purchase the Palos Verdes project from Prismo.

Transaction highlights for Prismo

• The strategic investment will provide for a cash injection to Prismo of $500,000 and issuance to Prismo of $1.5-million in Vizsla shares, which will provide Prismo shareholders further exposure to the district by equity ownership position in Vizsla;
• Formation of joint technical committee will allow for the pursuit of district-scale exploration of Panuco silver-gold district by the formation of a joint technical committee.

Craig Gibson, president and chief executive officer of Prismo, comments,

"Prismo looks forward to welcoming Vizsla as a new shareholder and working closely with them to advance our mutual understanding of this long-underexplored, high-grade silver-gold district. We look forward to the combined Prismo-Vizsla brain-trust unravelling the geology to unlock the potential of Palos Verdes and the entire Panuco district."

Transaction details

Vizsla has agreed to subscribe for four million units of Prismo. Each unit consists of one common share of Prismo and one-half of one common share purchase warrant. Each warrant entitles the holder to acquire one common share of Prismo at a price of 75 cents for a period of two years.

The consideration for the strategic investment will consist of a cash payment of $500,000 at closing and one million common shares of Vizsla. Following completion of the strategic investment, Vizsla will own approximately 12.04 per cent of Prismo on a basic basis and 17.03 per cent on a partially diluted basis.

The common shares received by Vizsla and the consideration shares received by Prismo will be subject to (i) a regulatory four-month hold period and (ii) a voluntary hold period of up to 24 months, with 25 per cent of the shares being released every six months.

The LOI contemplates that Prismo and Vizsla will enter into definitive agreements, which will include, subject to certain conditions, the following rights:

• Prismo and Vizsla will form a technical committee, financed by Vizsla, to focus on a district-scale understanding of the combined land package without regard to ownership.
• Technical committee to be comprise one nominee from Prismo, one nominee from Vizsla and one nominee mutually acceptable by both parties.
• Vizsla will have the right to nominate one director to Prismo's board of directors.
• Vizsla will be granted the ROFR on the project for a duration of four years, subject to an acceleration clause if Vizsla's ownership in Prismo drops below 10 per cent for a period of more than 60 days.
• Vizsla will be granted the right to maintain its pro rata ownership in Prismo in future financings and standard top-up rights (subject to Vizsla maintaining a minimum 10-per-cent equity ownership position in Prismo).
• Vizsla, and/or affiliates of Vizsla, will have the right to designate a purchaser in respect of any proposed sale of consideration Shares by Prismo.
• Prismo will have the right to designate a purchaser in respect of any proposed sale of Prismo shares by Vizsla.

The definitive agreements are expected to be signed on or around Dec. 16, 2022, and closing of the strategic investment is expected to occur shortly thereafter. Closing is conditional upon the parties entering into definitive agreements, and the obtaining all regulatory and third party approvals and consents which may be necessary in order to allow the parties to complete the strategic investment.

Financial adviser

Prismo has engaged Agentis Capital Mining Partners to provide financial and capital markets advisory services.

About Prismo Metals Inc.

Prismois junior mining company focused on precious metal exploration in Mexico.

We seek Safe Harbor.