Vizsla Silver Corp 40-F/A for FY2022
Vizsla Silver Corp. (VZLA)
About this 40-F/A
Vizsla Silver Corp filed this 40-F/A on July 28, 2022, covering the fiscal year ended April 30, 2022 (FY2022).
Headline figures
Fiscal year ended April 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- 15.27M CAD
- compared with a net loss of 11.1M CAD a year earlier
- Diluted EPS
- -0.11 CAD
- compared with -0.13 CAD a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Amendment No. 1)
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Registration statement pursuant to Section 12 of the Securities Exchange Act of 1934 |
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Annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 |
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For the fiscal year ended
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Commission File Number
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(Exact name of Registrant as specified in its charter)
N/A
(Translation of Registrant's name into English (if applicable))
| British Columbia, |
1040 | N/A |
| (Province or other jurisdiction of | (Primary Standard Industrial Classification | (I.R.S. Employer |
| incorporation or organization) | Code Number) | Identification Number) |
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(Address and telephone number of Registrant's principal executive offices)
1-
(Name, address (including zip code) and telephone number (including
area code) of agent for service in the United States)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered |
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Securities registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
For annual reports, indicate by check mark the information filed with this Form:
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Indicate the number of outstanding shares of each of the registrant's classes of capital or common stock as of the close of the period covered by the annual report:
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.
[X]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
[X]
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.
| † | The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
EXPLANATORY NOTE
This Amendment No. 1 to the Annual Report on Form 40-F (“Amendment No. 1”) amends the Annual Report on Form 40-F of Vizsla Silver Corp. (the “Registrant”) for the year ended April 30, 2022, which was originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on July 22, 2022 (the “Original Annual Report”). This Amendment No. 1 is being filed to include the Audit Report of the Registrant’s Auditor to the Consolidated Financial Statements for the fiscal year ended April 30, 2022 (filed as Exhibit 99.2 to this Amendment No. 1) which was omitted due to clerical error and for the purpose of submitting Exhibits 101 and 104 to the Form 40-F as required by General Instruction B(15)(a)(iii) of Form 40-F and Rule 405 of Regulation S-T. Exhibits 101 and 104 were omitted from the Registrant's Original Form 40-F in accordance with the 30-day grace period provided under Rule 405(a)(2)(ii) or Regulation S-T.
Except as described above, the Original Annual Report remains unchanged. This Amendment No. 1 does not reflect events occurring after the filing of the Original Annual Report, or modify or update those disclosures. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Annual Report.
SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this Amendment No. 1 to the Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.
| VIZSLA SILVER CORP. | ||
| By: | /s/ Michael Konnert | |
| Name: Michael Konnert | ||
| Title: Chief Executive Officer |
Date: July 28, 2022
EXHIBIT INDEX
* Previously filed.
** Filed herewith.
Consolidated Financial Statements
(Expressed in Canadian Dollars)
For the year ended April 30, 2022
| Independent Auditor's Report |  |
To the Shareholders of Vizsla Silver Corp:
Opinion
We have audited the consolidated financial statements of Vizsla Silver Corp and its subsidiaries (the "Company"), which comprise the consolidated statements of financial position as at April 30, 2022 and April 30, 2021, and the consolidated statements of loss and comprehensive loss, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at April 30, 2022 and April 30, 2021, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards.
Basis for Opinion
We conducted our audits in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audits of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Other Information
Management is responsible for the other information. The other information comprises Management's Discussion and Analysis.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audits of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audits or otherwise appears to be materially misstated. We obtained Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
- Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audits and significant audit findings, including any significant deficiencies in internal control that we identify during our audits.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
The engagement partner on the audit resulting in this independent auditor's report is
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July 20, 2022 |
Chartered Professional Accountants |
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VIZSLA SILVER CORP. |
| As at | Note | April 30, 2022 | April 30, 2021 | ||||||
| $ | $ | ||||||||
| ASSETS | |||||||||
| Current assets | |||||||||
| Cash and cash equivalents | |||||||||
| Tax receivables | 6 | ||||||||
| Other receivables | |||||||||
| Prepaid expenses | |||||||||
| Due from related party | 10 | ||||||||
| Total current assets | |||||||||
| Property, plant and equipment | 7 | ||||||||
| Exploration and evaluation assets | 8 | ||||||||
| Total assets | |||||||||
| LIABILITIES | |||||||||
| Current liabilities | |||||||||
| Accounts payable and accrued liabilities | |||||||||
| Due to related party | 10 | ||||||||
| Total liabilities | |||||||||
| SHAREHOLDERS' EQUITY | |||||||||
| Share capital | 9 | ||||||||
| Reserves | |||||||||
| Share to be issued | 9 | ||||||||
| Accumulated other comprehensive income (loss) | ( |
) | |||||||
| Deficit | ( |
) | ( |
) | |||||
| Total shareholders' equity | |||||||||
| Total liabilities and shareholders' equity |
Note 1 - Nature and continuance of operations
Note 15 - Subsequent events
They are signed on the Company's behalf by:
| "Michael Konnert" | "Craig Parry" | |
| Director, CEO | Director, Chairman | |
The accompanying notes are an integral part of these consolidated financial statements
Page | 2
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VIZSLA SILVER CORP. Consolidated Statements of Loss and Comprehensive Loss Expressed in Canadian dollars |
| For the years ended | Note | April 30, 2022 | April 30, 2021 | ||||||
| $ | $ | ||||||||
| General and administrative expenses | |||||||||
| Amortization | |||||||||
| Consulting fees | |||||||||
| Directors fees | 10 | ||||||||
| Exploration investigation | |||||||||
| Foreign exchange (gain)/loss | ( |
) | |||||||
| Insurance | |||||||||
| Management fees | 10 | ||||||||
| Marketing | |||||||||
| Office and miscellaneous | 10 | ||||||||
| Professional fees | |||||||||
| Share based compensation | 9e | ||||||||
| Transfer agent and filing | |||||||||
| Travel and promotion | |||||||||
| ( |
) | ( |
) | ||||||
| Other income | |||||||||
| Gain on spin-out of mining interest | 5 | ( |
) | ||||||
| Interest income | ( |
) | ( |
) | |||||
| Net loss | ( |
) | ( |
) | |||||
| Other Comprehensive Income (Loss) | |||||||||
| Items that will be reclassified subsequently | |||||||||
| Translation (loss) / gain on foreign operations | ( |
) | |||||||
| Comprehensive loss | ( |
) | ( |
) | |||||
| Basic and diluted loss per share | ( |
) | ( |
) | |||||
| Weighted average number of common shares | |||||||||
| Basic and diluted |
The accompanying notes are an integral part of these consolidated financial statements
Page | 3
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VIZSLA SILVER CORP. Consolidated Statements of Cash Flows Expressed in Canadian dollars |
| For the years ended | Note | April 30, 2022 | April 30, 2021 | ||||||
| $ | $ | ||||||||
| Operating activities | |||||||||
| Net loss for the year | ( |
) | ( |
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| Items not affecting cash: | 7 | ||||||||
| Amortization | |||||||||
| Foreign exchange (gain) loss | ( |
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| Gain on spin-out of mining interest | 9 | ( |
) | ||||||
| Shares issued for services | |||||||||
| Share-based compensation | |||||||||
| Changes in non-cash working capital items: | |||||||||
| Accounts payable and accrued liabilities | |||||||||
| Due to/from related party | ( |
) | ( |
) | |||||
| Taxes receivable | ( |
) | ( |
) | |||||
| Other receivable | ( |
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| Prepaid expenses | ( |
) | ( |
) | |||||
| Net cash flows used in operating activities | ( |
) | ( |
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| Investing activities | |||||||||
| Purchase of exploration and evaluation assets | ( |
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| Exploration and evaluation expenditures | ( |
) | ( |
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| Purchase of equipment | 5 | ( |
) | ( |
) | ||||
| Expenditures on spin-out | ( |
) | |||||||
| Net cash flows used in investing activities | ( |
) | ( |
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| Financing activities | |||||||||
| Cash proceeds of common shares issued net of issuance costs | |||||||||
| Issuance of common shares - option exercise | |||||||||
| Issuance of common shares - warrants exercise | |||||||||
| Net cash flows provided by financing activities | |||||||||
| Increase in cash and cash equivalents | |||||||||
| Cash and cash equivalents, beginning of year | |||||||||
| Cash and cash equivalents, end of year |
The accompanying notes are an integral part of these consolidated financial statements
Page | 4
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VIZSLA SILVER CORP. Consolidated Statements of Changes in Equity Expressed in Canadian dollars, except for number of shares |
| Common shares | Other | |||||||||||||||||||||||
| Number | Amount | Reserves | Share to be | comprehensive | Deficit | Total | ||||||||||||||||||
| issued | income (loss) | |||||||||||||||||||||||
| Note | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Balance, April 30, 2020 | ( |
) | ||||||||||||||||||||||
| Shares issued pursuant to private placement and prospectus | - | - | - | - | ||||||||||||||||||||
| Shares issued pursuant to exercise of warrants and options | - | - | - | - | ||||||||||||||||||||
| Shares issued for services | - | - | - | - | ||||||||||||||||||||
| Share issuance costs - cash | - | ( |
) | - | - | - | - | ( |
) | |||||||||||||||
| Share issuance costs - finders warrants | - | ( |
) | - | - | - | - | |||||||||||||||||
| Stock based compensation | - | - | - | - | - | |||||||||||||||||||
| Net loss and other comprehensive income for the year | - | - | - | - | ( |
) | ( |
) | ||||||||||||||||
| Balance, April 30, 2021 | ( |
) | ||||||||||||||||||||||
| - | ||||||||||||||||||||||||
| Shares issued pursuant to private placement and prospectus | - | - | - | |||||||||||||||||||||
| Shares issued pursuant to property acquisition | - | - | - | - | ||||||||||||||||||||
| Shares issued pursuant to exercise of warrants and options | - | - | - | - | ||||||||||||||||||||
| Share issuance costs - cash | - | ( |
) | - | - | - | - | ( |
) | |||||||||||||||
| Share issuance costs - finders warrants | - | ( |
) | - | - | - | - | |||||||||||||||||
| Stock based compensation | 9 | - | - | - | - | - | ||||||||||||||||||
| Contingent consideration adjustment | 8 | - | - | - | ( |
) | - | - | ( |
) | ||||||||||||||
| Transfer of exploration and evaluation assets pursuant to spin-out | 5 | - | ( |
) | - | - | - | - | ( |
) | ||||||||||||||
| Net loss and other comprehensive loss for the year | - | - | - | - | ( |
) | ( |
) | ( |
) | ||||||||||||||
| Balance, April 30, 2022 | ( |
) | ( |
) | ||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements
Page | 5
| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
1. Nature and Continuance of Operations
The Company was incorporated on September 26, 2017, under the Business Corporations Act (British Columbia) under the name Vizsla Capital Corp. On March 6, 2018, the Company changed its name to Vizsla Resources Corp. The Company's principal business activity is the exploration of mineral properties. The Company currently conducts substantially all of its operations in Canada and Mexico in one business segment. On February 8, 2021, the Company change its name to Vizsla Silver Corp. (the "Company", "Vizsla Silver"). It is trading on the venture exchange under the symbol VZLA.
On January 21, 2022, Vizsla Silver Corp was listed on the NYSE American and commenced trading under the symbol "VZLA".
The head office and principal address of the Company is located at 700 - 1090 West Georgia Street, Vancouver, B.C., V6E 3V7.
The Company has not yet determined whether its properties contain ore reserves that are economically recoverable. The recoverability of the amounts shown for mineral properties and exploration costs is dependent upon the existence of economically recoverable ore reserves, the ability of the Company to obtain necessary financing to complete the exploration and development of its properties, and upon future profitable production or proceeds from the disposal of properties.
These consolidated financial statements have been prepared using accounting principles applicable to a going concern which assumes the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business rather than through a process of forced liquidation.
The recent outbreak of the coronavirus, also known as "COVID-19", has spread across the globe and is impacting worldwide economic activity. Conditions surrounding the coronavirus continue to rapidly evolve and government authorities have implemented emergency measures to mitigate the spread of the virus. The outbreak and the related mitigation measures may have an adverse impact on global economic conditions as well as on the Company's business activities as it can result in operating, supply chain and project development delays that can materially adversely affect the operations of the Company. Operations at the Panuco-Copala property could be further suspended as actions are taken in an effort to combat the spread of COVID-19. If the exploration or development of the Panuco-Copala property is further suspended or delayed, it may have a material adverse impact on Vizsla's results of operations, financial condition and the trading price of its common shares. The extent to which the coronavirus may impact the Company's business activities will depend on future developments, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions, business disruptions, and the effectiveness of actions taken in Canada and other countries to contain and treat the disease. These events are highly uncertain and as such, the Company cannot determine their financial impact at this time.
Page | 6
| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
The consolidated financial statements have been prepared in accordance with International Accounting Standard ("IFRS") issued by the International Accounting Standards Board ("IASB") and Interpretations of the International Financial Reporting Interpretations Committee ("IFRIC").
These consolidated financial statements have been prepared on a historical cost basis except for certain financial instruments which are measured at their fair value as explained in the accounting policies set out below.
In addition, these consolidated financial statements have been prepared using the accrual basis of accounting other than the consolidated statements of cash flows. The consolidated financial statements were approved by the Board of Directors of the Company on July 20, 2022.
3. Significant Accounting Policies
The significant accounting policies set out below have been applied consistently to all periods presented in the consolidated financial statements.
a) Basis of consolidation
These consolidated financial statements incorporate the financial statements of the Company and the subsidiaries controlled by the Company.
The principal subsidiaries of the Company, which are accounted for under the consolidation method, are as follows:
| Entity | Principal activities | Country of incorporation and operation |
Ownership interest as at April 30, 2022 |
Ownership interest as at April 30, 2021 |
| Vizsla Copper Corp. (formerly Northbase Resources Inc.)* | Exploring evaluating mineral properties | |||
| Canam Alpine Ventures Ltd. | Holding company | |||
| Minera Canam S.A. de C.V. | Exploring evaluating mineral properties | |||
| Operaciones Canam Alpine S.A. de C.V. |
Exploring evaluating mineral properties | |||
| Vizsla Royalty Corp. (formerly Vizsla Copper Corp. and 1283303 B.C. Ltd.) | Royalty Company | |||
| Canam Royalties Mexico, S.A. de C.V. | Royalty Company |
*The Company spun-out Vizsla Copper Corp. on September 20, 2021 (Note 5).
Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases. All significant intercompany transactions and balances have been eliminated.
Page | 7
| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
3. Significant Accounting Policies (continued)
b) Foreign Currency Translation
i) Functional and Presentation Currency
Items included in the financial statements of each consolidated entity in Vizsla Silver Corp.'s group are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). The functional currency of the Company and its Canadian subsidiaries is Canadian dollars ("CAD"), the functional currency of the Company's Mexican subsidiaries is Mexican Peso ("MXD"). The consolidated financial statements are presented in Canadian dollars ("CAD"), which is the Company's presentation currency.
For the purpose of presenting these consolidated financial statements, entities that have a functional currency different from the presentation currency ("foreign operations") are translated into CAD as follows:
- Assets and liabilities: at the closing rate at the date of the statement of financial position; and
- Income and expenses: at the average rate for the period (as this is considered a reasonable approximation of actual rates prevailing at the transaction dates).
Exchange differences arising, if any, are recognized in other comprehensive income and accumulated in equity. When an entity disposes of its entire interest in a foreign operation, or loses control, or significant influence over a foreign operation, the foreign currency gains or losses accumulated in other comprehensive income related to the foreign operation are recognized in profit or loss. If an entity disposes part of an interest in a foreign operation which remains a subsidiary, a proportionate amount of foreign currency gains or losses accumulated in other comprehensive income related to the subsidiary is reallocated between controlling and non-controlling interests.
ii) Transactions and Balances
In preparing the financial statements of each individual Vizsla Silver Corp. entity and subsidiary, transactions in currencies other than the entity's functional currency ("foreign currency") are recognized at the rates of exchange prevailing at the date of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences on monetary items are recognized in profit or loss in the period in which they arise except for the exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognized initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.
c) Cash and cash equivalents
Cash consists of cash on hand, deposits in banks with no restrictions and highly liquid savings accounts. Cash equivalents include other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. The Company's cash and cash equivalents are invested with major financial institutions in business accounts.
Page | 8
| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
3. Significant Accounting Policies (continued)
d) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost can be measured reliably.
The major categories of property, plant and equipment are depreciated on a straight-line basis as follows:
| Mining Equipment | |
| Office Equipment | |
| Computer Equipment | |
| Office improvements |
Impairment losses are included as part of other gains and losses on the consolidated statements of loss and comprehensive loss.
e) Exploration and evaluation assets
The Company is in the exploration stage with respect to its investment in mineral interests. Accordingly, once a license to explore an area has been secured, the Company follows the practice of capitalizing all costs relating to the acquisition of, exploration for and development of exploration and evaluation assets. Such costs, include, but are not limited to, geological and geophysical studies, exploratory drilling and sampling. At such time as commercial production commences, these costs will be charged to operations on a unit-of-production method based on proven and probable resources. The aggregate costs, related to abandoned exploration and evaluation assets are charged to operations at the time of any abandonment or when it has been determined that there is evidence of a permanent impairment.
f) Provision for restoration and rehabilitation
A provision for restoration and rehabilitation is recognized when there is a present legal or constructive obligation as a result of exploration and development activities undertaken; it is more likely than not that an outflow of economic benefits will be required to settle the obligation and the amount of the provision can be measured reliably. The estimated future obligation includes the cost of removing facilities, abandoning sites and restoring the affected areas. The provision for future restoration costs is the best estimate of the present value of the expenditure required to settle the restoration obligation at the reporting date. The estimated cost is capitalized into the cost of the related asset and amortized on the same basis as the related assets. If the estimated cost does not relate to an asset, it is charged to earnings in the period in which the event giving raises to the liability occurs.
As at April 30, 2022, and 2021, the Company did not have any provision for restoration and rehabilitation.
g) Related party transactions
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control, related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.
Page | 9
| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
3. Significant Accounting Policies (continued)
h) Share capital
Common shares are classified as equity. Transaction costs directly attributable to the issue of common shares and share purchase warrants are recognized as a deduction from equity, net of any tax effects.
i) Share issue costs
Professional, consulting, regulatory and other costs directly attributable to equity financing transactions are recorded as share issue costs when the financing transactions are completed if the completion of the transaction is considered likely. Otherwise, they are expensed as incurred. Share issue costs are charged to share capital when the related shares are issued. Deferred share issue costs related to financing transactions that are not completed are charged to expenses.
j) Warrants
Proceeds from issuances by the Company of units consisting of shares and warrants are allocated based on the residual method, whereby the carrying amount of the warrants is determined based on any difference between gross proceeds and the estimated fair market value of the shares. If the proceeds from the offering are less than or equal to the estimated fair market value of shares issued, a nil carrying amount is assigned to the warrants.
k) Share based payments
The Company grants share-based compensation to directors, officers, employees and service providers. Each tranche in an award is considered a separate award with its own vesting period. The Company applies the fair value method of accounting for share-based payments and the fair value is calculated using the Black-Scholes option pricing model.
Share-based payments for employees and others providing similar services are determined based on the grant date fair value. Share-based payments for non-employees are determined based on the fair value of the goods/services received or fair value of the share-based payment measured at the date on which the Company obtains such goods/services. Compensation expense is recognized over each tranche's vesting period, in earnings or capitalized as appropriate, based on the number of awards expected to vest.
l) Income taxes
Income tax expense comprises current and deferred tax. Income tax is recognized in the statement of loss and comprehensive loss except to the extent it relates to items recognized directly in equity.
Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at year end, adjusted for amendments to tax payable with regards to previous years.
Page | 10
| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
3. Significant Accounting Policies (continued)
l) Income taxes (continued)
Deferred tax is recognized using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized on the initial recognition of assets or liabilities in a transaction that is not a business combination and, at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss). In addition, deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
m) Earning (Loss) per share
Basic earnings per share are computed using the weighted average number of common shares outstanding during the year. Diluted earnings per share amounts are calculated giving effect to the potential dilution that would occur if securities or other contracts to issue common shares were exercised or converted to common shares using the treasury stock method. If the Company incurs net losses in a fiscal year, basic and diluted losses per share are the same.
n) Financial Instruments
Financial assets
The Company classifies its financial assets in the following categories:
- Fair value through profit or loss (FVTPL)
- Fair value through other comprehensive income (FVTOCI)
- Amortized cost
The determination of the classification of financial assets is made at initial recognition. The Company's accounting policy for each of the categories is as follows:
Financial assets at FVTPL
Financial assets carried at FVTPL are initially recorded at fair value and transaction costs are expensed in the consolidated statements of loss and comprehensive loss. Realized and unrealized gains and losses arising from changes in the fair value of financial assets held at FVTPL are included in the consolidated statements of loss and comprehensive loss.
Financial assets at FVTOCI
Financial assets carried at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently they are measured at fair value, with gains and losses arising from changes in fair value recognized in other comprehensive loss.
Page | 11
| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
3. Significant Accounting Policies (continued)
n) Financial Instruments (continued)
Financial assets at amortized cost
A financial asset is measured at amortized cost if the objective is to hold the financial asset for the collection on contractual cash flows and the asset's contractual cash flows are comprised solely of payments of principal and interest. The financial asset is classified as current or non-current based on its maturity date and is initially recognized at fair value and subsequently carried at amortized cost less any impairment. The Company classifies cash and due from related parties, other receivables and loan receivables in this category.
Impairment of financial assets at amortized cost
The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost.
Financial liabilities
The Company classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was incurred. The Company's accounting policy for each category is as follows:
Financial liabilities at FVTPL
This category comprises derivatives or liabilities acquired or incurred principally for the purpose of selling or repurchasing in the near term. They are carried in the statement of financial position at fair value with changes in fair value recognized in the statements of loss and comprehensive loss.
Other financial liabilities
This category includes accounts payable and accrued liabilities and due to related parties, which are recognized at amortized cost using the effective interest method.
The effective interest method calculates the amortized cost of a financial liability and allocates interest expense over the corresponding period. The effective interest rate is the rate that discounts estimated future cash receipts over the expected life of the financial liability, or, where appropriate, a shorter period. Transaction costs in respect of financial liabilities at fair value through profit or loss are recognized in the statements of operations and comprehensive loss immediately while transaction costs associated with other financial liabilities are included in the initial measurement of the financial liability.
The financial assets are derecognized when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. Financial liabilities are derecognized when its contractual obligations are discharged, cancelled or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.
Page | 12
| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
3. Significant Accounting Policies (continued)
o) Reclassification
Certain comparative numbers have been reclassified to reflect the current year presentation.
p) Standards issued but not yet effective
The new standards or amendments issued but not yet effective are either not applicable or not expected to have a significant impact on the Company's consolidated financial statements.
4. Significant Accounting Judgments and Estimates
The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses, and related disclosure. Estimates and assumptions are continuously evaluated and are based on management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Judgment is used mainly in determining how a balance or transaction should be recognized in the financial statements. Estimates and assumptions are used mainly in determining the measurement of recognized transactions and balances. Actual results may differ from these estimates.
Significant areas where management's judgment has been applied include:
- Impairment of exploration and evaluation assets (E&E assets)
In accordance with the Company's accounting policy, the Company's E&E assets are evaluated every reporting period to determine whether there are any indications of impairment. If any such indication exists, which is often judgmental, a formal estimate of recoverable amount is performed and an impairment loss is recognized to the extent that the carrying amount exceeds the recoverable amount. The recoverable amount of an asset or cash generating group of assets is measured at the higher of fair value less costs to sell and value in use.
The evaluation of asset carrying values for indications of impairment includes consideration of both external and internal sources of information, including such factors as market and economic conditions, metal prices, future plans for the Company's mineral properties and mineral resources and/or reserve estimates.
Management has assessed for impairment indicators for the Company's E&E assets and has concluded that no indicators of impairment were identified, and the Company plans to continue with its objective of developing Panuco - Copala Property.
- The acquisition of a company may result in the reporting of the acquisition as a business combination, or an asset acquisition as defined within IFRS. Judgment is required to determine the basis of accounting for the acquisition.
- These consolidated financial statements have been prepared using International Financial Reporting Standards applicable to a going concern, which assumes that the Company will be able to realize its assets and discharge its liabilities and commitments in the normal course of operations for the foreseeable future.
Page | 13
| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
4. Significant Accounting Judgments and Estimates (continued)
Significant areas requiring the use of management estimates and assumptions include:
- Fair value calculation of share-based payments
The fair value of share-based payments in relation to the warrants and options granted is calculated using a Black Scholes option pricing model. There are a number of estimates used in the calculation such as the expected option life, rate of forfeiture of options granted, risk-free interest rate used and the future price volatility of the underlying security which can vary from actual future events. The factors applied in the calculation are management's best estimates based on industry average and future forecasts.
- Assessing whether deferred tax assets and liabilities are recognized in accordance with IAS 12, Income taxes.
Provisions for income taxes are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. The Company reviews the adequacy of these provisions at the end of the reporting period. However, it is possible that at some future date an additional liability could result from audits by taxing authorities. Where the final outcome of these tax-related matters is different from the amounts that were originally recorded, such differences will affect the tax provisions in the period in which such determination is made.
▪ Acquisition of a company requires substantially all identifiable assets, liabilities and contingent considerations to be recorded at the date of acquisition at their respective fair values which requires significant judgement and estimation. Assumptions have been made by management regarding the likelihood of meeting future milestones. Discount rates applied are consistent with external industry information reflecting the risk associated with the voluntary pooling restrictions.
▪ Tax receivables
Value-added tax ("VAT") receivable is collectible from the government of Mexico. The collection of VAT is subject to risk due to the complex application and collection process and therefore, risk related to the collectability and timing of payment from the Mexican government. The Company uses its best estimates based on the facts known at the time and its experience to determine its best estimate of the collectability and timing of these recoveries. Changes in the assumptions regarding collectability and the timing of collection could impact the valuation and classification of VAT receivable.
Page | 14
| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
5. Plan of Arrangement
On June 20, 2021, the Company announced that at its special meeting of shareholders held on June 15, 2021, all of the resolutions were duly passed, including the special resolution to approve the proposal plan of arrangement (the "Arrangement") pursuant to which Vizsla Silver will spin-out its British Columbia copper exploration assets to Vizsla Copper Corp. ("Vizsla Copper" or "SpinCo"). Also, the Supreme Court of British Columbia approved the Arrangement under the terms of the Business Corporations Act (British Columbia). Common shares of Vizsla Copper (the "SpinCo Shares") will be distributed to shareholders of Vizsla Silver (the "Shareholders") on the basis of one Vizsla Copper share for every three common shares of Vizsla Silver. The Arrangement will not result in any change to a shareholder's ownership of Vizsla Silver. The majority of shareholders (those who hold their shares through their broker) will receive their SpinCo Shares with no further action. Once the Arrangement becomes effective, Shareholders will own shares in both public companies:
The Arrangement was completed on September 20, 2021, and the Company injected $
On September 20, 2021, the Company transferred its
Under the terms of the Arrangement, each issued and outstanding Vizsla Silver option has been adjusted for the assets spun-out. The exercise prices of the Vizsla Silver replacement stock options were adjusted based on the proportional market value of the two companies after completion of the Arrangement. See Note 6d.
Under the terms of the Arrangement, each issued and outstanding Vizsla Silver warrant has been adjusted for the assets spun-out such that for each of the warrant exercised, the holder is entitled to receive one New Vizsla Share for each Vizsla Share that was issuable upon due exercise of the Vizsla Warrant and one-third of Vizsla Copper share immediately prior to September 20, 2021.
In connection with the Arrangement, the carrying value of Blueberry Property and Carruthers Pass copper property totaling $
Page | 15
| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
6. Taxes Recoverable
| April 30, 2022 | April 30, 2021 | |||||
| $ | $ | |||||
| Goods and Service Tax (GST) recoverable | ||||||
| Mexican Value Added Tax (IVA) recoverable | ||||||
| Total |
7. Property, Plant and Equipment
| Computer | Office | Mining | Office | Total | |||||||||||
| equipment | equipment | equipment | improvements | ||||||||||||
| Cost | $ | $ | $ | $ | $ | ||||||||||
| Balance - April 30, 2020 | |||||||||||||||
| Additions | |||||||||||||||
| Disposal | |||||||||||||||
| Effect of change in exchange rate | |||||||||||||||
| Balance - April 30, 2021 | |||||||||||||||
| Additions | |||||||||||||||
| Disposal | ( |
) | ( |
) | |||||||||||
| Effect of change in exchange rate | |||||||||||||||
| Balance - April 30, 2022 | |||||||||||||||
| Accumulated depreciation | |||||||||||||||
| Balance - April 30, 2020 | |||||||||||||||
| Depreciation | |||||||||||||||
| Disposal | |||||||||||||||
| Effect of change in exchange rate | |||||||||||||||
| Balance - April 30, 2021 | |||||||||||||||
| Depreciation | |||||||||||||||
| Disposal | |||||||||||||||
| Effect of change in exchange rate | |||||||||||||||
| Balance - April 30, 2022 | |||||||||||||||
| Carrying amounts | |||||||||||||||
| As at April 30, 2020 | |||||||||||||||
| As at April 30, 2021 | |||||||||||||||
| As at April 30, 2022 |
Page | 16
| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
8. Exploration and Evaluation Assets
Exploration and evaluation assets are summarized in the table below:
| April 30, | April 30, | |||||
| 2022 | 2021 | |||||
| Northbase Resources Inc. - Blueberry Property (a) | $ | $ | ||||
| Canam Alpine Ventures Ltd. - Panuco-Copala property (b) | ||||||
| Vizsla Copper Corp. - Carruthers Pass property (c) | ||||||
| $ | $ |
a) Northbase Resources Inc. - Blueberry Property
On January 16, 2019, pursuant to a definitive share exchange agreement dated December 17, 2018, the Company acquired all of the issued and outstanding common shares of Northbase Resources Inc. ("Northbase") a private British Columbia company which controls a district-scale (20,265 hectare) land package known as the Blueberry Property in the Babine porphyry copper district in central British Columbia. Under the terms of the acquisition, the holders of Northbase shares received one common share of the Company in exchange for each Northbase share held. NorthBase Resources Inc.'s name was changed to Vizsla Copper Corp. on April 23, 2021.
On September 20, 2021, the Company completed the Arrangement and spin-out Vizsla Copper with its
Cost related to the properties can be summarized as follows:
| Balance | Additions | Balance | Additions | Transfer to | Balance | |||||||||||||
| April 30, 2020 | April 30, 2021 | Vizsla Copper | April 30, 2022 | |||||||||||||||
| Acquisition costs | ||||||||||||||||||
| Shares | $ | $ | $ | $ | ( |
) | $ | |||||||||||
| ( |
) | |||||||||||||||||
| Exploration costs | ||||||||||||||||||
| Analysis | ( |
) | ||||||||||||||||
| Equipment | ( |
) | ||||||||||||||||
| Geophysical consulting | ( |
) | ||||||||||||||||
| Project management | ( |
) | ||||||||||||||||
| Travel, supplies and field expenses | ( |
) | ||||||||||||||||
| Subtotal | ( |
) | ||||||||||||||||
| Balance | $ | $ | $ | ( |
) | $ |
b) Canam Alpine Ventures Ltd. - Panuco-Copala Property
On November 5, 2019, pursuant to a definitive share exchange agreement (the "Agreement") dated September 13, 2019, the Company acquired all of the issued and outstanding common shares of Canam Alpine Ventures Ltd.("Canam"), a private British Columbia company. Canam owns two subsidiaries in Mexico, Minera Canam S.A. de C.V. and Operaciones Canam Alpine S.A. de C.V. According to the Agreement, the Company agreed to pay the consideration of $
- Milestone event 1: Upon exercise of any defined options by Canam, the Company will issue
- Milestone event 2: Upon definition of a resource greater than
Page | 17
| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
8. Exploration and Evaluation Assets (continued)
b) Canam Alpine Ventures Ltd. - Panuco-Copala Property (continued)
In addition, the Company issued
On August 8, 2019, Canam entered into an option agreement with Minera Rio Panuco S.A. de C.V. ("Panuco") whereby the Company can earn a
On September 9, 2019, Canam entered into an option agreement with Silverstone Resources S.A. de C.V. ("Copala") whereby the Company can earn a
On July 21, 2021, the Company signed a binding amending agreement (the "Panuco Amending Agreement") with Panuco and has executed a binding option exercise notice ("Copala Exercise Notice") with Copala, which together will constitute the acceleration and exercise of the Company's option to acquire
Under the Amending Agreement, Vizsla/Canam and Panuco have agreed to amend the terms of the original Panuco option agreement in order to accelerate the Company's exercise of its option on the Panuco property (the "Panuco Property"). Upon closing of the transactions contemplated by the Panuco Amending Agreement, Vizsla will acquire a
- A cash payment of US$
- The issuance of
- A cash payment of US$
The mineral concessions comprising the Panuco Property include the Napoleon vein corridor, which has seen the majority of Vizsla's exploration.
Page | 18
| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
8. Exploration and Evaluation Assets (continued)
b) Canam Alpine Ventures Ltd. - Panuco-Copala Property (continued)
Under the Copala Exercise Notice, Vizsla and Copala have agreed to amend the terms of the original Copala option agreement in order to accelerate the Company's exercise of its option on the Copala property (the "Copala Property"). A definitive agreement was signed on July 20, 2021 (the "Copala Amending Agreement" and, together with the Panuco Amending Agreement, the "Amending Agreements"). Upon closing of the transactions contemplated by the Copala Amending Agreement, Vizsla will acquire a
- A cash payment of US$
- The issuance to Copala of
Costs related to the properties can be summarized as follows:
| Balance April 30, 2020 |
Additions | Balance April 30, 2021 |
Additions | Balance April 30, 2022 |
|||||||||||
| Acquisition costs | |||||||||||||||
| Cash | $ | $ | $ | $ | $ | ||||||||||
| Contingent consideration | ( |
) | $ | ||||||||||||
| Effective settlement of loans receivables | |||||||||||||||
| Shares | |||||||||||||||
| Transaction cost | ( |
) | |||||||||||||
| Subtotal | $ | $ | $ | $ | $ |
| Balance April 30, 2020 |
Additions | Balance April 30, 2021 |
Additions | Balance April 30, 2022 |
|||||||||||
| Exploration costs | |||||||||||||||
| Analysis | $ | $ | $ | $ | $ | ||||||||||
| Depreciation | |||||||||||||||
| Drilling | |||||||||||||||
| Ejido Rights | |||||||||||||||
| Engineering consulting | |||||||||||||||
| Equipment | |||||||||||||||
| Field Cost | |||||||||||||||
| Geological Consulting | |||||||||||||||
| Maintenance | |||||||||||||||
| Rent of land | |||||||||||||||
| Travel and miscellaneous | |||||||||||||||
| Subtotal | $ | $ | $ | $ | $ | ||||||||||
| $ | $ | $ | $ | $ | |||||||||||
| Effect of change in exchange rate | $ | ( |
) | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Total | $ | $ | $ | $ |
The Company created a
Page | 19
| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
8. Exploration and Evaluation Assets (continued)
c) Carruthers Pass Property, British Columbia
On March 15, 2021, the Company announced entering into an option agreement with Cariboo Rose Resources to earn a
The Company paid $
| Milestone | Work Commitment |
Option Payment |
Share Issuance |
||||||
| On signing (paid) | $ | $ | $ | ||||||
| 12-month anniversary of signing | |||||||||
| 24-month anniversary of signing | |||||||||
| 36-month anniversary of signing | |||||||||
| 48-month anniversary of signing | |||||||||
| 60-month anniversary of signing | |||||||||
| Total | $ | $ | $ |
On September 20, 2021, the Company completed the Arrangement and transferred its
Costs related to the property can be summarized as follows:
| Balance April 30, 2021 |
Additions | Transfer to Vizsla Copper |
Balance April 30, 2022 |
|||||||||
| Acquisition costs | ||||||||||||
| Cash | $ | $ | ( |
) | $ | |||||||
| Exploration costs | ||||||||||||
| Geophysical consulting | ( |
) | ||||||||||
| Balance | $ | $ | ( |
) |
Page | 20
| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
9. Share Capital
a) Authorized:
Unlimited number of common shares with no par value.
b) Issued and Outstanding
As at April 30, 2022,
During the year ended April 30, 2022, the Company issued common shares of the Company (the "Shares") as follow:
On June 3, 2021, the Company announced closing of the bought deal prospectus offering of
In consideration for the services provided by the Underwriters in connection with the Public Offering, on closing the Company paid to the Underwriter a cash commission equal to
On June 21, 2021, the Company announced completion of a non-brokered private placement (the "Private Placement") previously announced on June 3, 2021. The Company issued a total of
On September 7, 2021,
During the year ended April 30, 2022,
Page | 21
| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
9. Share Capital (continued)
c) Escrow shares
As at April 30, 2022, the Company has
d) Warrants
As at April 30, 2022, the Company has
The following is a summary of warrant transactions for the years ended April 30, 2022, and 2021:
| April 30, 2022 | April 30, 2021 | |||||||||||
| Number of warrants |
Weighted average exercise price $ |
Number of warrants |
Weighted average exercise price $ |
|||||||||
| Warrants outstanding, beginning of the year | ||||||||||||
| Issued | ||||||||||||
| Exercised | ( |
) | ( |
) | ||||||||
| Warrants outstanding, end of the year | ||||||||||||
During the year ended April 30, 2022, the weighted average share price on the date of warrant exercise is $
The following warrants were outstanding and exercisable April 30, 2022:
| Expiry date | *Exercise price | Number of warrants outstanding and exercisable |
||||||
| 30-Jul-22 | ||||||||
| 30-Jul-22 | ||||||||
| 30-Jul-22 | ||||||||
| 03-Dec-22 | ||||||||
| 03-Dec-22 | ||||||||
| 18-Dec-22 | ||||||||
| 18-Dec-22 | ||||||||
*According to the Arrangement with Vizsla Copper on September 20, 2021, each Vizsla Silver Warrants was exchanged for one Vizsla Silver Replacement Warrant with the exercise price being adjusted accordingly.
As at April 30, 2022, the weighted average remaining contractual life for outstanding warrants is
Page | 22
| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
9. Share Capital (continued)
d) Warrants (continued)
Vizsla Silver is liable to issue shares pursuant to the Arrangement, whereby a holder exercises a Vizsla Silver warrant will be entitled to receive one new Vizsla Silver common share and
The fair value of the warrants granted was calculated as of the grant date using the Black-Scholes option pricing model with the following assumptions:
| Risk Free Interest Rate | |
| Expected Dividend Yield | |
| Expected Volatility | |
| Expected Term in Years |
During the year ended April 30, 2022, the Company recorded fair value of $
e) Options
The Company has adopted a Stock Option Plan (the "Plan") pursuant to which options may be granted to directors, officers and consultants of the Company. Under the terms of the Plan, the Company can issue a maximum of
The continuity of stock options for the years ended April 30, 2022, and 2021, is as follows:
| April 30, 2022 | April 30, 2021 | |||||||||||
| Number of options |
Weighted average exercise price $ |
Number of options |
Weighted average exercise price $ |
|||||||||
| Options outstanding, beginning of the year | ||||||||||||
| Issued | ||||||||||||
| Cancelled | ( |
) | ( |
) | ( |
) | ||||||
| Exercised | ( |
) | ( |
) | ( |
) | ||||||
| Options outstanding, end of the year | ||||||||||||
| Options exercisable, end of the year | ||||||||||||
During the year ended April 30, 2022, the weighted average share price on the date of option exercise is $
Page | 23
| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
9. Share Capital (continued)
e) Options (continued)
The following options were outstanding and exercisable as April 30, 2022:
| Expiry date | Exercise price | *Adjusted exercise price |
Number of Options outstanding |
Number of Options exercisable |
| 27-Feb-29 | ||||
| 13-Jun-24 | ||||
| 30-Dec-24 | ||||
| 07-Jan-25 | ||||
| 29-Jun-25 | ||||
| 06-Aug-25 | ||||
| 27-Aug-25 | ||||
| 01-Oct-25 | ||||
| 01-Dec-25 | ||||
| 12-Jan-26 | ||||
| 17-Feb-26 | ||||
| 22-Jun-26 | ||||
| 12-Jul-26 | ||||
| 27-Jul-26 | ||||
| 24-Sep-26 | ||||
| 01-Feb-27 | ||||
*According to the Arrangement with Vizsla Copper on September 20, 2021, each Vizsla Silver Option was exchanged for one Vizsla Silver Replacement Option with the exercise price being adjusted accordingly. The change in the fair value of the options upon replacement was in the amount of $
As at April 30, 2022, the weighted average remaining contractual life for outstanding options is
The fair value of the options granted was calculated using the Black-Scholes option pricing model with the following assumptions:
| Risk Free Interest Rate | |
| Expected Dividend Yield | |
| Expected Volatility | |
| Expected Term in Years |
The Company recorded total fair value of $
Page | 24
| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
10. Related Party Transactions
During the years ended April 30, 2022 and 2021, the Company has the following related party transactions:
(a) The Company has incurred $
(b) The Company has incurred $
(c) The Company has paid $
(d) The Company has granted
(e) As of April 30, 2022, $
These transactions are in the normal course of operations and have been valued in these consolidated financial statements at the exchange amount, which is the amount of consideration established and agreed to by the related parties.
11. Financial Instruments
Fair value of financial instruments
The Company applied the following fair value hierarchy which prioritizes the inputs used in the valuation methodologies in measuring fair value into three levels:
The three levels are defined as follows:
|
•
|
Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
|
•
|
Level 2 - inputs to valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
|
|
•
|
Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement.
|
The Company's financial instruments are cash and cash equivalent, other receivables, due from related parties, due to related parties and accounts payable and accrued liabilities. All these financial instruments are carried on the consolidated statements of financial position at amortized cost. The fair values of these financial instruments approximate their carrying value due to their short-term nature.
The Company's financial instruments are exposed to certain financial risks, including liquidity risk, credit risk and interest rate risk.
Page | 25
| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
11. Financial Instruments (continued)
Liquidity risk
Liquidity risk is the risk that the Company will not meet its financial obligations as they become due. The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at April 30, 2022, the Company had a cash and cash equivalent balance of $
Historically, the Company's sole source of funding has been the issuance of equity securities for cash, primarily through private placements. The Company's access to financing is always uncertain. There can be no assurance of continued access to significant equity funding.
Market risk
Market risk is the risk that changes in market prices will affect the Company's earnings or the value of its financial instruments. Market risk is comprised of commodity price risk and interest rate risk. The objective of market risk management is to manage and control exposures within acceptable limits, while maximizing returns. The Company is not exposed to significant market risk.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of financial instruments will fluctuate because of changes in market interest rates. An immaterial amount of interest rate exposure exists in respect of cash balances on the statement of financial position. As a result, the Company is not exposed to material cash flow interest rate risk on its cash balances.
Foreign currency risk
Foreign currency risk is the risk that a variation in exchange rates between the Canadian dollar, United States dollar, and Mexican Peso will affect the Company's operations and financial results. The Company and its subsidiaries do not hold significant monetary assets or liabilities in currencies other than their functional currency and as a result, the Company is not exposed to significant currency risk.
The Company measures the effect on total assets or total receipts of reasonably foreseen changes in interest rates and foreign exchange rates. The analysis is used to determine if these risks are material to the financial position of the Company.
Price risk
This risk relates to fluctuations in commodity and equity prices. The Company closely monitors commodity prices of precious and base metals, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company. Fluctuations in pricing may be significant.
Credit risk
Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company. The Company is exposed to credit-related losses in the event of non-performance by the counterparties. The carrying amounts of financial assets best represent the maximum credit risk exposure at the reporting date. Cash and cash equivalent are held with reputable banks in Canada. The long-term credit rating of these banks, as determined by Standard and Poor's, was A+. As at April 30, 2022, the cash on deposit at these institutions was in excess of federally insured limits. However, management believes credit risk is low given the good credit ratings of the banks.
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| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
12. Capital Management
The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the acquisition, exploration and development of mineral properties. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company's management to sustain future development of the business.
The Panuco-Copala property in which the Company currently has an interest are in the exploration stage, as such the Company has historically relied on the equity markets to fund its activities. In order to carry out the planned exploration and pay for administrative costs, the Company will spend its existing working capital and raise additional amounts as needed. The Company will continue to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geologic or economic potential and if it has adequate financial resources to do so.
The capital structure of the Company consists of shareholder's equity, comprising issued capital and deficit. The Company is not exposed to any externally imposed requirements. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.
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| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
13. Income Taxes
The following table reconciles the expected income taxes expense (recovery) at the Canadian statutory income tax rates to the amounts recognized in the consolidated statements of loss and comprehensive loss for the years ended April 30, 2022 and 2021:
| 2022 | 2021 | |||||
| $ | $ | |||||
| Net loss before tax | ( |
) | ( |
) | ||
| Statutory tax rate | ||||||
| Expected income tax (recovery) | ( |
) | ( |
) | ||
| Change in deferred tax assets not recognized | ||||||
| Share issuance costs | ( |
) | ( |
) | ||
| Foreign exchange | ( |
) | ||||
| Change in estimate | ( |
) | ||||
| Tax effect of spinout | ( |
) | ||||
| Non-deductible items and other | ||||||
| Total income tax expense (recovery) |
The deferred taxes assets and liabilities reflect the tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax values. The recognized deferred tax liability and assets as at April 30, 2022 and 2021 are comprised of the following:
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| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
13. Income Taxes (continued)
| 2022 | 2021 | |||||
| $ | $ | |||||
| Tax loss carry forwards | ||||||
| Exploration and evaluation assets | ( |
) | ( |
) | ||
| Net deferred tax asset (liability) |
The unrecognized deductible temporary differences as at April 30, 2022 and 2021 are comprised of the following:
| 2022 | 2021 | |||||
| $ | $ | |||||
| Tax loss carry forwards | ||||||
| Property, plant and equipment | ||||||
| Financing costs | ||||||
| Total unrecognized deductible temporary differences |
The Company has non-capital loss carry forwards of approximately $
| Expiry | |
| $ | |
| 2032 | |
| 2034 | |
| 2035 | |
| 2036 | |
| 2037 | |
| 2038 | |
| 2039 | |
| 2040 | |
| 2041 | |
| 2042 | |
| Total |
14. Segment Information
The Company has one operating segment, being principally mineral exploration.
Geographic Information
The Company's non-current assets, excluding non-current deposits, by location of assets are as follows:
| April 30, 2022 | April 30, 2021 | |||||
| $ | $ | |||||
| Canada | ||||||
| Mexico | ||||||
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| VIZSLA SILVER CORP. |
| Notes to Consolidated Financial Statements |
| For the years ended April 30, 2022, and 2021 |
| Expressed in Canadian dollars |
15. Subsequent Events
The Company made a cash payment of US$
On June 2, 2022, the Company granted
Subsequent to year end,
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EXHIBIT 99.4
CERTIFICATION
I, Michael Konnert, Chief Executive Officer of Vizsla Silver Corp., certify that;
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I have reviewed this Amendment No. 1 to the Annual Report on Form 40-F of Vizsla Silver Corp.; |
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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Based on my knowledge, the financial statements, and other financial information included in this Annual Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
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The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): |
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All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: July 28, 2022
By: /s/ Michael Konnert
Name: Michael Konnert
Title: Chief Executive Officer
EXHIBIT 99.5
CERTIFICATION
I, Mahesh Liyanage, Chief Financial Officer of Vizsla Silver Corp., certify that;
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I have reviewed this Amendment No. 1 to the Annual Report on Form 40-F of Vizsla Silver Corp.; |
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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Based on my knowledge, the financial statements, and other financial information included in this Annual Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
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The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): |
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All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: July 28, 2022
By: /s/ Mahesh Liyanage____________
Name: Mahesh Liyanage
Title: Chief Financial Officer
EXHIBIT 99.6
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael Konnert, Chief Executive Officer of Vizsla Silver Corp. (the "Company"), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
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This Amendment No. 1 to the Annual Report on Form 40-F of the Company for the fiscal year ended April 30, 2022 (the "Annual Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
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the information contained in the Annual Report fairly presents in all material respects the financial condition and results of operations of the Company. |
Date: July 28, 2022
By:
/s/ Michael Konnert
Name: Michael Konnert
Title: Chief Executive Officer
EXHIBIT 99.7
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Mahesh Liyanage, Chief Financial Officer of Vizsla Silver Corp. (the "Company"), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
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This Amendment No. 1 to the Annual Report on Form 40-F of the Company for the fiscal year ended April 30, 2022 (the "Annual Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
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the information contained in the Annual Report fairly presents in all material respects the financial condition and results of operations of the Company. |
Date: July 28, 2022
By:
/s/ Mahesh Liyanage
Name: Mahesh Liyanage
Title: Chief Financial Officer
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent the use of our auditor's report dated July 20, 2022 with respect to the consolidated financial statements of Vizsla Silver Corp. and its subsidiaries as at April 30, 2022, as filed with the United States Securities Exchange Commission ("SEC").
We also consent to the incorporation by reference in this Amendment No. 1 to the Registration Statement on Form 40-F, of our auditor's report dated July 20, 2022, with respect to the consolidated financial statements of Vizsla Silver Corp. and its subsidiaries as at April 30, 2022, as filed with the SEC.
Chartered Professional Accountants
July 28, 2022
Vancouver, Canada
