Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX) has drilled more than 37,000 meters in 108 holes at its massive Dolly Varden and Homestake Ridge Golden Triangle projects, and according to some analysts, all that exploration is paying off.
Results from both projects demonstrate “equally compelling high-grade potential,” analyst Stuart McDougall of Research Capital Corp. wrote on Nov. 29.
“Results are still pending for many holes, but we continue to view the available ones as generally supportive of each project’s exploration upside and note that today’s update (reflects) the first batch of holes released by DV since they acquired Homestake Ridge earlier this year from Fury Gold Mines Ltd. (FURY-T),” McDougall wrote.
One hole at Homestake Ridge reported 75.13 grams per tonne gold (g/t Au) and 2,337 g/t silver (Ag) over 1.77 meters, followed by a few meters later by 216 g/t Au and 113 g/t Ag over 0.5 meters.
Dolly Varden also has the backing of big industry names like Hecla Mining Co. and mining financier Eric Sprott.
McDougall rated the stock a Speculative Buy with a target of CA$1.35 per share.
Earlier in November, the company announced the extension of the Wolf Vein at its namesake project.
“The update follows similarly positive results from the nearby Kitsol and Torbrit Main zones, all of which suggest good potential for expanding resources in the future,” McDougall wrote on Nov. 21.
Dolly Varden also has the backing of big industry names like Hecla Mining Co. and mining financier Eric Sprott.
Dolly Varden President and Chief Executive Officer Shawn Khunkhun called the 2022 drill program “exceptional.”
“The recently acquired Homestake Ridge Deposit has delivered more high-grade gold and silver values, commonly with strong copper mineralization,” Khunkhun said. “These intercepts demonstrate strong continuity of mineralization over wide intervals, similar to the recently announced high-grade results at the Wolf and Kitsol Deposits, located 6 kilometers to the south.”
The Catalyst: The Resource
Kitsault Valley hosts an indicated resource of 34.7 million ounces (Moz) Ag and 166,000 ounces gold (Au), with additional inferred resources of 29.3 Moz Ag and 817,000 ounces Au within multiple outcropping deposits.
“The 2022 (drilling) program has more than doubled the (Wolf) vein's strike length and extended its dip extent to 750 meters,” McDougall wrote.
Dolly Varden is working to prepare an NI 43-101 compliant Updated Mineral Resource Estimate. It will be the basis for a Preliminary Economic Assessment (PEA) for the whole project. A major goal of that survey is to connect the Dolly Varden and Homestake Ridge resources along the 15-kilometer valley trend.
“The 2022 (drilling) program has more than doubled the (Wolf) vein's strike length and extended its dip extent to 750 meters,” McDougall wrote. “The potential for stacking also appears in recent holes, though the grades from two other intercepts reported in hole 316 were noticeably low. That said, results are still pending from Hole DV22-320, and mineralization remains open.”
A second hole at Homestake Ridge found 54.1 g/t Au, 4,890 g/t Ag, and 0.11% copper (Cu) over 0.39 meters starting 112 meters downhole, followed by two closely spaced intervals averaging 74.8 g/t Au and 20 g/t Ag over 0.39 meters and 33.8 g/t Aug and 14 g/t Ag over 0.81 meters.
At the Wolf Vein at Dolly Varden, one hole intersected 412 g/t Ag over 12.8 meters, including 2.15 meters grading 1,646 g/t Ag, 2.38% lead, 3.1% zinc, and 0.10 g/t Au. A second hole collared 551 g/t Ag over 9.8 meters, including 3.6 meters grading 1,049 g/t Ag, 1.19% lead, and 0.29% zinc.
The Green Future Has a Silver Tint
The Silver Institute has predicted that global silver demand will reach a new high of 1.21 billion ounces this year, up 16% from last year. Industrial demand is on course to grow to 539 million ounces (Moz).
“Developments such as ongoing vehicle electrification (despite sluggish vehicle sales), growing adoption of 5G technologies, and government commitments to green infrastructure will have industrial demand overcome macro-economic headwinds and weaker consumer electronics demand,” the report said.
The global silver market is forecasted to record a second consecutive deficit between supply and demand this year, the Institute said. At 194 Moz, it will be a multi-decade high and four times 2021’s level.
Ownership, Coverage, and Share Structure
Fury Gold Mines Ltd. is Dolly Varden’s largest shareholder at 26%. Hecla owns 10.71%, and 2176423 Ontario Ltd. owns 11.1%, according to Reuters.
The company is covered by a plethora of analysts, including Michael Gray of Agentis Capital, Geordie Mark of Haywood Securities, and McDougall. Newsletter writers Maurice Jackson, The Critical Investor, Clive Maund, Rick Mills, and Bob Moriarty also follow the company. Click "See More Live Data" in the data box above to view more coverage.
Dolly Varden has a market cap of CA$168.35 million and 230.6 million shares outstanding, with 119.3 million shares free floating. It trades in a 52-week range of CA$0.88 and CA$0.355.
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1) Steve Sobek wrote this article for Streetwise Reports LLC. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
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