Coming off a successful year of drilling at its Golden Triangle projects, Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX) announced closing a CA$22.6 million private placement including continued participation by mining heavyweight Hecla Mining Co. (HL:NYSE).
Gross proceeds from the placement were about CA$20.7 million, and the company also received CA$1.9 million from Hecla Canada Ltd. to maintain its 10.21% ownership in the company on a fully diluted basis.
Dolly Varden drilled more than 37,000 meters in 108 holes at its Dolly Varden and Homestake Ridge British Columbia projects.
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.
Newsletter writer Bob Moriarty of 321Gold.com wrote in November that “Dolly Varden is silver.”
“This is the time to make your fortune” in metals, he said. “When silver is hot again, and it will be, Dolly Varden is going to be the go-to silver stock once again.”
Newsletter writer Bob Moriarty of 321Gold.com wrote in November that “Dolly Varden is silver. This is the time to make your fortune” in metals.
Money from the private placement will be used for further exploration, mineral resource expansion, and drilling at the projects after what Dolly Varden President and Chief Executive Officer Shawn Khunkhun called the company’s “most successful year to date.”
“Drill results received and released to date have exceeded expectations, and we eagerly await the remaining 50 drill holes from our 2022 exploration season,” Khunkhun said.
The Catalysts: Two ‘Equally Compelling’ Sites
Analyst Stuart McDougall of Research Capital Corp. wrote on Nov. 29 that results from both Dolly Varden and Homestake Ridge demonstrate “equally compelling high-grade potential.”
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.
“Dolly Varden is one of only a few junior resource companies putting out excellent drill results in a difficult market,” Rick Mills, editor of the newsletter Ahead of the Herd, wrote on Dec. 14. “Drilling wrapped up in mid-October, with the majority of assays still pending. Shareholders can therefore expect the news flow to continue well into 2023.”
“Dolly Varden is one of only a few junior resource companies putting out excellent drill results in a difficult market,” Rick Mills
Dolly Varden will be drilling for another season to acquire more data on recent discoveries for a NI 43-101 compliant Updated Mineral Resource Estimate, which 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.
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.
Silver Demand to Hit Multi-Decade High
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 and Share Structure
Streetwise Ownership Overview*
Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX)
Fury Gold Mines Ltd. is Dolly Varden’s largest shareholder at 23%, according to the company. Hecla owns 10.21%, and mining financier Eric Sprott owns 10%. Institutions own 50% of the company, and 7% is retail.
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$205.31 million and 233.1 million shares outstanding, with 121.9 million shares free floating. It trades in a 52-week range of CA$1.02 and CA$0.355.
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Disclosures:
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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