Research Capital Corp. analyst Stuart McDougall, in a research report published on June 19, 2024, provided an update on Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX) following the company's announcement of two new high-grade silver-bearing veins at its Kitsault Valley project in northwestern British Columbia.
The analyst reiterated a Speculative Buy rating and a target price of CA$1.45 per share.
"On June 19, Dolly Varden (DV) announced the confirmation of two new high-grade silver-bearing veins to its Kitsault Valley project in northwestern British Columbia," McDougall noted. "The first, known as Moose, returned 5m grading 977gpt silver (Ag), including 0.79m at 3,670gpt, while the second, known as Chance, returned 206gpt Ag over 23.03m, including 1.4m at 597gpt and 0.5m at 749gpt."
The analyst emphasized that while it's still in the early days, the grades and widths are similar to those in the known zones located to the south.
"Accordingly, we continue to value the company on the basis of its successful expansion of existing resources, using our benchmark in situ metrics of US$3/oz Ag and US$75/oz gold (Au), adjusted for options and our future equity financing assumptions," McDougall stated.
The Moose Vein is located 1.4km north of the Wolf Vein on a similar cross-cutting structure that projects under a mid-valley sedimentary cap. The latest hole, DV24-387, targeted the vein approximately 45m up-plunge from a previous intersection and returned the noted high-grade results at a hole depth of 113.6m.
The Chance Vein, located 1.3km northeast of the Moose Vein, sits just above the contact between the Hazelton and underlying Stuhini formations, known as the "Red Line" in the Golden Triangle region. Hole DV24-388 targeted the zone's projection of approximately 30m down-plunge from historical drilling and returned significant silver grades.
McDougall highlighted that Dolly Varden's ongoing 25,000m drilling program has completed or has in progress 25 holes to date. The analyst noted that the initial results from this program give further comfort to the upside component added to Research Capital Corp.'s valuation in a previous note.
The analyst's valuation methodology for Dolly Varden Silver Corp. is based on in situ metrics of US$3/oz for silver and US$75/oz for gold, adjusted for options and future equity financing assumptions. The target price of CA$1.45 per share represents a projected return of 45.0% from the current price of CA$1.00.
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- Dolly Varden Silver Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Dolly Varden Silver Corp.
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Disclosures for Research Capital Corp., Dolly Varden Silver Corp., June 19, 2024
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