The initial 2024 results are in for Dolly Varden Silver Corp.'s (DV:TSX.V; DOLLF:OTCQX) ongoing drill campaign in the Wolf vein of its Kitsault Valley silver-gold project in British Columbia's Golden Triangle, and they "continue to push the margins of known high-grade mineralization," reported Haywood Securities analyst Marcus Giannini in an Aug. 12 research note.
"Overall, these initial results from Wolf continue to illustrate the uncapped nature of the vein system at depth, as additional assays downplunge are anticipated in the near term," Giannini wrote.
147% return potential
Dolly Varden Silver's stock price is about CA$0.97 per share. The company "trades at a price:net asset value (P:NAV) multiple of ~0.39x, versus peers trading at an average P:NAV multiple of ~0.80x," noted Giannini. "We recommend accumulating shares at current levels."
Haywood reiterated its price target on the Canadian explorer of CA$2.40 per share. This implies a 147% return for investors given the current share price.
"We continue to view Dolly's high-grade endowment as an increasingly attractive target for larger North America-focused precious metal producers," the analyst commented.
Dolly Varden is a Buy.
Impressive grades encountered
The most notable intercept came from DV24-404, a 40 meter (40m) southwest stepout hole, reported Giannini. It returned 1,091 grams per ton (1,901 g/t) silver over 9.38m, including 2,505 g/t silver over 1.63m, beginning at 766.82m downhole.
"We continue to see a strong consistency of mineralization within Wolf as well as an increase in base metal content, with the width and dip of the currently defined ore body playing well into a potential long hole stoping mining scenario," Giannini wrote.
The higher base metal grades and native silver presence intersected via the hole suggest the system remains open at depth.
Pending results to add color
Along with DV24-404, Dolly Varden placed two additional stepout "daughter" holes using directional drilling, reported Giannini. The company directed these toward the base of the sedimentary cap to target Wolf's downplunge extension, steered them to intersect the Wolf vein and place them at least 30m apart from one another. This is because the upper area that Dolly collared the holes in also returned gold mineralization.
These results of these "daughter" holes are pending but when available, should shed further light on the continuity of mineralization at depth.
Mineralization elusive in two holes
Another two holes, DV24-396 and DV24-402, drilled in the upper, northeastern portion of the Wolf vein extension, tested for mineralization below plunge of a high-grade interval reported in 2021, Giannini relayed. However, the holes did not encounter the mineralization.
They did return strong alteration and higher base metal values, associated with the Wolf structure.
Program expansion likely
Dolly Varden budgeted 8,000m of drilling for the Wolf vein because "high-grade silver mineralization continues to trend downplunge below the sedimentary rock cover," wrote Giannini. However, the company likely will expand the scope of the program due to the recent positive results from Wolf and the previous findings from the Moose and Chance veins.
"The company's 2024 campaign continues to demonstrate the multifaceted potential at Kitsault Valley as Dolly continues to demonstrate various avenues of growth across its property," Giannini commented.
To determine the extent of the high-grade mineralized trend encountered in hole DV24-404, reported Giannini, Dolly Varden Silver intends to prioritize Wolf vein drilling to the southwest during the rest of this season.
Also, the explorer is expected to do follow-up drilling between Homestake Silver and Homestake Main in light of positive results of stepout hole HR23-389, which returned 79.49 g/t gold over 12.45m.
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