Drill Results Show Deposit More Robust Than First Thought
Research Report

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Disclosures for Research Capital Corp., Dolly Varden Silver Corp., January 7, 2025

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Dolly Varden Silver Corp.'s (DV:TSX.V; DOLLF:OTCQX) recent drill results further extended the Wolf vein system at its Kitsault Valley gold-silver project in northwestern British Columbia, reported Research Capital Corp. Analyst Stuart McDougall in a Jan. 7 research note.

"We continue to recommend purchase [of Dolly Varden Silver] as a Speculative Buy for patient and risk-tolerant investors, noting the company's strong cash position to test for potential expansion of the open-ended zones with further drilling," McDougall wrote.

Target Suggests 53% Uplift

Research Capital reiterated its CA$1.45 per share target price on this Canadian explorer, noted McDougall. In comparison, Dolly Varden Silver is trading at the time of the report at about CA$0.95 per share.

The difference between these prices implies a potential return for investors of 53%.

Details of Wolf Extension

McDougall reported that new drill results extended the Wolf vein zone for almost 700 meters (700m) downplunge of the existing resource outline. This was shown through stepout hole DV24-421, which intersected nearly 22m ,averaging 379 grams per ton silver (379 g/t Ag) and 1.3% lead plus zinc (Pb+Zn), beginning 757m downhole.

This result is 120m from the previously announced deepest intercept, which was 10.32m of 175 g/t Ag and 1.13% Pb+Zn, from wedge hole DV24-409. This result is also nearly twice the plunge extent of the zone from the existing wireframe, about 1.5 kilometers in all.

Overall, during the 2024 drill program, Wolf returned high grades, 4,350 g/t Ag, 0.47 g/t Au, and 4.02% Pb+Zn, over 0.6m.

These new findings refute Dolly Varden Silver's original estimates on Wolf, McDougall pointed out. Back in 2019, the company believed Wolf to be one of Kitsault Valley's smaller and lower grade deposits, hosting an estimated 412,000 tons (412 Kt) of 295 g/t Ag, for a contained 3,900,000 ounces (3.9 Moz) of silver.

Even More Growth Potential

McDougall highlighted that the Wolf vein likely could be extended further, at depth, and cited two newly reported holes (mentioned above) that exhibit this potential. One is stepout hole DV24-421, which returned, in the first 10.43m of the broader intercept, an average of 556 g/t Ag plus 2.02% Pb+Zn and in the remaining 6.25m, demonstrated 225 g/t Ag plus 0.97% Pb+Zn.

Likewise, wedge hole DV24-409, in its final 2.72m, included 421 g/t Ag and 1.08% Pb+Zn. Its pilot hole DV24-404 cut 1,657 g/t Ag and 3.55% Pb+Zn in the first 3.18m of a reported 9.38m, averaging 1,091 g/t Ag plus 2.75% Pb+Zn.

Given the vertical extent of Wolf is 100m, it "may support a relatively high-grade, bulk-minable opportunity," the analyst added. "In short, we still see upside from here."

Another Expandable Deposit

In other news, reported McDougall, Dolly Varden Silver released the final 17 of 19 exploration holes targeting six other areas at Kitsault Valley, and the best results were from North Star. This deposit's resource, mostly in the Indicated category, is 241 Kt of 262 g/t Ag.

In this new batch of results, the highlight hole from North Star was DV-243. It showed 22.78m of 124 g/t Ag, 0.13 g/t Au, and 3.33% Pb+Zn, starting at about 294m downhole. Within this, there were 3.04m of 432 g/t Ag and 6.67% Pb+Zn.

This hole, DV-243, stepped out 35m from a previously reported hole from 2023 hole that had encountered 3.45m of 138 g/t Ag and 11.19% Pb+Zn.

Mineralization at North Star remains open at depth, indicating potential exists for expanding its resource with additional drilling.

"We continue to assume that the company successfully expands [the Wolf vein] and the others by at least 25%, or 16 Moz Ag and 246,000 ounces Au on a combined basis," noted McDougall.

What To Watch For

In the near term, Dolly Varden Silver is expected to announce project updates in the near-term, noted McDougall.