Drill Results Show Silver Vein Wider, Longer, Closer to Surface

The original Dolly Varden silver mine was among the British Empire's most important more than 100 years ago.

Starting in 1919, Dolly Varden and the Torbrit mine, both now owned by Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX), produced more than 20 million ounces silver (Moz Ag) over 40 years, according to Ahead of the Herd newsletter writer Rick Mills.

"While these deposits were already enough to work with, DV always believed that the Kitsault Valley property is prospective for hosting further precious metal deposits, being on the same structural and stratigraphic belts that host numerous other high-grade deposits on the same trend such as Eskay Creek," Mills wrote.

Eskay Creek historically produced 160 Moz Ag and 3.3 Moz gold (Au).

Dolly Varden, the company, released initial drill results on August 8 from its summer campaign at its Kitsault Valley project, which includes the Dolly Varden silver property and the Homestake Ridge gold-silver property. The results establish that the Kitsol vein is wider, longer, and closer to the surface than thought.

"Three of the 11 reported holes have extended the high-grade Kitsol vein closer to surface, while a fourth extended the separate Torbrit Main deposit along strike to the south," wrote Research Capital Corp. analyst Stuart McDougall.

The combined 163-square-kilometer project in British Columbia's Golden Triangle hosts an indicated resource of 34.7 Moz Ag and 166,000 ounces Au and inferred resources of 29.3 Moz Ag and 817,000 ounces Au within multiple outcropping deposits.

More than 70 holes have been drilled so far this season, but so efficiently that the company has been able to add a fifth drilling rig to expand its campaign by about 10,000 meters to 55,000 meters.

"Three of the 11 reported holes have extended the high-grade Kitsol vein closer to surface, while a fourth extended the separate Torbrit Main deposit along strike to the south," wrote Research Capital Corp. analyst Stuart McDougall on August 8.

McDougall rated Dolly Varden a Speculative Buy at a CA$1.35 per share target price, more than double the CA$0.68 the stock was on Friday afternoon.

The Catalyst: 'A Consistent High-Grade Interval'

Highlights of the early results include Hole DV23-334, which intersected 297 grams per tonne (g/t) Ag over 8.32 meters, including 1,090 g/t Ag over 0.90 meters; Hole DV23-336, which intersected 342 g/t Ag over 18 meters, including 2,270 g/t Ag over 0.5 meters; Hole DV23-337, which intersected 496 g/t Ag over 9.57 meters, including 1,100 g/t Ag over 07.3 meters; and Hole DV23-348, which intersected 334 g/t Ag over 3.5 meters, including 672 g/t Ag over 1.34 meters.

"Drilling has identified a consistent high-grade interval within the wide-vein interval, associated with multiple phases of brecciation," Ahead of the Herd's Mills wrote.

Results released earlier this year revealed the highest-grade silver assay yet received from the Dolly Varden property. Hole DV22-329 in the Wolf Vein northeast returned 1,499 g/t Ag, 1.8% lead (Pb), and 0.46% zinc (Zn) over 15.94 meters (8.77 meters estimated true width), including 23,997 g/t Ag, 1.24% Pb, and 0.34% Zn over 0.35 meters (0.19 meters estimated true width).

"Drilling has identified a consistent high-grade interval within the wide-vein interval, associated with multiple phases of brecciation," Ahead of the Herd's Mills wrote.

Possibly Amenable to Bulk Mining?

The results show "high-grade silver mineralization over wide intervals that is possibly amenable to bulk underground mining methods," Dolly Varden President and Chief Executive Officer Shawn Khunkhun said.

"Bulk mining would enable us to boost . . . the tonnage per day, improving mine economics," Khunkhun told Global Stocks News.

With bulk mining, the company would pull out thousands of tons of rock per blast instead of 25 tons.

"You're peeling off large amounts of rock; you don't need a lot of equipment and people moving around," Vice President of Explorations Robert Van Egmond told GSN.  

Khunkhun said the results posted on August 8 represent less than 10% of the drill program, so more results are expected soon.

"We will continue to drill," he said. "I anticipate putting out result-oriented news once or twice a month throughout September, October, November, December, and into the new year."

Ownership and Share Structure

Dolly Varden reports a number of institutional investors. Fury Gold Mines Ltd. (FURY-T) owns 23.37% of the company with 59.5 million shares, Hecla Mining Co. (HL:NYSE) owns 10.62% with 27.04 million shares, 2176423 Ontario Ltd. owns 10.07% with 25.63 million shares, Fidelity Management & Research Company LLC owns 6.68% with 17.00 million shares, and ETF Managers Group LLC owns 2.83% with 7.20 million shares.

Sprott Asset Management LP owns 2.13% with 5.44 million shares, U.S. Global Investors Inc. owns 1.28% with 3.25 million shares, Mirae Asset Global Investments owns 1.16% with 2.96 million shares, DWS Investment GmbH owns 0.29% with 0.75 million shares, and Charteris Treasury Portfolio Management owns 0.2% with 0.5 million shares.

It has 255 million shares outstanding with a market cap of CA$172.94 million. It trades in a 52-week range of CA$0.355 and CA$1.24.

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Important Disclosures:

1. 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.
2. 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.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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