The first results coming from Dolly Varden Silver Corp.'s (DV:TSX.V; DOLLF:OTCQX) massive 2023 drilling campaign at its Kitsault Valley project are encouraging for growing the company's gold and silver resources, several analysts agreed.
The results established that the site's Kitsol vein has a higher grade silver shoot that is wider, longer, and extends closer to the surface than the company thought. The recognition of the higher grade shoots in the Kitsol and Wolf veins has upped the priority of similar style exploration targets, such as the Moose Vein, and led to an extension of the drill program from 45,000 meters to 55,000 meters.
"We see this batch of results as the beginning of an avalanche of results that will continue into mid-Q1/24," analyst Geordie Mark of Haywood Capital Markets wrote in an updated research note on August 8. "Never has this area laid witness to the scale of exploration in such an integrated fashion with an intellectual data set that affords better insights into system morphology, structural control, and genesis with the work on known systems expected to lead to new discoveries."
"We believe that now is the right time for leverage in precious metals through investment in Dolly Varden Silver on 2023 results, and the upside potential to be germinated in the 2023 program," wrote Geordie Mark of Haywood Capital.
The Kitsault Valley project includes the Dolly Varden silver property and the Homestake Ridge gold-silver property. The combined 163-square-kilometer project in British Columbia's Golden Triangle hosts an indicated resource of 34.7 million ounces silver (Moz Ag) and 166,000 ounces gold (Au) and inferred resources of 29.3 Moz Ag and 817,000 ounces.
More than 70 holes have been drilled so far this season, so efficiently that the company was able to add a fifth drilling rig to expand the number of holes in its campaign by about 10,000.
"We believe that now is the right time for leverage in precious metals through investment in Dolly Varden Silver on 2023 results, and the upside potential to be germinated in the 2023 program," wrote Mark, who rated the stock Buy with CA$2 per share target price.
The Catalyst: 'Very Strong' Numbers
Results released earlier this year revealed the highest-grade silver assay ever from the Dolly Varden property. Hole DV22-329 returned 1,499 grams per tonne (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).
Those numbers are "very strong," Caesars Report newsletter editor Thibaut Lepouttre wrote.
"Dolly Varden is well on its way to another successful drilling season, with initial results already showing high-grade mineralization and extending the Kitsol Vein closer to surface," wrote Rick Mills of the Ahead of the Herd newsletter.
"As the true width is estimated at 8.77 meters, this is an excellent result," Lepouttre wrote. "Even if you would take out the 0.19 meters of estimated true width of 23,997 g/t silver, the residual silver value in the remaining 8.58 meters is still about 1,000 g/t, so although the narrow interval of almost 24 kilograms of silver per tonne of rock sounds like it massively boosted the average grade, this can’t be considered smearing."
Highlights of the most recent release on August 8 of results from this year include Hole DV23-334, which intersected 297 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.
Research Capital Corp. analyst Stuart McDougall noted in an August 8 note that Dolly Varden is well-financed to advance the project forward, as well. He rated the stock a Speculative Buy with a CA$1.35 per share target price.
"Dolly Varden is well on its way to another successful drilling season, with initial results already showing high-grade mineralization and extending the Kitsol Vein closer to surface," wrote Rick Mills of the Ahead of the Herd newsletter on August 19.
"The fact the company has added another drill rig to what was already a bigger drill program this year should give shareholders plenty of excitement for the rest of 2023. More encouraging assays, perhaps exceeding those from last year, along with new discoveries, should no longer be a surprise."
'A Good Point to Buy'
Research Capital Corp. analyst Stuart McDougall noted in an August 8 note that Dolly Varden is well-financed to advance the project forward, as well. He rated the stock a Speculative Buy with a CA$1.35 per share target price.
"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," McDougall wrote.
Technical analyst Clive Maund noted the stock was "looking most attractive here" after its price dropped in June to a low of CA$0.62 per share. DV was CA$0.73 on Tuesday afternoon.
Technical analyst Clive Maund noted the stock was "looking most attractive here" after its price dropped in June to a low of CA$0.62 per share. DV was CA$0.73 on Tuesday afternoon.
"The intermediate bottom that has formed from mid-June has included some large white candles on good volume, and the Accumulation line has been trending steadily higher, which is bullish," Maund wrote on Aug. 13. "It’s oversold relative to its still rising 200-day moving average and downside momentum has dropped out. This is viewed as a very good point to buy or add to positions."
'Pure Silver'
The property has seen a lot of history. 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, produced more than 20 Moz Ag over 40 years, according to 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).
Bob Moriarty of 321 Gold also compared the project to Eskay Creek, saying assay results are "absolutely staggering" and said the Golden Triangle is "one of the most important districts in the world."
Bob Moriarty of 321 Gold also compared the project to Eskay Creek, saying assay results are "absolutely staggering" and said the Golden Triangle is "one of the most important districts in the world."
"Dolly Varden has done an incredible job," Moriarty said. "Anyone interested in investing should go to their website and go through the news because the numbers are absolutely mind-bending."
Most people aren't aware that 70% of the silver produced in the world is a byproduct of copper mining, Moriarty noted.
"Dolly Varden is pure silver," he said. "The number of pure silver mines in the world is small — only 30% total."
Streetwise Ownership Overview*
Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX)
Dolly Varden's stock was also upgraded in July to Good from Above Average by the research firm SADIF Investment Analytics.
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$185.65 million. It trades in a 52-week range of CA$0.355 and CA$1.24.
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