Writers, Analysts Continue to Like This Silver Stock

As Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX) continues to release impressive assay results from expanded drilling at its Kitsault Valley project in British Columbia's Golden Triangle, newsletter writers and analysts continue to recommend the stock as markets face more turbulence.

For not the first time, Bob Moriarty of 321gold.com pointed to the company as a premium play in silver.

"I'll say it again. Dolly Varden is silver," Moriarty wrote last month. "Soon everyone is going to realize there is no soft landing coming. Investors will be looking for a safe haven, and the only safe haven in town is the metals."

The company's stock rose from CA$0.365 in September 2022 to CA$1.22 six months later, and it is "going to do exactly the same thing again," he predicted.

"I'll say it again. Dolly Varden is silver," Moriarty wrote last month. "Soon everyone is going to realize there is no soft landing coming. Investors will be looking for a safe haven, and the only safe haven in town is the metals."

"The shares are down 50% from a high in April without anything bad happening to the company," Moriarty wrote. "I make a point in my books that if nothing else changes and the price goes down of a stock you really like, that's a good thing."

Five rigs have now completed more than 43,000 meters of an expanded 55,000-meter drilling campaign at the project, which includes both the Dolly Varden silver and Homestake Ridge gold-silver properties.

The combined project 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.

The Catalyst: 'Now is the Right Time' For DV

Recently, the company released assay results from 19 holes early in the drilling season, saying that step-out drilling has extended the length of mineralization in the project's Wolf vein.

Hole DV23-368 intersected 381 grams per tonne silver (g/t Ag) over 29 meters, including 1,898 g/t Ag over 1 meter. Other results included holes DV23-352, which intersected 246 g/t Ag over 18.07 meters (12.29 meters estimated true width), including 712 g/t Ag over 2.95 meters (2.01 meters estimated true width), and DV23-339, which intersected 287 g/t Ag and 0.35 g/t gold (Au) and 22.83% lead (Pb) over 2.65 meters (1.67 meters estimated true width).

"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 Haywoof Capital's Geordie Mark, 

What do those grades mean? According to the Independent Speculator, 150 g/t through 350 g/t Ag is average grade, while over 350 g/t is considered "high-grade."

"I should stress that these are not international standards set by some geological authority," researcher Lobo Tiggre wrote on the site. "These are my numbers based on what I've seen in the field. More important is that . . .  these numbers are just a starting point."

The recognition of higher-grade shoots in the Kitsol and Wolf veins has upped the priority of similar exploration targets and led to the extension of this summer's drill program.

"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," analyst Geordie Mark of Haywood Capital Markets wrote in a research note.

"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.

'Potentially Massive' System

Almost all computers, cars, and appliances, and probably the device you're reading this on, contain silver, the most conductive element in nature.

The industry saw a 237.7-million-ounce (Moz) deficit in 2022, "most likely also an all-time record," the Silver Institute wrote in its World Silver Survey 2023.

"The combined 2021 and 2022 deficits more than offset the cumulative surpluses of the previous 11 years," the institute wrote. "We believe that 2023 will see much of a repeat of last year."

It's "on the same structural and stratigraphic belts that host numerous other high-grade deposits on the same trend, such as Eskay Creek," Rick Mills of Ahead of the Herd wrote.

Newsletter writer Rick Mills of Ahead of the Herd, has noted that "to satisfy future demands, it's clear that more silver mines must be developed to reverse this trend. The focus has to be on promising silver explorers and mine developers that could contribute to the future supply chain."

The "potentially massive precious metals system" in Kitsault Valley includes what was originally among the most important silver mines in the British Empire.

"This 163-square-kilometer land package is said to host one of the largest undeveloped high-grade precious metals projects in all of Western Canada," Mills wrote on Sept. 14.

Dolly Varden believes the property could host more precious metal deposits, he wrote.

It's "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 has historically produced 160 Moz Ag and 3.3 Moz Au.

Stock Could 'Take Off Like a Rocket'

Technical analyst Clive Maund wrote that he was holding on further purchases of precious metal stocks as he predicted the prices of those stocks could go even lower before they flip.

"However, in the case of Dolly Varden, we are prepared to make an exception and buy it right away," Maund wrote.

The stock is "right down on strong support where it appears to have been building out a base pattern since June with the volume pattern and Accumulation line positive," Maund wrote.

Technical analyst Clive Maund wrote that he was holding on further purchases of precious metal stocks as he predicted the prices of those stocks could go even lower before they flip. "However, in the case of Dolly Varden, we are prepared to make an exception and buy it right away."

It can't be ruled out that it could break lower during a market crash, he wrote.

But if more "positive drilling results are forthcoming it could then take off like a rocket," Maund wrote. "We should keep in mind that if it is forced lower temporarily by a market crash, then it is likely to come bouncing back hard and fast, like a beach ball that is pushed underwater."

Research Capital Corp. analyst Stuart McDougall noted in a research note that Dolly Varden is well-financed to advance the project forward. 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.

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$178 million. It trades in a 52-week range of CA$0.50 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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