New drilling results from Dolly Varden Silver Corp.’s (DV:TSX.V; DOLLF:OTCQX) Kitsault Valley project in British Columbia’s Golden Triangle extend multiple deposits and reveal the highest-grade silver assay yet received from the Dolly Varden property.
Hole DV22-329 in the Wolf Vein northeast returned 1,499 grams per tonne silver (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).
“DV drilled a total of 37,062 (meters) in 108 holes at its adjoining Homestake Ridge and Dolly Varden deposits (since renamed Kitsault Valley), prior to the seasonal shutdown in mid-October,” Research Capital Corp. analyst Stuart McDougall wrote in a Tuesday update note. “We continue to view the results as generally supportive of each project's exploration upside, noting that this latest batch extends the known Wolf and Kitsol veins, as well as identifies a new discovery for further investigation in the Red Point area.”
Jeff Clark of TheGoldAdvisor.com said the results bode well for the company.
McDougall reiterated his Speculative Buy rating for the stock with a CA$1.35 per share target. Jeff Clark of TheGoldAdvisor.com said the results bode well for the company.
“This is easily becoming a prime takeover target — and it’s not done growing,” Clark said of the company this week.
Technical analyst Clive Maund of CliveMaund.com said he was staying long on the stock and rated it an immediate Buy on Jan. 30 after the first set of drill results was released.
“The picture remains positive, and so it is likely that the drilling results released by the company … will get it moving again, especially as the company is moving to raise its profile and all this news should trigger a breakout above the December highs,” Maund wrote.
The stock hit CA$0.99 on Dec. 16 before rising to CA$1.08 on Feb. 1. On Tuesday morning it was at CA$0.98.
The Catalyst: Results ‘Exceed Expectations'
The company has released results from both the Wolf Deposit and its Homestake Ridge property.
The new discovery at Red Point, west of the Kitsol Vein, returned 17.2 g/t gold (Au) and 1.65% copper (Cu) over 1.15 meters at hole DV22-322 and 8.1 g/t Au, 244 g/t Ag, and 5.16% Cu over 1 meter at hole DV22-321.
Hole DV22-320 in the Wolf Vein southwest returned 321 g/t Ag, 0.84% Pb, and 0.84% Zn over 12.85 meters (6.81 meters estimated true width), including 664 g/t Ag, 1.24% Pb, and 3.54% Zn over 1.63 meters (0.86 meters estimated true width).
Technical analyst Clive Maund of CliveMaund.com said he was staying long on the stock and rated it an immediate Buy.
“Results from the Wolf Vein continue to exceed expectations, returning the highest-grade silver assay yet received,” said Dolly Varden President and Chief Executive Officer Shawn Khunkhun. “Our priority during . . . 2023 will be to connect the Wolf Deposit with the Kitsol Deposit, located 1,400 meters to the south.”
Kitsault Valley hosts an indicated resource of 34.7 million ounces (Moz) Ag and 166,000 ounces gold (Au), and inferred resources of 29.3 Moz Ag and 817,000 ounces Au within multiple outcropping deposits.
Dolly Varden plans to drill another season to acquire more data for a NI 43-101 compliant Updated Mineral Resource Estimate, which will be the basis for a Preliminary Economic Assessment (PEA) for the whole project.
Silver Demand to Reach New High
Silver demand was expected to reach a new high of 1.21 billion ounces in 2022, 16% more than the previous year, The Silver Institute predicted. Industrial demand alone is expected to grow to 539 million ounces (Moz).
“Physical investment in 2022 is on track to jump by 18% to 329 Moz, which would also be a new record,” the report said. “Support has come from investor fears of high inflation, the Russia-Ukraine war, recessionary concerns, mistrust in government, and buying on price dips.”
Investors also love the precious metal because of its versatility, wrote Vishal Toora on Equity.guru.
"Silver bulls love the metal because you get the best of both worlds,” Toora wrote. "You get an investment which follows the monetary metal but also has an industrial usage.”
The global silver market also was forecasted to record a second consecutive deficit between supply and demand in 2022, the Institute said. At 194 Moz, it would be a multi-decade high and four times 2021’s level.
Ownership and Share Structure
Streetwise Ownership Overview*
Fury Gold Mines Ltd. (FURY-T) is Dolly Varden’s largest shareholder at 23%, according to the company. Hecla Mining Co. (HL:NYSE) owns 10.21%, and mining financier Eric Sprott owns 10%. Institutions own 50% of the company, and 7% is retail.
The company is covered by several analysts, including Michael Gray of Agentis Capital, Geordie Mark of Haywood Securities, and McDougall with Research Capital Corp. Newsletter writers Maurice Jackson, The Critical Investor, Clive Maund, Rick Mills, and Bob Moriarty also follow the company. Click the bottom of the data box above to view more coverage.
Dolly Varden has a market cap of CA$253 million and 254 million shares outstanding, with 231 million shares free-floating, according to the company. It trades in a 52-week range of CA$1.15 and CA$0.355.
1) Steve Sobek wrote this article for Streetwise Reports LLC. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
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