Silver-Gold Explorer Grosses CA$15M in Public Offering

Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX) closed its bought-deal public offering in which Eric Sprott participated, generating gross proceeds of CA$15 million, according to a news release.

"Having already established one of the richest undeveloped high-grade silver and gold projects in Western Canada, these funds will enable the company to continue to follow up on the newly discovered high-grade gold at Homestake and the wide and high-grade silver deposits at Wolf and the past-producing Torbrit mine," Chief Executive Officer Shawn Khunkhun said in the release.

Specifically, the company will use the money primarily for resource expansion and exploration drilling at its flagship Kitsault Valley project in northwestern British Columbia.

The offering involved the sale of 14,285,700 shares of Dolly Varden Silver at CA$1.05 apiece.

Compelling Resource, Jurisdiction, and Upside

Headquartered in Vancouver, British Columbia, Dolly Varden Silver is a mineral exploration company advancing Kitsault Valley in the province's renowned Golden Triangle.

"The company's extremely rare combination of a large primary silver resource and a safe mining jurisdiction . . . plus a major-league gold resource . . . put it in a position to lead the pack among silver juniors in the next run higher," The Golden Opportunities newsletter wrote on March 7

This note pointed out the factors making Dolly Varden Silver an attractive investment. A major one is the project and its current resource.

Kitsault Valley spans 163 square kilometers and encompasses two main areas of resources, Homestake Ridge and, and in the southeast corner, where 20,000,000 ounces (20 Moz) of silver were mined historically, Dolly Varden.

The current resource of the various target areas comprising Dolly Varden is 32.9 Moz of 300 grams per ton silver in the indicated category and 11.4 Moz of silver in the Inferred category. For Homestake Ridge the current Indicated resource is 1.8 Moz silver and 166,000 ounces (166 Koz) of gold, and the Inferred resource is 17.4 Moz of silver and 817 Koz of gold.

"The company's extremely rare combination of a large primary silver resource and a safe mining jurisdiction . . . plus a major-league gold resource . . . put it in a position to lead the pack among silver juniors in the next run higher," The Golden Opportunities newsletter wrote.

Combined, the total Kitsault Valley resource is almost 65 Moz of silver and nearly 1 Moz of gold. This resource makes "Kitsault Valley one of the more exciting undeveloped primary silver mining complexes around today," Lundin commented. It also makes Dolly Varden Silver a takeout target.

Bob Moriarty, founder of 321Gold, wrote in an article earlier this month that the current resource is sufficient to support the company's current market cap.

The jurisdiction in which Kitsault Valley is located is favorable, Golden Opportunities noted. It is safe, mining-friendly, and has stable mining and tax laws. The Golden Triangle is one of the world's richest precious metals districts and has seen more than CA$5 billion in mergers and acquisitions since 2018.

The newsletter also highlighted that Dolly Varden Silver is quite active, and stands out among junior mining companies because of this. Last year alone, it drilled 51,527 meters (51,527m) at its project.

Further, the Canadian explorer offers a compelling exploration upside. For one, the Kitsault Valley property is rife with highly prospective mineralized targets, Lundin noted. The Wolf vein is one of the known ones. The mineralization there, extending 900m downplunge, remains open at depth and up-plunge. Other previously identified targets are Red Point and North Star.

Given the Kitsault Valley trend extends 15 kilometers along strike, significant potential exists to expand the total resource with additional drilling. By further discovery and by further derisking of the project, Dolly Varden Silver continues to grow the company, it said, and, thereby, boost shareholder value.

Bull Market Here for Gold, Coming for Silver

With silver being one of the critical metals for the green energy transition, demand for it is on the rise, and, according to Golden Opportunities, silver is "on a path to sustained supply deficits."

However, a silver bull market seems imminent. Silver tends to follow gold's lead, and during a gold bull market, the white metal outperforms the yellow. This has been happening since the end of February, confirming that a secular gold bull market has begun.

Ron Struthers, founder and editor of Struthers' Resource Stock Report, purported in a March 21 article that the gold price likely will eventually reach US$3,000 per ounce and that over the long term in the bull precious metals market, junior miners will experience the highest gains. These predictions for silver and gold bode well for Dolly Varden Silver.

Bob Moriarty, founder of 321Gold, wrote in an article earlier this month that the current resource is sufficient to support the company's current market cap.

Technical Analyst Clive Maund asserted in a March 18 report that once silver breaks through the resistance, which will happen during a silver bull market, it will quickly climb to its 2011 highs, hitting US$50 and then moving past it.

"Time is fast running out to buy silver and silver-related investments at the current bargain basement prices," he wrote. "If you are minded to do so, you had better get on with it."

Rick Mills, Editor and Publisher of Ahead of the Herd, drew the same conclusions last month. He wrote that "at some point, investors will have to reckon with the shrinking supply of silver coupled with rising demand, along with the Fed's inability to bring inflation back to its 2% target. When that happens, the price of silver will likely take off. If it does, US$25 silver will look like a real bargain."

Mills added, "This also means silver-focused exploration companies like Dolly Varden will be held in higher regard within the mining industry than before."

The Catalysts: Next Drill Program Details

Near-term catalysts for Dolly Varden Silver are the announcement of the plan for its 2024 drill campaign, for which it is fully funded, according to Moriarty, with CA$10M in the bank.

Also, "investors should be looking for an updated 43-101 after the 2024 drill program completes and has been reported," Moriarty wrote.

Another significant upcoming event, the exploration company said, is launching a royalty business with the Nisga'a Nation of northwestern British Columbia.

Both Moriarty and Golden Opportunities are among the experts who like Dolly Varden Silver.

Golden Opportunities stated that it offers investors "a big silver-equivalent resource in British Columbia's Golden Triangle to leverage rising silver prices and exciting, discovery-driven growth."

Further, Golden Opportunities explained that silver provides very significant leverage to gold's gains, and junior silver companies generally provide even more leverage.

"So by getting into premier silver plays at current low levels, one could stack leverage on top of leverage," it wrote. "The soaring prices for junior silver companies in the last big move in 2020 demonstrated how powerful this dynamic can be. This is why investors are salivating over the potential with Dolly Varden right now."

The silver-gold company has a Buy rating on it from Raymond James Analyst Craig Stanley. According to TipRanks, the average target price of all analysts covering the Canadian explorer's stock implies a 38% return for investors.

Ownership and Share Structure

According to Dolly Varden, 48% of the company is held by institutional investors, including Fidelity Management & Research Company LLC, Sprott Asset Management LP, U.S. Global Investors Inc., Delbrook, and Extract Capital. 

44% is with strategic investors. 19% is with Fury Gold Mines. 15% is with Hecla, and Eric Sprott owns 10% himself. 

The rest, 8%, is with retail and high-net-worth investors.

The company has 283 outstanding shares.

Its market cap is CA$225M, and its 52-week trading range is CA$0.58–1.24 per share.

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. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
4.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

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Contributing Author Disclosures:

1. Bob Moriarty: I, or members of my immediate household or family, own securities of: Dolly Varden Silver Corp. My company has a financial relationship with Dolly Varden Silver Corp. I determined which companies would be included in this article based on my research and understanding of the sector.