Golden Triangle Silver Explorer Acquires Strategic Properties

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As Dolly Varden Silver Corp. (DV:TSX.V; DVS:NYSEA; DVQ:FSE) continues its bid to consolidate more of British Columbia's Golden Triangle into a massive silver and copper district, Chief Executive Officer, President, and Director Shawn Khunkhun on Friday continued a series of messages to shareholders explaining the company's new direction.

Near the top, he asks the question: "What company am I keeping?" with other shareholders, or do they "know more about the mining business than I do?"

"Strategic investors — or 'smart money' — hold about 52% of DV stock," Khunkhun wrote. "I'd like to introduce you to three of our key institutional investors."

The CEO then explains three major investments that help drive the company, mining financier Eric Sprott, Fury Gold Mines Ltd. (FURY-T), and Hecla Mining Co. (HL:NYSE).

Sprott, "described as a 'precious metals fanatic,'" owns 10% of Dolly Varden's shares and typically holds 90% of his personal assets in gold and silver, Khunkhun said. The former Merrill Lynch analyst is now a fund manager. His company, Sprott Inc. (SII:TSX), has a market cap of US$1.43 billion.

Fury owns 15% of the company's shares after DV purchased Homestake Ridge from them in 2021.

"The CEO of Fury, Tim Clark, is a capital markets’ veteran (Deutsche Bank, Merrill Lynch, BMO) who has a strong track record in the mining industry," Khunkhun noted. "Mr. Clark is on the board of Dolly Varden Silver."

Hecla Mining owns 12% of Dolly Varden Silver shares after Hecla Canada invested CA$10 million in DV in 2023, significantly raising its stake.

Hecla US$3.09 billion and is projected to produce 15.5 million ounces (Moz) of silver, generating more than US$200 million free cash flow. The company operates in the Yukon, Alaska, Idaho and BC.

"Our land package is surrounded by Hecla property," Khunkhun wrote. "Two of our technical advisors work for Hecla and are familiar with the styles of deposits we have."

Collectively, Khunkhun said Sprott, Fury, U.S. Global Investors, Fidelity, and Delbrook Capital own about US$100 million of DV stock, he said.

"Having sophisticated institutional co-shareholders does not guarantee our success, but it is, in my opinion, a significant derisking factor," Khunkhun's message said.

'The Premier Advanced Explorer in the Golden Triangle'

Last week, the explorer acquired interests in four properties totaling 20,000 hectares (ha) in the same district as its Kitsault Valley silver-gold project.

The properties are American Creek (consisting of Mountain Boy, Silver Crown and the Dorothy option), Theia, BA and Red Cliff. Three are road accessible and close to power and Ascot Resources Ltd.'s (AOT:TSX.V) recently completed Premier gold-silver mill near the port of Stewart.

The MTB Metals portfolio is the company's third announced acquisition this month. The other two are StrikePoint Gold Inc.'s (SKP:TSX.V; STKXF:OTCQB) past-producing Porter project and Hecla Mining Co.'s (HL:NYSE) Kinskuch project, both also in the Golden Triangle.

"Shawn's vision for Dolly Varden is clear: becoming the premier advanced explorer in the Golden Triangle," Jeff Valks wrote for The Gold Advisor on the day after the MTB purchases were announced. "With strategic acquisitions stacking up and historic grades to boast, Dolly Varden is carving out its claim in one of the world's richest silver and copper districts."

This expansion activity is consistent with one pillar of the junior mining company's growth strategy, as stated in its Corporate Presentation: accretive acquisitions.

The other pillar is aggressive exploration, and Dolly Varden is making moves in this regard, too. It is about to embark on its largest ever drill program at Kitsault Valley (at least 35,000 meters), to grow its resource base and continue demonstrating its scale. With this fully funded campaign, the company will diamond drill various targets at both the Dolly Varden and Homestake Ridge properties.

Kitsault Valley is prospective for additional precious metal deposits, the company said, because it is in the same structural and stratigraphic belts of numerous other, on-trend, high-grade deposits, including Skeena Resources Ltd.'s (SKE:TSX.V) Eskay Creek and Newmont Corp.'s (NEM:NYSE) Brucejack.

The 'Jewel of the Deal'

The "jewel of the deal," according to Valks, is the American Creek Property, a 2,602-hectare site centered on the historic Mountain Boy high-grade silver mine.

"According to BC Government Minfile Reports, silver production at Mountain Boy in the 1910s through the 1940s and 2000s showcased silver grades ranging from 8,000 to 17,000 g/t (grams per tonne)," he wrote. "Historic drilling results include 5.10 meters of 5,258 g/t silver and 6.1 meters of 2,260 g/t silver — figures that hint at substantial mineralization that remains open both to depth and along strike."

The stock is still off its 52-week high, Valks wrote.

"That said, the company has been making a plethora of strategic acquisitions in the last few months, marking a serious play at becoming the dominant silver player in the game," he wrote. "I hold a long position, as does Jeff Clark."

Raymond James Analyst Craig Stanley noted on May 5, after the Kinsuch purchase but before the others will triple its strike length of the Red Line, which is the contact between the Triassic Stuhini and Jurassic Hazelton formations, "a key marker for precious metals and copper mineralization" in the historical mining district.

Staney has an Outperform rating with a CA$3.52 per share target price on the stock.

"Dolly Varden has plenty of cash, about CA$30 million," he wrote. "Next year, the company will update the Kitsault Valley mineral resource estimate, incorporating into it drill results from the past four programs.

The Catalyst: Nature's Best Conductor

Silver's industrial utility means there will still be a deficit for the metal, which is the best conductor of electricity among the metals.

Mordor Intelligence noted that silver is expected to register a compound annual growth rate (CAGR) of more than 5% between 2024 and 2029.

Silver and silver mining equities are about to have their time in the spotlight, experts say.

According to Technical Analyst Clive Maund, the main driver for higher precious metals prices is the worsening debt market crisis, he wrote in a May 13 report. He explained that more and more money is being created as a way to stabilize debt markets, which is destroying the purchasing power of currencies and creating greater inflation. This accounts for the ongoing gold bull market, he added, "with silver set to follow."

Jesse Colombo, financial analyst and investor, expects a strong bull market in silver mining stocks, he wrote in a Money Metals article on May 13.
"Silver mining stocks, in my view, represent one of the most compelling and potentially profitable opportunities in the next leg of the commodities bull market," Colombo added.

Peter Krauth of The Silver Stock Investor wrote on May 14 that silver looks poised for a two and a half-year breakout, a boon to silver mining equities. However, it may not happen until after the current typical seasonal weakness.

"The breakout could be spectacular," he added. "That's why you'll want to own the best of the best in this sector as we wait for that move."

Ownership and Share Structure

According to the company's latest corporate presentation in January 2025, 52% of its stock is held by institutional investors, including Fidelity Management & Research Company LLC, Sprott Asset Management LP, U.S. Global Investors Inc., and Delbrook. 

About 37% is with strategic investors, including 15% with Fury Gold Mines, 12% with Hecla, and Eric Sprott owns 10% himself. 

The rest, 11%, is with retail and high-net-worth investors.

The company has 79.52 million outstanding shares. Its market cap is CA$278.32 million, and its 52-week trading range is CA$3.21–5.84 per share.