Silver Co.'s High-Grade Gold Discovery Is Open for Expansion

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Dolly Varden Silver Corp. (DV:TSX.V; DVS:NYSEA; DVQ:FSE) announced a significant gold intercept from a 2025 step-out drill hole at the Homestake Silver deposit.

In a release on October 1, the company said Hole HR25-456 intersected 3.34 grams per tonne gold (g/t Au) over 120 meters, including 216 g/t Au over 0.52 meters and 166 g/t Au over 1.3 meters. This hole is a 45-meter step-out along strike from hole HR24-433 and 30 meters up dip from hole HR24-451, both previously released on February 3, confirming both continuity and growth potential beyond the current Mineral Resources.

Approximately 40% of the 2025 drill program, which spans 55,000 meters at the Company's 100% owned Kitsault Valley Silver and Gold Project, targeted the Homestake Silver Deposit to expand and infill zones of high-grade gold mineralization. The deposit remains open for expansion, with gold mineralization extending towards the Homestake Main Deposit, along strike to the north of the Homestake Silver Deposit.

"These gold results from a step-out hole at the Homestake Silver Deposit confirm that the deposit continues to grow beyond the current mineral resource estimate," Chief Executive Officer Shawn Khunkhun said. "These results demonstrate the strength of the high-grade gold system, potentially a separate and overlapping event from high-grade silver mineralization at the deposit; this deposit is potentially a key driver of future project development."

Five Diamond Drills Turning

Five diamond drills are nearing completion of the 2025 drill program across the Kitsault Valley and Big Bulk Projects, the company said. At Homestake Silver, drilling has focused on expanding and infilling areas of high-grade gold mineralization. Additional drilling is testing areas outside the current resource.

Further results from the Homestake Silver gold zone, Wolf Vein silver mineralization extension, Big Bulk copper-gold porphyry system, and other exploration targets will be reported as assays are received.

Dolly Varden is using directional drilling technology to precisely target areas for step-out and infill holes at Homestake Silver. HR25-456 is one of three holes drilled from the same pad, designed to extend the wide, high-grade plunging zone and test outside the current mineral resource model. The drill hole is approximately a 45-meter step-out along strike from previous intersects.

The Homestake Ridge deposits are understood to be structurally controlled, multi-phase epithermal vein stockwork and vein breccia systems hosted within Jurassic Hazelton volcanic rocks, the company said. The mineralization comprises pyrite, with occasional galena and sphalerite, and visible gold within a silica breccia matrix. The northwest-trending structural corridor contains multiple subparallel structures that govern high-grade gold and silver shoots within a broader mineralized envelope.

Although traditionally viewed as a silver-rich gold deposit, recent drilling at Homestake Silver has identified a shallow north-plunging dilation zone characterized by a broad mineralized interval with a higher frequency of high-grade gold veins and vein breccias, indicating a shift towards a gold-rich system to the north, Dolly Varden said. The deposit remains open along its plunge and at depth.

Also on October 1, Dolly Varden announced that it had entered into an agreement with a group of underwriters to purchase, on a bought-deal basis, a combination of the company's securities for total gross proceeds of CA$30,034,000.

A portion of the net proceeds will be used for exploration and mineral resource expansion. The money will also be used for working capital and general corporate purposes, the company said.

Expert: Silver Co. Strikes Gold

On October 1, Jeff Valks, senior analyst at The Gold Advisor, noted the significance of Dolly Varden Silver literally striking gold in its latest step-out drilling at the Homestake Silver deposit in British Columbia's Kitsault Valley.

"It’s the kind of grade profile that gets investors leaning forward, not just because of the length of the intercept, but the spikes of ultra-high grade within it," Valks wrote of the intercepts.

The hole is located approximately 45 meters along strike from a previous intercept (HR24-433) and 30 meters up dip from another (HR24-451), confirming that mineralization extends beyond the current resource model, Valks said.

About 40% of this year's 55,000-meter drilling program has been concentrated on Homestake, where the company aims to expand and refine zones of high-grade mineralization, Valks said.

The program is being conducted with five diamond drills across the Kitsault Valley and Big Bulk projects, with Homestake Silver clearly taking center stage. Dolly Varden is employing directional drilling technology to precisely target step-out and infill areas, with HR25-456 being one of three holes from the same pad designed to extend a plunging zone of wide, high-grade mineralization, the newsletter writer noted.

While Homestake has traditionally been considered silver-rich, recent work indicates a distinct shift northward into a gold-rich system. This is supported by the data: HR25-456 also returned 22 g/t gold over 0.65 meters and a one-meter interval of 3.11 g/t gold. Base metals like copper, lead, and zinc were also present in smaller quantities, adding to the deposit's metal content.

The bigger picture: Homestake Ridge is part of a structurally controlled epithermal vein and breccia system within Jurassic volcanic rocks. Mineralization remains open along plunge and at depth, leaving room for further discoveries as assays continue to arrive from Homestake, Wolf Vein, and Big Bulk.

The takeaway? Valks said Dolly Varden is primarily a silver operation that consistently uncovers long intervals of gold with impressive grades that would attract attention anywhere. Meanwhile, it continues to expand the footprint of a deposit that grows in significance with each drilling season.

"The stock is up nearly 5% on the news as I write," the author noted. "It's now up 80% YTD. As we’ve said, buy the dips and ride the waves. I hold a long position; Jeff Clark is fully weighted."

The company was also discussed by Peter Krauth in the Silver Stock Investor newsletter on October 1. Krauth called the gold intercepts "impressive."

"This new hole sits 45 meters along strike and 30 meters above earlier high-grade hits, confirming both continuity and strong growth potential well beyond the current resource model," wrote Krauth. "The results point to a wide, high-grade plunging zone that remains open to the north and at depth, suggesting exciting expansion potential."

Overall, the findings highlight Homestake Silver's transition toward a more gold-focused system, injecting new excitement into what was already regarded as a silver-rich deposit, Krauth said. The deposit's open-ended potential positions it as one of Dolly Varden's most promising avenues for growth.

Also on October 1, Stephanie Baufeld issued a brief update by email on the stock following the release, noting that it confirmed "continuity of a developing high-grade gold trend."

The continued drilling positions the project "for potential resource growth and bulk-tonnage optionality," she wrote.

The Catalyst: Gold Continues Upward Journey

Gold prices increased on Friday, remaining close to record highs and on track for a seventh straight weekly gain, according to a report by Noel John and John Biju for Reuters on October 3. This rise is fueled by mounting concerns about the economic effects of an extended U.S. government shutdown and anticipated interest rate cuts. Spot gold climbed 0.5% to US$3,876.55 per ounce by 10:48 a.m. ET, following a record high of US$3,896.49 reached on Thursday. Prices have risen over 2% this week.

Goldman Sachs announced that the potential for gold prices to exceed its US$4,000 per ounce forecast for mid-2026 has increased, pointing to two key factors that could drive prices higher, Vahid Karaahmetovic reported for Investing.com on October 2.

Gold has surged 14% since late August and increased 47% year-to-date. This breakout is attributed to renewed buying from exchange-traded funds (ETFs), central banks, and, to a lesser extent, speculative investors.

The first catalyst that could propel gold prices above the US$4,000 mark is the limited influence of speculative positioning in the recent rally, according to Goldman analyst Daan Struyven, the Investing.com article said.

Struyven noted that speculation "explains only a modest 1pp of the 14% rally since August 26 and has not increased over the last three weeks." This indicates that the surge has been driven by more stable long-term buyers, suggesting room for further price increases if speculative flows eventually rise.

The second factor is the unexpectedly strong demand from Western ETFs, Karaahmetovic wrote. Holdings increased by 109 tonnes in September, significantly surpassing Goldman’s model prediction of 17 tonnes, which was based on declining U.S. interest rates.

Struyven stated that this demonstrates the "key upside risk" they have been highlighting — private investors diversifying more significantly into gold — "seems to be realizing for now." Since gold ETFs are relatively small compared to developed-market bond markets, even a slight shift in allocations away from fixed income could lead to a substantial further increase in gold prices, the analyst added.

Goldman reiterated that gold is its "highest-conviction long commodity recommendation," citing structurally higher central bank demand, upside risks from private sector diversification, and attractive hedging properties during market downturns.

Ownership and Share Structure

According to Dolly Varden's Corporate Presentation, institutional investors own 50% of the company. Along with Hecla with 13.7%, other strategic investors include Fury Gold Mines Ltd. (FURY:TSX) with 13.5% and Eric Sprott with 9.5%. The rest is in retail.

Dolly Varden has 85.43 million outstanding shares and 90.5 million fully diluted shares. Its market cap is CA$579.22 million. Its 52-week range, according to Refinitiv, is CA$3.21–CA$7.46 per share.