Dolly Varden Silver intersects 27.44 g/t gold and 463 g/t silver over 9.16m, including 75.13 g/t Au and 2,337 g/t Ag over 1.77m at Homestake Ridge – Richard Mills

2022.12.14

Dolly Varden Silver (TSXV:DV, OTC:DOLLF) continues to hit high-grade silver and gold at its Kitsault Valley Project, located in the Golden Triangle exploration hotspot of northwestern British Columbia.

The 163-square-km property is an amalgamation of Dolly Varden’s namesake project, and the Homestake Ridge Project that DV acquired from Fury Gold Mines back in February.

The combined mineral resource of 34.7Moz silver and 166,000 oz gold (indicated), and 29.3Moz silver and 817,000 oz gold inferred, within multiple outcropping deposits, makes Kitsault Valley one of the largest high-grade, undeveloped precious metal assets in Western Canada.

The 2022 exploration drill program on the Kitsault Valley trend has completed 37,061 meters in 108 drill holes, with four rigs turning. Drilling wrapped up in mid-October, with the majority of assays still pending. Also, ground-based geophysics, surface mapping and prospecting work were completed, evaluating historical prospects and identifying new silver and gold occurrences.

Homestake Ridge

The objective of drilling at the Homestake Main and Homestake Silver deposits this year was to expand multiple, sub-parallel mineralized zones and to upgrade inferred resources.

The highlights from a batch of drill results released on Nov.29, included:

• 27.44 g/t Au and 463 g/t Ag (33.34 g/t gold-equivalent, or AuEq) over 9.16 meters in hole HR22-328, including 75.13 g/t Au and 2,337 g/t Ag (103.66 g/t AuEq) over 1.77m, and half a meter of 216 g/t Au, 113 g/t Ag and 0.48% Cu (218.06 AuEq).

• 5.68 g/t Au and 147 g/t Ag (7.48 g/t AuEq) over 15 meters in hole HR22-330, including 54.10 g/t Au, 4,890 g/t Ag and 0.11% Cu (113.25 g/t AuEq*) over 0.39m.

 Other key intercepts:

• HR22-314: 4.27 g/t Au and 64 g/t Ag (5.10 g/t AuEq) over 16.06m, including 18.76 g/t Au and 193 g/t Ag (21.49 g/t AuEq) over 3.08m;
• HR22-322: 6.47 g/t Au and 27 g/t Ag (5.83 g/t AuEq) over 6m;
• HR22-325: 7.18 g/t Au and 30 g/t Ag, 0.49% Cu (8.26 g/t AuEq) over 10m, including 20.20 g/t Au and 68 g/t Ag (21.13 g/t AuEq) over 1.47m;
• HR22-337: 3.79 g/t Au and 2 g/t Ag (3.84 g/t AuEq) over 21m, including 11.15 g/t Au and 5.00 g/t Ag (11.22 AuEq) over 2m;
• HR22-339: 14.56 g/t Au and 4.00 g/t Ag (14.63 g/t AuEq) over 2.5m.

“Our 2022 drill program has truly been exceptional. The recently acquired Homestake Ridge Deposit has delivered more high-grade gold and silver values, commonly with strong copper mineralization,” said Shawn Khunkhun, Dolly Varden’s President and CEO, in the Nov. 29 news release. He added:

“These intercepts demonstrate strong continuity of mineralization over wide intervals, similar to the recently announced high-grade results at the Wolf and Kitsol deposits, located six kilometers to the south. We eagerly anticipate additional assays from all of Dolly Varden’s deposits, as well as new exploration targets drilled during the 2022 program.”

The results were primarily infill drilling from current inferred resource areas and suggest that the higher-grade gold-silver lenses may be continuous over more extensive areas than previously interpreted. In addition, the drilling has generated new targets down-dip ofthe Homestake Main deposit, along the projected plunge of the higher-grade shoots that are wide open for expansion. More assays from the Homestake Main and Silver deposits are pending.

The Homestake Ridge deposits are interpreted as a structurally-controlled, multi-phase epithermal vein and breccia system hosted in Jurassic-aged Hazelton Group volcanic rocks. The mineralization consists of pyrite and chalcopyrite in a breccia matrix within a silica breccia vein system (Figure 2). The northwest orientation of the main Homestake trend appears to have numerous sub-parallel structures that are interpreted to form the controls for higher-grade gold shoots within a broader low-grade zone at the Homestake Main deposit. The main structural corridor dips steeply to the northeast (Figures 3 and 4).

Wolf Vein

Dolly Varden has also been successful at the Wolf Vein target area, where wide-spaced step-out drilling has dramatically extended the limits of silver mineralization, which remains open for expansion, with additional assays pending from the 2022 season.

The highlights from step-out drilling included:

• 412 g/t silver (Ag) over 12.80m (5.38 meters true width) at hole DV22-311, including 2.15m (0.90m true width) @ 1,646 g/t Ag, 2.38% Pb (lead), 3.10% Zn (zinc)  and 0.10 g/t Au (gold);

• 551 g/t Ag over 9.80m (4.90m true width) at hole DV22-316, including 3.60m (1.8m true width) grading 1,049 g/t Ag, 1.19% Pb and 0.29% Zn.

The company notes that drill hole DV22-316 intersected wide, high-grade mineralization in multiple vein and breccia phases, over 200 meters down plunge from a previously reported drill hole, DV22-300, that intersected 19.85m (13.90m true width) averaging 584 g/t Ag, 0.92 % Pb, 0.56% Zn and 0.19 g/t Au (Sept. 13, 2022 news release).

Drill hole DV22-311 intersected similar-style mineralization 400m down dip of mineralization in DV22-300 (Figure 1).

“Dolly Varden Silver’s wide-spaced step-out drilling this season has more than doubled the strike length of the Wolf deposit, as well as extending high-grade silver mineralization to over 750 meters in dip extent. The highest grades are within robust, vein-hosted mineralization that is potentially amenable to underground bulk mining methods,”said Shawn Khunkhun, President and CEO. “We eagerly anticipate additional drilling results from the 2022 season at Wolf, Homestake Main, Homestake Silver and Red Point.”

The Wolf Vein is interpreted as a wide, multi-phase epithermal vein and breccia system. Mineralization consists of pyrargerite (ruby silver), argentite, native silver, argentiferous galena and sphalerite in a silica breccia vein system (Figure 2). At depth, as seen in drill hole DV22-316, the system appears to widen to a 143-meter (71m true width) package that consists of three distinct veins within an alteration zone that averages 0.48% Zn over its width, the company states.

The northeast/ southwest orientation of the Wolf Vein system, and the nature of the plunge directions of high-grade silver mineralization, is similar to what is seen at the Kitsol deposit, located approximately 1.4 km to the south.

Dolly Varden adds:

Drilling during the 2022 season at Wolf has significantly expanded the wide, high-grade silver mineralization, which occurs in wide, as well as localized shoots hosted within silica vein and breccia sets. Drill intercepts outside of the high-grade shoots encountered anomalous silver mineralization within broad potassic alteration halos underneath a cap of sedimentary rocks. The continuity of silver mineralization underneath the sedimentary cover near the bottom of the Kitsault Valley is resulting in new, blind silver discoveries within the 100-year-old Dolly Varden silver mining camp, a result of innovative exploration and modelling techniques. Additional results from step-out drill holes testing for deeper, down plunge mineralization from DV22-316 at the Wolf Vein are pending.

Torbrit

A series of drill results were also released in early November from the Torbrit resource area, where the high-grade and potentially bulk-mineable Kitsol Vein continues to deliver contiguous silver and base-metal mineralization.

Hole DV22-291 intersected 12.51m (8.88m true width) averaging 442 g/t Ag, 0.68% Pb and 0.42% Zn, including 1,367 g/t Ag over 1.50m (1.07m true width), as an up-dip infill hole from previous high-grade intercepts.

Highlights include:

• DV22-289: 979 g/t Ag over 0.49m true width, step out at Torbrit Main;
• DV22-291: 442 g/t Ag over 8.88m true width, infill at Kitsol;
• DV22-298: 372 g/t Ag over 10.78m true width, up-dip extension at Kitsol;
• DV22-308: 297 g/t Ag over 6.59m true width, step out at Torbrit Main;
• DV22-312: 585 g/t Ag over 3.30m true width, step out at Torbrit Main.

“In addition to discovery-focused exploration drilling, Dolly Varden Silver has been prioritizing resource expansion and upgrading at the Torbrit/Kitsol, Wolf, Homestake Main and Homestake Silver deposits. We continue to encounter wide, potentially bulk-mineable vein-hosted silver mineralization at Kitsol,” said President and CEO Shawn Khunkhun, in the Nov. 7 news release.

The Torbrit Main and North deposits consist of strata-bound silver mineralization associated with a high potassium and coincident sodium depletion alteration signature. Layers consist of red jasper with bladed crystal growths after barite, later replaced by silica. Relatively quick capping of the system by volcanic activity caused an overprinting of epithermal brecciation and veining which further augmented the silver grades within the deposit area.

According to Dolly Varden, the main focus of step-out drilling at the Torbrit Main deposit targeted the southern limits of the current resource. The drill holes were oriented to step out from, as well as infill, areas of modeled inferred resources (Figure 3). The Torbrit horizon was intersected in all expansion holes; future infill drilling programs will target high-grade shoots within the lower grade horizon, which were commonly encountered in historical mining at the Torbrit, Wolf and Dolly Varden deposits.

Mineralization consists of pyrargerite (ruby silver), argentite and native silver in a silica breccia vein system. The northeast/southwest orientation of the vein and nature of the high-grade silver plunge is similar to what is developing at the Wolf deposit 1.4 km to the north (Figure 2).

Dolly Varden adds:

Drilling during the 2022 season at Kitsol has encountered wide, high-grade silver mineralization, commonly with overprinting high-grade vein shoots within wide vein sets. Previously reported step-out drill hole DV22-283 that intersected 50.18m (~30.0m true width) averaging 414 g/t Ag (August 10, 2022 news release) suggest multiple high-grade, steeply plunging yet wide silver shoots that extend to surface, as demonstrated by up-dip hole DV22-298 which intersected 21.55m (10.78m true width) grading 372 g/t Ag (Figure 5). Additional results from step-out drill holes testing deeper, down plunge mineralization from DV22-283 at the Kitsol Vein are pending.

$18M financing

Dolly Varden’s success at the drill-bit this year has been matched by a stellar fund-raising effort.  

In early October, Dolly Varden announced that its largest shareholder, Fury Gold Mines, agreed to sell 17 million DV common shares @ CAD$0.40, to an un-named institutional investor. Fury approached the company about selling a portion of its DV shares, to fund exploration of itsEau Claire and Éléonore South Joint Venture projects in Quebec. The transaction was thought to be beneficial to both parties, asit brings another experienced institutional investor to Dolly Varden while providing Fury with exploration funding. Fury continues to be Dolly Varden’s top shareholder, with about a 26% stake.

October’s financial news was followed in early December by an announcement that Dolly Varden has launched a brokered private placement financing to raise gross proceeds of up to $18 million. Common shares of DV will be sold as “flow-through shares” at $0.90 per share, and “charity offered shares” at $1.05/sh.

CEO Shawn Khunkhun took the opportunity of the private placement news to summarize Dolly Varden’s year:

“2022 has been a transformational year for Dolly Varden Silver. The technical breakthrough of the discovery of high-grade silver mineralization beneath the sedimentary cap has: (i) led to significant expansion of the Wolf deposit footprint, via exceptional and ambitious step-out discoveries; and (ii) opened up over 5 kilometers of prospective trend heading north to Homestake Ridge. In addition, significant broad high-grade silver mineralization has continued to expand and extend the Torbrit deposit, specifically at the Kitsol Vein. Lastly, recent results of both high-grade gold and silver from Homestake has validated the acquisition and set us up for targeting high-grade shoots around the main deposit. These funds will allow Dolly to continue to aggressively explore and follow up on recent success on one of the most prospective land packages in BC’s Golden Triangle.”

Conclusion

321gold’s Bob Moriarty makes a couple of interesting points regarding Dolly Varden’s exploration success and its share structure.

“With a $133 million CAD market cap and $10 million in cash, Dolly is getting less than $1 CAD an ounce or $.70 USD. Well before the marvelous run up to near $50 an ounce in 2011 silver companies were getting $3 to $5 an ounce USD and it will happen again. Dolly certainly could have a 400-700% move higher when silver investors wake up.”

“Dolly’s 2022 drill program called for 30,000 meters of drilling in 99 holes with four rigs turning. The company is releasing results on a regular basis. Their press release from November 7, 2022 showed 12.51 meters of 442 g/t Ag. That’s almost $300 rock in USD and highly economic.”

Moriarty’s second point concerns Dolly Varden’s shares, which are almost totally in the hands of professional investors. Sprott holds 11%, Hecla Mining 10%, Fury 26% and 45% belongs to institutions. Retail investors own just 8% of the company.

“There is a mere 8% in the clutches of retail investors yet they are the people who move the stock. When silver is hot again and it will be, Dolly Varden is going to be the go-to silver stock once again.”

The case for silver

Dolly Varden is one of only a few junior resource companies putting out excellent drill results in a difficult market. The stock hit an eight-month high of $0.84 on Dec. 1, and it’s holding steady at $0.75/sh. Since Sept. 27 DV has more than doubled in value.

This year crews completed 37,061 meters in 108 drill holes, with four drills. Drilling wrapped up in mid-October, with the majority of assays still pending. Shareholders can therefore expect the news flow to continue well into 2023.

Dolly Varden Silver Corp.
TSXV:DV, OTC:DOLLF
Cdn$0.74, 2022.12.13
Shares Outstanding 230m
Market cap Cdn$170.6m
DV website

Richard (Rick) Mills
aheadoftheherd.com
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