Dolly Varden’s (TSX.V:DV, OTC:DOLLF) silver properties, consisting of two past-producing silver deposits, Dolly Varden and Torbrit, became part of British Columbia’s mining lore, featuring assays as high as 2,200 ounces (over 72 kg) silver per ton, with historical production of 20 million ounces Ag, between 1919 and 1959. In fact, the Dolly Varden/ North Star Mine was among the richest silver mines in the British Empire, producing 1.3Moz at an average grade of 1,109 g/t Ag between 1919 and 1921.
Dolly Varden’s goal is to try and extend the Torbrit deposit through step-out drilling, and to get into the high-grade, 500g to 1kg material. There are early indications of Torbrit “look-alikes” along a 4.5-km trend. Through drilling, Dolly Varden wants to prove up another Torbrit and drastically increase the size of the resource which in all categories is about 44Moz at an eye-popping average grade of 300 g/t! It is encouraging that the rocks hosting the mineralization on the property are the same age as some of the other large deposits found in the Golden Triangle including Eskay Creek.
The company finds itself in the rare position of being a pure-play silver explorer, in a space where most silver production comes from lead-zinc deposits or is a by-product of gold mining.
While most of the world’s silver is mined in Latin America and China, British Columbia should not be overlooked as a past and future Ag producer. The province is endowed with one of the richest mineralized regions on the planet, in the Golden Triangle of northwestern BC.
With over a century of mining history, the triangle has been the site of three gold rushes and some of Canada’s greatest mines, including Premier, Snip and Eskay Creek. Other significant and well-known deposits include Brucejack, Galore Creek, Copper Canyon, Schaft Creek, KSM, Granduc and Red Chris.
The Golden Triangle takes its name from a 500-km belt of mineralization, that stretches from the British Columbia-Yukon border in the north, to the town of Kitsault, just southeast of the port of Stewart, BC. The Kitsault area is historically associated with molybdenum and silver production.
Dormant for a number of years due to low metals prices and its relative isolation compared to other mining districts, lately there has been a resurgence of interest in the Golden Triangle, with the excitement driven by:
Re-awakening the Dolly Varden silver mine
“The exciting thing about the Dolly Varden project is that it is hosted in the Hazelton formation, a Jurassic package of volcanic rocks that went through the same expansion or release of pressure called the Eskay Rift period,” says head geologist Rob van Egmond, in an AOTH video interview. “That was the time frame when a lot of the metallogenic deposits throughout the whole Golden Triangle were emplaced, such as Eskay Creek.
After that rifting there was a compressional period which formed a lot of the structures that host the epithermal veins. And a lot of those epithermal veins were probably active to form the deposits that were on the seafloor, VMS-style.”
CEO Shawn Khunkhun likes to compare Dolly Varden Silver to Skeena Resources, which has seen a significant re-rating commensurate with its success so far in developing the historical Eskay Creek Mine.
“Our story is very similar,” he says. “They’re awakening Eskay Creek, we’re re-awaking the Dolly Varden silver mine. It’s got a rich history, it’s one of the richest silver mines in the world, it’s produced 20 million ounces of high-grade silver, and we’re endowed with 44 million ounces in a cornerstone high-grade pure silver resource, and we’ve got a technical team that has the ability to unlock further discoveries in this trend.”
Emerging silver district
The Dolly Varden project comprises 88 square km in the Stewart Complex of northwestern BC, which hosts base and precious metals deposits. The property has four historically active mines — Dolly Varden, Torbrit, North Star and Wolf.
On the map below, note that Dolly Varden’s project is in the bottom corner of the Golden Triangle. It lies to the west of Hecla Mining’s (NYSE:HL) Kinskuch project, and borders Fury Gold Mines’ (TSX:FURY) Homestake Ridge, where a PEA envisions a 13-year mine with peak annual production of just over 88,000 gold-equivalent ounces.
Hecla’s Kinskuch is an early-stage project with the potential for discovery of epithermal silver-gold, gold-rich porphyry and VMS deposits.
According to Dolly Varden Silver, only 3% of the Dolly Varden property has been explored in detail, leaving tons of upside for shareholders.
“Despite the long production history and exploration history we’re still making new discoveries,” says van Egmond. “We’ve done structural re-interpretation of the whole project, and we’ve drilled across faults and found offsets to the main Torbrit deposit, within 50m of the old drilling from the ‘50s. So, there’s still a lot of exploration upside near deposit, as well as all the way up the trend to the northern end of the property, we have four and a half kilometers of these Hazelton rocks with a strong potassic alteration signature, as well as sodium depletion, so that’s indicative of VMS heat cells working within that alteration, so we look forward to exploring up the rest of that belt.”
An updated NI 43-101 resource estimate completed by Dolly Varden in 2019 revealed 32.9Moz silver in indicated resources and 11.477Moz inferred, adjacent to the historical deposits. Drilling and underground work that went into the resource estimation confirmed that the mineralization occurs as two styles: bedding-parallel VMS, similar to that mined at Eskay Creek, as well as cross-cutting epithermal mineralization similar to that being developed at Pretium’s Valley of the Kings deposit (Brucejack mine).
According to DV, both the Eskay Creek and Valley of the Kings deposits are located on the same structural trend to the north of Dolly Varden’s ground. Dolly Varden represents the silver end of these styles of mineralization and includes the base metals lead and zinc.
Could Dolly Varden represent the southern end of a silver district that extends northward? It seems likely and further exploration may prove it.
A total of 11,397 meters in 40 drill holes were completed in 2020, 19 of which were in the Torbrit area. The rest were reconnaissance and exploration drill holes, testing multiple areas on the property.
In February, the rest of the assays came in, with highlights that included 310 g/t over 6 meters, a stand-out 304 g/t over 45.82m, and 306 g/t over 5.10m. Higher-grade core within those intercepts featured 648 g/t over 6.06m, 1,595 g/t over 1.06m, and 1,290 g/t over 0.6m.
“We are seeing consistent intervals of high-grade silver mineralization at the Torbrit silver deposit that has the potential to support economically attractive underground bulk-mining technics, while at the same time each successive drill programs continues to demonstrate that the deposit is open for expansion,” states Khunkhun, in the Feb. 16 news release.
He adds that the company “cannot rule out a gold discovery consistent with the plus million-ounce resource at the adjacent Homestake property in addition to the potential for another Torbrit like silver discovery,” given encouraging geological and geochemical results for gold and copper mineralization from the four-kilometer-long trend to the northwest of the silver deposits.
Dolly Varden is conducting exploration in the Golden Triangle at the perfect time for the silver market, which is supporting higher prices and a renewed sense of purpose as an essential metal for the modern economy. Silver is an important ingredient in solar panels, 5G technology and the automotive industry.
On Monday silver prices led gains in precious metals, with the value of the US dollar falling amid a report showing that US manufacturing cooled in April. The white metal followed gold higher on Friday, last trading at $27.43/oz, at time of writing.
From a decade-low of $12.59 reached in March, 2020, silver has more than doubled, the gains based on heightened industrial activity, as economies hurt by the pandemic recovered, and safe-haven investment demand. Silver functions as both a monetary and an industrial metal.
According to the Silver Institute, global demand for silver will rise to 1.025 billion ounces in 2021, the highest in eight years, led by investments in industrial and investment-grade physical silver, ie., bars and coins.
“The outlook for the silver price in 2021 remains exceptionally encouraging, with the annual average price projected to rise by 46 percent to … $30,” it said in a statement.
“Given silver’s smaller market and the increased price volatility this can generate, we expect silver to comfortably outperform gold this year.”
Dolly Varden Silver Corp.
Shares Outstanding 130.6m
Market cap Cdn$87.4m
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