Dolly Varden Silver’s (TSXV:DV, OTCQX:DOLLF) stock price shot up 16 cents for a gain of 20% Thursday, after announcing a consolidation of its Big Bulk property, which lies within its Kitsault Valley project.
Big Bulk is prospective for porphyry- and skarn-style copper and gold mineralization, similar to other such deposits in the region, such as Red Mountain, KSM and Red Chris.
This week, Dolly Varden announced it is consolidating Big Bulk by acquiring the southern portion owned by Libero Copper & Gold. The agreement entitles Dolly to earn-in a 100% interest in the southern part of Big Bulk, thus bringing the entire project under Dolly’s control. Libero’s portion consists of seven claims encompassing 3,025 hectares.
The news release also states that historical data sets will be incorporated into a complete geologic model, and that there is a land use agreement and exploration permit in place.
“We have been continuing to seek accretive consolidation opportunities in the area and the amalgamation of the southern portion of the Big Bulk copper gold porphyry with Dolly Varden’s portion is our latest step”, said Shawn Khunkhun, Dolly Varden’s president and CEO, in the Dec. 20 news. “In the Golden Triangle, porphyry systems can represent metallogenic feeders to high-grade vein systems, such as the KSM deposit that occurs adjacent to the Brucejack Mine. Big Bulk may represent a causative mineralized porphyry to the high-grade silver and gold deposits 10 kilometres to the west at the Kitsault Valley Trend.”
Dolly Varden agreed to issue consideration shares to Libero at $0.78/sh, for an aggregate consideration of $214,500.
Under the option agreement, Dolly will make a series of cash payments totaling $1.45 million, starting on or before Dec. 31, 2023, and ending on or before Dec. 31, 2027.
Big Bulk is 20 kilometers north of Kitsault, and is surrounded by Hecla Mining’s Kinskuch project.
According to the company, the porphyry copper-gold system hosts multiple phases of intrusive rocks, hosted in Lower Jurassic-age Hazelton and Triassic-age Stuhini volcanic and sedimentary rocks.
Recent work by the British Columbia Geological Survey (BCGS) and the University of British Columbia (UBC) Mineral Deposits Research Unit (MDRU) indicate that Big Bulk is the northernmost porphyry of a string of several porphyry mineralized systems of multiple geological ages that extend 30 km south to New Moly LLC’s Eocene-age Kitsault molybdenum deposit.
The southern portion of the Big Bulk property was initially explored by Teck and Canadian Empire Minerals from 2001 to 2003. The northern half of the system was drilled by AngloGold in 2009, encountering porphyry-style alteration with copper and gold mineralization associated with quartz chalcopyrite/pyrite stockwork veins.
A new interpretation of the geology based on recent geological mapping by the BCGS indicates that the target is a much larger calc-alkaline porphyry system tilted on its side with similarities in age and structural setting to the Kerr-Sulpherets-Mitchell (KSM) deposits. 2018 work by UBC-MDRU places the Big Bulk intrusive along a regional structural trend that hosts numerous porphyry and epigenetic deposits. Within the Big Bulk porphyry system, higher grade mineralization occurs in a discreet mineralized phase that had not been targeted by previous operators.
Libero’s 2021 drill program at Big Bulk tested the new geological model focusing on a quartz-chalcopyrite veined hornblende diorite intrusive phase of the Texas Creek plutonic Suite that was intersected in multiple holes.
Kitsault Valley project
Dolly Varden’s Kitsault Valley project is in the minerals-rich Golden Triangle region of northwestern British Columbia.
This 163-square-kilometer land package hosts one of the largest undeveloped high-grade precious metals projects in Western Canada. Its combined mineral resource is estimated at 34.7 million oz of silver and 166,000 oz of gold in the indicated category and 29.3 million oz of silver and 817,000 oz of gold inferred.
The Kitsault Valley project has a rich history, which can be traced back to the early 20th century when Scandinavian prospectors first made the silver discovery in what is now the Stewart Complex.
Within the boundaries of the company’s original property are two past-producing silver mines: Dolly Varden and Torbrit, which formed a prolific silver mine camp starting in 1919 that produced more than 20 million ounces in the span of 40 years, with assays as high as 2,200 ounces per tonne.
It should be noted that Dolly Varden was among the most important silver mines in the British Empire during its heyday.
Other historically active mines in the area include North Star and Wolf, which remain underexplored to this day. Together, the four deposits comprise about 90 square kilometers within the Stewart Complex.
While these deposits were already enough to work with, DV always believed that the Kitsault Valley property is prospective for hosting further precious metal deposits, being on the same structural and stratigraphic belts that host numerous other high-grade deposits on the same trend such as Eskay Creek and Brucejack.
Towards the end of 2021, the company further consolidated its position with the acquisition of Homestake Ridge, which occupies the northern half (~75 sq km) of Kitsault Valley. This project features a high-grade gold and silver resource from three known deposits that the company believes can be converted into higher-confidence categories.
By this fall, the company had completed over 43,000 meters of the expanded 55,000-meter drill program at Kitsault Valley. Results included 19 drill holes from early-season drilling at the Wolf Vein.
In mid-September, Dolly Varden Silver put out more encouraging results from drilling at Wolf.
The highlight of the bunch was hole DV23-368, a 75m step-out down plunge that intersected 1,898 g/t over 1.00m within 381 g/t Ag over 29.34m core length. The hole was drilled along plunge from the earlier hole DV22-320, which graded 321 g/t Ag over 12.85m.
On Nov. 6, Dolly published results from drill hole DV23-375, an 81-meter step-out from mineralization encountered in 2022 and 50 meters below hole DV23-268. The highlight was 461 g/t AgEq (296 g/t Ag, 1.68% Pb, 3.01% Zn) over 26.99 meters, including 2,260 g/t AgEq (1,475 g/t Ag, 10.65% Pb, 12.00% Zn) over half a meter.
At the Moose Vein, located 1.5 km from Wolf within the 5.4-km-long belt of silver mineralization, initial drilling highlighted 712 g/t Ag over 1.00 meter, within a 7.55-meter-long interval averaging 269 g/t Ag.
“The results we are seeing from the Wolf Vein continue to demonstrate depth continuity of the high-grade silver mineralization as well as an increase in base metal content,” Khunkhun said. “Drill hole DV23-375 has extended the plunge length to over 950 meters with increased thickness of the potentially underground bulk-mineable mineralization and it remains wide open for expansion. With over 70 drill holes remaining to be assayed and announced we eagerly await their results”.
A total of 31 holes for 15,860 meters were drilled at the Wolf Vein in 2023, part of 51,454 meters completed this year at the Dolly Varden and Homestake Ridge areas. The exploration camp has now been winterized.
At the end of October, Dolly announced that Hecla Mining, the largest silver producer in the United States, will purchase 15,384,616 shares at $0.65 per share for gross proceeds of $10 million. When the offering completed on Nov. 2, Hecla’s share percentage increased from 10.6% to 15.7%, calculated on an undiluted basis.
Six million will be used for exploration expenditures, mineral resource expansion and related costs in the Kitsault Valley project, with the balance to be used for working capital and G&A costs, DV said.
Dolly Varden Silver Corp.
Shares Outstanding 254.6m
Market cap Cdn$188.4m
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