A 30,000-meter drill program in northwestern British Columbia is shapely up nicely, with three drills coring over 7,700m in 27 of 99 holes.
The program by Dolly Varden Silver (TSXV: DV) (OTC: DOLLF) is directed at the Kitsault Valley Project, which 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 of the 163 square km property, makes Kitsault Valley one of the largest high-grade, undeveloped precious metal assets in Western Canada.
The combined project also consolidates the highly mineralized Kitsault Valley trend along with seven precious metal deposits, thereby transitioning Dolly Varden’s 100% owned silver asset into a project with 50/50 gold-silver resources measured by value.
The company says initial work has focused on stepping out from wide, high-grade silver intercepts, particularly at the Kitsol Vein and Wolf Mine. Based on visual indicators of mineralization and veining, drills have continued to step out in these areas, with the deepest hole at Wolf extended to 720 meters in length, and 400 meters at the Kitsol part of the Torbrit deposit. Assays are pending.
“We are very encouraged with our initial drilling in multiple areas on the Property. Our focus is primarily resource expansion and discovery at our silver-rich targets at the south end of the Kitsault Valley trend and are now commencing resource upgrade drilling and regional exploration at our recently acquired gold and silver-rich Homestake Ridge targets in the north,” said Dolly Varden’s President & CEO Shawn Khunkhun, in the July 13 news release.
The 2022 exploration program is balanced between mineral resource expansion and upgrading at five of the deposits that comprise the Kitsault Valley Project, and exploration work focusing on the discovery of new silver and gold deposits. The objective of infill drilling is to convert inferred mineral resources to the measured and indicated categories, with an emphasis on inferred resources at the recently acquired Homestake Ridge area.
Step-out drilling is being performed at most resource areas, with an early emphasis during the 2022 season at the Torbrit/Kitsol/North Star deposits and the historical Wolf Mine. Step-outs also planned later in the season at the Homestake Ridge and Homestake Silver deposits. Late winter snowpacks have delayed the start of drilling at the latter, with initial drilling expected this week. Drill productivity and core recovery have been excellent during the first five weeks of exploration.
Over half of this season’s exploration work is allocated to discovery of new deposits, primarily silver-rich systems but also gold and copper targets.
There are numerous new exploration targets located in the 5.4 km-long corridor between the Homestake Ridge and Dolly Varden deposits that are currently being explored, with one drill currently targeting these areas. Ongoing surface geology by the company’s technical team and geophysical exploration will be used to generate and vector into drill targets. Currently, 20 targets have been identified, eight of which are classified as top priority. Ground-induced-polarity (“IP”) geophysical surveys will be commencing shortly on the Kitsault Valley Project.
Dolly Varden Silver Project
The Dolly Varden project is considered a rare exploration asset as it has significant silver resources within a safe jurisdiction. It includes four known precious metal deposits: Wolf, North Star, Dolly Varden and Torbrit — two of which are past producers (Dolly Varden and Torbrit).
Historical records show these two deposits together have produced more than 20Moz of high-grade silver between 1919-1959, with assays of ore as high as 2,200 oz (over 72 kg) per tonne.
Production subsequently ceased due to low silver prices, and the assembled property was eventually acquired by the company with a view of re-awakening the historical silver mine.
An updated NI 43-101 resource estimate completed in 2019 revealed 32.9Moz silver in indicated resources and 11.477Moz inferred, for a total of 44Moz, all adjacent to the historical deposits.
Drilling and underground work that went into the resource estimation confirmed that the mineralization occurs as two styles.
The first is a bedding-parallel VMS at the Torbrit deposit, which hosts the bulk of the resources on the property. Dolly Varden considers this to be similar to that mined at Eskay Creek to the north (see map below).
Once the highest-grade gold mine in the world, Eskay Creek produced 3.3Moz gold and 160Moz silver at average grades of 45/g/t Au and 2,224 g/t Ag respectively between 1994 and 2008.
The second is a cross-cutting epithermal mineralization similar to that being developed at Pretium’s (now Newcrest Mining following an acquisition) Valley of the Kings deposit (Brucejack mine), which, like Eskay Creek, is also located on the same structural trend to the north of the company’s ground.
The Dolly Varden property also lies immediately to the west of Hecla Mining’s Kinskuch property, an early-stage project with potential for discovery of epithermal silver-gold, gold-rich porphyry and VMS deposits.
So far, the exploration focus on this part of the property has been silver. Dolly Varden is currently in the midst of an aggressive two-year drill campaign designed to expand the existing silver resource of the Torbrit deposit and to test multiple highly prospective targets on the property.
From 2017-2021, the project saw in excess of 86,000 meters of drilling, with new discoveries made in a 100-year-old mining camp as a result of modern exploration technologies, data reinterpretation and drilling.
Homestake Ridge Gold-Silver Project
The newly acquired Homestake Ridge project features a high-grade gold and silver resource, including three known precious metal deposits: Homestake Main, Homestake Silver and South Reef.
Mineral resources contained within the Homestake Ridge land package are estimated at 165,993 oz gold and 1.8Moz silver in the indicated category, and 816,719 oz. gold and 17.8Moz silver in the inferred category.
The property is located within the prolific Iskut-Stewart-Kitsault belt, which hosts several precious and base metal mineral deposits, about 32 km southeast of Stewart, BC. It is situated close to regional infrastructure: Northwest Transmission Corridor, deep water access and existing road within 6 km of the deposit.
“The close proximity of the deposits that make up the current mineral resource estimates, combined with common infrastructure in the region, is expected to generate substantial co-development synergies as these deposits are advanced in combination,” Dolly Varden previously stated in a news release announcing its acquisition.
To date, more than 275 holes for over 90,000 metres of drilling have been completed on the Homestake property; multiple exploration targets remain to be tested along a combined 15 km strike length.
A standalone preliminary economic assessment (PEA) for the project indicated an after-tax net present value (NPV) of $173 million and an internal rate of return (IRR) of 32%, based on a 1,620/oz gold price and $14.40/oz silver price.
The study estimated a total gold-equivalent production of 590,040 oz over a 13-year initial mine life, at an all-in sustaining cost (AISC) of $670/oz gold.
Rob van Egmond appointment
Dolly Varden Silver also took the opportunity, in the July 13 news release, to announce the promotion of Rob van Egmond, the company’s head geologist, to Vice President, Exploration.
Van Egmond brings extensive exploration experience to the position, from grassroots to advanced project development, mine site exploration and production. He was part of the Platinum Group Metals’ team that discovered and defined the massive Waterburg platinum-palladium deposit within the previously unknown northern extension of the Bushveld complex in South Africa. As Candente Copper’s country manager for Peru, he led the exploration and resource definition work that defined the multi-billion-tonne Canariaco copper porphyry deposit, from initial drilling to the pre-feasibility study. Van Egmond also has deep experience in Canada’s north, including diamond exploration and resource development for BHP at the Ekati Mine and for Kennecott/Aber JV at the Diavik Mine. While with BHP, he also worked as an open-pit mine geologist at the Island Copper Operation in BC and as an exploration geologist in the Hope Bay greenstone gold belt in Nunavut.
Van Egmond started his exploration career in northwestern BC’s Golden Triangle for Cominco and returned as chief geologist for the Dolly Varden Project in 2017.
Cashed up from a $13 million financing involving big-name investors like Hecla Canada and Eric Sprott, Dolly Varden is one of only a few junior resource companies conducting drill programs this summer, in a difficult market. 30,000 meters is a large drill campaign, and I am looking forward to seeing it bear fruit, as the first assays trickle in. Shareholders can expect ample news flow throughout the second half and into next year.
Dolly Varden Silver Corp.
Shares Outstanding 230.5m
Market cap Cdn$117.5m
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