Silver Explorers shares rise after announcement of further pauses for investors

Dolly Varden Silver Corp. adds a new institutional investor to its stable of major backers that includes Hecla Mining Co. and mining financier Eric Sprott.

Shares of Dolly Varden Silver Corp. (DV: TSX.V; DOLLF: OTCQX) rose more than 50% this week compared to last week on news of the arrival of a major new institutional investor.

Dolly Varden adds the investor to a stable of major backers that includes Hecla Mining Co. and mining financier Eric Sprott.

The stock fell from CA$0.40 on September 29, 2022 to CA$0.63 two days after news broke that its largest shareholder, Fury Gold Mines Ltd. (FURY-T) sells 7.4% of the common stock of Dolly Varden to the still-unnamed investor.

Dolly Varden adds the investor to a stable of big-name backers that includes Hecla Mining Co. (HL:NYSE) and mining financier Eric Sprott.

“We have very supportive institutional shareholders who already owned 38% prior to this transaction, and now we have just added another large institution to the register,” said Dolly Varden chief executive Shawn Khunkhun. Streetwise Reports. “Our institutional ownership is going up to around 45%.”

Fury has reached an agreement to sell 17 million common shares at C$0.40 to help fund further exploration at its Eau Claire and Éléonore South Joint Venture projects in Quebec. Fury will continue to be Dolly Varden’s largest shareholder at 26%.

Fury CEO Tim Clark said his support for Dolly Varden and his Homestake Ridge mine, which he sold to the company last year, has not wavered.

“I still have 80% of our position there, we own over a quarter of the company,” Clark said.

The Catalyst

It all depends on when the shares are transferred, the two CEOs said.

Since Fury was also a junior mining company, there were concerns that it might, at the wrong time, need to sell some of its Dolly Varden shares to fund its exploration activities in Quebec, the chief executive said. by Dolly Varden, Shawn Khunkhun.

“It usually comes at the worst time for both entities,” Khunkhun said.

The two companies are “proactive” with the sale after meeting each other with the institutional investor interested in buying the shares. This puts Fury in a good cash position and gives Dolly Varden another institutional partner.

“It was a very elegant solution,” he said. The new institutional investor can “help us move this project forward. And I think that’s very, very, very important and very strategic.

Dolly Varden’s Kitsault Valley project in British Columbia’s Golden Triangle is composed of the Kitsol vein to the south and Homestake Ridge to the north.

Fury sold Homestake Ridge to focus on James Bay properties and its Committee Bay project in Nunavut, Clark said.

“We wanted to simplify the story and focus on what we were great at,” he said.

Dolly Varden will not receive any money from the transaction. The new investor was not expected to become a 10% or more shareholder in the transaction.

Expansion of the drilling campaign

Dolly Varden announced last month that it was expanding its drilling campaign at Kitsault Valley after seeing promising results from an expansion drill hole. It added a fourth diamond drill rig and expanded the program to 35,000 meters as it works to upgrade and expand resources there.

The company said it intersected 19.85 meters of 584 grams per tonne of silver (g/t Ag), 0.92% lead (Pb), 0.56% zinc (Zn) and 0.19 g/ t gold (Au), with silver “bonanza grade”. Mineralization of 4,326 g/t Ag, 4.21% Pb, 1.36% Zn and 1 g/t Aug over 1.6 meters at the Wolf vein.

Based on these results, Dolly Varden said it will prioritize incremental drilling in this area for the remainder of the 2022 drilling season.

Kitsault Valley contains an indicated resource of 34.7 million ounces (Moz) Ag and 166,000 ounces of gold (Au), with additional inferred resources of 29.3 Moz Ag and 817,000 ounces Au in multiple outcropping deposits .

Dolly Varden is working to prepare an updated NI 43-101 compliant mineral resource estimate for the project. It will include results from drilling at Dolly Varden in 2018 and Homestake Ridge this year. It will serve as the basis for a preliminary economic assessment (PEA) for the entire project.

One of the main purposes of this investigation will be to connect Dolly Varden and Homestake Ridge.

Ownership and shareholding structure

Besides Fury, Hecla owns 10.71% or 24.7 million shares, and 2176423 Ontario Ltd. owns 11.1% or 25.6 million shares, according to Reuters.

Dolly Varden has a market capitalization of C$142.98 million and 230.6 million shares outstanding, including 102.4 million free-floating shares. It is trading within a 52-week range of CA$0.88 and CA$0.36.

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