Analyst: Silver Co. Hits 'Bonanza-Grade' Gold-Rich Zone

Analyst Update: The last results from Dolly Varden Silver Corp.'s (DV:TSX.V; DOLLF:OTCQX) 2023's step-out drilling at its Homestake Ridge property include "bonanza-grade" gold, one analyst noted in a new research note.

Marcus Giannini of Haywood Capital Markets said the new results — which include one hole that returned 79.49 grams per tonne gold (Aug) over 12.45 meters and 1,335 g/t Au over 0.68 meters — compares favorably to Newcrest's Brucejack Gold Mine, which produces 300,000 ounces Au per year.

Brucejack hosts similar "assemblages of electrum-bearing quartz-carbonate stockwork," noted Giannini. "Additionally, we emphasize that in the early stages of exploration at Brucejack, silver was initially discovered at the property, with the discovery of significant gold mineralization taking place subsequently."

Homestake Ridge's new high-grade zone "hints at a broader gold trend between Homestake Silver and Main," he wrote. "We expect the Company’s 2024 summer drill program to include follow up drilling within this area by way of further step-out holes along trend."

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Dolly Varden said it has intersected a new gold-rich zone northwest of the Homestake Silver Deposit on its Homestake Ridge property in British Columbia's Golden Triangle.

Part of Dolly Varden's massive Kitsault Valley project, highlights from the last 48 drill holes at Homestake Ridge included one hole that returned 79.49 grams per tonne gold (g/t Au) and 60 g/t silver (Ag) over 12.45 meters, including 1,335 g/t Au and 781 g/t Ag over 0.68 meters.

Chris Temple, editor and publisher of The National Investor, told Streetwise Reports the numbers are "remarkable."

But even more remarkable, he said, is that some investors may still be catching up to the story of Dolly Varden and "be a few years behind."

Chris Temple, editor and publisher of The National Investor, told Streetwise Reports the numbers are "remarkable."

Not only does the company possess its high-grade and rapidly growing silver resource, he said, but its acquisition of Homestake Ridge in 2022 added silver and gold. In December, its agreement with Libero Copper & Gold Corp. (LBC:TSX.V; LBCMF:OTCQB) granted Dolly Varden the opportunity to earn a 100% interest in the Big Bulk copper-gold porphyry project.

"They really have turned themselves into one of the more compelling district plays," Temple said of Dolly Varden.

Highlights of the new step-out and infill drilling results include:

• Hole HR23-389: 79.49 g/t Au and 60 g/t Ag over 12.45 meters, including 1,335 g/t Au and 781 g/t Ag over 0.68 meters within a broad mineralized zone grading 15.26 g/t Au and 20.05 g/t Ag over 66.5 meters.
• Hole HR23-399: 43.10 g/t Au and 66 g/t Ag over 1.01 meters, and 40.33 g/t Au and 418 g/t Ag over 1.75 meters within a broad mineralized zone grading 2.68 g/t Au and 20 g/t Ag over 57.7 meters.
• Hole HR23-410: 10.17 g/t Au over 6.61 meters, including 50.7 g/t Au over 0.62 meters.
• Hole HR23-374: 22.6 g/t Au over 0.67 meters, 18.75 g/t Au over 2 meters and 10.15 g/t Au over 1 meter in separate vein breccias included in a wider mineralized envelope grading 1.22 g/t Au and 1.90 g/t Ag over 83.51 meters.
• Hole HR23-386: 18.14 g/t Au and 30 g/t Ag over 2.5 meters, including 69.9 g/t Au and 42 g/t Ag over 0.5 meters.
• Hole HR23-390: 129 g/t Au and 218 g/t Ag over 0.5 meters in a vein breccia included in a wider mineralized envelope grading 1.92 g/t Au and 3.58 g/t Ag over 50.30 meters.

"Whether we discover new zones of high-grade gold at Homestake Ridge or expand the large, wide and high-grade silver deposits at Wolf and Torbrit, drilling continues to deliver results from the premier, undeveloped gold-silver trend in Canada," Chief Executive Officer Shawn Khunkhun said.

The new results included 48 drill holes from the 2023 exploration program at Kitsault Valley, Dolly Varden's 100%-owned Golden Triangle project that includes both the Homestake Ridge and Dolly Varden properties.

Reported on the release were 26 holes totaling more than 11,000 meters from Homestake Main, four holes totaling nearly 2,500 meters from the new gold-rich zone at the Homestake Silver northwest extension, and six exploration holes totaling more than 1,600 meters on the Homestake Ridge property. In addition, 12 holes totaling nearly 7,000 meters were included from the North Star, Red Point, and Wolf areas.

"The new high-grade gold and silver mineralization encountered in step out drilling to the northwest of Homestake Silver represents a significant breakthrough in further defining, upgrading, and expanding the mineralization at Homestake Ridge," said Vice President Exploration Rob van Egmond. "This new zone remains open to the northwest, projecting towards the Homestake Main deposit."

Upcoming Catalysts: 2024 Drilling, MRE

The high-grade intersections at the holes separated by about 40 meters horizontally and "are interpreted to be a new gold zone extending northwest, at depth towards the Homestake Main Deposit," the company said in a release.

A second, targeted mineralized envelope was encountered deeper in these holes. The new gold zone overlaps parallel with known mineralized envelopes to the east.

Last month, Technical Analyst Clive Maund recommended that investors buy Dolly Varden Silver on weakness in the short and medium term. For those already in the stock, he suggested staying long.

"This zone remains open to the northwest below historic drilling," the company said. "Drilling in 2024 will target a (350-meter) long gap between the Homestake Silver and Homestake Main Deposits to expand this new zone."

Announcing its 2024 drill plans will be an upcoming catalyst for the company, as will launching a royalty business with the Nisga'a Nation of northwestern British Columbia and completing a Kitsault Valley mineral resource estimate.

"The best way Dolly Varden can add value to its shareholders, the most cost-effective way, is through discovery," Khunkhun has said.

Since Khunkhun became CEO four years ago, the company has more than tripled its total ounces of silver equivalent. Specifically, the Indicated and Inferred resource went to 140,000,000 ounces (140 Moz) — half silver, half gold — from 44 Moz.

'Take a Serious Look' at This Stock

Temple called Dolly Varden an "impressive" precious metals company that investors should "take a serious look at." He said the stock was undervalued, considering the work the company is doing and what it could be worth.

"The big question in my mind is, how long is a potential suitor willing to wait when we're probably months rather than years from a more decisive turn higher in precious metals?" he said of major mining companies. "How long does somebody want to wait before they make a play for (Dolly Varden)? Because that's, of course, the end game here."

Bob Moriarty, founder of 321 Gold, told Streetwise Reports in January that Kitsault Valley is "one of those slam dunk, safe projects" with "enormous potential for the future."

Last month, Technical Analyst Clive Maund recommended that investors buy Dolly Varden Silver on weakness in the short and medium term. For those already in the stock, he suggested staying long.

"With its positive fundamental outlook, Dolly Varden is viewed as better value and more of a Buy here," he wrote, referring to its then-price of about CA$0.69 per share. It was CA$0.68 Tuesday afternoon.

Bob Moriarty, founder of 321 Gold, told Streetwise Reports in January that Kitsault Valley is "one of those slam dunk, safe projects" with "enormous potential for the future." Now is a good time to invest in precious metals companies because the shares are "absurdly cheap," he said

Ownership and Share Structure

Reuters provided a breakdown of the company's ownership and share structure, where management and insiders own approximately 0.11% of the company. According to Reuters, Director Darren P. Devine owns 0.07%, Director James Anthony Sabala owns 0.02%, and Director Robert John McLeod owns 0.01%.

Reuters reported that strategic investors own 41.6% of the company, as Fury Gold Mines, Ltd. owns 22.01% of the company with 59.50 million shares, Hecla Mining Co. owns 10% of the company with 27.04 million shares, and 2176423 Ontario, Ltd. owns 9.49% of the company with 25.63 million shares.

According to Reuters, institutions own approximately 13.41% of the company, including Fidelity Management & Research Company L.L.C. with 6.29%, Sprott Asset Management L.P. with 2.01%, E.T.F. Managers Group, L.L.C. with 1.96%, and Mirae Asset Global Investments (U.S.A.) L.L.C. with 1.33%.

Reuters reports that there are 270 million shares outstanding with 157.87 million free-float traded shares. The company has a market cap of CA$183.65 and trades in a 52-week range between CA$0.58 and CA$1.24.

Important Disclosures:

1. Dolly Varden Silver Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Dolly Varden Silver Corp.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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