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Major Silver Co. in British Columbia Closes Strategic Deal

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Dolly Varden has closed a strategic deal with Hecla Canada Ltd. valued at CA$10 million. Read on to see why analysts like this major silver company.

Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX) has announced in a press release that it has established an agreement with Hecla Canada Ltd. pertaining to Hecla's acquisition of 15,384, 616 common shares valued at CA$0.65 of Dolly Varden, totaling in CA$10 million. The company reports that Hecla now holds 15.7% of the company, and this deal will close on November 1, 2023.

Dolly Varden reported that it has also agreed that it will not take on additional debt for 2023 and that Dolly Varden will not complete any debt or equity financings greater than CA$15 million between January 1, 2024, and September 1, 2024.

The company has stated that it plans to use CA$6 million of the revenue generated by this deal to finance exploration and expansion on the Kitsault Valley project in British Columbia.

Shawn Khunkhun, the CEO of Dolly Varden, commented that "Hecla's support for Dolly Varden Silver's high-grade Kitsault Valley project in B.C.'s prolific Golden Triangle is validated with today's financing news. Hecla is the world's fastest-growing established silver producer, the largest in the U.S. and soon to be in Canada. We celebrate Hecla agreeing to increase their stake in Dolly from 10% to 15% and want to extend our gratitude for their financing and technical support of the company and the project."

Silver Likely to Take Off

Earlier this month, Technical Analyst Clive Maund reviewed the silver market, which he believes represents an opportunity for investors.

According to Maund, silver has "very little downside and huge upside" and continued to say that "it is still significantly undervalued relative to gold."

Bob Moriarty of 321 Gold rated the company as a positive asset: "Boasting a massive silver and gold resource, the property contains world-class intercepts that could substantially expand ounces."

Maund believes that while silver has been negatively impacted by a strong dollar, the precious metal is still set to rally. Maund said, "Once it gets above US$30, silver is likely to take off like a rocket."

In a report compiling statements by analysts and newsletters on the silver industry, comments from The Silver Institute highlighted the demand for silver compared to insufficient supply, which could drive up the value: "The combined 2021 and 2022 deficits more than offset the cumulative surpluses of the previous 11 years. We believe 2023 will see much of a repeat of last year."

178% Return for Investors

Bob Moriarty of 321 Gold reviewed the company on October 4, 2023, and rated the company as a positive asset: "Boasting a massive silver and gold resource, the property contains world-class intercepts that could substantially expand ounces."

Dolly Varden has the potential to yield gains for investors, said Moriarty, since "Dolly Varden Silver presents speculative upside with minimal downside risk. Patient accumulation while silver languishes could deliver big rewards when the inevitable rally kicks off."

Geordie Mark covered Dolly Varden in August of this year and rated it as a "Buy" for investors. Mark named a target price of CA$2, representing a potential 178% gain for investors compared to its current price of CA$0.72.

Geordie Mark covered Dolly Varden in August of this year and rated it as a "Buy" for investors. Mark named a target price of CA$2, representing a potential 178% gain for investors compared to its current price of CA$0.72.

Mark also highlighted the company's successful drill results as a draw for investors in the company. He commented, "We see the maiden results as proving the growth potential of the mineral endowment across the Kitsault family of gold-silver mineralized systems."

Rick Mills of Ahead of the Herd also weighed in on Dolly Varden, where he noted that these results are another addition to the company's string of success stories. The company appears to be looking towards expansion, as well. Mills stated, "Towards the end of 2021, the company further consolidated its position with the acquisition of Homestake Ridge . . .  This project features a high-grade gold and silver resource from three known deposits." Mills concluded that, with its past producing properties and history of quality grades, the company is very impressive by industry standards.

Dolly Varden, in its investor presentation, has a number of catalysts to report, including the continued generation of drill targets and plans to expand its ground geophysical studies of its properties.

Ownership and Share Structure

streetwise book logoStreetwise Ownership Overview*

Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX)

*Share Structure as of 10/30/2023

Reuters provided a breakdown of the company's ownership and share structure, where management and insiders own approximately 0.12% of the company. According to Reuters, Director Darren P. Devine owns approximately 0.08% of the company with 0.20 million shares, Director James Anthony Sabala owns 0.02% of the company with 0.05 million shares, and Director Robert John McLeod owns 0.02% of the company with 0.04 million shares.

Reuters reports that institutions own approximately 57.61% of the company, as Fury Gold Mines, Ltd. owns 23.36% of the company with 59.50 million shares, Hecla Mining Co owns 10.62% of the company with 27.04 million shares, 2176423 Ontario Ltd. owns 10.06% of the company with 25.63 million shares, Fidelity Management & Research Company LLC owns 6.68% of the company with 17.00 million shares, Sprott Asset Management LP owns 2.13% of the company with 5.44 million shares, ETF Managers Group, LLC owns 2.02% of the company with 5.15 million shares, Mirae Asset Global Investments (USA) LLC owns 1.17% of the company with 2.99 million shares, U.S. Global Investors, Inc., owns 1.08% of the company with 2.75 million shares, DWS Investment GmbH owns 0.29% of the company with 0.75 million shares, and Charteris Treasury Portfolio Managers Limited owns 0.20% of the company with 0.50 million shares.

According to Reuters, there are 254.68 million shares outstanding with 142.21 million free float traded shares, while the company has a market cap of CA$128.54 million and trades in the 52-week period between CA$0.56 and CA$1.24.

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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. Amanda Duvall wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. 
  4. The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

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