Silver Developer Targets Big Gains with Contango Merger

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1. Ownership and Share Structure Information

The information listed above was updated on the date this article was published and was compiled from information from the company and various other data providers.

Dolly Varden Silver Corp. (DV:TSX.V; DVS:NYSEA; DVQ:FSE) announced the filing of its management information circular on SEDAR+ dated February 11 in preparation for a special meeting of shareholders to discuss and vote on a special resolution regarding the previously announced statutory arrangement with Contango ORE Inc., according to a February 13 release.

Additionally, Dolly Varden has received an interim order from the Supreme Court of British Columbia, which covers the calling and holding of the meeting, dissent rights, and other procedural matters.

The meeting is scheduled to take place in person at the offices of Stikeman Elliott LLP, Suite 1700, 666 Burrard St., Vancouver, B.C., V6C 2X8, on March 17 at 10 a.m. PT (Vancouver time). Shareholders are encouraged to cast their votes well before the proxy voting deadline of 10 a.m. (Vancouver time) on March 13, 2026.

According to the arrangement agreement dated December 7, 2025, between Dolly Varden, Contango, and 1566004 B.C. Ltd., Contango will acquire all issued and outstanding common shares of Dolly Varden.

At the effective time of the arrangement, Dolly Varden shareholders will receive 0.1652 of a Contango share for each company share held, unless an eligible Canadian shareholder opts to receive 0.1652 of an exchangeable share in a Canadian subsidiary of Contango. This arrangement will be executed through a court-approved plan under the Business Corporations Act (British Columbia) and requires approval by 66.66% of the votes cast by Dolly Varden shareholders at the meeting, the release said.

Board Recommendation and Rationale

The board of directors of Dolly Varden unanimously recommends that shareholders vote in favor of the arrangement resolution for several reasons, including:

• The ability to respond to a superior proposal, if one arises, in line with the arrangement agreement.
• The opportunity for shareholders to benefit from the future value of the combined company.
• The belief that the process and outcomes ensure fair treatment for stakeholders.
• The anticipated likelihood of obtaining necessary approvals, including court and regulatory approvals.
• The absence of a financing condition and a clear path to completion (subject to approvals and conditions).
• Expected continuity with certain directors and senior executives anticipated to have roles in the combined company.
• Voting support agreements with all directors, officers, and certain large shareholders.
• Fdfor eligible shareholders, the potential for a tax-deferred rollover election through the exchangeable share election mechanics.

Voting support agreements have been secured with all directors and officers of Dolly Varden and certain large shareholders, who collectively own or control approximately 22% of the outstanding company shares as of the arrangement agreement date. They have agreed to vote in favor of the arrangement, subject to the terms of the agreements.

The release said for questions about the circular or voting assistance, shareholders can contact Dolly Varden's proxy solicitation agent, Laurel Hill Advisory Group, by phone at 1-877-452-7184 (North America toll-free) or 416-304-0211 (collect calls outside North America), by texting "info" to either number, or by email at [email protected].

2025 Drilling Program

Dolly Varden focused its 2025 drilling program at Homestake Ridge on three main areas, primarily targeting Homestake Silver. The first area involved infill drilling in the southern silver-rich zone. The second area saw infill and down-dip drilling in the central part of the zone. The third area involved expansion drilling at the northern end, including down-dip tests below the known mineralization extent.

In the central zone of Homestake Silver, infill and down-dip extension drill holes were concentrated along the lower boundary of the northerly plunging, high-grade trend. Gold assay results from these intercepts indicate a downdip expansion of the zone by approximately 100 meters over a 350-meter strike length in this central area. Step-out drilling at the northern end of the mineralized trend and below the deposit successfully expanded the extent of mineralization. Drill holes HR25-458 and HR25-460 extended northwest from the previously released HR25-456, which graded 3.34 grams per tonne gold (g/t Au) over 120 meters, including 216 g/t Au over 0.52 meters and 166 g/t Au over 1.3 meters. The 2025 drilling also expanded the down-dip potential below the deposit, intersecting high-grade vein and vein breccias within a roughly 10-meter wide stockwork and alteration zone, highlighted by drill holes HR25-454 and HR25-483.

During the 2025 season, Dolly Varden Silver drilled a total of 56,131 meters in 86 drill holes at the Kitsault Valley Project, with about 40% of the drilling at Homestake Ridge focusing on step-outs and local infill at Homestake Silver. The company used directional drilling technology to accurately target areas for step-out and infill holes at Homestake Silver. Some single holes used directional drilling to precisely intercept the target within the mineralized zone, while other areas utilized multiple holes based off a central mother hole.

The Homestake Ridge Deposits are interpreted as structurally controlled, multi-phase epithermal vein stockwork and vein breccia systems hosted in Jurassic Hazelton volcanic rocks. Mineralization consists of pyrite, +/- galena, and sphalerite, with visible gold in a silica breccia matrix. The northwest-trending structural corridor hosts multiple subparallel structures that control high-grade gold and silver shoots within a broader mineralized envelope. Although historically considered a silver-rich gold deposit, recent drilling at Homestake Silver has defined a shallow north-plunging zone characterized by wide mineralized intervals with an increased frequency of high-grade gold veins and vein breccias, indicating a shift towards a gold-rich system towards the north. The deposit remains open along the plunge and at depth.

'Wide, Weighty, and Hard to Ignore'

Jeff Valks, a senior analyst for The Gold Advisor, described Dolly Varden's recent assay results as "wide, weighty, and hard to ignore" in a February 4 update. The latest findings are impressive, resembling a complex, layered composition rather than a single standout hit, he said.

The company's 2025 program successfully infilled and expanded a northerly plunging, high-grade gold and silver trend, delivering broad mineralized intervals interspersed with sharp, high-grade veins. A total of 29 holes were completed at Homestake Silver and two at Homestake Main, continuing a steady stream of results released through late 2025. He highlighted "the headline intercept" as 48.49 meters of 4.66 g/t gold, including 1.01 meters of 52.15 g/t gold and 306 g/t silver, and 1.87 meters of 46.55 g/t gold and 298 g/t silver.

The drilling extended beyond infill, with step-out and down-dip holes expanding the mineralized footprint to the north and at depth. "The pattern is consistent: broad envelopes of mineralization with repeated high-grade veins stitched inside," he wrote. These results are part of a broader context. As long-time investors know, Dolly Varden has consistently reported high-grade hits at Homestake, secured financings, and scaled up drilling across the Kitsault Valley Project. The latest intercepts confirm a system that remains open along plunge and at depth, while showing continuity across an expanding strike length.

"The combination of width, grade, and repeatability at Homestake Silver continues to strengthen the case that this is a deposit with real heft, not just highlight reels," Valks wrote. "And don’t forget about the upcoming merger with Cantango Ore. I hold a long position, (Gold Advisor Founder) Jeff Clark maintains his full-weighting."

In a preview note on precious metals stocks dated January 27, Haywood Capital Markets reported adjustments to its financial outlook. The firm raised both its short-term and long-term gold price forecasts, adjusted its foreign exchange rate assumptions, and decreased its NAV multiple to 0.70x from 0.75x NAV.

"The net effect of these changes has led to our Target Price increasing to CA$14.00 from CA$11.25 per share," the firm stated. The stock continues to be rated as a Buy.

The Catalyst: Gold Prices Still Near Record Highs

Gold and silver prices declined on Monday as the top consumer of precious metals, China, remained closed for the Lunar New Year celebrations, and U.S. stock and bond markets were shut for Presidents' Day, reported Atsuko Whitehouse at BullionVault on February 16. Recent Comex derivatives data indicate that speculative positions in U.S. gold futures and options are continuing to ease from January's peaks, even though gold prices remain near the record highs seen at the start of the year.

In London, spot gold prices dropped by as much as 1.5% to US$4,967 per Troy ounce on Monday morning, before recovering half of those losses by midday. This decline followed a record-high weekly close at London's afternoon benchmarking auction, spurred by a dip in U.S. inflation data that raised hopes for potential interest-rate cuts by the Federal Reserve.

However, in the five trading sessions ending last Tuesday, the latest data reveal that hedge funds and other leveraged speculators in Comex gold futures and options reduced their net bullish positions on gold for the third consecutive week. Their collective position fell to a three-month low, equivalent to a notional weight of 289 tonnes. This was 33.3% below the Managed Money's one-year average net speculative position and 18.3% below the five-year average.

Gold and silver held onto some gains from the previous week, bolstered by a combination of dip-buying and a weaker dollar. Rising tensions between the U.S. and Iran also encouraged some safe-haven buying. However,

Precious metals continued to trade significantly below their peaks from late January, experiencing a series of volatile fluctuations in recent weeks as markets remained largely uncertain about the future of U.S. interest rates, according to Peter Nurse reporting for Investing.com on February 15.

Gold's losses in late January were initially sparked by U.S. President Donald Trump's nomination of Kevin Warsh as the next Federal Reserve Chair, following Jerome Powell's term ending in May. Warsh was perceived as a less dovish choice, raising concerns that U.S. monetary policy might not ease significantly in the coming years, Nurse noted.

"The market’s attention is gradually shifting to the potential impact of tariffs, which has yet to fully emerge in economic and inflation data, and doubts remain around future Fed credibility," ANZ analysts said in a note, according to the article. "Such a backdrop will intensify investors’ appetite for real assets like gold." The analysts added that their long-term view on gold remained largely positive. 

Ownership and Share Structure¹

Institutional investors own 52% of the company. Among them, Hecla Mining Co. (HL:NYSE) holds 13%, Fury Gold Mines Ltd. (FURY-T) owns 12%, and Eric Sprott holds 9%. The remainder is held by retail investors.

Dolly Varden has 90.92 million outstanding shares and its market cap is CA$558.22 million. Its 52-week range is CA$3.21–CA$8.09 per share.