Co. Looks for More High-Grade Silver Golden Triangle
Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX) announced it has started its 2024 drilling program at its 100%-owned Kitsault Valley project in British Columbia's Golden Triangle. Find out why one analyst says the stock is set to hit a "major upleg."
Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX) announced it has started its 25,000-meter drilling program at its 100%-owned Kitsault Valley project in British Columbia's Golden Triangle.
The company said three rigs have been mobilized to test for new discoveries and follow up high-grade silver mineralization encountered in 2023. Initial targets include Moose Vein, Chance Vein, and the North Star Deposit step-out.
"With drilling already underway, (this) is the earliest startup for of any season for Dolly Varden Silver and we look forward to building on resource expansion and high-grade mineralization discovered during the 2023 program," Dolly Varden Chief Executive Officer Shawn Khunkhun said. "We are excited to continue to grow the premier advanced silver project in Canada, backed by our strong corporate, institutional, and strategic investors."
The program will be split about 50/50 between the Dolly Varden and Homestake Ridge properties (which together make up the Kitsault Valley project). The drilling will also be split by thirds overall between the Homestake Silver deposit area, the Wolf deposit, and project-wide exploration for new discovery targets.
"This season's introduction of directional drilling technology will allow for highly accurate placement of drill intercepts," Khunkhun has said.
The Catalyst: Resources Expected to Increase
When the exploration program was announced in April, Research Capital Corp. analyst Stuart McDougall raised his target price for the stock, which he rated a Speculative Buy.
When the exploration program was announced in April, Research Capital Corp. analyst Stuart McDougall raised his target price for the stock, which he rated a Speculative Buy."We are raising our target price to (CA)$1.45/share from (CA)$1.35/share to reflect our expectations for a 25% increase to existing project resources, net of a higher share count for (CA)$25 (million) worth of equity financings completed since our last update and for our future equity assumptions, priced in the context of the current market," McDougall noted.
On Wednesday, Technical Analyst Clive Maund wrote that Dolly Varden was among several stocks that could see some upward movement due to a possible "major upleg" that could begin immediately in gold and silver stocks.
"A fine countertrend Pennant has formed in Dolly Varden over the past month that has brought it back to support above its rising 50-day moving average and unwound its earlier overbought condition," Maund wrote. "The next upleg should start soon, and it could be big."
Details of the Drilling
The Moose Vein is about 1.5 kilometers north of the Wolf vein on a similar crosscutting structure that projects under the mid-valley sedimentary cap, Dolly Varden said.
Drilling in 2023 intersected mineralized vein and vein breccias there similar to the Wolf vein, with previously reported results from drill hole DV23-371 of 712 grams per tonne silver (g/t Ag) over 1 meter within a wider vein interval grading 269 g/t Ag over 7.55 meters.
The 2024 drilling at Moose will target the down plunge mineralization projection, trending towards and below the mid-valley sedimentary cover rock, the company said.
Located within the lower portion of the Hazelton Formation, just above the contact with the
underlying Stuhini Formation (the contact known as "The Red Line" of the Golden Triangle), is the Chance Vein.
Drilling has commenced there on a recently developed model of the plunge direction that is interpreted to trend through an area that has not previously been tested. The first hole at the Chance Vein will test the interpreted down-plunge projection of previously released drill hole DV19-173, which intersected 488 g/t Ag over 26.5 meters, including 1,044 g/t Ag over 5.6 meters.
Technical Analyst Clive Maund wrote that Dolly Varden was among several stocks that could see some upward movement due to a possible "major upleg" that could begin immediately in gold and silver stocks.Dolly Varden said the third drill has commenced step-out drilling to the west of the North Star deposit, which is included in the current mineral resource estimate and is interpreted as the western extension of the Torbrit Exhalative Layer (the Torbrit Horizon). It is located across the Kitsault Valley from the Torbrit deposit, which hosts the largest silver resource on the Dolly Varden portion of the project.
Drilling in 2023 tested down-dip and stepped out to the west along the projection of the Torbrit Horizon towards an area with the potential to host a continuation of the horizon, the company said. Follow-up drilling will target the extension of previously released drill hole DV23-358 from North Star, which intersected 345 g/t Ag over 7.45 meters and included 1,510 g/t Ag over 0.58 meters.
The current resource of the various target areas comprising Dolly Varden is 32.9 million ounces (Moz) of 300 g/t Ag in the indicated category and 11.4 Moz Ag in the Inferred category. For Homestake Ridge, the current Indicated resource is 1.8 Moz Ag and 166,000 ounces (166 Koz) gold, and the Inferred resource is 17.4 Moz silver and 817 Koz gold.
Combined, the total Kitsault Valley resource is almost 65 Moz of silver and nearly 1 Moz of gold.
Silver Prices Rising
Jeff Clark, author of The Gold Advisor, wrote on Wednesday that he was "definitely holding on to my position."
"The stock made a new all-time high (ATH) last week," Clark wrote. "It's pulled back since, but it is my strong opinion there will be more new ATHs in the future. Lots of news this summer, and when investors see an obvious growth in ounces, they'll want to own the stock."
Both Bob Moriarty of 321gold.com and the Golden Opportunities newsletter are among the other experts who like Dolly Varden Silver.
The company offers investors "a big silver-equivalent resource in British Columbia's Golden Triangle to leverage rising silver prices and exciting, discovery-driven growth," Golden Opportunities stated.
The silver-gold company also has a Buy rating from Raymond James analyst Craig Stanley.
Silver spot prices rose nearly 20% to an all-time high of about US$30 at the beginning of the quarter.
Streetwise Ownership Overview*
Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX)
*Share Structureas of 5/17/2024Source: Dolly Varden Silver Corp.According to the Silver Institute's World Silver Survey, global demand for silver "massively exceeded" supply last year, a deficit that is expected to extend into a fourth consecutive year in 2024.
Ownership and Share Structure
According to Dolly Varden, 48% of the company is held by institutional investors, including Fidelity Management & Research Company LLC, Sprott Asset Management LP, U.S. Global Investors Inc., Delbrook, and Extract Capital.
About 44% is with strategic investors, including 19% with Fury Gold Mines, 15% with Hecla, and Eric Sprott owns 10% himself.
The rest, 8%, is with retail and high-net-worth investors.
The company has 283 outstanding shares.
Its market cap is CA$305.68 million, and its 52-week trading range is CA$0.58-1.29 per share.
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Important Disclosures:
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.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.Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. This article does not constitute investment advice and is not a solicitation for any 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. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.For additional disclosures, please click here.