September 19, 2022 (Investorideas.com Newswire) Dolly Varden Silver Corp. is adding a fourth diamond drilling rig to its campaign at its Kitsault Valley project in British Columbia after seeing big returns.
Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX) is expanding its drilling campaign at its Kitsault Valley project in British Columbia’s Golden Triangle after seeing promising results from a stepout drill hole and geophysical surveys and surface sampling.
The company is adding a fourth diamond drilling rig and expanding the program from 5,000 meters to 35,000 meters as it works to upgrade and expand the resources at the Kitsault Valley mineralized trend, which is made up of multiple deposits and historic mines.
It announced on Tuesday it had intersected 19.85 meters of 584 grams per tonne silver (g/t Ag), 0.92% lead (Pb), 0.56% Zinc (Zn), and 0.19 g/t gold (Au), with “bonanza grade” silver 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.
Newsletter writer Rick Mills of Ahead of the Herd wrote there could be many “mineralized offshoots” at Kitsault.
“The mineralization is very consistent; it doesn’t have gaps in it,” he wrote. “The wall rock isn’t mineralized, but there’s very little wall rock between veins. Again, this makes the target amenable to bulk mining methods – a mine operator doesn’t have to mine each vein individually. Rather, they could go in and mine the veins together as one bulk deposit. That makes the economics of mining it potentially extremely attractive.”
The Wolf deposit is about 2 kilometers north of the main Dolly Varden deposit in the much larger Kitsault Valley Trend. Analyst Michael Gray of Agentis Capital wrote in an updated note on Wednesday that the drilling campaign is helping the company get a better grip on its resource there.
“We like the consolidation that was completed by (Dolly Varden) in Feb/2022 to cement the +10km Kitsault Valley Trend under one roof to unlock exploration potential by better understanding the district ore controls,” wrote Gray, who did not rate the stock.
On the strength of the new results, the company said it would now prioritize stepout drilling at the Wolf vein during the remainder of the 2022 drilling season.
Dolly Varden has finished more than 25,000 meters of drilling so far, over 80 holes with the three drills. It should be finished with all 35,000 meters by the end of September, with assay results flowing in after that.
Chief Executive Officer Shawn Khunkhun said part of the company’s success lies in being able to expand its reach when drilling on the 163-square-kilometer property.
“You can easily miss these veins when you’re drilling into these big properties,” Khunkhun said. “I think the difference that I’m giving my team is they have more shots. So instead of maybe having one or two shots on a target, keep going until you find it.”
Last month, Dolly Varden announced it had intersected 414 grams per tonne silver (g/t Ag) over 50.2 meters in a stepout hole at Kitsol vein.
Highlights of hole DV22-283 included 634 g/t Ag over 7.15 meters, 658 g/t Ag over 11.74, and 849 g/t Ag over 6.9 meters. There were also three 0.5-meter samples that assayed 2,910 g/t Ag, 2,390 g/t Ag, and 2,500 g/t Ag, respectively.
The project hosts an indicated resource of 34.7 million ounces (Moz) Ag and 166,000 ounces gold (Au), with additional inferred resources of 29.3 Moz Ag and 817,000 ounces Au within multiple outcropping deposits.
Connecting the Dots
The 100%-owned property is comprised of Dolly Varden in the South, which includes the Kitsol vein and Homestake Ridge in the north. Dolly Varden acquired Homestake Ridge from Fury Gold Mines Ltd. (FURY-T), consolidating the two adjacent properties. It’s one of the largest high-grade and undeveloped precious metals assets in the Golden Triangle.
The company has backing from shareholders that include Hecla Mining Co. (HL:NYSE) and mining financier Eric Sprott. It has CA$21 million in the bank.
Dolly Varden is working to prepare an NI 43-101 compliant Updated Mineral Resource Estimate for the project. It will include results from drilling in Dolly Varden in 2018 and Homestake Ridge this year. It will be the basis for a Preliminary Economic Assessment (PEA) for the whole project.
A major goal of that survey will be to connect Dolly Varden and Homestake Ridge.
“Shareholders can expect the news flow to ramp up and continue through the fall and well into January 2023,” Mills of Ahead of Herd wrote.
The current state of the markets gives investors a chance to do their due diligence on the company.
“Investors right now have the luxury to really understand what we’re doing, to understand that there is a ton more of these results to come and that we’re cashed up,” Khunkhun said. “I think it’s a great time to be a mining investor.”
Other large shareholders include Fury Gold Mines Ltd., which owns 33% or 76.5 million shares, and 2176423 Ontario Ltd., which owns 11% or 25.6 million shares, according to Reuters.
Dolly Varden has a market cap of CA$119.9 million and 230.6 million shares outstanding, with 102.4 million shares free floating. It trades in a 52-week range of CA$0.88 and CA$0.44.
1) Steve Sobek wrote this article for Streetwise Reports LLC. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
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