Junior explorer Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX) has intersected 414 grams per tonne silver (g/t Ag) over 50.2 meters in a step-out hole at the Kitsol vein in its Kitsault Valley project in northwest British Columbia’s Golden Triangle, the company announced.
Dolly Varden is conducting a 30,000-meter, 99-hole drilling campaign at the sprawling site this summer. It has completed 18,000 meters of that drilling so far.
Analyst Michael Gray of Agentis Capital called the results “bonanza grade.”
“Previous drilling at the Kitsol vein had typically encountered lower grades over narrower thickness,” Gray wrote in a note on Wednesday. “Our initial take is that the thick portion of the vein has a flat plunge and that mineralized shoots may have steeper plunges.”
Gray did not give a rating on the stock, but analyst Stuart McDougall of Research Capital Corp. previously rated the company a Speculative Buy with a $1.50 target.
Highlights of hole DV22-283 released this week 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 company has three diamond drill rigs going to upgrade and expand the resources at the trend, which is made up of multiple deposits and historic mines.
The 163-square-kilometer 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.
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.
Connecting Dolly Varden, Homestake Ridge
Dolly Varden President and Chief Executive Officer Shawn Khunkhun told Streetwise Reports that he was “thrilled” with the results from DV22-283.
“It’s a bit of a gamechanger for us,” Khunkhun said. “In addition to this area, there are two other areas of the property … where I feel confident that we’re going to also deliver some success. We’re in a good place.”
The company said it is working to prepare an NI 43-101 complaint Updated Mineral Resource Estimate for the project after the campaign. It will include Dolly Varden drill results from 2018 and Homestake Ridge drill results from 2022. That estimate will then be the basis for a Preliminary Economic Assessment (PEA) for the whole project.
Connecting the two parts of the project will be a lynchpin of that survey, The Critical Investor wrote for Streetwise Reports.
“I view the consolidated Kitsault Valley PEA, although this will take a while, as an important benchmark for indicating the consolidated project economics,” The Critical Investor said. “The value of the project seems to have a good chance on improving beforehand, through exploration potential, and leverage to precious metal prices.”
‘Inbox Is Filling Up’
For Khunkhun, DV22-283 is “a discovery,” and it’s forcing him to take a step back and look at the whole system.
“We’re only 280 meters deep,” he said. “But it’s getting richer, and it’s getting wider at depth. And it’s opening. And so the question is, are we in the edges of a really big theater system here?”
Khunkhun said that larger companies were taking notice, and his “inbox is filling up.”
“We’ve definitely got a really strong indication of what to do next,” he said. “And I feel very confident that we’re going to keep building upon this success. Some big investors have already recognized it, like Hecla and Eric Sprott. But I think that this is just the beginning.”
The company is expected to continue releasing assay results through into next year.
“Dolly Varden is one of only a few junior resource companies conducting drill programs this summer, in a difficult market,” newsletter writer Rick Mills of Ahead of the Herd wrote on July 15. “30,000 meters is a large drill campaign, and I am looking forward to seeing it bear fruit as the first assays trickle in.”
Dolly Varden has a market cap of CA$152.2 million and 230.6 million shares outstanding. It trades in a 52-week range of CA$0.88 and CA$0.44.
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