Dolly Varden Silver Receives $5.3M Investment from Hecla
VANCOUVER, BC, Feb. 25,
2022 /CNW/ - Dolly Varden Silver Corporation
("Dolly Varden" or the "Company") (TSXV: DV) (OTC:
DOLLF), and Fury Gold Mines Ltd. ("Fury") (TSX: FURY)
(NYSE American: FURY) are pleased to announce the completion of
their previously announced transaction whereby Dolly Varden has
acquired from Fury, through the acquisition of Fury's wholly-owned
subsidiary Homestake Resource Corporation, a 100% interest in the
Homestake Ridge gold-silver project ("Homestake Project"),
located adjacent to the Dolly Varden Project ("DV Project")
in the Golden Triangle, British
Columbia (the "Transaction").
Shawn Khunkhun, chief executive
officer of Dolly Varden, commented: "Completing the consolidation
and unification of the Kitsault Valley Project is a pivotal event
towards exploring and developing these high-grade precious metals
assets in a globally recognized and coveted mining district. I look
forward to working closely with our new partner and shareholder
Fury to unlock the full potential through discovery, development,
permitting and production. I would also like to thank Hecla for their continued financial and
technical support."
Tim Clark, CEO and Director of
Fury, added: "The consolidation of these two adjacent properties is
an exciting next step that benefits both our companies and only
further enhances the upside opportunity of additional discovery of
high-grade ounces along this prolific 15km mining trend. We look
forward to working closely with the team at Dolly Varden and
leveraging complementary skillsets, geology and infrastructure to
continue to maximize value for investors in both companies."
Pursuant to the ancillary rights agreement between Hecla Canada
Ltd. ("Hecla") and the
Company dated September 4, 2012,
Hecla exercised its anti-dilution
right in respect of the Transaction and has acquired 9,048,539
common shares of Dolly Varden at a price of $0.59 per common share for aggregate proceeds to
Dolly Varden of $5,322,351. As
a result of this subscription, Hecla will maintain its equity interest in the
Company of 10.25%.
Transaction Highlights
- Combined mineral resource base of 34.7 million ounces of silver
and 166 thousand ounces of gold in the Indicated category and 29.3
million ounces of silver and 817 thousand ounces of gold in the
Inferred category, solidifying the combined Homestake Project and
DV Project (to be referred to together as the "Kitsault Valley
Project") as among the largest high-grade, undeveloped precious
metal assets in Western
Canada.
- Consolidation of two adjacent projects, allowing for numerous
potential co-development opportunities with capital and operating
synergies.
- Exposure to a large and highly prospective land package, with
potential to further expand resources through additional
exploration along a combined 15 km strike-length within a 163
km2 consolidated land package.
- Tim Clark, the Chief Executive
Officer of Fury, and Michael
Henrichsen, the Senior Vice President, Exploration of Fury,
joining the Dolly Varden board.
Transaction Details
Pursuant to a purchase agreement dated December 6, 2021 (the "Purchase
Agreement"), Dolly Varden has acquired 100% of Homestake
Resource Corporation from Fury in exchange for a $5 million cash payment and the issuance of
76,504,590 common shares of Dolly Varden ("Common Shares").
Homestake Resource Corporation owns a 100% interest in the
Homestake Project. As a result, Fury now own approximately 32.88%
of Dolly Varden's issued and outstanding Common Shares.
The Homestake Project hosts a Current Mineral Resource estimated
to contain 165,993 ounces of gold and 1.8 million ounces of silver
in the Indicated category and 816,719 ounces of gold and 17.8
million ounces of silver in the Inferred category within a 7,500
hectare land package located contiguous to and northwest of the DV
Project. The DV Project hosts a Current Mineral Resource estimated
to contains 32.9 million ounces of silver in the indicated category
and 11.4 million ounces of silver in the Inferred category within a
7,800 hectare land package. For further resource disclosure, please
see below under the heading "Technical Disclosure".
The combined Homestake Project and DV Project would boast a
collective mineral resource base of 34.7 million ounces of silver
and 165,993 ounces of gold in the indicated category and 29.3
million ounces of silver and 816,719 ounces of gold in the inferred
category, solidifying the combined Homestake Project and Dolly
Varden Project, the Company's existing project, as among the
largest high-grade, undeveloped precious metal assets in
Western Canada.
The close proximity of the Homestake Project and DV Project,
combined with common infrastructure in the region, is expected to
generate substantial co-development synergies for the consolidated
Homestake Project and DV Project, to be called the "Kitsault
Valley Project", as the respective deposits are advanced in
combination.
In connection with the Transaction, Dolly Varden and Fury have
also entered into an investor rights agreement (the "Investor
Rights Agreement") granting Fury the right to appoint two
nominees to the Dolly Varden board so long as Fury owns greater
than 20% of the Common Shares outstanding. Should Fury own greater
than 10% of the Dolly Varden Common Shares outstanding, Fury shall
have the right to appoint one nominee to the Dolly Varden board.
Additionally, the Common Shares issued to Fury are subject to a
one-year hold period. The Investor Rights Agreement also contain
certain customary re-sale restrictions, voting and standstill
conditions, and participation rights as agreed between Dolly Varden
and Fury.
The Common Shares issuable to Fury will be subject to a
contractual one-year hold which expires on February 25, 2023 and a statutory hold period of
four months plus one day which expires on June 26, 2022. All Common Shares issued to
Hecla will be subject to a
statutory hold period of four months plus one day which expires on
June 26, 2022.
Further information regarding the Transaction, the Purchase
Agreement and the Investor Rights Agreement is provided in the
Company's management information circular dated January 24, 2022 (the "Circular"). The
Circular is available under the Company's profile on SEDAR at
www.sedar.com and on the Company's website at
https://www.dollyvardensilver.com/investors/#special-meeting.
Advisors and Counsel
Haywood Securities Inc. ("Haywood") has acted as
financial advisor to Dolly Varden. Stikeman Elliott LLP acts as
legal counsel to Dolly Varden.
Minvisory Corp. has acted as financial advisor to Fury. McMillan
LLP acts as legal counsel to Fury.
About Dolly Varden Silver Corporation
Dolly Varden Silver Corporation is a mineral exploration company
focused on exploration in northwestern British Columbia. The DV Project consists of
the namesake Dolly Varden silver property that hosts a unique pure
silver mineral resource as well as the nearby Big Bulk copper-gold
porphyry property. Adjacent to the DV Project, the Homestake Ridge
Project hosts structurally controlled epithermal gold, silver and
copper mineralization. Together, the consolidated DV Project
and Homestake Ridge Project, to be referred to as the Kitsault
Valley Project, create one large, high-grade precious metals
project with further synergistic and exploration upside
potential. The Kitsault Valley Project is considered to be
highly prospective for hosting high-grade precious metal deposits,
since it comprises the same structural and stratigraphic setting
that host numerous other high-grade deposits (Eskay Creek, Brucejack). The Big Bulk property
is prospective for porphyry and skarn style copper and gold
mineralization similar to other such deposits in the region (Red
Mountain, KSM, Red Chris).
About Fury Gold Mines Limited
Fury Gold Mines Limited is a Canadian-focused exploration
company positioned in two prolific mining regions across the
country. Led by a management team and board of directors with
proven success in financing and advancing exploration assets, Fury
intends to grow its multi-million-ounce gold platform through
rigorous project evaluation and exploration excellence. Fury is
committed to upholding the highest industry standards for corporate
governance, environmental stewardship, community engagement and
sustainable mining. For more information on Fury Gold Mines, visit
www.furygoldmines.com.
Qualified Person
The technical information contained in this news release has
been approved by Rob van Egmond, P.
Geo, Chief Geologist for Dolly Varden, who is a "qualified person"
within the meaning of National Instrument 43-101 – Standards of
Disclosure for Mineral Projects.
Technical Disclosure
Homestake Resource Estimate:
The Homestake resource estimate is based on the technical report
with an effective date of January 20,
2022 and titled, "Technical Report and Updated Mineral
Resource Estimate for the Homestake Ridge Gold Project, Skeena
Mining Division, British Columbia"
which was filed and is available on Dolly Varden's SEDAR profile at
www.sedar.com. The report has been prepared in accordance with NI
43-101, Companion Policy 43-101CP to NI 43-101, and Form 43-101F of
NI 43-101.
Mineral resources are estimated at a cut-off grade of 2.0 g/t
gold equivalent.
Dolly Varden Resource Estimate:
The Dolly Varden resource estimate is based on the technical
report with an effective date of May 8,
2019, and titled, "Technical Report and Mineral Resource
Update for the Dolly Varden Property, British Columbia, Canada" which was filed and
is available on Dolly Varden's SEDAR profile at www.sedar.com. The
report has been prepared in accordance with NI 43-101, Companion
Policy 43-101CP to NI 43-101, and Form 43-101F of NI 43-101.
A 150 g/t silver cut-off was chosen to reflect conceptual
underground mining and processing cut-off grade.
Mineral Resources are not Mineral Reserves. Mineral resources
which are not mineral reserves do not have demonstrated economic
viability. There has been insufficient exploration to define the
inferred resource as an indicated or measured mineral resource, and
it is uncertain if further exploration will result in upgrading the
resource to a measured resource category. There is no guarantee
that any part of the mineral resource discussed herein will be
converted into a mineral reserve in the future.
Forward Looking Statements
This release may contain forward-looking statements or
forward-looking information under applicable Canadian securities
legislation that may not be based on historical fact, including,
without limitation, statements containing the words "believe",
"may", "plan", "will", "estimate", "continue", "anticipate",
"intend", "expect", "potential", "unlocking" and similar
expressions. Forward-looking statements involve known and unknown
risks, uncertainties, and other factors which may cause the actual
results, performance, or achievements of Dolly Varden to be
materially different from any future results, performance, or
achievements expressed or implied by the forward-looking
statements. Forward looking statements or information in this
release relates to, among other things, potential synergies
expected from the combination of the DV Project and Homestake
Project and the development potential of the Kitsault Valley
Project.
These forward-looking statements are based on management's
current expectations and beliefs and assume, among other things,
the ability of the Company to successfully pursue its current
development plans, that future sources of funding will be available
to the company, that relevant commodity prices will remain at
levels that are economically viable for the Company and that the
Company will receive relevant permits in a timely manner in order
to enable its operations, but given the uncertainties, assumptions
and risks, readers are cautioned not to place heavy reliance on
such forward-looking statements or information. The Company
disclaims any obligation to update, or to publicly announce, any
such statements, events or developments except as required by
law.
For additional information on risks and uncertainties, see the
Company's most recently filed annual management discussion &
analysis ("MD&A"), which is available on SEDAR at
www.sedar.com. The risk factors identified in the MD&A are not
intended to represent a complete list of factors that could affect
the Company.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX-V)
accepts responsibility for the adequacy or accuracy of this news
release.
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SOURCE Dolly Varden Silver Corp.
