Acquisition Expands Co.'s Gold Triangle Footprint to District-Scale Package
Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX) announced it is acquiring 100% of Hecla Mining Co.'s Kinskuch property in British Columbia's Golden Triangle, dramatically increasing the size of its Kitsault Valley project. Read why one analyst thinks it's a great move for both companies.
Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX) announced Monday that it has entered into a definitive agreement to acquire 100% of Hecla Mining Co.'s Kinskuch property in British Columbia's Golden Triangle, dramatically increasing the size of Dolly Varden's Kitsault Valley project.
The transaction consolidates a district-scale, contiguous claim package including the Kitsault Valley, Big Bulk and Kinskuch projects, increasing the Kitsault Valley project to about 77,000 hectares, "covering some of the most underexplored and prospective rocks for silver, gold, and copper mineralization in the golden triangle," DV said in a release.
"Consolidating Dolly Varden's Kitsault Valley Project with our major shareholder Hecla's large and underexplored claims covering prospective Hazelton Group rocks will allow for more efficient exploration and enable us to unlock value on our path to be a premier precious metals company," said Dolly Varden President and Chief Executive Officer Shawn Khunkhun. "Additionally, we welcome Hecla's increased share ownership in our company."
Dolly Varden said it is purchasing the Kinskuch property from Hecla for consideration of CA$5 million or 1,351,963 common shares of the company. Hecla will also retain a 2% net smelter return (NSR) royalty on the Kinskuch property area. The NSR will include a 50% buyback right, for CA$5 million, that will allow Dolly Varden to reduce the royalty to 1% at any time.
The transaction will increase Hecla's ownership in Dolly Varden, and Hecla will also continue to maintain a designated position on Dolly Varden's Technical Committee.
The issuance of the common shares and completion of the transaction must still be approved by the TSX Venture Exchange and NYSE American and is scheduled to complete in mid-May.
Dolly Varden's technical team will now explore two separate, 30-kilometer-long trends of Hazelton Group rocks, the company noted in a release.
"We will be using our structural and lithological framework model developed at the Kitsault Valley Trend that has led our team to significant discoveries such as the Wolf Vein and applying them to exploration of the Illiance Trend," said Vice President Exploration Rob Van Egmond. "Hecla was successful in identifying a subparallel trend of silver-rich mineralization, located to the east of our significant silver and gold deposits."
Trends Part of District-Scale Sub-Basin
Dolly Varden's increased holdings will triple the total strike length of favorable Jurassic age Hazelton-group volcanic rocks and associated "red line" by adding the Illiance trend to the Kitsault Valley trend.
"Both the Kitsault Valley and the Illiance trends are interpreted to be part of a district scale, sub-basin of the Eskay Rift period," the company said. "The Illiance trend has seen little modern exploration work, limited to localized diamond drilling by Hecla on the 3 kilometer long, north-south trending Illy epithermal system."
Also included with the purchase is the past producing Esperanza Mine (1910), interpreted as quartz-carbonate veins with similar silver grades to the historic Dolly Varden Mine (1920) hosted in Upper Hazelton sedimentary rocks, the company said.
The Esperanza Mine is located along the Kitsault Valley access road, 2 kilometers north of Dolly Varden's camp in Alice Arm, British Columbia, DV noted.
The southwestern portion of the acquired claims covers Hazelton Group rocks that trend to within 7 kilometers of Goliath Resources' recently discovered Surebet Zone.
The Kinskuch property is covered by a recently renewed five-year exploration permit on both Nisga'a and Gitanyow Traditional lands, the company said.
Newsletter Author: Hecla Trades Up
DV's stock rose 2.5% on the news, according to Jeff Valks writing for The Gold Advisor.
"Dolly Varden Silver Corp. is staking out a significantly larger footprint in British Columbia's Golden Triangle, announcing a deal to acquire Hecla Mining Company's Kinskuch property an agreement that will quadruple its project area and fold several noteworthy mineral trends into a single, district-scale exploration package," Valks wrote on Monday. "The deal consolidates Dolly Varden's Kitsault Valley Project with Hecla's adjacent and underexplored holdings."
Valks said Hecla did not "walk away" from the project, but "traded up."
"Hecla keeps a stake in any upside without spending a dime on drills it's not a core property for them and they want Dolly Varden to drill it," wrote Valks, who said he and Jeff Clark are long on the stock. "As for Dolly Varden, the company now controls a consolidated 77,000-hectare district ideal for streamlined exploration. It's a classic mining move: less risk, more leverage, shared reward."
On April 17, Haywood Securities highlighted Dolly Varden as "offering unique exposure to both high-grade gold and high-grade silver across the company's Kitsault Valley project."
"Ultimately, we continue to view the Kitsault Valley project as increasingly suitable for larger miners such as Hecla given its uncapped growth potential, as seen in the company's most recent exploration program, as precious metal grades at site are highly competitive amongst peers," the firm continued.
The Catalyst: Industrial Utility Helps Create Deficit
Silver followed an advance by gold on Monday, trading at US$32.28 and hitting an intraday high of US$32.45, reported Arslan Ali for FX Empire. Both metals were benefiting from a surge in defensive positioning, with institutional and retail investors hedging against rising instability.
"Silver is trading near US$32.37, attempting a rebound from the US$31.98 support zone," wrote Ali. " A breakout here could open the door toward US$32.98, with the next resistance at US$33.38. On the flip side, failure to clear US$32.65 could see silver roll over and retest the US$31.97 floor. The 200 EMA (US$32.59) is acting as overhead pressure, keeping bullish enthusiasm in check."
The metal's industrial utility also helps create a deficit for silver, which is the best conductor of electricity among the metals.
Streetwise Ownership Overview*
Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX)
*Share Structureas of 1/7/2025Source: Dolly Varden Silver Corp."Underpinning silver's fundamentals is robust demand from industrial applications," The Silver Institute said in its World Silver Survey 2024 report. "These continued to push higher last year, reaching a new all-time record, fueled by the remarkable rise in solar demand and in spite of stagnation in some other sectors. Sluggish silver supply, owing to the slight decline in global mine production, was another factor contributing to silver's deficit conditions last year."
Mordor Intelligence noted that silver is expected to register a compound annual growth rate (CAGR) of more than 5% between 2024 and 2029.
Ownership and Share Structure
According to the company's latest corporate presentation in January 2025, 52% of its stock is held by institutional investors, including Fidelity Management & Research Company LLC, Sprott Asset Management LP, U.S. Global Investors Inc., and Delbrook.
About 37% is with strategic investors, including 15% with Fury Gold Mines, 12% with Hecla, and Eric Sprott owns 10% himself.
The rest, 11%, is with retail and high-net-worth investors.
The company has 79.52 million outstanding shares. Its market cap is CA$279.91 million, and its 52-week trading range is CA$3.21-5.84 per share.
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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.