Co. Continues to Hit High-Grade Silver in Golden Triangle
Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX) announced more results from its high-grade silver plunge expansion drilling at its 100%-owned Kitsault Valley project in British Columbia's Golden Triangle. One analyst says the company continues to make an "attractive target" for larger companies.
Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX) has announced more results from its high-grade silver plunge expansion drilling at the Wolf Vein at its 100%-owned Kitsault Valley project in British Columbia's Golden Triangle.
The company said in a release Monday that the new intersections "demonstrate consistent thicknesses and indicate an increased vertical extent to the mineralized zone as it plunges to the southwest."
"The Wolf Vein continues to deliver exceptional silver grades, often with significant base metal values and strong native silver mineralization over potentially bulk-mineable widths," Chief Executive Officer Shawn Khunkhun said. "The extended drill program will prioritize lateral and vertical step-outs from these new Wolf results and follow up at other exploration targets, including the silver zone at Moose."
In the newest results, Hole DV24-416 intersected 654 grams per tonne silver (g/t Ag), 0.47% lead (Pb), and 0.57% zinc (Zn) over 21.48 meters, including 1,000 g/t Ag, 0.11 g/t gold (Au), 0.62% Pb, and 0.64% Zn over 7.70 meters.
Hole DV24-408 intersected 513 g/t Ag, 2.95% Pb, and 1.82% Zn over 27.19 meters, including 2,520 g/t Ag, 0.34 g/t Au, 0.18% Pb, and 0.88% Zn over 2.80 meters, the company said.
Khunkhun said resource and exploration continues, "within the projection of (a) wider high-grade gold and silver plunge zone defined in 2023."
Based on the results and recently completed financing, the company said its 2024 exploration drilling at Kitsault Valley has been expanded from 25,000 meters to 32,000 meters, with three drills currently drilling.
Analyst: 'Uncapped Nature' of Vein System at Depth
The new results are from three directional holes drilled from the same pad intersecting the Wolf Vein about 80 meters northeast of four step-out holes released last month.
"Drill holes DV24-416 and DV24-408 intersected wide and high-grade silver mineralization in Wolf Vein breccias and coliform grey silica and carbonate approximately 14 meters above and 30 meters below, respectively, from previously reported . . . drill hole DV23-368," the release said.
Hole DV23-368 graded 381 g/t Ag, 0.46% Pb, and 0.39% Zn over 29.34 meters, including 583 g/t Ag, 0.13 g/t Au, 0.66% Pb, and 0.45%Pb over 16.97 meters with 1,898 g/t Ag over 1 meter.
After last month's results, analyst Marcus Giannini of Haywood Capital Markets noted in a research note that the company continued to "push the margins of known high-grade mineralization" at the project.
"We highlight that of the 25,000 meters of drilling budgeted for the project, 8,000 meters has been allocated to the Wolf Vein as high-grade silver mineralization continues to trend down plunge below the sedimentary rock cover, with the most recent hole extending mineralization through a 40-meter southwest step-out," Giannini wrote on August 12. "Overall, these initial results from Wolf continue to illustrate the uncapped nature of the vein system at depth, as additional assays down-plunge are anticipated in the near-term."
An 'Attractive Target'
Dolly Varden has said about 8,000 meters of its ongoing drill program at the project is being drilled at the Wolf Vein to expand and infill the plunge of high-grade silver mineralization.
Drill holes DV24-409, DV24-412, and DV24-414 released last month are "daughter" holes directed off the initial "mother" hole DV24-404, the company said. Results from that hole including 1,091 g/t Ag over 9.38 meters were also released in August.
Hole DV24-412 intersected 606 g/t Ag, 0.61% Pb, and 1.43% Zn over 16.2 meters, including 868 g/t Ag, 0.18% Pb, and 0.88% Zn over 2.27 meters. Hole DV24-414 found 771 g/t Ag, 2.93% Pb, and 2.29% Zn over 3.77 meters, including 1,065 g/t Ag, 4.64% Pb, and 3.48% Zn over 2.46 meters within a 15.02-meter-wide vein breccia zone grading 254 g/t Ag, 0.86% Pb, and 1.34% Zn.
The location of hole DV24-404 and its daughter holes continues to show a "strong consistency of mineralization within Wolf, as well as an increase in base metal content," noted Gianini, giving the stock a Buy rating with a CA$2.40 per share target price.
"We continue to view Dolly's high-grade endowment as an increasingly attractive target for larger North American-focused precious metal producers," he noted.
The Catalyst: New EV Batteries?
Silver was down 2.82% Monday morning from the previous day and up 17.61% since the start of the year. It hit an all-time of US$32.43 on May 20.
The commodity will likely be affected by a weak U.S. jobs data increase and the possibility of an interest rate cut by the Federal Reserve at its September meeting, Akhtar Faruqui wrote for FXStreet on Monday.
"The potential gains for silver might be limited due to safe-haven flows, given the recent easing of geopolitical tensions in the Middle East," Faruqui wrote. "Israeli forces have withdrawn from Jenin, according to Reuters citing the Palestine news agency WAFA."
But according to a piece by Sergio Goschenko for Bitcoin.com last month, new electric vehicle (EV) battery technology could drive demand for the metal in the long-term. Retired financial analyst Kevin Bambrough, who has "over a decade of experience in commodities," said he was very bullish on the metal.
"Silver could reach US$200 per ounce in the next 10 to 15 years, riding the wave of increased demand for a new EV battery technology developed by Samsung," Goschenko wrote. "According to Bambrough, the new batteries may require 1 kg of silver per car, driving silver usage sky-high."
Streetwise Ownership Overview*
Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX)
*Share Structureas of 5/17/2024Source: Dolly Varden Silver Corp.The most conductive element in nature, silver is used to coat electrical contacts in computers, phones, cars, and appliances. It's also an important element in solar technology.
Mordor Intelligence noted that the white metal is expected to register a compound annual growth rate (CAGR) of more than 5% between 2024 and 2029.
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 286.21 million outstanding shares. Its market cap is CA$280.54 million, and its 52-week trading range is CA$0.58-1.29 per share.
| Want to be the first to know about interestingSilver investment ideas?Sign up to receive the FREE Streetwise Reports' newsletter. | Subscribe |
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.