Dolly Varden Silver Corp


Sitting On a 44 Million Ounce High-Grade Silver Deposit and Backed by Eric Srott and Hecla

One of the Earth’s Few Pure Silver
Projects Is Severely Undervalued


Dolly Varden Silver Corp is currently trading below US$0.75.

There's huge upside potential with Dolly Varden given the high-grade nature of its silver asset — the 100%-owned Dolly Varden Project — and the significant institutional and strategic ownership of its shares.

The company is sitting on very high-value silver deposits with a proven history of producing high-grade silver.

Dolly Varden/North Star Mine produced 1.3 million ounces at an average grade of 1,109 grams per tonne silver from 1919-1921

Torbrit Mine was the third largest silver producer in Canada in 1956, produced 18 million ounces of silver at 466 grams per tonne.

Dolly Varden’s current minerals resources stand at 32.9 million ounces indicated and 11.48 million ounces inferred. The majority of the resource is at Torbrit, but there are several other deposits being explored that can add ounces quickly.


Armed with a treasury of C$20 million, and with key shareholders like Hecla and Eric Sprott, the company has drilled over 55,000 meters in 174 holes since 2017 — including positive results outside of the current resource, which means more ounces are on the way.

And metallurgical testing has shown the company can recover 87% of the silver from Torbrit and 86% of the silver from Dolly Varden.

When you combine the company's structural strength with the value of their deposits, you’re looking at an opportunity for significant returns — even if silver prices stay where they are.

Silver in the Golden Triangle

Dolly Varden is exploring for high-grade silver, gold, and base metals in the Golden Triangle District of northwestern British Columbia.

The area of Canada is a powerhouse when it comes to the global mining industry, and hosts multiple mines including Pretium’s Brucejack and Teck/Newmont’s Galore Creek.

The property is 23 kilometers from a deep tidewater port and 30 kilometers from the power grid. There’s also a historical hydro project on the property.

The seven kilometers of underground workings on the project only scratch the surface of the prolific silver occurrences on the property.


Structural re-interpretation and aggressive drill testing in the past three years have yielded new discoveries of high-grade silver mineralization proximal to areas with 100 years of exploration history, including:

Chance Offset: Hole DV19-165: 385 g/t Ag (399 g/t AgEq) over 24.9m Beginner’s Luck: Hole DV17-080: 110 g/t Ag (116 g/t AgEq) over 2.94m

The mineralization, alteration, and rock formation of the Dolly Varden Project have a lot in common with the nearby Eskay Creek deposit.

The Eskay Creek deposit is located north of the Dolly Varden project, at an approximate distance of 100 km. This deposit is known for being rich in high-grade gold and silver deposits.

Dolly is a very historic mine in Northwestern, BC with very high production grades of 500 grams per tonne silver in the past.

Recent step-out drilling has shown some very exciting results. Multiple silver zones were intersected including 419 g/t silver over 75 meters and 1,240 g/t silver over 16 meters.

Hole-ID From (m) To (m) Core
Length (m)
Ag (g/t) Pb (%) Zn (%) Mineralization
DV20-209 109.00 114.00 5.00 158 0.15 0.03 Vein Breccia
DV20-210 111.00 114.00 3.00 176 0.79 0.07 Vein Breccia

156.05 166.40 10.35 16 0.07 0.12 Torbrit East extend
DV20-211 147.25 160.00 12.75 351 0.41 0.09 Torbrit East edge
incl 147.25 150.60 3.35 951 0.39 0.16
incl 147.90 150.60 2.70 1083 0.39 0.19
DV20-212 132.75 133.75 1.00 227 2.30 0.09 Torbrit East edge
DV20-213 129.00 166.50 37.50 134 0.45 0.28 Torbrit
incl 129.00 145.45 12.85 191 0.30 0.41 Torbrit upper lens
incl 129.00 130.00 1.00 906 2.40 2.48
incl 152.00 166.50 14.50 160 0.97 0.31 Torbrit lower lens
DV20-214 117.00 121.00 4.00 185 0.48 0.07 Vein Breccia

151.50 174.15 22.65 56 0.27 0.09 Torbrit horizon
incl 166.00 169.00 3.00 166 0.05 0.11
DV20-215 No significant results Torbrit edge
DV20-216 112.00 115.66 3.66 134 0.23 0.34 Vein Breccia
DV20-217 29.35 61.30 31.95 302 0.15 0.21 Torbrit horizon
incl 47.00 51.00 4.00 642 0.24 0.10
DV20-217 77.00 79.15 2.15 515 8.57 5.90 Torbrit lower lens

The results from the 2020 drilling program of Dolly Varden Silver Corp have demonstrated that there is plenty of silver yet to find. The known deposits are open along strike and down dip in some areas. And there is no shortage of exploration targets.

Shareholders have recently been realigned and Eric Sprott has come on as a major backer. And with a strong treasury the company is in a position to continue drilling and adding ounces.

Here with us to talk more about it is Shawn Khunkhun, the CEO of Dolly Varden Silver corp.

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Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of Dolly Varden Silver (TSX-V: DV)(OTC: DOLLF), Mr. Shawn Khunkhun. Shawn, how are you this morning?

Shawn Khunkhun

Shawn Khunkhun: Gerardo, I'm doing excellent. Very nice to be with you this morning.

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GDR: I am excited to help tell this story because I believe we are in the early stages of what will be a historic precious metals market. You had some news this morning that I want to get to. But before we get into that, I know you recently came on and took over, took the reins at Dolly Varden Silver. So I have to ask, can you walk me through what attracted you to the company? And then give us a brief overview of your background and then we'll get into the team and the asset and what we have to look forward to moving forward.

Shawn Khunkhun

SK: Perfect, Gerardo. I'm very happy to be here. I'll start with my background and then I'll go into Dolly Varden. I've been in the mining business for 16 years. I started at a time where we were at the beginning of a really strong gold bull market. I helped build a company that went from inception to about a $1.5 billion dollar valuation. After we saw gold top out at $1,900 and as we moved into a bear market I stayed in the space and got very, very familiar with quality assets and started looking at these assets at these much lower valuations.

Coming around to Dolly Varden, the opportunity in Dolly is I've been made aware of the history on the property. Dolly is a very historic mine in Northwestern, BC with very, very high-grade production grades, 500 gram production out of the Torbrit Mine. About 20 million ounces of gold have been produced on the property. I was aware of Dolly and essentially what led me to take on the reins as CEO was I was watching a company that had some very, very good fundamentals. They controlled the deposit. They had 100% interest. They had a clean balance sheet. There was about $3 million in the bank. But on an enterprise value per ounce they were trading at half the value of their peers. That's where I saw the opportunity.

That's why I joined the company. What I've done in the first 6 months here is we've taken the treasury from $3 million to $20 million. We're now in a position where we can go out and we can realize the full potential of the property. We have realigned the shareholders. We've been backed by Eric Sprott. Eric has come in since myself and the new management team has come in and taken a 20% stake in the company. You've got Eric Sprott at 20%, you've got Hecla at over 10%, and then we've got some other notable precious metals investors rounding out another 35%.

We've got just a solid foundation from a structure standpoint. We've got a robust cash position and we're anchored with about a 44 million ounce high-grade silver deposit that used to be a very, very rich producing silver mine. It was only really abandoned due to the price of silver being at $0.85 an ounce back in 1959.

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GDR: Let me go over that production profile because within a 10-year period the mine produced, I believe, 18 million ounces of silver at 466.3 grams per tonne. Let's be clear, what you're targeting here is high-grade silver, gold, and then obviously there's some base metal credits that apply as well, right?

Shawn Khunkhun

SK: The way we report is we just report the silver. What makes Dolly very special is it's predominantly a silver mine, but there are some other byproducts. The numbers that you went over are from the Torbrit Mine. If you look at the old Dolly Varden Mine that was a mine that was producing at over 1,000 grams per tonne. Where we have resources is 85% of our resources are at Torbrit but the other 15% are spread amongst three other deposits, including the old Dolly Varden Mine.

One of the big opportunities here, Gerardo, is there's an exploration trend on our property that goes for about 4.5 kilometers where there are many other – whether they're surface showings, whether they're past-producing mines, whether they're new, exciting discoveries. For instance Chance, which yielded some exceptional results last season. The point I'm trying to get across here is there are a lot of rich targets on the property.

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GDR: You mentioned the current resource. Can we get into that a bit? Because I know that the metallurgical recovery rates, the testing and the silver recovery rates are pretty robust. I believe 87% and 86%, respectively at Torbrit and Dolly Varden. Correct?

Shawn Khunkhun

SK: That is correct. Yeah. See, what I love about this project is everything is modern. The resource estimate came out in 2019. Every year, the compliance and the governance around these types of reports gets more stringent and more stringent. It should really give investors confidence in our numbers. This is a modern resource estimate that was published in the spring of 2019 and the metallurgical work was also reported at that same time.

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GDR: The indicated resource stands at 32.9 million ounces of silver at 300 grams per tonne silver, and the inferred resource at 11.48 million ounces of silver at 277 grams per tonne silver. You mentioned the strong institutional ownership of over 60% and obviously the strategic investment by Eric Sprott and Hecla.

Notable and Major Shareholders
Institutional 50%
  - US Global Investors
  - Sprott Asset Management
  - Ingalls and Snyder Brokerage Accounts
Hecla Canada 11%
Eric Sprott 19.9%
Management & Consultants 5%
Retail 12%

A large part of what has to have attracted those folks to Dolly Varden is the strong team. I mean, you have some of the better, stronger, more well-known names in the space, people that know this region and this area. I've got to believe that's extremely valuable to you as you look to grow the asset base, right?

Shawn Khunkhun

SK: Absolutely. I come from a capital markets background. But really I think one of the things that sets us apart is we've got a director and a technical advisor in Rob McLeod, who's not only had four M&A transactions but is also from the Stewart area and has worked on many mines and discoveries that are in the area. So knowing the nuances of the Golden Triangle and how these different systems are formed and how to efficiently explore and develop them is very, very important.

In addition to myself and Rob, we're supported by a board that has worked with companies like Coeur Mining, Hecla, Anglo. We've got a very, very strong experienced board and management team.

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GDR: Let's get to how that asset base is going to grow. You had some recent news. The headline read, “Dolly Varden Silver Step Outs Intersects Multiple Silver Zones including 1,083 g/t Ag over 2.7 meters within 12.75 meters of 351 g/t Ag.” Can you speak to this news?

Shawn Khunkhun

SK: Yeah, absolutely. I think the key here for this news is we're demonstrating strong silver mineralization. We're demonstrating significant thickness. Essentially, it's our belief that there is the potential to expand the resource. With these step-out holes extending Torbrit validates that belief that we're only scratching the surface here along this corridor. There is big, big potential here to grow current resources.


Now, this is one aspect of the drill campaign. We have two rigs that are out right now that are working. In addition to resource expansion drilling, we're also going up along that 4.5 kilometer trend and are going out for more exploratory holes. So those results are also pending, Gerardo.

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GDR: Excellent. You mentioned the strong mining jurisdiction. How are community relations? We know social license in this day and age is absolutely critical to advancing a project. And I know you would like nothing less than to be able to have a transaction under your belt, a notch on the belt there. How are relationships locally?

Shawn Khunkhun

SK: So we're part of an organization called the BC Regional Mining Association. It's essentially three groups. It's government, it's First Nations – these are the indigenous populations of the region – and it's companies. So the four companies that make up this group are Dolly Varden, Skeena, Ascot and GT Gold. These are four prominent explorer-developers in the area. What we've done is we've partnered with government and with the First Nations to let the world know that this part of British Columbia, the Golden Triangle, Northwest BC is open for business. We've got a very pro-First Nations group. All the local communities, whether it's Stewart, if it's some of the surrounding areas around the townships of Terrace or Smithers, they're very, very supportive of mining. We're in just a great, great jurisdiction. Particularly during times of COVID-19 we're able to drive to our sites. Being here in BC, it's just been a huge competitive advantage for us.

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GDR: You have the robust treasury, $20 million in cash you mentioned. How do you plan on allocating that? What can shareholders and people frankly that are looking for a high-grade silver story in a stable jurisdiction with a lot of upside? How do you plan to allocate those funds and what can we expect the rest of the year, Shawn?

Shawn Khunkhun

SK: When I first came into Dolly Varden we were in a $17 silver universe and with, call it, 50 million ounces in the ground at these grades my first thought was, "Let's go out and let's test this exploration corridor and let's grow these resources." With the price of silver shooting up like it has over the summer and having that leverage to the price of silver it's not only wanted me to look at the exploration potential and unlock that value for our shareholders but to also start looking at the project through a development lens. Some of these funds could be used for future studies going down the path of development.

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GDR: Fantastic. Well listen, it seems like you have a busy 4th quarter, Shawn. I'm looking forward to having you back on. If you're able to duplicate the kind of results that you announced today I sense it's going to be a fun 4th quarter and a fantastic 2021.

Is there anything else that you'd like to add? Thank you for your time by the way. I really appreciate it.

Shawn Khunkhun

SK: The last thing I'd just like to say is in mining, there's thousands of stocks of companies to choose from all over the world from Australia to South America. I think the one thing that we've got here that's very rare is we have a pure high-grade silver company. I've got a short list of maybe 50 companies that qualify for that. What makes us even more rare amongst a very small group of companies is that we're in Canada. Most of the silver that's mined is coming out of Chile, Argentina, Mexico, Peru. I think what makes Dolly so special is we are a pure silver play, we've got grade, and we're in Canada.

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GDR: I suspect you're likely on the list of several bigger companies yourself, Shawn.

Shawn Khunkhun

SK: I concur.

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GDR: Thank you so much. I appreciate your time. You take care.

Shawn Khunkhun

SK: Okay. Thank you so much, Gerardo.

The Opportunity

Dolly Varden is one of the world’s great pure silver mines.

It has produced tens of millions of ounces of silver and was only shut down because of low silver prices.

Now, in a $20+ silver environment, the project has new life.

It already boasts 44 million ounces of silver — with a street value of over $1 billion — yet trades with a market cap below $75 million.

That leaves a runway for the stock of some 16X.

Exploration continues and ounces will add up very fast, meaning the company will be worth even more very soon.... Making now a perfect time to start checking out Dolly Varden Silver (TSX-V: DV)(OTC: DOLLF).

Click here to learn more at the company’s website.

— Resource Stock Digest Research