Dolly Varden Silver Corp

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

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.

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.

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.

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.

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.

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.

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.

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.

SK: I concur.

SK: Okay. Thank you so much, Gerardo.