DOLLF - Asset Provides Two Robust Ways To Create Value | Benzinga
Source: Marcus Giannini 05/14/2024
The gold-silver project "remains accommodating for a modest production profile at present with opportunity for growth" noted a Haywood Securities report.
Dolly Varden Silver Corp. (OTC: DOLLF) offers upside in exploration potential on its sizable land package and in its current, likely expandable mineral resource, purported Haywood Securities analyst Marcus Giannini in a May 9 research note. Giannini recently took over covering this mining company.
"While we believe the opportunity for discovery within the greater land package remains a significant catalyst for future value creation, we also view the current endowment of defined gold and silver resources as a starting point for a modest underground and conventional mining and processing scenario" Giannini wrote.
142% Gain, Catalysts
Haywood has a Buy rating and a CA$2.40 per share target price on the Canadian explorer-developer, trading at about CA$0.99 per share at the time of the report, noted Giannini. As such, the implied return for investors is 142%.
"We recommend investors accumulate shares of Dolly at current prices" Giannini wrote. "We believe the primary value driver for Dolly over the short and long term should occur by way of the drill bit as the firm's 2024 program nears commencement."
The start of this summer exploration campaign is an upcoming catalyst for Dolly Varden Silver, as is an update to the mineral resource estimate for its Kitsault Valley project in British Columbia's Golden Triangle.
Initial Production Scenario
Giannini presented the highlights of the Dolly Varden Silver story.
One is the company's existing high-grade gold and silver resource for its Kitsault Valley project, comprised of gold-rich Homestake Ridge to the north and various silver-dominant deposits to the south (Dolly Varden, Torbrit, North Star, and Wolf). The current Indicated plus Inferred resource at Kitsault Valley totals 64,000,000 ounces of silver and 982,712 ounces of gold.
"Grade, jurisdiction, and upside to resource growth sets these ounces apart from other peers in the space" Giannini wrote.
Based on the current resource, Haywood outlined a production scenario for Dolly Varden Silver, which has two underground mines feeding ore to a centralized processing plant. Production would be about 84,000 of gold equivalent (Au eq) per annum for about 13.5 years. Estimated costs would be US$150 million (US$150M) as initial capex, ...