DOLLF - Targeting Safe Silver Jurisdictions: Hecla Invests $10 million in Dolly Varden Silver (DV.V)
(TheNewswire)
November 7, 2023 – TheNewsWire – Global Stocks News– On November 2, 2023 Dolly Varden Silver (TSXV:DV) (OTC:DOLLF)announced that it has closed a deal where Hecla Canada invested $10 million in DVSilver , raising its stake in DV Silver from10.6% to 15.7%.
DV Silver is developing its 100% held Kitsault ValleyProject located in the Golden Triangle of British Columbia, Canada,25kms by road to tide water.
The Golden Triangle hosts one of the world’s largestconcentrations of minerals,” confirms The Deep Dive with “1.2 billion ounces silver estimated reserves, with214 million proven and probable.”
Hecla Mining, the parent company of Hecla Canada wasfounded in 1891. It has a market cap of USD $2.59 billion and tradeson the New York Stock Exchange (NYSE). It has produced 11.4 million ounces of silverthis year so far .
Hecla operates mines in Alaska, Idaho, and Quebec,Canada. Hecla is also developing a mine in the Yukon, Canada, and owns“a number of exploration and pre-development projects in world-classsilver and gold mining districts throughout North America”.
Hecla’s Silver All In Sustaining Silver Costs (AISC)are $11.30/ounce, lower than peers Silvercrest, Coeur, Fortuna,Fresnillo, Pan American Silver, First Majestic Silver and EndeavourSilver. [ 1 ]
Hecla has a disciplined business model: it operates in low political risk jurisdictions that do not depend on high silver prices togenerate profit. It is expanding aggressively into Canada .
The Hecla and Dolly Varden Silver relationship goesback about a decade. Seven years ago, Heclatried to take over DV Silver for .69 per share. There was a fierce court battle which was eventually resolved in Dolly Varden’s favour.The take-over offer was rejected.
“In a battle likened to David defeating Goliath, twoprovincial regulators have confirmed a junior mining explorationcompany [DV Silver] in British Columbia can proceed with a $6 millionprivate placement offering, despite a hostile takeover bid by a biggerAmerican silver mining company [Hecla],” reported Canadian LawyerMagazine .
“There's was a contentious relationship between Heclaand the four management teams that ran DV Silver before I tookover,” Shawn Khunkhun, CEO of DV Silver told Guy Bennett, CEO ofGlobal Stocks News. “I have tried to usher in a new era ofcommunication and respect.”
“For DV Silver to be successful,” continuedKhunkhun. “The Indigenous people and the community have to win. Retail and institutional investors have to win. And Hecla has towin. There’s enough meat on the bone for allstakeholders.”
With Hecla’s increased stake in DV Silver, there is aspeculation that Dolly Varden will again be Hecla’s buyout target.“ Hecla basically put down adown payment today,” stated one shareholder on an investorbullboard , echoing thegeneral sentiment.
Hecla owns 156 mining claims totaling 59,400 hectaresnext door to DV’s property. So it already has a demonstratedinterest BC’s Golden Triangle.
Hecla’s strategy of targeting assets in low-riskjurisdictions may be pushing DV Silver higher on their radar.
The world’s biggest silver producer, Mexico isbecoming an increasingly challenging environment for resourcecompanies.
“Concerns about political meddling by Mexico’sPresident Lopez Obrador’s government have caused activity in themining sector to stall,” reports Forbes Magazine .
“Mexico’s president is strangling exploration,”stated Douglas Coleman, CEO of the Mexican Mining Center. “We’llfeel the effects of that for years to come. The actual investmentgoing into Mexico is about half of what it was ten yearsago.”
“The political environment in Mexico along with thenarcotics trade are creating challenges for precious metal companiesoperating there,” confirmed Khunkhun. “There is also labourunrest”. A labour dispute at Newmont’s Penasquito mine in Mexicocost Newmont about $3.7 million day .
Dolly Varden has agreed with Hecla that it will notcomplete any further debt or equity financings for the remainder of2023.
“Additionally, Dolly Varden has agreed that betweenJanuary 1, 2024 and September 1, 2024, without the prior consent ofHecla, it will not complete any debt or equityfinancings other than equity financings for net proceeds to theCompany of up to $15 million and provided that the issue price undersuch financing is greater than $0.65 per security,” stated DVSilver.
The current resource expansion drilling at the KitsolVein has intersected high grade silver mineralization over wideintervals, that is potentiallyamenable to bulk underground mining methods .
The Kitsault Valley asset is a volcanogenic,strata-bound system with 1,000-gram veins. The system is alsodisseminated with 200 gram/tonne silver. Bulk mining would enable DVSilver to boost the average grade and the tonnage per day, improvingmine economics.
“Hecla is the world’s fastest growing establishedsilver producer, the largest in the US and soon to be in Canada,”stated Shawn Khunkhun, CEO of Dolly Varden Silver.
“$6 million of the net proceeds from the Offeringwill be used for exploration expenditures, mineral resource expansionand related costs in the Kitsault Valley project, located innorthwestern British Columbia, Canada, with the balanced to be usedfor working capital and G&A costs,” stated DV Silver.
“We celebrate Hecla agreeing to increase their stake in Dolly from 10% to 15% and want toextend our gratitude for their financial andtechnical support,” added Khunkhun.
“We will have more drill results from the WolfDeposit to report soon,” Khunkhun told GSN. “After the latest batch released November 6,2023 - there’s still another 70 holes toreport. With Hecla’s strategic $10 million investment – we arewell funded to continue exploring, drilling and building our silverinventory.”
References:
1. Hecla October 2023 corporate update:https://s29.q4cdn.com/244919359/files/doc_presentations/2023/Oct/09/october-ir-update_final.pdf
Contact: guy.bennett@globalstocksnews.com
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