Site visit: Dolly Varden Silver targets high-grade expansion at Kitsault Valley in BC

Dolly Varden Silver (TSXV: DV; US-OTC: DOLLF) says drilling at its Kitsault Valley project in northern British Columbia is on track to meet this year’s exploration targets as the company weighs selling the project or developing it.

A recent site visit showcased several deposits including Homestake Silver, the northernmost along a 15-km-trend that also hosts the Moose, Dolly Varden, Torbrit, and North Star deposits. The project is already pegged to hold 34.7 million oz. silver in a 2023 indicated resource. As part of an initial 25,000-metre drill program this year, Dolly Varden reported in June a hole at Moose intersected 977 grams silver per tonne over 5 metres, including 3,670 grams silver over 0.8 metre from 115.2 metres depth.

“We’ve hit the ground running this season, starting earlier than ever before, with three rigs testing high-priority targets,” exploration manager Amanda Bennett told The Northern Miner during the visit. “The results so far are encouraging, and we’re optimistic about what this season will yield.”

Dolly Varden is backed with a 15% stake held by 130-year-old Hecla Mining (NYSE: HL) as it advances Kitsault Valley towards a resource update this year and a preliminary economic assessment to follow. It’s located in B.C.’s Golden Triangle – an area that has seen about US$5 billion in mergers and acquisitions since 2018. The company is benefiting from investor interest in silver which has gained about 18% to US$27.04 per oz. in the past year.

The project, combining the brownfield Dolly Varden and Homestake Ridge projects, respectively holds an indicated resource of 3.4 million tonnes at 299.8 grams silver per tonne for 32.9 million oz. silver, and 736,000 tonnes grading 74.8 grams silver per tonne and 7.02 grams gold for 1.8 million oz. silver and 165,993 oz. gold. The estimate was constrained at 150 grams silver per tonne cut-off for the Dolly Varden deposit and 2 grams gold-equivalent cut-off per tonne for the Homestake Ridge deposit.

Credit: Dolly Varden Silver

The inferred resource base, using the same parameters, entails 1.29 million tonnes at Dolly Varden grading 277 grams silver for 11.4 million oz. of metal, and 5.5 million tonnes at Homestake Ridge grading 100 grams silver and 4.58 grams gold for 17.8 million oz. of silver and 816,719 oz. of gold.

“If we have over a 7 million oz. gold-equivalent deposit, we want to triple that based on our 15-km strike length,” Bennet said.

Challenges and permitting

Despite the promising discoveries, the Kitsault Valley project, 46 km southeast of the deep-water port town of Stewart, has challenges. The rugged terrain and complex permitting processes in B.C. require careful navigation. While the team has successfully amended existing permits, starting new approvals from scratch involves negotiations with local First Nations and compliance with the evolving B.C. Mines Act which the government plans to amend after a court ruling requiring more Indigenous consultation.

Dolly Varden may face those headwinds with the Big Bulk copper porphyry deposit it acquired last year from Libero Copper & Gold (TSXV: LBC; US-OTC: LBCMF) northeast of Kitsault Valley and wants to drill next year. Bennett acknowledged the hurdles but remained optimistic.

“Permitting is always a challenge, but we’ve been able to move quickly thanks to our team’s experience and the support from local stakeholders. The topography and the legal terrain are tough, but it’s nothing we can’t handle with the right planning and equipment.”

Build or sell?

With institutional investors holding 48%, a 19% holding by Fury Gold Mines (TSX: FURY; NYSE: FURY) and Hecla’s financial backing and technical support, Dolly Varden is gearing up for further exploration. A new funding round planned this year will underpin a drill program expansion with new targets across the property.

Dolly Varden shares have gained about 34% over the past 12 months to 97¢ on Wednesday, touching 58¢ and $1.29 over the period. It has a market capitalization of $276.1 million.

As Dolly Varden continues its exploration, the company is weighing the prospect of developing the asset alone or with a partner, or grooming it for a sale.

“Whether we continue on our own or partner with a major player like Hecla, our goal is to build substantial shareholder value through resource expansion and discovery,” Bennet said. “Hecla’s input and feedback have guided our exploration strategy, and their commitment to maintaining their stake speaks volumes about the project’s potential.”

High-grade discovery

Drilling at the Moose vein may significantly extend the Kitsault Valley’s mineralization trend, according to Bennett. The Chance vein shows expansion potential with drilling that returned 206 grams silver over 23 metres, including 597 grams over 1.4 metres and 749 grams over 0.5 metre.

At the top of the Kitsault Valley lies the Homestake Silver deposit below a receding glacier field. Dolly Varden acquired it in 2021 from Fury for $39.2 million and it shows promise for expansion after recent drilling, the exploration manager said.

“We’re seeing high-grade zones that could significantly add to our resource base,” Bennett said.

At the Torbrit deposit, the largest on the Kitsault Valley property, step-out drilling aims to expand resources by targeting the western extension, with past intersections including 345 grams silver over 7.45 metre, including 1,510 grams silver over 0.58 metres from 409.9 metres depth.

The Wolf deposit, 1.4 km south of Moose, continues to be a focal point, with drilling revealing high-grade silver at unexpected depths, Bennet said. Hole DV23-375 demonstrated polymetallic potential last year, returning 296 grams silver per tonne, 1.68% lead and 3.01% zinc (461 grams silver-equivalent) over 27 metres from 715.8 metres depth.

“The grades we’re seeing are among the highest in the region,” Bennett noted.

Dolly Varden Silver looks to find another Torbrit deposit at Kitsault Valley. Credit: Henry Lazenby

Scratching the surface

Advanced technologies like LiDAR imaging have been crucial in discovering new mineralized zones, guiding drilling efforts beneath dense forest cover, she said. LiDAR uses laser beams to create three-dimensional maps by measuring the time it takes for light to bounce back from the ground or objects. Different light wavelengths indicate the mineral composition of surface rocks.

The team also collaborates closely with the Nisga’a Nation to ensure responsible exploration practices, including water management, land restoration and community benefits, Bennet said.

Dolly Varden Silver exploration manager Amanda Bennett explains the mineralogy present in core from the Chance vein at Kitsault Valley. Credit: Henry Lazenby

With its early drilling success, the next milestones include releasing new drill results from the Moose, Chance, and North Star veins and potential resource updates for the Homestake Silver and Wolf deposits this year.

“We’re just scratching the surface of what’s possible here,” Bennet said. “Every drill hole brings us closer to understanding the true extent of the mineralization.”