Dolly Varden and Fury to Consolidate Emerging Canadian Silver-Gold District in the Golden Triangle
Dolly Varden and Fury to Consolidate Emerging Canadian Silver-Gold District in the
Golden Triangle
Vancouver, BC - December 6, 2021 – Dolly Varden Silver Corporation (“Dolly Varden”) (TSXV: DV)
(OTCQX: DOLLF) and Fury Gold Mines Ltd (“Fury”) (TSX: FURY) (NYSE American: FURY) are pleased
to announce that the companies have entered into a definitive agreement dated December 6, 2021 (the
“Purchase Agreement”) pursuant to which Dolly Varden will acquire from Fury, through the acquisition of
Fury’s wholly-owned subsidiary, a 100% interest in the Homestake Ridge gold-silver project (“Homestake
Project”), located adjacent to the Dolly Varden Project (“ DV Project” and together with the Homestake
Project, the “Kitsault Valley Project”) in the Golden Triangle, British Columbia (the “Transaction”).
The Homestake Project hosts a resource estimated to contain 165,993 ounces of gold and 1. 8 million
ounces of silver in the Indicated category and 816,719 ounces of gold and 17.8 million ounces of silver in
the Inferred category (refer to further resource disclosure at the end of this release) within a 7,500 hectare
land package located contiguous to and northwest of the DV Project. The close proximity of the deposits
that make up the current mineral resource estimates , combined with common infrastructure in the region,
is expected to generate substantial co -development synergies as the se deposits are advanced in
combination. The Transaction values the Homestake Project at CAD$50 million for which Dolly Varden will
pay $5 million in cash and issue 76,504,590 Dolly Varden common shares to Fury, as further described
below.
Transaction Highlights
• Combined mineral resource base of 34.7 million ounces of silver and 166 thousand ounces of gold
in the Indicated category and 29.3 million ounces of silver and 817 thousand ounces of gold in the
Inferred category, solidifying the Kitsault Valley Project as among the largest high-grade,
undeveloped precious metal assets in Western Canada.
• Consolidation of two adjacent projects, allowing for numerous potential co -development
opportunities with capital and operating synergies.
• Exposure to a large and highly prospective land package, with potential to further expand resources
through additional exploration along a combined 15 km strike-length within a 163 km2 consolidated
land package.
• Transformative scale to enhance investor visibility and peer group positioning.
• Previous stand-alone Homestake Project preliminary economic assessment produced an after-tax
net present value of USD$173 million and an internal rate of return of 32% at US$1,620 per ounce
gold price and US$14.40 per ounce silver price. The study estimated a total of 590,040 ounces of
gold equivalent production over a 13 years initial mine life at an all -in sustaining costs per ounc e
gold of US$670.
• Fury to have board representation in Dolly Varden and agrees to voluntary share sale restrictions.
Shawn Khunkhun, CEO & Director of Dolly Varden, commented “We are excited to combine two adjacent
precious metals projects located in one of the world’s top mining jurisdictions. We expect that this
combination will result in significant synergies in the areas of exploration, development, permitting and
production. Upon completion of the Transaction, we look forward to continued engagement with Indigenous
and community partners to ensure the responsible development of this compelling new project.”
Tim Clark, CEO & Director of Fury, further added “The commercial logic behind the combination of these
two adjacent assets is very strong. We are delighted to cooperate with the Dolly Varden team and are very
excited to be part of this regional consolidation in British Columbia. Combining our Homestake Project with
the DV Project creates an attractiv e opportunity to immediately establish shareholder value through the
potential synergies that result from their regional proximity. We look forward to having our shareholder s
benefit from the exciting growth and development of the Kitsault Valley Project, and to Fury becoming a
partner and significant shareholder of Dolly Varden.”
Ivan Bebek, Chair and Director of Fury commented “The decision to vend Homestake is a difficult one given
the exploration upside and our positive outlook for the commodity markets. However, we feel that bringing
the two projects together is clearly the best path forward and are very excited to be partnering with the team
at Dolly Varden . This transaction also simplifies Fury’s portfolio which coincides with recent positive drill
results from both of Fury’s Quebec and Nunavut assets.”
Transaction Details
Under to the Purchase Agreement, Dolly Varden has agreed to acquire Fury’s wholly -owned subsidiary,
Homestake Resource Corporation, which owns a 100% interest in the Homestake Project in exchange for
a $5 million cash payment and the issuance of 76,504,590 common shares of Dolly Varden. Upon
completion of the Transaction, Fury will own approximately 36.9% of Dolly Varden on an outstanding basis.
The Transaction is subject to a number of closing conditions, including the receipt of TSX Venture Exchange
(“TSXV”) approval and the satisfaction of certain other closing conditions customary for a transaction of this
nature. The Transaction is also subject to approval by a simple majority of the votes cast by Dolly Varden
shareholders at a Dolly Varden shareholders meeting. Dolly Varden expects to hold a special meeting of
shareholders in February 2022 to consider the Transaction. The Transaction is an arm’s-length transaction
under the rules of the TSXV.
Dolly Varden and Fury will enter into an investor rights agreement (the “Investor Rights Agreement”) on
completion of the Transaction pursuant to which Fury shall have the right to appoint two nominees to the
Dolly Varden board so long as Fury owns greater than 20% of the Dolly Varden shares outstanding. Should
Fury own greater than 10% of the Dolly Varden shares outstanding, Fury shall have the right to appoint one
nominee to the Dolly Varden board. Additionally, the shares issued to Fury shall be subject to a one -year
hold period. The Investor Rights Agreement shall also contain certain customary re-sale restrictions, voting
and standstill conditions, and participation rights as agreed between Dolly Varden and Fury.
The Purchase Agreement also includes certain representations, warranties, covenants, indemnities and
conditions that are customary for a transaction of this nature. A termination fee of $2 million may be payable
by Dolly Varden to Fury if the Transaction is not approved by Dolly Varden shareholders due to a competing
proposal being made or announced before the Dolly Varden shareholder meeting and Dolly Varden is
subsequently acquired by the third party under such competing proposal.
Further information regarding the Transaction will be contained in a management information circular to be
prepared by Dolly Varden and mailed to shareholders of Dolly Varden in connection with the special
meeting of shareholders to be held by Dolly Varden to consider the Transaction and related matters. All
shareholders of Dolly Varden are urged to read the information circular once available, as it will contain
important additional information concerning the Transaction.
Dolly Varden Board Recommendations and Voting Support
The Purchase Agreement has been unanimously approved by the board of directors of both Dolly Varden
and Fury. The Dolly Varden board of directors recommend that Dolly Varden shareholders vote in favour
of the Transaction.
All of the directors and officers of Dolly Varden and certain shareholders of Dolly Varden, including Eric
Sprott, holding in aggregate 18.2% of the issued and outstanding common shares of Dolly Varden, have
entered into customary voting support agreements agreeing to vote in favour of the Transaction.
Haywood Securities Inc. has provided a fairness opinion to the boar d of directors of Dolly Varden that, as
of the date thereof, and based upon and subject to the assumptions, limitations and qualifications stated
therein, the consideration to be paid by Dolly Varden to Fury under the Agreement is fair, from a financial
point of view, to Dolly Varden.
Conference Call and Webcast
A joint webcast will be held by management of both Dolly Varden and Fury to discuss the Transaction
on Monday, December 6th, 202 1 at 10 a.m. Pacific time / 1 p.m. Eastern time. Shareholders, analysts,
investors and media are invited to join the live webcast by registering using the following link:
http://services.choruscall.ca/links/dollyvardensilver20211206.html
A presentation to accompany the conference call and webcast can be accessed via either the Dolly Varden
or Fury websites at www.dollyvardensilver.com or www.furygoldmines.com. A replay of the joint webcast
will be available on both websites following the conclusion of the call.
Advisors and Counsel
Haywood Securities Inc. is acting as financial advisor to Dolly Varden. Stikeman Elliott LLP is acting as
legal counsel to Dolly Varden.
Minvisory Corp. is acting as financial advisor to Fury. McMillan LLP is acting as legal counsel to Fury.
Qualified Persons
The technical information contained in this news release relating to Dolly Varden has been approved by
[Rob van Egmond, P. Geo, Chief Geologist for Dolly Varden], who is a “qualified person” within the meaning
of National Instrument 43-101 - Standards of Disclosure for Mineral Projects.
The technical information contained in this news release relating to Fury has been approved by [Michael
Henrichsen, P. Geo, SVP of Exploration at Fury], who is a “qualified person” within the meaning of National
Instrument 43-101 - Standards of Disclosure for Mineral Projects.
About Dolly Varden Silver Corporation
Dolly Varden Silver Corporation is a mineral exploration company focused on exploration in northwestern
British Columbia. Dolly Varden has two projects, the namesake Dolly Varden silver property and the nearby
Big Bulk copper-gold property. The Dolly Varden property is considered to be highly prospective for hosting
high-grade precious metal deposits, since it comprises the same stru ctural and stratigraphic setting that
host numerous other high-grade deposits (Eskay Creek, Brucejack). The Big Bulk property is prospective
for porphyry and skarn style copper and gold mineralization similar to other such deposits in the region
(Red Mountain, KSM, Red Chris).
Technical Disclosure
Homestake Resource Estimate:
The Homestake resource estimate is based on the technical report with an effective date of May 29, 2020,
as amended and restated June 24, 2020 and titled, "Technical Report, Updated Mineral Resource Estimate
and Preliminary Economic Assessment on the Homestake Ridge Gold Project, Skeena Mining Division,
British Columbia" which was filed and is available on Fury’s SEDAR profile at www.sedar.com. The report
has been prepared in accordance with NI 43-101, Companion Policy 43-101CP to NI 43-101, and Form 43-
101F of NI 43-101.
Mineral resources are estimated at a cut-off grade of 2.0 g/t gold equivalent.
Gold equivalent values were calculated using a long-term gold price of US$1,300 per ounce, silver price at
US$20 per ounce and copper price at US$2.50 per pound and an exchange rate of US$1.00=C$1.20. The
gold equivalent calculation included provisions for metallurgical r ecoveries, treatment charges, refining
costs and transportation.
Dolly Varden Resource Estimate:
The Dolly Varden resource estimate is based on the technical report with an effective date of May 8, 2019,
and titled, "Technical Report and Mineral Resource Update for the Dolly Varden Property, British Columbia,
Canada" which was filed and is available on Dolly Varden’s SEDAR profile at www.sedar.com. The report
has been prepared in accordance with NI 43-101, Companion Policy 43-101CP to NI 43-101, and Form 43-
101F of NI 43-101.
A 150 g/t silver cut-off was chosen to reflect conceptual underground mining and processing cut-off grade.
Mineral Resources are not Mineral Reserves. Mineral resources which a re not mineral reserves do not
have demonstrated economic viability. There has been insufficient exploration to define the inferred
resource as an indicated or measured mineral resource, and it is uncertain if further exploration will result
in upgrading t he resource to a measured resource category. There is no guarantee that any part of the
mineral resource discussed herein will be converted into a mineral reserve in the future.
About Fury Gold Mines Limited
Fury Gold Mines Limited is a Canadian-focused exploration and development company positioned in three
prolific mining regions across the country. Led by a management team and board of directors with proven
success in financing and developing mining assets, Fury will aggressively grow a nd advance its multi -
million-ounce gold platform through careful project assessment and exploration excellence. Fury is
committed to upholding the highest industry standards for corporate governance, environmental
stewardship, community engagement and sust ainable mining. For more information on Fury Gold Mines,
visit www.furygoldmines.com.
Dolly Varden Contact Information
Shawn Khunkhun, CEO & Director
1-604-602-1440
www.dollyvardensilver.com
Fury Contact Information
Salisha Ilyas, Vice President, Investor Relations
1-437-500-2529
www.furygoldmines.com
Forward-Looking Statements
This release includes certain statements that may be deemed to be “forward -looking statements”. All
statements in this release, other than statements of historical facts, that address events or developments
that management of Dolly Varden and Fury expect, are forward -looking statements. Actual results or
developments may differ materially from those in forward -looking statements. Dolly Varden and F ury
disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise, save and except as may be required by applicable securities
laws.
These statements in this release include: the anticipated benefits of the Transaction to Dolly Varden, Fury
and their shareholders; the timing and anticipated receipt of required regulatory and shareholder approvals
for the Transaction; the ability of Dolly Varden and Fury to satisfy the conditions to, and to complete, the
Transaction as proposed;the holding of the Dolly Varden shareholder meeting; the anticipated timing of the
mailing of the information circular regarding the Transaction and of the closing of the Transaction; the ability
to achieve synergies, the quantity and grade of the gold and silver resources and the ability to expand
resources through the exploration of a combined projects.
In respect of the forward -looking information concerning the anticipated completion of the proposed
Transaction and the anticipated timing thereof, Dolly Varden and Fury have provided them in reliance on
certain assumptions that they believe are reasonable at this time, including assumptions as to the time
required to prepare and mail shareholder meeting materials, including the required information circular; the
ability of the parties to receive, in a timely manner, the necessary regulatory and shareholder approvals;
and the ability of the parties to satisfy, in a timely manner , the other conditions to the closing of the
Transaction. These dates may change for a number of reasons, including unforeseen delays in preparing
meeting materials, inability to secure necessary shareholder, regulatory or other approvals in the time
assumed or the need for additional time to satisfy the other conditions to the completion of the Transaction.
Accordingly, readers should not place undue reliance on the forward -looking information contained in this
news release concerning these times.
Since forward-looking information address future events and conditions, by their very nature they involve
inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due
to a number of factors and risks. These include, but are not limited to, the risk that the Transaction may not
close when planned or at all or on the terms and conditions set forth in the Purchase Agreement; the failure
to obtain the necessary shareholder and regulatory approvals required in order to proceed with the
Transaction; the synergies expected from the Transaction not being realized; business integration risks;
operational risks in development, exploration and production for precious metals; delays or changes in
plans with respect to explorati on or development projects or capital expenditures; the uncertainty of
resource estimates; health, safety and environmental risks; gold price and other commodity price and
exchange rate fluctuations; environmental risks; competition; incorrect assessment o f the value of
acquisitions; ability to access sufficient capital from internal and external sources; and changes in
legislation, including but not limited to tax laws, royalties and environmental regulations.
Actual results, performance or achievement could differ materially from those expressed in, or implied by,
the forward -looking information and, accordingly, no assurance can be given that any of the events
anticipated by the forward looking information will transpire or occur, or if any of them do so, what benefits
may be derived therefrom and accordingly, readers are cautioned not to place undue reliance on the
forward looking information.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this news release.