Dolly Varden Silver and Fury Gold Mines Complete Consolidation of the High Grade Silver-Gold Kitsault Valley Project Dolly Varden Silver Receives $5.3M Investment from Hecla
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Dolly Varden Silver and Fury Gold Mines Complete Consolidation of
the High Grade Silver-Gold Kitsault Valley Project
Dolly Varden Silver Receives $5.3M Investment from Hecla
VANCOUVER, British Columbia, Feb. 25, 2022 -- Dolly Varden Silver Corporation ("Dolly Varden" or the
"Company") (TSXV: DV) (OTC: DOLLF), and Fury Gold Mines Ltd. ("Fury") (TSX: FURY) (NYSE American:
FURY) are pleased to announce the completion of their previously announced transaction whereby Dolly
Varden has acquired from Fury, through the acquisition of Fury's wholly-owned subsidiary Homestake
Resource Corporation, a 100% interest in the Homestake Ridge gold-silver project ("Homestake
Project"), located adjacent to the Dolly Varden Project ("DV Project") in the Golden Triangle, British
Columbia (the "Transaction").
Shawn Khunkhun, chief executive officer of Dolly Varden, commented: “Completing the consolidation
and unification of the Kitsault Valley Project is a pivotal event towards exploring and developing these
high-grade precious metals assets in a globally recognized and coveted mining district. I look forward to
working closely with our new partner and shareholder Fury to unlock the full potential through
discovery, development, permitting and production. I would also like to thank Hecla for their continued
financial and technical support.”
Tim Clark, CEO and Director of Fury, added: “The consolidation of these two adjacent properties is an
exciting next step that benefits both our companies and only further enhances the upside opportunity of
additional discovery of high -grade ounces along this prolific 15km mining trend. We look forwa rd to
working closely with the team at Dolly Varden and leveraging complementary skillsets, geology and
infrastructure to continue to maximize value for investors in both companies.”
Pursuant to the ancillary rights agreement between Hecla Canada Ltd. (“Hecla”) and the Company dated
September 4, 2012, Hecla exercised its anti -dilution right in respect of the Transaction and has acquired
9,048,539 common shares of Dolly Varden at a price of $0.59 per common share for aggregate proceeds
to Dolly Varden of $5, 322,351. As a result of this subscription, Hecla will maintain its equity interest in
the Company of 10.25%.
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 combined Homestake Project and DV Project (to be
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referred to together as 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.
• Tim Clark, the Chief Executive Officer of Fury, and Michael Henrichsen, the Senior Vice
President, Exploration of Fury, joining the Dolly Varden board.
Transaction Details
Pursuant to a purchase agreement dated December 6, 2021 (the “Purchase Agreement”), Dolly Varden
has acquired 100% of Homestake Resource Corporation from Fury in exchange for a $5 million cash
payment and the issuance of 76,504,590 common shares of Dolly Varden (“Common Shares”).
Homestake Resource Corporation owns a 100% interest in the Homestake Project. As a result, Fury now
own approximately 32.88% of Dolly Varden’s issued and outstanding Common Shares.
The Homestake Project hosts a Current Mineral 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 within a 7,500 hectare land package located contiguous to and
northwest of the DV Project. The DV Project hosts a Current Mineral Resource estimated to contains
32.9 million ounces of silver in the indicated category and 11.4 million ounces of silver in the Inferred
category within a 7,800 hectare land package. For further resource disclosure, please see below under
the heading “Technical Disclosure”.
The combined Homestake Project and DV Project would boast a collective mineral resource base of 34.7
million ounces of silver and 165,993 ounces of gold in the indicated category and 29.3 million ounces of
silver and 816,719 ounces of gold in the inferred category, solidifying the combined Homestake Project
and Dolly Varden Project, the Company’s existing project, as among the largest high-grade, undeveloped
precious metal assets in Western Canada.
The close proximity of the Homestake Project and DV Project, combined with common infrastructure in
the region, is expected to generate substantial co-development synergies for the consolidated
Homestake Project and DV Project, to be called the “Kitsault Valley Project”, as the respective deposits
are advanced in combination.
In connection with the Transaction, Dolly Varden and Fury have also entered into an investor rights
agreement (the “Investor Rights Agreement”) granting Fury the right to appoint two nominees to the
Dolly Varden board so long as Fury owns greater than 20% of the Common Shares outstanding. Should
Fury own greater than 10% of the Dolly Varden Common Shares outstanding, Fury shall have the right to
appoint one nominee to the Dolly Varden board. Additionally, the Common Shares issued to Fury are
subject to a one-year hold period. The Investor Rights Agreement also contain certain customary re-sale
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restrictions, voting and standstill conditions, and participation rights as agreed between Dolly Varden
and Fury.
The Common Shares issuable to Fury will be subject to a contractual one-year hold which expires on
February 25, 2023 and a statutory hold period of four months plus one day which expires on June 26,
2022. All Common Shares issued to Hecla will be subject to a statutory hold period of four months plus
one day which expires on June 26, 2022.
Further information regarding the Transaction, the Purchase Agreement and the Investor Rights
Agreement is provided in the Company’s management information circular dated January 24, 2022 (the
“Circular”). The Circular is available under the Company’s profile on SEDAR at www.sedar.com and on
the Company’s website at https://www.dollyvardensilver.com/investors/#special-meeting.
Advisors and Counsel
Haywood Securities Inc. (“Haywood”) has acted as financial advisor to Dolly Varden. Stikeman Elliott LLP
acts as legal counsel to Dolly Varden.
Minvisory Corp. has acted as financial advisor to Fury. McMillan LLP acts as legal counsel to Fury.
About Dolly Varden Silver Corporation
Dolly Varden Silver Corporation is a mineral exploration company focused on exploration in
northwestern British Columbia. The DV Project consists of the namesake Dolly Varden silver property
that hosts a unique pure silver mineral resource as well as the nearby Big Bulk copper-gold porphyry
property. Adjacent to the DV Project, the Homestake Ridge Project hosts structurally controlled
epithermal gold, silver and copper mineralization. Together, the consolidated DV Project and
Homestake Ridge Project, to be referred to as the Kitsault Valley Project, create one large, high-grade
precious metals project with further synergistic and exploration upside potential. The Kitsault Valley
Project is considered to be highly prospective for hosting high-grade precious metal deposits, since it
comprises the same structural 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).
About Fury Gold Mines Limited
Fury Gold Mines Limited is a Canadian-focused exploration company positioned in two prolific mining
regions across the country. Led by a management team and board of directors with proven success in
financing and advancing exploration assets, Fury intends to grow its multi-million-ounce gold platform
through rigorous project evaluation and exploration excellence. Fury is committed to upholding the
highest industry standards for corporate governance, environmental stewardship, community
engagement and sustainable mining. For more information on Fury Gold Mines, visit
www.furygoldmines.com.
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Qualified Person
The technical information contained in this news release 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.
Technical Disclosure
Homestake Resource Estimate:
The Homestake resource estimate is based on the technical report with an effective date of January 20,
2022 and titled, “Technical Report and Updated Mineral Resource Estimate for the Homestake Ridge Gold
Project, Skeena Mining Division, British Columbia ” 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.
Mineral resources are estimated at a cut-off grade of 2.0 g/t gold equivalent.
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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 o n 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 are 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 the 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.
Forward Looking Statements
This release may contain forward-looking statements or forward-looking information under applicable
Canadian securities legislation that may not be based on historical fact, including, without limitation,
statements containing the words “believe”, “may”, “plan”, “will”, “estimate”, “continue”, “anticipate”,
“intend”, “expect”, “potential”, “unlocking” and similar expressions. Forward-looking statements involve
known and unknown risks, uncertainties, and other factors which may cause the actual results,
performance, or achievements of Dolly Varden to be materially different from any future results,
performance, or achievements expressed or implied by the forward-looking statements. Forward
looking statements or information in this release relates to, among other things, potential synergies
expected from the combination of the DV Project and Homestake Project and the development
potential of the Kitsault Valley Project.
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These forward-looking statements are based on management's current expectations and beliefs and
assume, among other things, the ability of the Company to successfully pursue its current development
plans, that future sources of funding will be available to the company, that relevant commodity prices
will remain at levels that are economically viable for the Company and that the Company will receive
relevant permits in a timely manner in order to enable its operations, but given the uncertainties,
assumptions and risks, readers are cautioned not to place heavy reliance on such forward-looking
statements or information. The Company disclaims any obligation to update, or to publicly announce,
any such statements, events or developments except as required by law.
For additional information on risks and uncertainties, see the Company's most recently filed annual
management discussion & analysis ("MD&A"), which is available on SEDAR at www.sedar.com. The risk
factors identified in the MD&A are not intended to represent a complete list of factors that could affect
the Company.
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.
For further 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