NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
VANCOUVER, BC, March 31, 2022 – Vancouver, BC: Dolly Varden Silver Corporation (TSXV: DV) (OTC: DOLLF) (the “Company” or “Dolly Varden“) is pleased to announce that it has closed its previously announced best efforts brokered private placement (the “Offering”) pursuant to which the Company has issued 11,274,400 common shares of the Company that qualify as “flow-through shares” as defined under the Income Tax Act (Canada) (the “Offered Shares“) at a price of $1.02 per share (“Offered Price“). This includes the full exercise of the Agents’ (as defined below) over-allotment option (the “Agents’ Option”) to sell up to an additional 15% of the number of Offered Shares sold in the Offering at the Offering Price. The aggregate gross proceeds to the Company is approximately $13 million, which includes approximately $11.5 million from the Offering and $1.5 million from Hecla Canada Ltd.’s participation.
Shawn Khunkhun, CEO & Director of Dolly Varden Silver remarked, “By consolidating seven high-grade silver and gold deposits and historic mines with potential development synergies as well as excellent exploration upside, we are on track to be the next pre-development Company, located within an accessible and stable region of B.C.’s prolific Golden Triangle. With $26 million in the treasury, we are grateful to existing and new strategic shareholders, including Hecla Mining and Eric Sprott that have supported Dolly Varden’s effort to advance one of the largest undeveloped silver-gold projects in Western Canada. We will announce upcoming drilling strategy and mobilization plans shortly.”
The Offering was completed by Research Capital Corporation and Eventus Capital Corp., as co-lead agents and joint bookrunners, on behalf of a syndicate of agents including Haywood Securities Inc. and Gravitas Securities Inc. (collectively, the “Agents“). In connection with the Offering, the Agents received an aggregate cash fee of up to 6.0% of the gross proceeds of the Offering, including in respect of the Agent’s Option.
The proceeds of the Offering will be used for further exploration, mineral resource expansion and drilling in Kitsault Valley located in northwestern British Columbia, Canada, as well as for working capital as permitted.
Eric Sprott, through 2176423 Ontario Ltd., a corporation which is beneficially owned by him, acquired 3,448,200 Offered Shares pursuant to the Offering for total consideration of $2,499,945. After closing of the Offering, Mr. Sprott now beneficially owns or controls 25,632,182 common shares of the Company and 1,250,000 common share purchase warrants of the Company representing approximately 11.1% on a non-diluted basis and 11.6% on a fully diluted basis assuming the exercise of all convertible securities of the Company.
Prior to the Offering, Mr. Sprott beneficially owned or controlled 22,183,982 common shares of the Company and 1,250,000 common share purchase warrants, representing approximately 10.2% of the issued and outstanding common shares of the Company on a non diluted basis and approximately 10.7% of the issued and outstanding common shares of the Company on a partially diluted basis.
The common shares were acquired by Mr. Sprott, through 2176423 Ontario Ltd., for investment purposes. Mr. Sprott has a long-term view of the investment and may acquire additional securities of the Company, including on the open market or through private acquisitions, or may sell securities of the Company, including on the open market or through private dispositions, in the future depending on market conditions, reformulation of plans and/or other relevant factors.
A copy of 2176423 Ontario Ltd.’s early warning report will appear on the Company’s profile on SEDAR and may also be obtained by calling 416-945-3294 (200 Bay Street, Suite 2600, Royal Bank Plaza, South Tower, Toronto, Ontario M5J 2J1).
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 Offering to acquire 1,742,472 common shares of the Company (“Common Shares”) at a price per Common Share of $0.86 for gross proceeds of $1,498,526. Hecla has also exercised its anti-dilution right with respect to the Company’s previously announced issuance of shares to Haywood Securities Inc. (“Haywood”) completed on March 11, 2022, to acquire 46,027 additional Common Shares at a price per Common Share of $0.5896, being the issuance price of the Common Shares issued to Haywood, for additional proceeds of $27,137. The Common Shares issued to Hecla are in addition to those issued as part of the Offering.
The Offered Shares and Common Shares issued to Hecla are subject to a holder period in Canada expiring on August 1, 2022.
The Offered Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) or any U.S. state securities laws, and may not be offered or sold in the “United States” or to “U.S. persons” (as such terms are defined in Regulation S under the U.S. Securities Act) absent registration under the U.S. Securities Act and any applicable U.S. state securities laws or compliance with an applicable exemption from such registration requirements. This news release will not constitute an offer to sell or the solicitation of an offer to buy nor will there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.
About Dolly Varden Silver Corporation
Dolly Varden Silver Corporation is a mineral exploration company focused on advancing its 100% held Kitsault Valley Project (which combines the Dolly Varden Project and the Homestake Ridge Project) located in the Golden Triangle of British Columbia, Canada, 25kms by road to tide water. The 163 sq. km. project hosts the high-grade silver and gold resources of Dolly Varden and Homestake Ridge along with the past producing Dolly Varden and Torbrit silver mines. It is considered to be prospective for hosting further precious metal deposits, being on the same structural and stratigraphic belts that host numerous other, on-trend, high-grade deposits, such as Eskay Creek and Brucejack. The Kitsault Valley Project also contains the Big Bulk property which is prospective for porphyry and skarn style copper and gold mineralization, similar to other such deposits in the region (Red Mountain, KSM, Red Chris).
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”, 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, the use of proceeds with respect to the Offerings.
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 undue 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“) and management information circular dated January 21, 2022 (the “Circular“), both of which are available on SEDAR at www.sedar.com. The risk factors identified in the MD&A and the Circular 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, 1-604-609-5137, www.dollyvardensilver.com;