Dolly Varden Silver Closes C$1.5 Million Loan, Begins Drill Program and Announces Board Changes
September 30, 2015 – Vancouver, BC: Dolly Varden Silver Corporation (TSX.V: DV | U.S.: DOLLF) (the “Company” or “Dolly Varden”) has signed the definitive documentation for the closing of the previously announced senior secured loan (the “Loan”) from Hecla Canada Ltd. and Robert L. Gipson, two significant shareholders of the Company (each a “Lender”, and together the “Lenders”). The Loan is in the principle amount of C$1,500,000, the net proceeds of which, after deduction of certain expenses in connection with the transaction, will be used to complete drilling on regional targets within the Dolly Varden project, located in northwestern British Columbia and thereafter for working capital purposes. An additional C$500,000 may be made available to the Company at the Lenders’ discretion. The Loan will bear interest at a rate of 5% per annum and will be repayable after one year, or repaid earlier with no penalty. In connection with the Loan, Dolly Varden will issue 1,250,000 warrants to each Lender, for a total of 2,500,000 warrants, each of which will entitle the holder to acquire one common share of Dolly Varden at a price of C$0.30, for a period of three years from the date of issuance.
Approximately C$1,200,000 of the Loan proceeds will be used immediately in completing 2,200 meters of core drilling to explore for high-grade volcanogenic massive sulfide (VMS) and epithermal styles of mineralization. Both mineralization styles are present in and around the four existing deposits on which a maiden mineral resource estimate was recently announced. Three of these deposits were historically mined and the four combined deposits are estimated to host indicated mineral resources containing 31.8 million ounces of silver, and inferred mineral resources containing an additional 10.8 million ounces of silver, both at grades in excess of 320 grams of silver per tonne (“g/t silver”) at a 150 g/t silver cut-off grade. For additional details regarding the maiden resource estimate, please see the Dolly Varden news release dated August 27, 2015. Similar rock sequences, alteration and geochemical anomalies extend from the historic deposits regionally on the Dolly Varden project. One priority for this drill program will be the Kitsol area, over a kilometer away from historic mining, where drilling in 2014 returned an intercept of 26 meters grading 712 g/t silver starting at a drilled depth of 148 meters.
Concurrent with the Loan closing, Allan Marter, Allen Ambrose and Ian He have resigned from Dolly Varden’s board of directors (the “Board”). Mr. Marter has been on the Board since March 2012. He served as Co-Chair from October 2014 until March 2015, at which time he was appointed Chairman of the Board. He was also the Chair of several special committees during his tenure. Mr. Ambrose was a member of the Company’s founding Board and has served as an independent director since March 2011. Mr. He has served as an independent director since July 2013. The remaining members of the Board (Tom Wharton, Don Birak and Rosie Moore) would like to thank Messrs. Marter, Ambrose and He for their time and dedication to the Company and wish them the best in their future endeavors.
About Dolly Varden – Dolly Varden Silver Corporation is a mineral exploration company focused on the exploration of the Dolly Varden property located in northwestern British Columbia, Canada. The entire Dolly Varden property 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, on-trend, high-grade deposits (Eskay Creek, Brucejack) in the Golden Triangle. The Company’s common shares are listed and traded on the TSX Venture Exchange (the “TSXV”) under the symbol DV and on the OTCBB system under the symbol DOLLF.
TECHNICAL INFORMATION – The Qualified Person for this release is Ron F. Nichols, P. Eng., VP Exploration of Dolly Varden, who has reviewed and approved the technical program and contents of this press release in compliance with the standards of NI 43-101. An updated NI 43-101 Technical Report, including the maiden resource estimate, is being finalized for filing on SEDAR. Further information regarding the Dolly Varden property, including that relating to historical production and historical resource estimates, can be found on the Company’s website and in the Company’s Amended Technical Report for the Dolly Varden Project dated May 1, 2015, filed on SEDAR, and available on the Company’s website.
This release may contain forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as “expects,” “plans,” “estimates,” “intends,” “believes,” “could,” “might,” “will” or variations of such words and phrases. 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 relates to, among other things, the draw down on the Loan, the use of proceeds of the Loan, the issuance of the warrants, the field work in 2015, the timing, accuracy and completion of the final resource estimate report, the final resource estimate not changing significantly from the initial report, and the Company’s plans for further exploration, which will require additional cash. These forward-looking statements are based on management’s current expectations and beliefs (including our belief in the accuracy of the resource estimate), the work of our consultants (including qualified persons), and our business plans and budgets, 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”), which is available on SEDAR at www.sedar.com and on the Company’s website at www.dollyvardensilver.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 TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.
Dolly Varden Silver Corporation
Rosie Moore, Director, Interim CEO & President
1-604-925-5881 or 1-604-512-1277
Ron Nichols, VP Exploration