Dolly Varden Silver Corporation Announces $3.2 Million Strategic Investment from Hecla Mining Company
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
VANCOUVER, BRITISH COLUMBIA — (Marketwire – August 21st, 2012) - Dolly Varden Silver Corporation (“Dolly Varden” or the “Company”) (TSX-V:DV)(U.S.: DOLLF) is pleased to announce that it has entered into an agreement pursuant to which a wholly-owned subsidiary of Hecla Mining Company (“Hecla”) has agreed to acquire 20,000,000 common shares of the Company (the “Dolly Shares”), representing 19.9% of the outstanding Dolly Shares, at a price of $0.16 per Dolly Share for total gross proceeds of $3,200,000 (the “Financing”). The issue price is equal to the 20-dayvolume-weighted average trading price of Dolly Shares at the time pricing was negotiated by the parties.
On closing of the Financing Hecla will be granted various rights pursuant to the terms of an ancillary rights agreement, exercisable for so long as long as Hecla holds more than a 10% interest in Dolly (calculated in accordance with that agreement) . These rights include: (a) a right to nominate one person to Dolly Varden’s board of directors, (b) a right to nominate one person to a technical committee, to be established to design and execute the Company’s exploration programs, (c) a right of first refusal in respect of any proposed transfer or sale by Dolly Varden of its interest in all or any part of its mining properties, including any third party offers to enter into a joint venture; and (d) a pre-emptive right to participate in any future proposed equity offering of Dolly Varden in order to maintain its pro rata interest. Pursuant to the terms of the ancillary rights agreement, Hecla will also agree to a voting agreement whereby Hecla will vote all Dolly Shares held by it in favour of management’s proposals on matters of routine business for a period of 12 months from the closing of the Financing.
“Dolly Varden is pleased to be able to forge such a strong strategic partnership with Hecla. The combination brings together two accomplished technical teams that have a wealth of experience in operating and/or restarting mines in historical silver mining camps, as well as expertise in exploring for and developing precious metal rich VMS deposits,” said Mr. Ron Nichols, CEO and President of Dolly Varden.
Mr. Nichols added “Hecla’s experience at its Greens Creek operation will be particularly valuable to the Dolly Varden silver project because of the similar geological settings of the Greens Creek Precious Metal Rich VMS deposit and the Precious Metal Rich target that has been identified on Dolly Varden’s property.”
All securities issued in the Financing will be subject to a statutory four month hold period. The Financing is subject to a number of conditions, including, without limitation, receipt of all regulatory approvals, including approval of the TSX Venture Exchange.
The net proceeds of the Financing will be used to advance the exploration and development of the Company’s Dolly Varden silver project in British Columbia.
About Dolly Varden
Dolly Varden Silver Corporation is a Canadian based mineral exploration company focused on the exploration and development of the Dolly Varden silver project located in northwestern British Columbia. The Company’s common shares are listed and traded on the TSX-V under the symbol DV and in the U.S. under the symbol DOLLF. The Dolly Varden silver project consists of 9,400 hectares which includes four well defined high grade silver deposits, two of which have seen historic production totaling 20 million ounces. All four deposits have remaining historic silver resources and are situated in the same geologic setting as the past-producing Eskay Creek deposit. The Company has two strategies for creating value at the Dolly Varden silver project: to confirm and expand the existing historic silver resources with the goal to re-start the historic deposits ; and to explore a major untested Eskay Creek-type gold and silver rich VMS target at Dolly Varden.
For additional information contact:
Strata Star – Gary Lindsey
Ron Nichols CEO and President
Dolly Varden Silver Corporation
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Certain of the statements and information in this press release constitute “forward-looking statements” or “forward-looking information” Any statements or information that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “believes”, “plans”, “estimates”, “intends”, “targets”, “goals”, “forecasts”, “objectives”, “potential” or variations thereof or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements or information. Forward looking statements or information related to, among other things the proposed terms of the Financing.
Forward-looking statements or information are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements or information, including, without limitation, the need for additional capital by the Company through financings, and the risk that such funds may not be raised; the speculative nature of exploration and the stages of the Company’s properties; the effect of changes in commodity prices; regulatory risks that development of the Company’s material properties will not be acceptable for social, environmental or other reasons and the efforts and abilities of the senior management team. This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements or information. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Accordingly, readers should not place undue reliance on forward-looking statements or information.
The Company’s forward-looking statements and information are based on the assumptions, beliefs, expectations and opinions of management as of the date of this press release, and other than as required by applicable securities laws, the Company does not assume any obligation to update forward-looking statements and information if circumstances or management’s assumptions, beliefs, expectations or opinions should change, or changes in any other events affecting such statements or information. For the reasons set forth above, investors should not place undue reliance on forward-looking statements and information.