Dolly Varden Silver Draws Final $500,000 Loan Tranche, Discusses Further Progress
February 3, 2016 – Vancouver, BC: Dolly Varden Silver Corporation (TSX.V: DV | U.S.: DOLLF) (the “Company” or “Dolly Varden”) is pleased to announce receipt of C$500,000 in funds comprising the second and final tranche of the previously announced senior secured loan (the “Loan”) from Hecla Canada Ltd. and Robert L. Gipson, two significant shareholders of the Company. Receipt of these funds brings the total amount funded under the Loan to C$2 million. The Loan bears interest at a rate of 5% per annum and is due on September 30th, 2016, or can be repaid earlier with no penalty. For further details of the Loan please see Dolly Varden news release dated September 30, 2015.
The majority of the Loan proceeds were used in completing required surface and subsurface exploration on the Dolly Varden project for new and further precious and base metal volcanogenic massive sulfide (VMS) and epithermal mineralization. A surface mapping and sampling program and a total of 2,037 meters of core drilling was performed with results announced on December 23, 2015. Technical interpretation of the programs’ results is ongoing, and is expected to provide a better understanding of each area’s exploration potential and define new targets.
In the still-challenging market for junior resource companies, Dolly Varden’s corporate efforts have been focused on successfully and significantly reducing costs, while continuing discussions that we believe may yield longer term sustainability for the Company. In January, Dolly Varden reduced staff and consolidated its corporate office within Hecla Canada’s Vancouver corporate office space, allowing elimination of monthly office rent payment. Dolly Varden’s new address and contact information are listed at the bottom of this release. In addition, Dolly Varden negotiated deferment of land payments regarding the Musketeer Option, a key claim group near the bonanza Kitsol silver discovery made by Dolly Varden in 2014. Several other cost-cutting initiatives are underway, and others will follow, that could yield further savings.
Commenting on the loan draw and corporate initiatives, Interim CEO and President Rosie Moore said, “We are fortunate to have the support of our lenders and major shareholders during these difficult times in the metals market. The strength and grade of Dolly Varden’s existing mineral resource, and exploration potential of the project demonstrated by our work in 2014 and 2015, warrant the cost-cutting measures we have taken to keep the Company viable in preparation for improved market conditions.”
The Dolly Varden project is located in northwestern BC, 25 kilometers north of deep tide water at Alice Arm, and its deposits were the focus of mining activity in the 1920’s and 1950’s producing approximately 20 million ounces of silver. Both VMS and epithermal mineralization styles result in high-grade mineralization in and around the four existing deposits, three of which were historically mined. Dolly Varden Silver announced a high grade maiden mineral resource estimate on August 27, 2015 covering the four combined deposits, comprising indicated mineral resources containing 31.8 million ounces of silver (3.1 million tonnes grading 321.6 grams of silver per tonne (“g/t silver”)), and inferred mineral resources containing an additional 10.8 million ounces of silver (0.9 million tonnes grading 373.3 g/t silver), calculated at a 150 g/t silver cut-off grade. For additional details regarding the maiden mineral resource estimate, please see the Dolly Varden news release dated August 27, 2015.
TECHNICAL INFORMATION – Ron F. Nichols, P. Eng., VP Exploration of Dolly Varden, a Qualified Person (as defined by NI 43-101), has reviewed and approved the technical program and contents of this press release. Further information regarding the Dolly Varden property can be found on the Company’s website and in the Company’s Amended NI 43-101 Technical Report for the Dolly Varden Project dated October 8, 2015, filed on SEDAR, and available on the Company’s website.
FORWARD-LOOKING STATEMENTS: 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 use of proceeds of the Loan, discussions regarding longer term sustainability, the Company’s ability to cut costs and remain viable, the Company’s plans for further exploration (which will require additional cash), the accuracy of our mineral resource estimate, and the strength and grade of our mineral resource. These forward-looking statements are based on management’s current expectations and beliefs (including our belief in the accuracy of the mineral 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.
Rosie Moore, Director, Interim CEO & President
1-604-925-5881 or 1-604-512-1277
Dolly Varden Silver Corporation
Suite 970, 800 W. Pender Street
Vancouver, B.C. Canada V6C 2V6