Dolly Varden Silver Repays Hecla/Gipson Loan
July 4, 2016 – Vancouver, BC: Dolly Varden Silver Corporation (TSX.V: DV | U.S.: DOLLF) (the “Company” or “Dolly Varden”) is pleased to report that, as announced on June 13, 2016, the Company has repaid the senior secured loan from Hecla Canada and Robert L. Gipson with proceeds from a short-term loan from Sprott Private Resource Lending (M), L.P. (previously announced as Sprott Resource Lending Partnership), an additional Sprott affiliate (collectively, “Sprott”) and The K2 Principal Fund L.P. (“K2”).
The Sprott-K2 loan provided $2,500,000 in funds to Dolly Varden. A total of $2,069,097.06 of the Sprott-K2 proceeds was paid to Hecla, as agent to the Hecla/Gipson loan, to discharge all principal and accrued interest on that senior secured loan. The Sprott-K2 loan bears interest at an annual rate of four percent, has a term of six months, and can be prepaid at any time with no penalty except payment of interest for the full term. A total of 2,500,000 share purchase warrants were issued to Sprott and K2 in connection with the loan. Each warrant entitles the holder to purchase one share in the capital of Dolly Varden for a period of two years at a price of $0.385 per share. The Company has agreed to pay a finder’s fee of $31,250.00 to Eventus Capital Corp. in connection with a portion of the Sprott-K2 loan. The remainder of proceeds will be used by Dolly Varden for working capital purposes.
Rosie Moore, Director and Interim CEO/President of Dolly Varden commented “Again, we wish to thank Hecla Canada and Robert L. Gipson for their support during a key time in the company’s transformation. We are reviewing all options and remain open to discussing further business opportunities. Our goal is for the company to become debt free and to grow the potential of the Dolly Varden silver property.”
About Dolly Varden – Dolly Varden Silver Corporation is a mineral exploration company focused on the exploration of the Dolly Varden silver property located in northwestern British Columbia, Canada. The entire Dolly Varden property is considered highly prospective for hosting high-grade precious metal deposits, since it comprises the same structural and stratigraphic settings that host numerous other, on-trend, high-grade deposits (Eskay Creek, Brucejack). The Company’s common shares are listed and traded on the TSX Venture Exchange under the symbol DV and on the OTCBB system under the symbol DOLLF.
This release may contain forward-looking statements. 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 receipt of a takeover bid from Hecla (if at all) and our consideration of such bid, the striking of a special committee, notification to shareholders of the Board’s recommendation in respect of a Hecla takeover bid, the realization of Dolly Varden’s stated goal to be debt free, the impact of Dolly Varden’s debt on the value of the Company, the repayment of the Hecla/Gipson loan, and the continued exploration and valuation of the Dolly Varden silver property. These forward-looking statements are based on management’s current expectations and beliefs 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, Interim CEO and President