Dolly Varden Silver Corp. Sept. 20 said it has entered into an indicative non-binding term sheet for a senior secured loan with two significant shareholders, Hecla Canada Ltd. and Robert L. Gipson.

The loan will provide Dolly Varden C$1.5 million to be used for exploration of the Dolly Varden Silver project in northwestern British Columbia and working capital purposes.

An additional C$500,000 may be made available to the company at the lenders' discretion.

The loan, which is repayable after one year, will bear interest at a rate of five percent per annum and will be secured by promissory notes and first ranking security over all of the company's assets.

In connection with the loan, Dolly Varden will issue 1.25 million warrants to each lender.

Each warrant will entitle the holder to acquire one common share of Dolly Varden at a price of C30 cents, for a period of five years from the date of issuance.

The loan is anticipated to occur by Sept. 30, subject to conditions and requisite approvals.

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