North of 60 Mining News - The mining newspaper for Alaska and Canada's North

Dolly Varden Silver Corp. June 11 announced that Eric Sprott and Hecla Mining Company participated in two private placement financings that raised C$7.68 million, which will primarily go towards further exploration and resource expansion at the company's Dolly Varden Silver property in northwestern British Columbia.

Situated 46 kilometers (29 miles) southeast of Stewart, the Dolly Varden property covers historic high-grade silver mines that date back to the early 20th century. Much of the company's exploration work has focused on exploring in and around four of these producing mines – Torbrit, Dolly Varden, Wolf and North Star.

Four deposits associated with these past producing mines host 3.42 million metric tons of indicated resource averaging 299.8 grams per metric ton (32.9 million ounces) silver; plus 1.29 million metric tons of inferred resource averaging 277 g/t (11.5 million oz) silver, according to a calculation completed about a year ago.

The bulk of the resources are found at Torbrit, which hosts 2.62 million metric tons of the indicated resource averaging 297 g/t (25.03 million oz) silver; and 1.19 million metric tons of the inferred resource averaging 278 g/t (10.59 million oz) silver.

While smaller, the Dolly Varden deposit hosts some of the highest grades on the property – 156,000 metric tons of indicated resource averaging 414 g/t (2.08 million oz) silver; and 86,000 metric tons of inferred resource averaging 272 g/t (754,000 oz) silver.

The company has identified numerous high-grade silver targets within the vicinity of but outside the resource. These include Torbrit North, Torbrit East, Moose-Lamb Fault, and Kitsol Zone. The property also hosts several regional exploration targets that include Chance, Moose-Climax, Ace-Galena, and a gold belt associated with Auryn Resources' Homestake Ridge project that borders the northeast side of the Dolly Varden property.

The company also owns Big Bulk, a small and earlier staged copper-gold exploration property about 10 kilometers (six miles) southeast of Dolly Varden and surrounded by Hecla Mining's Kinkuch silver-zinc property.

Hecla invested in Dolly Varden in 2012 and has rights to maintain its roughly 10% interest in the company. Exercising these rights, Hecla acquired 1.3 million Dolly Varden shares at C33 cents and 1.1 million shares at C40 cents during the two financings. As a result, Hecla owns roughly 10.8% of Dolly Varden stock.

Sprott also participated in the financings and now owns roughly 18.9% interest in Dolly Varden.

"This is a strong endorsement of our current high-grade silver resource and the substantial growth potential of our assets in the prolific Golden Triangle of British Columbia," Dolly Varden Silver CEO Shawn Khunkhun said upon the May announcement of Sprott's intent to participate in the financing.

Author Bio

Shane Lasley, Publisher

Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.

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