The gold and silver project “currently remains suitable for a modest production profile with growth opportunities,” noted a report from Haywood Securities.
Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX) offers superior exploration potential on its large land package and current, likely expandable, mineral resources, Haywood Securities analyst Marcus Giannini said in a May 9 research note. Giannini recently took over the management of this mining company.
“While we believe discovery opportunities across the land package remain an important catalyst for future value creation, we also view the current resource-defined endowment of gold and silver as a starting point for a modest underground and conventional mining and processing scenario. » Giannini wrote.
142% gain, catalysts
Haywood has a buy rating and target price of C$2.40 per share on the Canadian explorer-developer, which is trading at around C$0.99 per share at the time of the report, Giannini noted . Thus, the implied return for investors is 142%.
“We recommend investors accumulate shares of Dolly at current prices,” Giannini wrote. “We believe the primary value driver for Dolly in the near and long term is expected to come through the drill bit as the company's 2024 program nears commencement.”
The start of this summer exploration campaign is an upcoming catalyst for Dolly Varden Silver, as is the updated mineral resource estimate for its Kitsault Valley project in British Columbia's Golden Triangle.
Initial production scenario
Giannini presented highlights of the Dolly Varden Silver story.
One of these is the company's existing high-grade gold and silver resources for its Kitsault Valley project, consisting of gold-rich Homestake Ridge to the north and various silver-dominated deposits to the south ( Dolly Varden, Torbrit, North Star and Wolf). Kitsault Valley's current indicated and inferred resources total 64,000,000 ounces of silver and 982,712 ounces of gold.
“The grade, jurisdiction, and resource growth benefits set these ounces apart from other peers in the space,” Giannini wrote.
Based on current resources, Haywood presented a production scenario for Dolly Varden Silver, which has two underground mines feeding ore to a centralized processing plant. Production would be approximately 84,000 gold equivalents (Au eq) per year for approximately 13.5 years. Estimated costs would be US$150 million (US$150 million) in initial investments, US$851 million per ounce of Au equivalent as an all-in sustaining cost and US$78 million in capital maintaining the life of the mine.
“Our assumed production scenario is perhaps conservative,” commented Giannini.
Potential for new discoveries
Given Dolly Varden Silver's 163 square kilometers of land in the prolific Golden Triangle, Giannini said, numerous opportunities exist for the Vancouver-based mining company to discover additional mineralization in the Kitsault Valley and expand its existing resources .
“Due to the underlying geology and metallogenic setting, we continue to see promising drilling results within current resources, as well as as we enter more untested areas,” the analyst added.
Various deposits remain open at depth and laterally. Untested targets exist along the Kitsault Valley trend, located between the contiguous Dolly Varden and Homestake Ridge properties. Beyond the known deposits, the entire Kitsault Valley lands also offer potential targets.
“Dolly Varden’s planned 2024 exploration program could be transformative as high priority areas remain open for expansion while untested regional targets could lead to the discovery of additional deposits,” Giannini wrote.
The company has sufficient liquidity for the planned work.
Attractive takeaway target
Giannini wrote that Haywood expects additional merger and acquisition activity to occur, particularly in tier one jurisdictions such as the Golden Triangle, and that Dolly Varden Silver's Kitsault Valley could be removed for various reasons.
The project has high quality ounces. Its “mineralogical and depositional context” is similar to those observed at another Golden Triangle project, Brucejack, acquired for US$2.8 billion in 2022 by Newcrest Mining. Already, North American producers have expressed interest in Dolly Varden Silver, such as Hecla Mining, which now owns around 15%.
“Kitsault Valley remains a good choice for established producers,” Giannini wrote.
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Important Disclosures:
- Dolly Varden Silver Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee of between US$4,000 and US$5,000.
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their households) own securities of Dolly Varden Silver Corp.
- Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
- This article does not constitute investment advice and does not constitute a solicitation for any investment. Streetwise Reports does not provide general or specific investment advice and the information contained in Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult their personal financial advisor and conduct their own comprehensive investment research. By opening this page, each reader agrees to Streetwise Reports' terms of use and full disclaimer. Streetwise Reports does not endorse or recommend the activities, products, services or securities of any company.
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Disclosures for Haywood Capital Markets, Dolly Varden Silver Corp., May 9, 2024
This research report is for informational purposes only. Nothing in this report is, or should be, considered a promise or representation as to future performance. The opinions and information contained in this communication constitute the current judgment of the authors as of the date and time of this report and are subject to change without notice. There are no representations, warranties or other assurances that the projections contained in this report will come to pass. Past performance does not represent future results.
This report is not intended to provide a personal investment. We are encouraged to seek advice regarding the advisability or suitability of any investments or strategies discussed in this report. Individuals involved in the production of research materials operate independently and without influence from other departments of Haywood Securities Inc., including affiliates of Haywood Securities Inc. consulting. Investors
This report is not and should not be construed as: (i) an offer to sell or a solicitation of an offer to buy any securities; (ii) an offer to transact business in any jurisdiction; or (iii) investment advice to any party. It does not constitute a personal recommendation and does not take into account the particular investment objectives, financial situation or needs of individual clients. Clients should consider whether any advice or recommendations arising from our research are suitable for their particular circumstances and, if so, seek professional advice, including tax advice. The products and services described here are only available where they can be lawfully provided.
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Analyst certification
I, Marcus Giannini, hereby certify that the opinions expressed in this report (which include the rating assigned to the issuer's shares and the analytical substance and tone of the report) fairly reflect my/our personal opinion on the securities concerned and the transmitter. . No part of my/our compensation was, is or will be directly or indirectly related to the specific recommendations.
Important Disclosures
Of the companies included in the report, the following important information applies:
- Haywood Securities, Inc. reviewed Dolly Varden Silver Corp.'s top projects. (DV-V) and part of the travel costs may have been reimbursed by the issuer.
- Haywood Securities or one of its affiliates managed or co-led or participated as a sales group in a public offering of securities for Dolly Varden Silver Corp. (DV-V) in the last 12 months.