Hecla invests $7.2 million in Dolly Varden Silver, ups share to 15%-plus

Dolly Varden Silver (TSXV: DV) is the recipient of a C$10 million ($7.2m) strategic investment by Hecla Mining (NYSE: HL). Hecla has agreed to subscribe for approximately 15.4 million Dolly Varden shares issued at a price of C$0.65 per share.

The investment raises Hecla’s share of Dolly Varden to 15.7% from 10.6%.

Dolly Varden plans to spend C$6 million of the net proceeds for exploration, resource expansion, and related costs in the Kitsault Valley project in northwest British Columbia. The balance will be used for working capital and G&A costs. No bonuses, finder’s fee or commissions were paid under terms of the offering.

“Hecla’s support for Dolly Varden Silver’s high-grade Kitsault Valley project in BC’s prolific Golden Triangle is validated with today’s financing news. Hecla is the world’s fastest growing established silver producer, the largest in the US and soon to be in Canada,” said Dolly Varden CEO Shawn Khunkhun.

Dolly Varden owns 100% of the Kitsault Valley silver-gold project, located in the southern tip of BC’s Golden Triangle.

The project, including for the first time Homestake Ridge, has an indicated resource of 4.2 tonnes containing 34.7 million oz. silver, 166,000 gold, 2.87 million lb. copper, and 1.25 million lb. lead. The inferred resource for both areas is 6.8 million tonnes containing 29.2 million oz. silver, 816,800 oz. gold, 15.9 million lb. copper and 17.3 million lb. lead.

In connection with the offering, Dolly Varden has agreed with Hecla that the company will not complete any further debt or equity financings for the remainder of 2023.

Additionally, Dolly Varden has agreed that between Jan. 1 and Sept. 1, 2024, without the prior consent of Hecla, it will not complete any debt or equity financings other than equity financings for net proceeds to Dolly Varden of up to C$15 million and provided that the issue price under such financing is greater than C$0.65 per security.