Dolly Varden says $15 million bought deal backed by Sprott
Dolly Varden Silver Corp. [DV-TSXV] has announced a $15 million bought deal public offering, with participation by resource financier Eric Sprott. Part of the proceeds are earmarked for further exploration, mineral resource expansion and drilling in the combined Kitsault Valley project in northwestern British Columbia.
The company said it has struck a deal with an underwriting syndicate, which has agreed to purchase 14.3 million flow-through shares of Dolly Varden on a bought deal basis. The shares are to be sold to charitable purchasers that will qualify as flow-through shares within the meaning of the Tax Act (Canada) at a price of $1.05 per charity flow-through share, generating gross proceeds of $14.99 million.
Eric Sprott, through an Ontario numbered company, has indicated his intention to participate in the transaction, which is expected to close on March 21, 2024.
Under existing agreements, with Dolly Varden, Hecla Canada Ltd. (a unit of U.S. precious metals giant Hecla Mining [HL-NYSE]) and Fury Gold Mines Ltd. [FURY-TSX, NYSE American] will be entitled to acquire shares in connection with the offering at 80 cents each in order to maintain their pro rate equity interest in the company.
Fury holds a 22% stake in Dolly Varden, while Hecla has a 15% stake in the company, which counts Eric Sprott as a shareholder with a 9.0% interest.
News of the bought deal financing was announced after the close of trading when Dolly Varden shares rose 8.21% or $0.06 to 79 cents. The shares currently trade in a 52-week range of $1.24 and 58 cents.
Dolly Varden is focused on advancing the wholly-owned Kitsault Valley Project, which covers 163 square kilometres in the Golden Triangle region and hosts the high-grade silver and gold resources of Dolly Varden and Homestake Ridge along with the past producing Dolly Varden and Torbit silver mines.
The entire property is considered to be highly prospective for hosting high-grade precious metal deposits since it comprises the same structural and stratigraphic setting that hosts numerous other on-trend, high-grade deposits, including Eskay Creek and Brucejack.
The property is also considered to be an advanced exploration stage property with targets that are well understood. However, the company has said mine restarts will require the discovery of additional silver resources and the confirmation of historic resources that were known at the cessation of mining in 1959.
Dolly Varden is a member of the British Columbia Regional Mining Alliance (BCRMA), which was set up by the B.C. Government along with First Nations, and several exploration companies from B.C.’s northwest region to promote B.C.’s mining opportunities internationally.