Dolly Varden Silver raising $7 million for B.C. project
Dolly Varden Silver Corp. [DV-TSXV, DOLLF-OTCBB] says it is increasing the size of a non-brokered private placement offering of flow-through shares to $7.0 million. The company had previously said it intended to raise $5.0 million, but due to strong investor demand it has increased the size of the offering.
Net proceeds will be used for exploration, and mineral resource expansion at Dolly Varden’s silver property in the Golden Triangle of northwestern British Columbia and for working capital.
The offering consists of the sale of up to 7.0 million common shares that qualify as “flow-through shares” as defined under the Income Tax Act (Canada) at $1 per share.
On Friday, Dolly Varden shares eased 1.1% or $0.01 to 85 cents in light trading volume. The shares are currently trading in a 52-week range of $1.17 and 16.5 cents.
Under an ancillary rights agreement between Hecla Canada Ltd. (a unit of U.S. precious metals giant Hecla Mining [HL-NYSE] and the company dated September 4, 2012, Hecla will be entitled to acquire common shares at 89 cents each to maintain its equity interest in Dolly Varden. If Hecla chooses to exercise those rights, any common shares issued to Hecla will be in addition to those issued as part of the offering.
The company has two projects – the namesake 100%-owned Dolly Varden silver property and nearby Big Bulk copper-gold property.
The entire Dolly Varden 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 company recently said step outs intersected multiple silver zones, including 1,083 g/t silver over 2.70 metres within 12.75 metres of 351 g/t silver.