VANCOUVER, Aug. 29, 2017 /CNW/ - Dolly Varden Silver Corporation (TSX.V: DV | U.S.: DOLLF) (the "Company" or "Dolly Varden") is pleased to announce that the Company intends to undertake a private placement financing (the "Offering") to raise gross proceeds of up to $5.0 million from the sale of up to: (a) 2,739,726 common shares in the capital of the Company ("Common Shares") at a price of $0.73 per share; and (b) up to 3,529,411 Common Shares that qualify as "flow-through shares" ("Flow-Through Shares"), as defined under the Income Tax Act (Canada), at a price of $0.85 per share.
The 2017 exploration program budget has been extended from $3.5 million to $6 million and increased from 5,000 meters to approximately 12,000 metres of diamond drilling. The net proceeds of the Offering will be used for further exploration and mineral resource expansion of the Dolly Varden silver property in northwestern British Columbia, Canada, as well as ongoing working capital for 2017.
"We are extremely proud of our technical team's efforts to date," said Gary Cope, President and CEO of Dolly Varden. "The success of the current exploration program has more than warranted its continuation and subsequent expansion of its budget. We look forward to unlocking further value from this expanded drilling campaign."
In connection with the Offering, the Company has agreed to pay a finder's fee in respect of those purchasers introduced to the Company by Eventus Capital Corp. (the "Finder"). The Finder will receive a cash payment equal to 6% of the gross proceeds received from purchasers under the Offering who were introduced to the Company by the Finder.
The issuance of the Common Shares, Flow-Through Shares, and payment of the Finder's fee are subject to the approval of the TSX Venture Exchange ("TSXV"), receipt of any other required regulatory approvals and other customary closing conditions. Closing of the Offering is anticipated to occur on or about September 8, 2017. Securities issued under the Offering will be subject to a four-month hold period.
Pursuant to the ancillary rights agreement between Hecla Canada Ltd. ("Hecla") and the Company dated September 4, 2012 (the "ARA"), Hecla will be entitled to acquire Common Shares to maintain its pro rata equity interest in the Company. If Hecla exercises its pro-rata rights under the ARA, any securities issued to Hecla will be in addition to those issued as part of the Offering.
About Dolly Varden
Dolly Varden Silver Corporation is a mineral exploration company focused on exploration in northwestern British Columbia. Dolly Varden has two projects, the namesake Dolly Varden silver property and the nearby Big Bulk copper-gold property. The 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 host numerous other, on-trend, high-grade deposits (Eskay Creek, Brucejack). The Big Bulk property is prospective for porphyry and skarn style copper and gold mineralization similar to other such deposits in the region (Red Mountain, KSM, Red Chris).
The current mineral resource estimate at Dolly Varden, effective date August 27, 2015, consists of four deposits with an Indicated Resource of 3.07 million tonnes grading 321.6 g/t Ag, for 31.8 million ounces of silver, plus an Inferred Resource of 0.9 million tonnes grading 373.3 g/t Ag, for 10.8 million ounces of silver. These resources were estimated at a cut-off grade of 150 g/t Ag. For more details, please refer to a NI 43-101 compliant Technical Report filed on www.sedar.com and on the Company's website.
Ben Whiting, P.Geo., Vice President of Exploration and Robert van Egmond, P.Geo., Chief Geologist for Dolly Varden, serve as 'Qualified Persons' under National Instrument 43-101, and have approved the scientific and technical information contained in this news release.
The Company's Common Shares are listed and traded on the TSXV under the symbol "DV" and on the OTCBB system under the symbol "DOLLF".
