Analyst Says Silver Stock Is Set for Pivotal Year

Source: Stuart McDougall 04/29/2024

In light of recent news, Research Capital Corp. maintained its Speculative Buy rating on Dolly Varden Silver Corp.

Dolly Varden Silver Corp. DOLLF announced on April 23, 2024, that it is preparing to commence its 2024 exploration season at the Kitsault Valley project in northwestern British Columbia. The company plans to conduct 25,000m of drilling, divided equally between the Dolly Varden and Homestake Ridge sections, with a focus on the Wolf and Homestake Silver zones.

Research Capital Corp. analyst Stuart McDougall, in a report published on April 29, 2024, increased the target price for Dolly Varden to CA$1.45/share from CA$1.35/share, reflecting expectations for a 25% increase in the project's existing resources. The analyst maintained a Speculative Buy rating on the company, recommending it for patient and risk-tolerant investors.

"We are raising our target price to CA$1.45/share from CA$1.35/share to reflect our expectations for a 25% increase to existing project resources, net of a higher share count for CA$25M worth of equity financings completed since our last update and for our future equity assumptions, priced in the context of the current market" McDougall stated.

The analyst's in situ valuation metrics remain unchanged at US$3/oz Ag and US$75/oz Au. McDougall highlighted that the latest drill holes at Kitsault Valley have added both bonanza-grade and bulk-tonnage potential to the existing resources.

In March 2023, Dolly Varden released an updated technical report following the acquisition of Homestake Ridge from Fury Gold Mines Ltd. FURY (Not Rated) for CA$5M in cash and 76.5M shares. The report combined and confirmed the pre-existing resource models, excluding over 76,000m of drilling on the original Dolly Varden block (2019-2023) and nearly 34,000m of drilling on the northern Homestake Ridge block (2022-2023).

Recent drilling has extended the Wolf Vein by ~500m down plunge, with highlights including 4,326gpt Ag, 1gpt Au, and 5.57% Pb+Zn over 1.12m, and ~27m grading 296gpt Ag and 4.69% Pb+Zn in the deepest step-out hole. The Homestake Silver zone has also shown potential for higher grades and gold enrichment, with intercepts such as 0.68m grading 1,335gpt Au and 781gpt Ag, and 1.75m grading 40.33gpt Au and 418gpt Ag.

"We think the vein also serves as another example of the project's potential for inclusion of a bulk-tonnage mining scenario, with the shallowest and deepest holes from the 2022 and 2023 seasons returning 18m grading 342gpt Ag and 15m grading 301gpt Ag, respectively" McDougall noted, referring to the Kitsol Vein, which lies immediately west of the Torbrit zones.

Dolly Varden's strategic plans for 2024 include the 25,000m drill program aimed at expanding the resource base at Kitsault Valley. The company's management team, led by CEO Shawn Khunkhun, has been focused on advancing the project and unlocking its full potential.

With a current market capitalization of CA$276.11 million and a share price of C$0.97, Research Capital Corp.'s target price of CA$1.45 implies a projected return of 49.5% for investors. As Dolly Varden continues to explore and expand the Kitsault Valley project, the analyst believes company is well-positioned to create significant value for its shareholders in the coming year.

Important Disclosures:

1. Dolly Varden Silver Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Dolly Varden Silver Corp.
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Disclosures for Research Capital Corp., Dolly Varden Silver Corp., April 29, 2024

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