Asset Provides Two Robust Ways To Create Value

Source: Marcus Giannini 05/14/2024

The gold-silver project "remains accommodating for a modest production profile at present with opportunity for growth" noted a Haywood Securities report.

Dolly Varden Silver Corp. DOLLF offers upside in exploration potential on its sizable land package and in its current, likely expandable mineral resource, purported Haywood Securities analyst Marcus Giannini in a May 9 research note. Giannini recently took over covering this mining company.

"While we believe the opportunity for discovery within the greater land package remains a significant catalyst for future value creation, we also view the current endowment of defined gold and silver resources as a starting point for a modest underground and conventional mining and processing scenario" Giannini wrote.

142% Gain, Catalysts

Haywood has a Buy rating and a CA$2.40 per share target price on the Canadian explorer-developer, trading at about CA$0.99 per share at the time of the report, noted Giannini. As such, the implied return for investors is 142%.

"We recommend investors accumulate shares of Dolly at current prices" Giannini wrote. "We believe the primary value driver for Dolly over the short and long term should occur by way of the drill bit as the firm's 2024 program nears commencement."

The start of this summer exploration campaign is an upcoming catalyst for Dolly Varden Silver, as is an update to the mineral resource estimate for its Kitsault Valley project in British Columbia's Golden Triangle.

Initial Production Scenario

Giannini presented the highlights of the Dolly Varden Silver story.

One is the company's existing high-grade gold and silver resource for its Kitsault Valley project, comprised of gold-rich Homestake Ridge to the north and various silver-dominant deposits to the south (Dolly Varden, Torbrit, North Star, and Wolf). The current Indicated plus Inferred resource at Kitsault Valley totals 64,000,000 ounces of silver and 982,712 ounces of gold.

"Grade, jurisdiction, and upside to resource growth sets these ounces apart from other peers in the space" Giannini wrote.

Based on the current resource, Haywood outlined a production scenario for Dolly Varden Silver, which has two underground mines feeding ore to a centralized processing plant. Production would be about 84,000 of gold equivalent (Au eq) per annum for about 13.5 years. Estimated costs would be US$150 million (US$150M) as initial capex, US$851 per ounce of Au eq as the all-in sustaining cost, and US$78M as life-of-mine sustaining capital.

"Our assumed production scenario may be conservative" Giannini commented.

Potential for New Discoveries

Given Dolly Varden Silver's 163 square kilometer land package in the prolific Golden Triangle, Giannini asserted, numerous opportunities exist for the Vancouver-based mining company to discover additional mineralization at Kitsault Valley and grow its existing resource.

"Driven by the underlying geology and metallogenic setting, we continue to see promising drill results within the current resources, as well as when stepping out into more untested zones" added the analyst.

Various deposits remain open at depth and along strike. Untested targets exist along the Kitsault Valley Trend that lies between the contiguous Dolly Varden and Homestake Ridge properties. Beyond the known deposits, the greater Kitsault Valley land package offers prospective targets, too.

"Dolly Varden's planned 2024 exploration program could be transformational as high-priority areas remain open for expansion while untested regional targets could lead to additional deposit discoveries" Giannini wrote.

The company has sufficient cash for this planned work.

Attractive Takeout Target

Giannini wrote that Haywood expects additional merger and acquisition activity to occur, particularly in tier-one jurisdictions such as the Golden Triangle, and Dolly Varden Silver's Kitsault Valley could get taken out for various reasons.

The project has high-quality ounces. Its "mineralogy and depositional context" are similar to those seen at another Golden Triangle project, Brucejack, acquired for US$2.8 billion in 2022 by Newcrest Mining. Already, North American producers have expressed an interest in Dolly Varden Silver, such as Hecla Mining, now with about a 15% stake in it.

"Kitsault Valley remains a good fit for established producers" wrote Giannini.

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.
3. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
4. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

Disclosures for Haywood Capital Markets, Dolly Varden Silver Corp., May 9, 2024

This research report is only for informational purposes. Nothing contained in this report is, or should be, relied upon as a promise or representation as to the future performance. The opinions and information in this communication constitutes the current judgment of the authors as of the date and time of this report and are subject to change without notice. There is no representation, warranty or other assurance that any projections contained in this report will be realized. Past performance is not indicative of future results.

This report is not intended to provide personal investment are encouraged to seek advice regarding the advisability or suitability of any investments or strategies discussed in this report. Individuals involved in the production of research materials operate independently and without influence from any other Haywood Securities Inc. departments, including Haywood Securities Inc. affiliates. advice. Investors

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Analyst Certification

I, Marcus Giannini, hereby certify that the views expressed in this report (which includes the rating assigned to the issuer's shares as well as the analytical substance and tone of the report) accurately reflect my/our personal views about the subject securities and the issuer. No part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendations.

Important Disclosures

Of the companies included in the report the following Important Disclosures apply:

• Haywood Securities, Inc. has reviewed lead projects of Dolly Varden Silver Corp. (DV-V) and a portion of the expenses for this travel may have been reimbursed by the issuer.
• Haywood Securities or one of its subsidiaries has managed or co-managed or participated as selling group in a public offering of securities for Dolly Varden Silver Corp. (DV-V) in the last 12 months.