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December 15, 2022
VANCOUVER, BC – Vancouver, BC: Dolly Varden Silver Corporation (TSXV: DV) (OTC: DOLLF) (the “Company” or “Dolly Varden“) today announces changes to its proposed brokered offering, previously announced on December 5, 2022, of common shares of the Company that qualify as “flow-through shares” as defined under the Income Tax Act (Canada) (“FT Offered Shares“) at a price of $0.90 per share (“FT Offered Price“) and common shares of the Company that qualify as “flow-through shares” as defined under the Income Tax Act (Canada) that will be issued as part of a charity arrangement (“Charity Offered Shares” and together with the FT Offered Shares, the “Offered Shares”) at a price of $1.05 per share (“Charity Offered Price” and together with the FT Offered Price, the “Offering Prices”).
The Company and its agents, Research Capital Corporation and Eventus Capital Corp., on behalf of a syndicate of agents, including Haywood Securities Inc. (the “Agents”) have elected to amend the proportion of FT Offered Shares and Charity Offered Shares which may be issued at the Offering Prices on a private placement basis to $18 million (the “Offering”) and to concurrently terminate the Listed Issuer Financing Exemption Offering (the “LIFE Offering”). The securities to be issued under the Offering will be offered by way of applicable prospectus exemptions in accordance with NI 45-106 to “accredited investors” only. All Offered Shares issued pursuant to the Offering will be subject to the statutory hold period of four months and one day from the date of issuance in accordance with applicable Canadian securities laws.
“We believe the fully allocated Private Placement represents a vote of confidence in our two flagship projects located in the Kitsault Valley in northwestern British Columbia, Canada. These funds will allow the Company to continue to aggressively explore and follow up on recent success on one of the most prospective land packages in BC’s Golden Triangle” commented Shawn Khunkhun, Chief Executive Officer of the Company.
The Agents have the option (the “Agents’ Option“) to increase the size of the Offering by up to 15%, which Agents’ Option is exercisable, in whole or in part, at any time up to 48 hours prior to the closing of the Offering.
The gross proceeds of the Offering will be used for further exploration, mineral resource expansion and drilling in Kitsault Valley located in northwestern British Columbia, Canada, as well as for working capital as permitted, as Canadian Exploration Expenses as defined in paragraph (f) of the definition of “Canadian exploration expense” in subsection 66.1(6) of the Income Tax Act (Canada) and “flow through mining expenditures” as defined in subsection 127(9) of the Income Tax Act (Canada) that will qualify as “flow-through mining expenditures”, which will be incurred on or before December 31, 2023 and renounced with an effective date no later than December 31, 2022 to the initial purchasers of FT Offered Shares and Charity Offered Shares.
In connection with the Offering, the Agents will receive an aggregate cash fee equal to 6.0% of the gross proceeds of the Offering, including in respect of the Agent’s Option.
Closing of the Offering is anticipated to occur on or about the week of December 22, 2022, or such date as the Agents and the Company may agree upon. The issuance of the Offered Shares under the Offering and the payment of the Agents’ commission are subject to the approval of the TSX Venture Exchange, receipt of any other required regulatory approvals and other customary closing conditions.
As previously announced, pursuant to the ancillary rights agreement between Hecla Canada Ltd. (“Hecla“) and the Company dated September 4, 2012, Hecla will be entitled to acquire common shares of the Company at a price of $0.83 per share to maintain its pro rata equity interest in the Company. If Hecla exercises its pro rata rights under the ancillary rights agreement, any common shares issued to Hecla will be in addition to those issued as part of the Offering. Also as previously announced, pursuant to the investor rights agreement between Fury Gold Mines Ltd. (“Fury“) and the Company dated February 25, 2022, Fury will be entitled to acquire common shares of the Company at a price of $0.83 per share to maintain its pro rata equity interest in the Company. If Fury exercises its pro rata right under the investor rights agreement, any common shares issued to Fury will be in addition to those issued as part of the Offering.
In connection with the termination of the LIFE Offering, the Company has elected to withdraw the offering document that it filed on December 5, 2022 with respect to the LIFE Offering.
In connection with the review of the Company’s preliminary base shelf prospectus filed October 7, 2022, the Company received feedback from the British Columbia Securities Commission with respect its technical disclosure for the Company’s 100% held Dolly Varden silver and gold project and Homestake Ridge gold project, both located in the Kitsault Valley of British Columbia, and which it refers to as the Kitsault Valley Project. Given the proximity of the two projects, and the Company’s announced desire to combine them if further analysis and work justify doing so, Dolly Varden will be required to file an updated technical report covering the combined Kitsault Valley Project. The Company is working expeditiously with its technical advisors to prepare a National Instrument 43-101 – Standards of Disclosure for Mineral Projects compliant technical report for the Kitsault Valley Project. Until such time as the Company can file the combined technical report, the British Columbia Securities Commission has informed Dolly Varden that it will remain on the Commission’s list of defaulting issuers.
This release does not constitute an offer to sell or a solicitation of an offer to buy of any securities in the United States. The securities described herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act“), or any state securities laws, and may not be offered or sold within the United States except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities laws or pursuant to available exemptions therefrom.
About Dolly Varden Silver Corporation
Dolly Varden Silver Corporation is a mineral exploration company focused on advancing its 100% held Kitsault Valley Project (which is composed of the Company’s Dolly Varden Project and the Homestake Ridge Project) located in the Golden Triangle of British Columbia, Canada, 25kms by road to tide water. The 163 sq. km. project hosts the high-grade silver and gold resources of Dolly Varden and Homestake Ridge along with the past producing Dolly Varden and Torbrit silver mines. It is considered to be prospective for hosting further precious metal deposits, being on the same structural and stratigraphic belts that host numerous other, on-trend, high-grade deposits, such as Eskay Creek and Brucejack. The Kitsault Valley Project also contains the Big Bulk property which is prospective for porphyry and skarn style copper and gold mineralization, similar to other such deposits in the region (Red Mountain, KSM, Red Chris).
For further information: Shawn Khunkhun, CEO & Director, 1-604-602-1440, www.dollyvardensilver.com;
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