Dolly Varden Silver Corporation (TSXV: DV) (OTCQX: DOLLF) (the
“
Company” or “
Dolly Varden”) is
pleased to announce that it has entered into an agreement with
Research Capital Corporation, as the sole bookrunner and co-lead
underwriter, and together with Haywood Securities Inc. as co-lead
underwriters, on behalf of a syndicate of underwriters, including
Raymond James Ltd. (collectively, the
“
Underwriters”), pursuant to which the
Underwriters have agreed to purchase, on a bought-deal basis, a
combination of securities of the Company (“
Offered
Securities”) for aggregate gross proceeds to the Company
of $25,000,000:
a) common shares of
the Company (“Common Shares”) at a price of $1.00
per Common Share for gross proceeds of $8,000,000, to be issued
under a prospectus supplement to the Company’s final short form
base shelf prospectus dated April 25, 2023 (“Prospectus
Offering”); and
b) Common Shares that
will qualify as "flow-through shares" within the meaning of
subsection 66(15) of the Income Tax Act (Canada) (the "Tax
Act") (each, a "FT Share") at a price of
$1.25 per FT Share for gross proceeds of $17,000,000, to be issued
under a private placement ("Private Placement
Offering", and together with the Prospectus Offering, the
"Offerings").
Mr. Eric Sprott, through 2176423 Ontario
Ltd., has indicated his intention to participate in the
transaction.
The Company has granted to the Underwriters an
option (the “Over-Allotment Option”) to increase
the size of the Offerings by up to an additional number of Offered
Securities that in aggregate would be equal to 15% of the total
number of Offered Securities to be issued under the Offerings, to
cover over-allotments, if any, and for market stabilization
purposes, exercisable at any time and from time to time up to 30
days following the closing of the Offerings.
The net proceeds from the sale of Common Shares
will be used for working capital and general corporate purposes.
The gross proceeds from the sale of FT Shares will be used for
further exploration, mineral resource expansion and drilling in the
combined Kitsault Valley project, 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” and “BC flow-through mining expenditures” as defined
in subsection 4.721(1) of the Income Tax Act (British Columbia),
which will be incurred on or before December 31, 2025 and renounced
with an effective date no later than December 31, 2024 to the
initial purchasers of FT Shares.
The first tranche of the Offerings is expected
to close on or about September 4, 2024, or such earlier or later
date as may be determined by the Underwriters (the
“Closing”). A portion of the Private Placement
Offering will close in a second tranche that is expected to occur
in mid-September 2024. Closing is subject to the Company receiving
all necessary regulatory approvals, including the approval of the
TSX Venture Exchange (the “Exchange”) to list, on
the date of Closing, the Common Shares and the FT Shares.
In connection with the Prospectus Offering, the
Company intends to file a prospectus supplement (the
“Supplement") to the Company’s short form base
shelf prospectus dated April 25, 2023 (the “Shelf
Prospectus"), with the securities regulatory authorities
in all provinces of Canada, except Quebec. Copies of the Shelf
Prospectus and, the Supplement to be filed in due course in
connection with the Prospectus Offering, will be available on
SEDAR+ at www.sedarplus.ca. The Shelf Prospectus contains, and the
Supplement will contain, important detailed information about the
Company and the Offerings. Prospective investors should read the
Supplement and the accompanying Shelf Prospectus and the other
documents the Company has filed on SEDAR+ at www.sedarplus.com
before making an investment decision.
The FT Shares will be offered to accredited
investors in each of the provinces of Canada pursuant to applicable
prospectus exemptions in accordance with National Instrument 45-106
- Prospectus Exemptions and will have a statutory hold period of
four months and one day from Closing.
In connection with the Offerings, the
Underwriters will receive an aggregate cash fee equal to 5.0% of
the gross proceeds of the Offerings. Eventus Capital Corp. is a
special advisor to the Company.
Pursuant to existing agreements with the
Company, Hecla Canada Ltd. ("Hecla") and Fury Gold
Mines Ltd. (“Fury”) will be entitled to acquire
Common Shares in connection with the Offerings at a price of $1.00
per Common Share to maintain their pro rata equity interest in the
Company. If Hecla or Fury exercise their pro rata rights, any
Common Shares issued will be in addition to those issued as part of
the Offerings.
This press release is not an offer to sell or
the solicitation of an offer to buy the securities in the United
States or in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to qualification or registration under
the securities laws of such jurisdiction. The securities being
offered have not been, nor will they be, registered under the
United States Securities Act of 1933, as amended, and such
securities may not be offered or sold within the United States or
to, or for the account or benefit of, U.S. persons absent
registration or an applicable exemption from U.S. registration
requirements and applicable U.S. state securities laws.
About Dolly Varden Silver
Corporation
Dolly Varden Silver Corporation is a mineral
exploration company focused on advancing its 100% held Kitsault
Valley Project (which combines the 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,
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).
Forward-Looking Statements
This news release contains statements that
constitute “forward-looking statements.” Such forward looking
statements involve known and unknown risks, uncertainties and other
factors that may cause the Company’s actual results, performance or
achievements, or developments to differ materially from the
anticipated results, performance or achievements expressed or
implied by such forward-looking statements. Forward looking
statements are statements that are not historical facts and are
generally, but not always, identified by the words “expects,”
“plans,” “anticipates,” “believes,” “intends,” “estimates,”
“projects,” “potential” and similar expressions, or that events or
conditions “will,” “would,” “may,” “could” or “should” occur. These
forward‐looking statements or information relate to, among other
things: receipt of all approvals related to the Offerings; the
intended use of proceeds from the Offerings; the potential
subscription of Hecla and Fury in connection with the Offerings and
the expected Closing of the Offerings.
Forward-looking statements in this news release
include, among others, statements relating to expectations
regarding the expected closing date of the Offerings, and other
statements that are not historical facts. By their nature,
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause our actual results,
performance or achievements, or other future events, to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Such factors and risks include, among others: the
Company may require additional financing from time to time in order
to continue its operations which may not be available when needed
or on acceptable terms and conditions acceptable; compliance with
extensive government regulation; domestic and foreign laws and
regulations could adversely affect the Company’s business and
results of operations; and the stock markets have experienced
volatility that often has been unrelated to the performance of
companies and these fluctuations may adversely affect the price of
the Company’s securities, regardless of its operating
performance.
The forward-looking information contained in
this news release represents the expectations of the Company as of
the date of this news release and, accordingly, is subject to
change after such date. Readers should not place undue importance
on forward-looking information and should not rely upon this
information as of any other date. The Company undertakes no
obligation to update these forward-looking statements in the event
that management’s beliefs, estimates or opinions, or other factors,
should change.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this news release.
For further information: Shawn Khunkhun, CEO
& Director, 1-604-609-5137, www.dollyvardensilver.com.
Dolly Varden Silver (TSXV:DV)
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