Dolly Varden Silver (TSX-V: DV)(OTC: DOLLF) CEO Shawn Khunkhun on Being a Top Silver Takeout Target


Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and CEO of Dolly Varden Silver, Mr. Shawn Khunkhun. Shawn, how are you today, sir?

Shawn Khunkhun: I'm doing well. Doing very, very well. How are you?

Gerardo Del Real: I'm well. Thank you for asking. Listen, we were both in Vancouver recently for a roundup and the Vancouver Resource Investment Conference. It was well attended. It was back to back to back meetings, and you and I actually did not get a chance to catch up, and so I'm really glad to have you on. Look, I've said for over a year now that I think Dolly Varden is a prime takeout target.

We haven't had the best precious metals environment, though it hasn't been a bad one. It's been kind of a boring one, but all Dolly keeps doing is hitting high grade silver after high grade silver hits, right? The most recent news was 93.95 meters of 357 grams per tonne silver equivalent. That included 9,422 grams per tonne silver equivalent over 1.02 meters. So I wanted to have you on to talk about how things are looking, how things are going, and of course, what comes next.

Shawn Khunkhun: Listen, I think it's important not to look at these things in a vacuum. And so we have to look at what precious metals equities are doing to start the year, and they're off to a very bad start. We had some really encouraging price action going into the end of the year. We had gold putting in a new all time high in US dollar terms, but to start the year, Gerardo, the ETFs that track these miners or these explore co’s or these developers, they're off in the double digits. And in that environment you could find the biggest gold, silver discovery on the planet and it's going to be tempered. It's going to be somewhat muted.

So I think the fact that we started the year down over 10% for gold stocks and silver stocks is an incredible opportunity because you do have the record high gold price. And silver, it's got some strong price action here. It's off the highs, but the trend is up. And I think this is incredible opportunity to get longer or get long some equities.

And I think in the case of Dolly Varden, we are growing the fundamentals of our business. We are adding silver, we are increasing our own confidence in the project, the continuity, the grade. In that press release, and this is not a part of the property that's known for silver, it's more known for gold, right? It's the southern part of the property where we've got the old richest silver mine in the British Empire, Canada's third-largest silver mine. It's in the southern part of the property that's known for silver. As you go north, we're getting into more of a gold system. The fact that we're hitting the types of numbers we are hitting, we've got nine meters of almost three kilos of silver eq., and then there's this broader mineralized envelope that's going 80 meters, 90 meters of 10 to 12 ounce silver eq., and it's silver and it's gold.

And what gives me so much confidence in this project today is when you have such a broad mineralized envelope, that works, that potentially can be bulk mined. When I look at my competition and the peers and look, there's a certain amount of money that's going to go to develop the next project. Do you want to go develop a project that's a mile underground where the veins are 0.3 meters wide, or do you want to come up to a project in Canada that's going to surface and it's extremely wide and high grade? So I am very, very confident in our project today. I've got another 40 drill results to come, and I think we're going to continue to garner a lot of talk and attention.

Gerardo Del Real: I couldn't agree more. It was really interesting to me that you recently decided to consolidate the Big Bulk copper gold porphyry property. Can you speak to the thought process there?

Shawn Khunkhun: Yeah. Listen, I don't want to be too self-promotional here about the company, the team and what we're doing, but I think the Big Bulk highlights why you should be a Dolly Varden shareholder. There's a situation where we've been monitoring Big Bulk for the four years I've been here. And it was a deal where we stole it for our shareholders. We got Big Bulk, which is thought to be a feeder to all the silver and gold mineralization that we've identified. We've identified 140 million ounces of silver equivalent on the Kitsault Valley trend. We just secured a hundred percent interest of the porphyry feeder. And we know it's fertile because there's some drill holes that Anglo had drilled a decade ago that we know the numbers.

You've got high grade veins at surface. You've got an intact, fertile copper-gold porphyry in an area that hosts Red Chris, that hosts KSM, so an extremely high grade producing copper-gold mine and one of the largest undeveloped gold mines on the planet. So that's the geology, that's the area, that's the neighborhood. And we just got this thing.

And what did we pay? We paid a million and a half dollars over four years. It was an incredible deal, and it was just a little tuck in that we put out on December 20th just before the end of the year. But I'm going to give our shareholders an opportunity to benefit from any discovery success there by allocating 5%. And again, 95% of our focus is going to be on what's working. And what's working is going after the low hanging fruit. We've vectored into incredible areas like the Wolf deposit, like Homestake Silver, like Homestake Main, like Torbrit. We are going to continue to do what is working. We're going to continue giving our shareholders leverage to high grade silver and gold ounces in a safe jurisdiction. But with 5% of our budget, we are going to give them an opportunity to discover and drill out and just show some economics around this porphyry.

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Gerardo Del Real: What comes next, Shawn?

Shawn Khunkhun: So drill results, and that's been the greatest driver of value for Dolly Varden. It's growing the mineral inventory through acquisition and through discovery. So we've got drill results that are coming very, very, very soon. These are from drilling that we did in 2023. So we're going to out the final results of our program, and then we'll immediately put out our plans for the 24 season, and then we will get up into the field and we'll continue to go. And I think what we've got here is, I was listening to Pierre Lassonde talk about Franco Nevada, and I was listening to him talk about creating value for shareholders. And I'll tell you, it made me think, right now, Dolly Varden is trading based on what we have and we're getting zero value for the land optionality, or another way to say that is the prospectivity or what's going to be discovered.

And that's where we are as a market right now, where these companies are, because of a lack of dollars coming into the space, because of a lack of money that's in the sector, it's leaving these high quality companies on sale, and it's a tremendous opportunity for investors. I think it'll go down as the single greatest time because you're not going to have to wait. You could find better opportunities in 2015 when the gold price was a thousand dollars, but you'd have to wait a decade. Right now you've got high gold price, low equity price. This is the moment.

Gerardo Del Real: I couldn't agree more. I've been very active writing checks behind the scenes and positioning and adding to positions. I think the risk reward proposition right now for quality juniors is as good a setup as I've seen in my 15 or so years speculating in the space. Anything to add to that, Shawn?

Shawn Khunkhun: No, that's it. I just think that stick with quality, stick with size, with scale. We talked about it before we hit record about this company being a takeover target. We've already attracted the corporate. They're at 15%. So investors can feel very confident that whether it's Hecla, whether it's Eric Sprott, whether it's Fidelity, there's been a tremendous amount of due diligence done on this name and it's led miners to become shareholders, and that should tell you something.

Gerardo Del Real: Couldn't agree more. Shawn, looking forward to having you back on for the pending assays and really excited about the 2024 work program. Thank you again.

Shawn Khunkhun: Thanks for having me, Gerardo. All the best.

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