General Precious Metals
Dolly Varden Silver (TSX-V: DV)(OTC: DOLLF) CEO Shawn Khunkhun on Forthcoming Assay Results from Dolly Varden Silver Project in British Columbia’s Prolific Golden Triangle
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Dolly Varden Silver — Mr. Shawn Khunkhun. Shawn, how are you? It's been a bit! Great to have you back on.
Shawn Khunkhun: Gerardo, excited to be here, my friend! The precious metals market has woken up, and I'm so glad that you've got me on.
Gerardo Del Real: Well, listen, let's start with the precious metals market. The last time you and I spoke publicly was in July. You had commenced diamond drilling on your silver deposit, that growing silver deposit.
The drilling was designed to upgrade the silver deposit. How is that coming along? This was back in early-July. I know the labs have been slightly delayed. But I had to reach out today because — with the silver price being where it is, with the takeout of Pretium here recently, the offer that was made to the tune of US$3.5 billion dollars — there's a lot of activity.
And I think we finally, finally have some tailwinds in the precious metals market. And I think Dolly Varden, frankly, is positioned perfectly. So I thought it an opportune time to reach out and just see where things were.
Shawn Khunkhun: Yeah, on that front, Gerardo, first of all, that takeover… it's great for the industry; it's great for the sector. But it happened in our backyard. And not only did it happen in our backyard but our project is set in the same rocks as the Brucejack mine. And our scientists that are unlocking our deposit have worked on all of the mines up in the area — including Brucejack.
So, when I came into Dolly — it's been almost a year and a half now — my goal here was to capitalize the company, to enhance the treasury. So I raised C$26 million accretively… the last financing being at C$1.00 a share… trying to do it in the most non-dilutive way for our shareholders.
And the second part of that is the 10,000 meters of drilling we did last year; the 10,000 meters that we're about to report from the 2021 drill program. I feel very confident based on last year's results, which are all public, that we've enhanced the deposit; we've grown the deposit.
We've expanded Torbrit which, just to remind your viewers, we've got 44 million ounces of high-grade silver at 300 grams per tonne. So as we report the 10,000 meters we just finished from this season, I think it's going to further give us confidence, further expand.
I think we've got a tremendous growing deposit here.
So my big picture goal here, Gerardo, it was to, number one, bring us the capital to unlock the potential. But the second thing I've done in the last six months is I've come out and I've said… we're on a quest for 100 million ounces of high-grade silver in the Golden Triangle.
I've never felt more confident that not only are we going to get to that number but we're going to exceed that number. And I look around at the opportunities, regionally, the opportunities within our deposit.
We just launched a new VRIFY deck on our website. So I encourage investors. They can see the expansion potential… they can see where the 2021 drill holes are… where the infill holes are at… where the expansion holes are. So it really brings the opportunity to life. But more importantly, it articulates the 1 to 2 kilometers in between some of the mines that we have on the property.
Gerardo Del Real: I think it's important to remind everyone that the last time you reported results back in February of this year, you were hitting 45.82 meters averaging 304 grams per tonne silver, right?
You mentioned the resource; you mentioned the grade. Both are spectacular. One hundred million ounces, of course, is a phenomenal number to get to. To hear you say that you think you can exceed that puts a smile on my face as we like telling stories, obviously, that have substantial upside.
And if we get the silver market that I think we're in for, I think it's going to be a spectacular end to the year and a phenomenal 2022. With that being said, you just added to your technical team with the addition of Mr. Andrew Hamilton. Can you speak to his background a bit?
Shawn Khunkhun: Well, listen, Andrew has been a part of companies that have not only put millions of ounces of gold and other metals (he's been involved in copper) but not only has he built up big resources but they've had the corporate success where they've had the large takeovers, the hundreds of hundreds of millions of dollars of takeovers.
We're bringing Andrew in strategically at this time because we're about to move into a stage of exploration and development that's going to require that very skillset to take our company to the next level.
So listen, we've got a tremendous technical team. We've got from, at the board level, to the advisory level, to management and to boots-on-the-ground — like from A to Z — we've got a great team.
But Andrew brings us that key piece of the puzzle that I think we need going into this next phase of development. We've got this rich ore body, that you articulated, with the last results. But if you look at the ore body, it's wide; it goes to surface. But there's tremendous room for growth and expansion.
And he can design the drill programs to build up the resource estimate to, hopefully, do one of two things, which would be to put us in a place where we develop this mine or to prompt a takeover bid.
Gerardo Del Real: Those 10,000 meters were split, if I recall correctly, 50/50 between infill and expansion. When do you anticipate the assays to start trickling in, Shawn?
Shawn Khunkhun: We tweaked the program a little bit. We probably went closer to 65% expansion. Based on the success we had last year, and based on some visuals, we decided to just allocate a little bit more meters around that expansion drilling.
Again, I don't control the assay labs; it's a third party. So I want to be very careful in my guidance because it's something where delays are just a part of the business when you're dealing with the amount of volume that these labs experience, especially in a seasonal part of the world like the Golden Triangle.
But I would suspect that we can't be more than a couple of weeks away from starting to report. But the exciting part is we should be continuing to report going into the end of Q4 and into early-Q1 of next year.
Gerardo Del Real: Shawn, you're not only CEO of Dolly Varden Silver but, like me, you're an active investor in the space. You have skin in the game. I can't let you go — given the precious metal setup that we have right now — without asking you for some companies that you like out there that maybe you're involved with or aren't involved with but you think are good speculations.
Shawn Khunkhun: Well, I'm a big fan of the work Arturo Bonillas is doing at the San Francisco mine. So this is Magna [Gold]. I can't stress enough when a company goes from an idea. Arturo shared a vision with me when I first met him two years ago and he said…
Listen, I'm going to win Magna. We're going to get 200,000 ounces of production. We're going to put 5 million ounces of gold in the ground.
And for him to get a big part of the way there with San Francisco in, really, less than two years is a feat that I've never seen. But more importantly, and more impressively, he did it and he's only got 89 million shares issued and outstanding.
So let's call it 90 million shares issued and with production guidance of 60,000 to 65,000 ounces this year. But he left Q3 at a run rate of 80,000 ounces. And I think he'll get to a place where he leaves Q4 at 90,000 ounces. The amount of cash that Magna is going to spit out, I've never in my career seen an opportunity that cheap. So, MGR, Magna; I'm a huge fan!
I've got an exploration company up in the Golden Triangle, StrikePoint, that has drilled about 5,000 meters. It's exciting because, unlike Magna, it's got that exponential potential because it's a C$0.16 stock, right? So you make a discovery, and you can move the decimal point one to the right. So I'm biased there because I am on the board and I do run the company.
The other name that comes to mind — and it's the last one I'll mention because I don't want to monopolize the time here — but my friend and colleague, Rob McLeod, who's CEO of Blackwolf Copper & Gold. You've got a situation there. You've got a C$21 million market cap, and you've got an asset in Niblack that underpins the value of the company.
Plus you have exploration potential in the Hyder projects. And Rob has proven over the years — whether it's as a director of Lithium X, whether it was VP Exploration for Underworld, whether it was CEO of IDM — Rob has got a history of M&A transactions; he's got a history of discovery.
I don't know an individual in the industry that gives back more to the communities, whether it's the Association of Mineral Exploration in BC or it's empowering and working together with nations, like the Nisga'a, our First Nations partners up in Northwest BC. So he's a great human being. He's a creative geologist.
And so those are a couple of names but there's many others. In this environment — with mining companies trading where they are in relation to the prices of these commodities — there's probably never been a time in history where, on a relative basis to metal prices, mining equities have been this undervalued. So it's an exciting time.
And then, Gerardo, you think about some of the numbers we saw this week. 6.2% CPI. We're at a 30-year high in the inflation numbers that they're reporting. And that's after all of the financial tweaking and engineering that goes into that headline number.
You and I probably both know — when we go out to the grocery store or we go to the gas station or we're living our lives — that inflation is really running in the double-digits and has been for a while and will continue to.
So how do you protect yourself?
I think that mining stocks are the way to go right now, especially relative to all of these other asset classes like the NASDAQ, like real estate, like crypto. This is a great, great, safe place to be.
Gerardo Del Real: I couldn't agree more with everything you just said. Open invitation for Rob to come on in, or come on the show, and happy to have a conversation with him about the team and the project.
I can tell you from past experience with Underworld. I made money with Lithium X. Nick Hodge got subscribers in; I think he helped finance that very early. And I know they made well over 1,000% gains on that deal there.
And then, Arturo Bonillas; I call him ‘The Michael Jordan of Exploration in Mining’ because when we met two years ago, he shared that idea, and I wrote a check at C$0.10. And at that time, he had had 5 deposits that he had put into production. And he was going for number six, right? Number six became San Francisco. Michael Jordan, of course, became a six-time champion. And I'm a Chicago kid. So there that is!
Anyhow, Shawn, it's great to have you on. I'm looking forward to having you back on, hopefully, in a couple of weeks with those assays coming in and, hopefully, with silver at US$26, US$27 and headed to US$30 [an ounce].
Shawn Khunkhun: Yeah, Gerardo, I'm a big fan of the work you and your partners are doing. And thank you so much for having me on.
Gerardo Del Real: I appreciate your time. Thank you, Shawn.
Shawn Khunkhun: Okay, all the best.Click here to see more from Dolly Varden Silver