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VANCOUVER, BC, July 27, 2020 /CNW/ - Dolly Varden Silver
Corporation ("Dolly Varden" or the "Company") (TSXV:
DV) (OTC:DOLLF), is pleased to announce that it has entered into an
agreement with Mackie Research Capital Corporation, as co-lead
agent and sole bookrunner, along with Eventus Capital Corp. as
co-lead agent (together, the "Agents") in connection with a
best efforts, brokered private placement of units of the Company
(the "Units") at a price of $0.71 per Unit (the "Offering Price") for
gross proceeds of up to $7,500,000
(the "Offering"). Continuing with his support of Dolly
Varden, Mr. Eric Sprott is expected
to subscribe into the Offering to maintain his 19.9% interest.
Each Unit will be comprised of one common share of the Company
(a "Common Share") and one-half of one Common Share purchase
warrant (each whole warrant, a "Warrant"). Each Warrant
shall be exercisable to acquire one Common Share (a "Warrant
Share") at a price of $1.10 per
Warrant Share for a period of 24 months from the closing of the
Offering. Provided that if, at any time prior to the expiry date of
the Warrants, the closing price of the Common Shares on the TSX
Venture Exchange (the "Exchange"), or other principal
exchange on which the Common Shares are listed, is greater than
$1.75 for 10 consecutive trading
days, the Company may, at the Company's discretion, and at any time
going forward, within 15 days of the occurrence of such event,
deliver a notice to the holders of Warrants accelerating the expiry
date of the Warrants to the date that is 30 days following the date
of such notice (the "Accelerated Exercise Period"). Any
unexercised Warrants shall automatically expire at the end of the
Accelerated Exercise Period.
"Dolly Varden's new geological team has uncovered a significant
number of high-grade silver targets that warrants an aggressive
drill program. There is some real excitement for us to
commence drilling to expand the Torbrit silver resource as well as
additional exploration along the Torbrit horizon. These funds give
Dolly Varden the opportunity to uncover and refine the potential
results this 2020 drilling season. I would like to thank Mr.
Sprott and the other key new institutional investors to allow us to
unlock value for our shareholders," remarked Shawn Khunkhun, Dolly Varden's Chief Executive
Officer.
The Agents will have an option (the "Agent's Option") to
offer for sale up to an additional 15% of the number of Units sold
in the Offering at the Offering Price, which Agent's Option is
exercisable, in whole or in part, at any time up to 48 hours prior
to the closing of the Offering.
The Company intends to use the net proceeds from the Offering
for further exploration, mineral resource expansion and drilling at
the Dolly Varden silver property in northwestern British Columbia, Canada, working capital and
general corporate purposes.
The securities to be issued under the Offering will be offered
by way of private placement in each of the provinces of
Canada, other than Quebec, and such other jurisdictions as may be
determined by the Company, in each case, pursuant to applicable
exemptions from the prospectus requirements under applicable
securities laws.
The Offering is scheduled to close on or about the week of
August 17, 2020, or such date as
agreed upon between the Company and the Agents (the
"Closing") and is subject to certain conditions including,
but not limited to, the receipt of all necessary approvals
including the approval of the Exchange. The Units to be issued
under the Offering will have a hold period of four months and one
day from Closing.
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 at a price of $0.71 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.
In connection with the Offering, the Agents will receive an
aggregate cash fee equal to 6.0% of the gross proceeds from the
Offering, including in respect of any exercise of the Agent's
Option. In addition, the Company will grant the Agents, on date of
Closing, non-transferable compensation warrants (the
"Compensation Warrants") equal to 6.0% of the total number
of Units sold under the Offering (including in respect of any
exercise of the Agent's Option). Each Compensation Warrant will
entitle the holder thereof to purchase one Common Share at an
exercise price equal to the Offering Price for a period of 24
months following the Closing.
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 accordingly, 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 requirements or
pursuant to exemptions therefrom. This press release does not
constitute an offer to sell or a solicitation to buy any securities
in any jurisdiction.
About Dolly Varden Silver Corporation
Dolly Varden Silver Corporation is a mineral exploration company
focused on exploration in northwestern British Columbia. Dolly Varden has two
projects, the namesake Dolly Varden silver property and the nearby
Big Bulk copper-gold property. The Dolly Varden property is
considered to be highly prospective for hosting high-grade precious
metal deposits, since it comprises the same structural and
stratigraphic setting that host numerous other high-grade deposits
(Eskay Creek, Brucejack). The Big
Bulk property 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 release may contain forward-looking statements or
forward-looking information under applicable Canadian securities
legislation that may not be based on historical fact, including,
without limitation, statements containing the words "believe",
"may", "plan", "will", "estimate", "continue", "anticipate",
"intend", "expect", "potential" and similar expressions.
Forward-looking statements involve known and unknown risks,
uncertainties, and other factors which may cause the actual
results, performance, or achievements of Dolly Varden to be
materially different from any future results, performance, or
achievements expressed or implied by the forward-looking
statements. Forward looking statements or information relates to,
among other things, completion of the Offering, Exchange approval
of the Offering, the use of proceeds with respect to the Offerings,
the results of previous field work and programs and the continued
operations of the current exploration program, interpretation of
the nature of the mineralization at the project and that that the
mineralization on the project is similar to Eskay and Brucejack,
results of the mineral resource estimate on the project, the
potential to grow the project, the potential to expand the
mineralization, the planning for further exploration work, the
ability to de-risk the potential exploration targets, and our
beliefs about the unexplored portion of the property. These
forward-looking statements are based on management's current
expectations and beliefs but given the uncertainties, assumptions
and risks, readers are cautioned not to place undue reliance on
such forward-looking statements or information. The Company
disclaims any obligation to update, or to publicly announce, any
such statements, events or developments except as required by
law.
For additional information on risks and uncertainties, see the
Company's most recently filed annual management discussion &
analysis ("MD&A"), which is available on SEDAR at
www.sedar.com. The risk factors identified in the MD&A are not
intended to represent a complete list of factors that could affect
the Company.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX-V)
accepts responsibility for the adequacy or accuracy of this news
release.
SOURCE Dolly Varden Silver Corp.
