Dolly Varden Silver Secures $25 Million Financing Deal
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Dolly Varden Silver Announces $25 Million Bought-Deal Financing
A recent announcement from Dolly Varden Silver Corporation (TSXV: DV) (OTCQX: DOLLF) highlights the company's endeavour to raise $25 million through a significant bought-deal financing. This agreement, which involves Research Capital Corporation as the sole bookrunner and co-lead underwriter, along with Haywood Securities Inc., is designed to enhance the company’s financial capabilities.
The financing will comprise securities, collectively referred to as "Offered Securities." This initiative is expected to generate gross proceeds of:
a) Common Shares at a price of $1.00 per share, projected to yield about $8 million, issued under a prospectus supplement related to a prior shelf prospectus dated April 25, 2023.
b) Flow-through shares (or "FT Shares") at a worth of $1.25 per share, expected to generate approximately $17 million through a private placement. This financing structure encourages investment while providing tax advantages under Canadian law.
Prominent investor Eric Sprott, via 2176423 Ontario Ltd., has expressed his intention to take part in this financing effort, underscoring the deal's potential attractiveness to institutional and accredited investors.
Additionally, the company has granted the underwriters an over-allotment option allowing them to acquire additional Offered Securities amounting to 15% of the total number planned for issuance. This feature offers market stabilization flexibility and helps address potential over-subscription in the offerings.
The net proceeds from the sale of Common Shares will be allocated towards general corporate purposes and working capital. In contrast, the proceeds from selling the FT Shares will primarily facilitate ongoing exploration, resource expansion, and drilling within the Kitsault Valley project in northwestern British Columbia. This project area is recognized for its rich mineral deposits, including both silver and gold resources.
The first tranche of the offerings is anticipated to close on or around September 4, pending any necessary regulatory approvals, particularly the consent for listing the securities on the TSX Venture Exchange.
Furthermore, the company intends to file a prospectus supplement for the regulatory authorities across Canadian provinces—in line with compliance measures necessary for a successful funding round. The intent is to ensure transparency and provide potential investors with all required details regarding the company and the financing method.
The FT Shares will be available to accredited investors, conforming to regulatory exemptions to facilitate the offering. A statutory hold period of four months and one day will apply post-closing for these shares.
All essential underwriting agreements stipulate compensation of a cash fee equivalent to 5.0% of the gross proceeds collected through these offerings. Also, Hecla Canada Ltd. and Fury Gold Mines Ltd. retain the right to acquire Common Shares at $1.00 each through existing agreements, maintaining their equity interest in Dolly Varden.
As a mineral exploration company, Dolly Varden Silver Corporation prioritizes advancing its Kitsault Valley Project. This venture is especially significant, as it houses the Dolly Varden Project and the Homestake Ridge Project, renowned for their high-grade silver and gold potential.
About Dolly Varden Silver Corporation
Dolly Varden Silver Corporation is dedicated to enhancing its 100% owned Kitsault Valley project, which spans 163 square kilometers and is strategically located within the Golden Triangle region of British Columbia, 25 kilometers from tidal waters. This project area integrates the high-grade resources of both the Dolly Varden and Homestake Ridge sites, alongside previously operating silver mines. The district is known for several prolific high-grade deposits and has further potential for discovering additional precious metal resources.
Frequently Asked Questions
1. What is the purpose of Dolly Varden Silver's recent financing?
The purpose of the financing is to raise $25 million for working capital, general corporate uses, and to fund exploration activities within the Kitsault Valley project.
2. Who is participating in this financing event?
Investor Eric Sprott, through 2176423 Ontario Ltd., has indicated his intention to participate in the financing transaction.
3. What types of shares are included in the financing?
The financing includes Common Shares and Flow-Through Shares (FT Shares) which offer tax advantages under Canadian regulations.
4. When is the expected closing date for the financing?
The first tranche is expected to close on or about September 4, subject to regulatory approvals.
5. How will the funds raised be utilized?
Net proceeds will be used for general corporate purposes and exploration efforts in the Kitsault Valley project to enhance mineral resource development.
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