Dolly Varden Silver Up Over 30 Percent on Maiden Resource Estimate

Wednesday was a terrible day for the silver price, with September futures dropping 3.9 percent to hit $14.04 per ounce, the lowest since August 2009. And while the metal has since largely recovered, silver-focused companies are still suffering from the drop.
Given those circumstances, Thursday’s news from Dolly Varden Silver (TSXV:DV) was particularly encouraging. The company released the maiden NI 43-101 resource estimate for its British Columbia-based Dolly Varden project, and by the end of the day its share price had risen an impressive 32 percent to hit $0.165.
The estimate is for the four known deposits at the Dolly Varden project: Dolly Varden, North Star, Torbrit and Wolf. The indicated mineral resource came in at 31.8 million ounces of silver contained in 3.07 million tonnes of material with an average grade of 321.6 g/t silver. The inferred mineral resource sits at 10.8 million ounces of silver grading 373.3 g/t.
Dolly Varden’s interim president and CEO, Rosie Moore, is pleased with the results, and highlighted the grades reported in a press release. She said, “[t]he fact that the estimated silver grades are greater than 250 grams per tonne in the Indicated category for all of the deposits, and 625 grams per tonne at the Dolly Varden deposit, means that this project warrants attention even at today’s metal prices.”
The company also notes in the release that the estimate nearly triples the historic estimated mineralization for the deposits.
Thursday’s release doesn’t outline what the next steps for Dolly Varden will be, but Moore does note that the estimate will help the company find “locations where tonnage and grade may be increased or where mineralization may be upgraded to higher confidence resource categories.” It will also be useful in “explor[ing] for similar high-grade deposits on the remainder of the property.”

Stocks in the black?

As mentioned, the silver price’s poor performance Wednesday affected silver-focused companies across the board. Indeed, Mineweb’s Kip Keen published an article that looks at exactly how badly they fared. In particular, he highlights major miner Fresnillo (LSE:FRES), whose “decline stood out” as one of the worst at 7.04 percent. According to Keen, the company “was clearly singled out and treated harshly for its silver production Wednesday.”
For investors, the question now is whether Thursday’s silver price bump has had any effect on the companies that suffered yesterday. Unfortunately, the answer is not as positive as might be hoped.
As of 2:00 p.m. EST Thursday, Fresnillo’s share price was up 3.03 percent, at GBP6.13. Meanwhile, Alexco Resource’s (TSX:AXR,NYSEMKT:AXU) share price was flat on the TSX, at $0.40, and Fortuna Silver Mines’ (TSX:FVI,NYSE:FSM) was at $3.19 on the TSX, up 5.98 percent. Alexco and Fortuna saw the biggest losses aside from Fresnillo on Wednesday, with their share prices sinking 8.05 percent and 7.38 percent, respectively. Essentially, while their share prices have improved since Wednesday’s takedown, they are not yet where they were prior to falling.
The upshot, then, is that while the situation is not all bad for silver stocks, caution and care are becoming increasingly important for investors interested in making moves. Perhaps more importantly, patience is becoming investors’ most important virtue.