SCHEDULE 13D: Hecla Mining Bolsters Strategic Stake in Dolly Varden Silver, Acquiring Additional Shares for Mining Claims

Hecla Mining Company and its subsidiaries have increased their beneficial ownership in Dolly Varden Silver Corp. to 14.6% through a recent acquisition of shares in exchange for mining claims.

Summary

• Hecla Mining Company, along with its subsidiaries Hecla Canada Ltd. and Hecla Quebec Inc., collectively known as the Reporting Persons, have filed a Schedule 13D.
• The filing reports that the Reporting Persons beneficially own an aggregate of 11,958,337 Common Shares of Dolly Varden Silver Corp., representing 14.6% of the Issuer's outstanding class.
• On May 23, 2025, Hecla Quebec Inc. acquired 1,351,963 Common Shares of Dolly Varden Silver Corp. in exchange for certain mining claims.
• The consideration for these mining claims included a 2% net smelter royalty on any mining production proceeds from the claims and CDN$5,000,000 worth of Common Shares of Dolly Varden Silver Corp.
• The shares were issued at a deemed price of CDN$3.70 per share, based on the 20-day Volume Weighted Average Price (VWAP) on the TSX Venture Exchange immediately prior to May 2, 2025.
• Hecla Canada Ltd. previously held 10,606,374 shares (12.8%), and the new acquisition by Hecla Quebec Inc. adds 1,351,963 shares (1.9%) to the group's total.
• Hecla Canada Ltd. maintains strategic rights under an Ancillary Rights Agreement (ARA) dated September 4, 2012, including the right to nominate a Board member, appoint a Technical Committee member, maintain pro rata ownership, and a right of first refusal on certain mining properties, as long as its ownership remains 10% or greater.

Sentiment

Score: 8

Explanation: The sentiment is positive as a major mining company (Hecla) has increased its strategic stake in Dolly Varden, indicating confidence in the Issuer's assets and providing a strong strategic partner with significant governance rights.

Positives

• Hecla Mining Company, a major precious metals miner, has increased its strategic stake in Dolly Varden Silver Corp., signaling confidence in the Issuer's assets and future prospects.
• The transaction involved Dolly Varden Silver Corp. acquiring additional mining claims, which could enhance its resource base and exploration potential.
• Hecla's continued significant ownership (14.6%) and associated rights (Board nomination, Technical Committee appointment, pre-emptive rights, right of first refusal) provide a strong strategic partner for Dolly Varden.

Future Outlook

Hecla Mining Company's continued significant ownership and strategic rights in Dolly Varden Silver Corp. suggest an ongoing strategic interest in the Issuer's assets and potential future collaboration or influence on its operations and corporate direction.

Management Comments

• Hecla Canada Ltd. previously invested in Issuer and has the right to designate one member of Issuer's Board of Directors.
• Hecla Quebec Inc. recently sold mining claims in British Columbia to the Issuer and received Common Shares of the Issuer as consideration.

Industry Context

This filing highlights a strategic move by a major precious metals producer, Hecla Mining Company, to increase its stake in a junior silver exploration company, Dolly Varden Silver Corp. Such investments are common in the mining industry, where larger companies often take positions in promising exploration or development stage companies to secure future resource pipelines or potential acquisition targets. Hecla's move reinforces its commitment to silver assets and potentially signals a positive outlook for the Dolly Varden project within the broader silver market.

Corporate Governance

Related Party Transactions

• Hecla Quebec Inc., a subsidiary of Hecla Mining Company (a significant shareholder of Dolly Varden), sold mining claims to Dolly Varden in exchange for shares and a net smelter royalty. This constitutes a transaction between related parties due to Hecla's existing and increased ownership and strategic influence.

Stakeholder Impact

• **Shareholders:** The increased strategic investment by Hecla Mining Company could be viewed positively, signaling confidence in Dolly Varden's assets and potentially attracting further institutional interest. However, the issuance of shares for the claims represents a form of dilution for existing shareholders.
• **Employees:** A stronger strategic partnership with a major miner like Hecla could provide greater stability and resources for Dolly Varden's operations, potentially benefiting employees.
• **Creditors:** A more robust shareholder base and strategic backing could improve Dolly Varden's financial standing and perceived creditworthiness.
• **Management:** Hecla's rights to Board and Technical Committee representation will likely lead to closer collaboration and oversight from a major industry player.

Next Steps

• Hecla Canada Ltd. is entitled to nominate one member to Dolly Varden's Board of Directors as long as it owns 10% or more of the outstanding Common Shares.
• Hecla Canada Ltd. is entitled to appoint one member to Dolly Varden's Technical Committee as long as it owns 10% or more of the outstanding Common Shares.
• Hecla Canada Ltd. retains a pre-emptive right to maintain its pro rata ownership interest in Dolly Varden's Common Shares.
• Hecla Canada Ltd. holds a right of first refusal on any mining property owned by Dolly Varden for which it receives a bona fide offer from a third party to purchase.

Key Dates

Keywords

Dolly Varden Silver Corp, Hecla Mining Company, Schedule 13D, Common Shares, Silver Mining, Precious Metals, Mining Claims, Strategic Investment, Beneficial Ownership, SEC Filing, Corporate Governance, Ancillary Rights Agreement