Dolly Varden Silver Responds To Hecla News Release
ACCESS Newswire
VANCOUVER, BC / ACCESSWIRE / June 27, 2016 / Dolly Varden Silver Corporation (TSX.V: DV | U.S.: DOLLF) (the "Company" or "Dolly Varden") acknowledges the announcement made on June 27, 2016 by Hecla Mining Company (together with its affiliates, "Hecla") that Hecla will make an unsolicited takeover bid (the "Hecla Offer") for all of the issued and outstanding shares of Dolly Varden that Hecla does not own. Dolly Varden has not received any formal bid for consideration from Hecla and advises that Dolly Varden's shareholders take no action at this time.
As announced on June 13, 2016, Dolly Varden entered into binding agreements with three lenders for a new short-term loan facility, to pay out the existing Hecla/Gipson loan. It is Dolly Varden's stated goal to become debt free. To do this, the Company requires some flexibility in its arrangements with its lenders. Restrictions in the Hecla/Gipson loan prohibit Dolly Varden from issuing securities to pay off the Hecla/Gipson loan without obtaining the consent of Hecla. The new loans specifically allow Dolly Varden to issue securities to repay the new loans giving the Company the ability to become debt free, which Dolly Varden's board strongly considers to be in the best interest of the Company. As previously announced, Dolly Varden expects the Hecla/Gipson loan to be repaid on or about June 28, 2016.
"After a very difficult period of restructuring, Dolly Varden is emerging as a stronger company with a lean share structure, improved market interest, and a valuable asset - the Dolly Varden silver project. Our board strongly believes that the value of the company cannot be fully realized as long as the Company remains in debt. We've had a number of discussions this year with Hecla regarding options for Dolly Varden to repay the Hecla/Gipson loan. Dolly Varden, Hecla and Gipson were not able to come to terms on converting debt to equity, a loan extension or an equity financing. The new loans permit Dolly Varden to discharge the Hecla/Gipson loan and to complete an equity financing to repay the new loans prior to their maturity date without obtaining the consent of the new lenders. In addition, the warrants issued with the new loans are no more dilutive than the same number of warrants with a lower exercise price issued to Hecla and Gipson under the Hecla/Gipson loan. Notwithstanding the foregoing, Dolly Varden's board and advisors will give serious consideration to the formal Hecla takeover proposal," said Rosie Moore, Director and Interim CEO and President of Dolly Varden.
The Company is in the process of reviewing and evaluating the Hecla Offer as described in Hecla's press release. The Company expects that a special committee of the Board of Directors of the Company will be appointed to assist the Board in (a) fulfilling its legal and fiduciary duties in respect of the Hecla Offer and (b) making every effort to maximize value for the benefit of Dolly Varden shareholders and other stakeholders.
The Company recommends that shareholders defer from taking any action in respect of the Hecla Offer until the Board of Directors of the Company makes a recommendation as to the merits of a formal offer if any is received from Hecla. Shareholders will be promptly notified of any recommendation by the Board of Directors through a news release and circular in accordance with applicable securities laws.
About Dolly Varden - Dolly Varden Silver Corporation is a mineral exploration company focused on the exploration of the Dolly Varden silver property located in northwestern British Columbia, Canada. The entire 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, on-trend, high-grade deposits (Eskay Creek, Brucejack). The Company's common shares are listed and traded on the TSX Venture Exchange under the symbol DV and on the OTCBB system under the symbol DOLLF.
FORWARD-LOOKING STATEMENTS:
This release may contain forward-looking statements. 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, the receipt of a takeover bid from Hecla (if at all) and our consideration of such bid, the striking of a special committee, notification to shareholders of the Board's recommendation in respect of a Hecla takeover bid, the realization of Dolly Varden's stated goal to be debt free, the impact of Dolly Varden's debt on the value of the Company, the repayment of the Hecla/Gipson loan, and the continued exploration and valuation of the Dolly Varden silver 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 and on the Company's website at www.dollyvardensilver.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 TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.
Contact Information:
Dolly Varden Silver Corporation Rosie Moore, Interim CEO and President 1-604-925-5881 www.dollyvardensilver.com
