Mr. Shawn Khunkhun reports

DOLLY VARDEN SILVER ANNOUNCES CLOSING OF FIRST TRANCHE OF $28 MILLION BOUGHT-DEAL OFFERING, WITH PARTICIPATION BY ERIC SPROTT

Dolly Varden Silver Corp. has closed the first tranche of its previously announced bought deal financing for aggregate gross proceeds to the company of $28-million. Pursuant to the closing of the first tranche of the offering, Dolly Varden sold: a) 11.5 million common shares of the company at a price of $1.00 per common share for gross proceeds of $11.5-million, issued under a prospectus supplement dated Aug. 21, 2024, to the company's final short form base shelf prospectus dated April 25, 2023, including the full exercise of the overallotment option under the prospectus offering; and b) 12.96 million common shares that qualify as flow-through shares within the meaning of Subsection 66(15) of the Income Tax Act (Canada) at a price of $1.25 per FT share for gross proceeds of $16.2-million, on a bought deal private placement basis.

Eric Sprott, through 2176423 Ontario Ltd., participated in the prospectus offering.

The offering (including today's completed prospectus offering and private placement offering) is being completed on a bought deal basis pursuant to an underwriting agreement dated Aug. 21, 2024, between the company and a syndicate of underwriters co-led by Research Capital Corp., as co-lead underwriter and sole bookrunner, and Haywood Securities Inc., as co-lead underwriter, and including Raymond James Ltd.

Pursuant to the underwriting agreement, the second tranche of the offering will consist of the further issuance by Dolly Varden of 1.44 million FT shares on a bought deal private placement basis at a price of $1.25 per FT share for further gross proceeds of $1.8-million, not including any exercise of the overallotment option (as defined herein). The second tranche of the offering is expected to close in the second half of September. Completion of the offering remains subject to the company receiving all necessary regulatory approvals, including final approval of the TSX Venture Exchange, to list the common shares and the FT shares. The exchange conditionally approved the private placement offering on Aug. 22, 2024, and the prospectus offering on Aug. 23, 2024.

The company granted the underwriters an option to increase the size of the offering by up to an additional number of FT shares that in aggregate would be equal to 15 per cent of the total number of FT shares to be issued under the offering, to cover overallotments, if any, exercisable at any time and from time to time up to 30 days following the closing of the offering.

The net proceeds from the sale of common shares will be used for working capital and general corporate purposes. The gross proceeds from the sale of FT shares will be used for further exploration, mineral resource expansion and drilling in the combined Kitsault Valley project, located in northwestern British Columbia, Canada, as well as for working capital as permitted, as Canadian exploration expenses as defined in paragraph (f) of the definition of Canadian exploration expense in Subsection 66.1(6) of the tax act and flow-through mining expenditures as defined in Subsection 127(9) of the tax act that will qualify as flow-through mining expenditures and B.C. flow-through mining expenditures as defined in Subsection 4.721(1) of the Income Tax Act (British Columbia), which will be incurred on or before Dec. 31, 2025, and renounced with an effective date no later than Dec. 31, 2024, to the initial purchasers of FT shares.

The FT shares issued pursuant to the private placement offering are subject to a hold period in Canada expiring on Jan. 5, 2025. The common shares issued pursuant to the prospectus offering are not subject to a statutory hold period.

In connection with the closing of the first tranche of the offering, the underwriters received a cash fee equal to $1,385,000, representing 5.0 per cent of the gross proceeds of the prospectus offering and private placement offering. Pursuant to the underwriting agreement, the underwriters will receive a further cash fee equal to 5.0 per cent of the gross proceeds of the second tranche of offering and any exercises of the overallotment option.

About Dolly Varden Silver Corp.

Dolly Varden Silver is a mineral exploration company focused on advancing its 100-per-cent-held Kitsault Valley project (which combines the Dolly Varden project and the Homestake Ridge project), located in the Golden Triangle of British Columbia, Canada, 25 kilometres by road to tidewater. The 163-square-kilometre project hosts the high-grade silver and gold resources of Dolly Varden and Homestake Ridge, along with the past-producing Dolly Varden and Torbrit silver mines. It is considered to be prospective for hosting further precious metal deposits, being on the same structural and stratigraphic belts that host numerous other high-grade deposits, such as Eskay Creek and Brucejack. The Kitsault Valley project also contains the Big Bulk property, which is prospective for porphyry and skarn-style copper and gold mineralization, similar to other such deposits in the region (Red Mountain, KSM and Red Chris).

We seek Safe Harbor.