Dolly Varden Silver has signed a definitive agreement to acquire a 100% interest in the Homestake Ridge gold-silver project in the Golden Triangle, British Columbia, Canada.

The company will purchase the property from Fury Gold Mines in a cash and stock deal valuing around $39.4m (C$50m).

The 7,500ha Homestake project is located adjacent to Dolly Varden’s namesake property, the Dolly Varden silver project.

According to an estimate, the project hosts around 165,993oz of gold and 1.8 million ounces (Moz) of silver in the Indicated category and 816,719oz of gold and 17.8Moz of silver in the Inferred category.

The acquisition of the property is expected to generate significant co-development opportunities with capital and operating synergies.

Together, the Dolly Varden Project and the Homestake Project (Kitsault Valley Project) are expected to contain a combined mineral resource base of 166,000oz of gold and 34.7Moz of silver in the Indicated category.

Dolly Varden director and CEO Shawn Khunkhun said: “We are excited to combine two adjacent precious metals projects located in one of the world’s top mining jurisdictions. We expect that this combination will result in significant synergies in the areas of exploration, development, permitting and production.

“Upon completion of the transaction, we look forward to continued engagement with indigenous and community partners to ensure the responsible development of this compelling new project.”

As agreed, Dolly Varden will pay C$5m in cash and issue 76,504,590 common shares to Fury Gold Mines as consideration.

The completion of the transaction is subject to multiple closing conditions. Once complete, Fury will hold a 36.9% Dolly Varden stake on an outstanding basis.

Earlier this year, Newmont acquired Canadian firm GT Gold for $311m. GT Gold was involved in advancing its 47,500ha Tatogga property in British Columbia.