Mineral exploration company Dolly Varden Silver has agreed to acquire Homestake Ridge gold-silver project from Fury Gold Mines in a deal valued at around C$50m ($30m).

Under the deal, Dolly Varden will acquire Fury’s wholly-owned subsidiary Homestake Resource Corporation, which has a 100% stake in the Homestake project.

The Homestake Ridge project is situated adjacent to the Dolly Varden’s project in the Golden Triangle, British Columbia, Canada.

The deal includes the payment of C$5m ($3.9m) cash payment and the issuance of 76,504,590 common shares of Dolly Varden to Fury Gold.

Dolly Varden CEO and director Shawn Khunkhun said: “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.”

The 7,500ha Homestake project is expected to contain 165,993 ounces of gold and 1.8 million ounces of silver in the indicated category, as well as 816,719 ounces of gold and 17.8 million ounces of silver in the inferred category.

Dolly Varden’s project, together with the Homestake project, will be known as Kitsault Valley project. The deal is expected to strengthen Kitsault Valley’s position as one of the largest high-grade and undeveloped precious metal assets in Western Canada.

The combined project is estimated to include mineral resource base of 34.7 million ounces of silver and 166 thousand ounces of gold in the indicated category, and 29.3 million ounces of silver and 817 thousand ounces of gold in the inferred category.

Fury Gold CEO and director Tim Clark said: “Combining our Homestake Project with the DV Project creates an attractive opportunity to immediately establish shareholder value through the potential synergies that result from their regional proximity.

“We look forward to having our shareholders benefit from the exciting growth and development of the Kitsault Valley Project, and to Fury becoming a partner and significant shareholder of Dolly Varden.”