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GEOLOGICAL SETTING

Jurassic-age intermediate to mafic volcaniclastic rocks of the Betty Creek Formation, Hazelton Group host the bulk of the silver deposits at the Dolly Varden, North Star, Torbrit and Wolf Mines. Host lithologies include large volumes of epiclastic tuffaceous breccias and sandstones, with lesser volumes of argillaceous tuffs, heterolithic volcanic conglomerate, and crystal ash to lapilli tuff. Bedded argillaceous silt and sandstones belonging to the Salmon River Formation overlie the Betty Creek volcaniclastic rocks.

The Company is targeting an Eskay Creek type deposit that is a striking example of a class of high-sulphidation VMS deposits. These deposits form near sub-aqueous hot-spring vents where base and precious metal-rich hydrothermal fluids exhale onto the seafloor under shallow depths of seawater. At the Eskay Creek deposit, stratiform (bedded) layers of precious metal-rich chemical sediments and massive sulphides accumulate near vent areas and become the source for clastic sulphide debris in adjacent areas. The bedrock in the vent areas are underlain by precious metal rich feeder veins, stockwork veins and strong alteration.

These two mineralization styles have now been documented at both Torbrit, North Star and Wolf Mines, showing striking similarities to the precious metal mineralization types at Eskay Creek mine.

PRESIDENT'S MESSAGE

Ron Nichols, President, CEO, states that he is pleased and encouraged by the positive results that were produced from the fall season of drilling and sampling. Some of the re-opened Torbrit Mine workings saw the first documented geological mapping and sampling since Newmont Mining Corp.'s 1967 mapping program conducted shortly after mine closure at the Torbrit in 1960.

"The results from Torbrit and Dolly Varden Mine 2012 program are in keeping with the historical grades and widths reported from historic programs. The 2012 Dolly Varden drilling was focused mainly on confirming and extending drill coverage within and below the known historical mineral resource blocks, and has the potential to add significantly to the total silver resource at the Dolly Varden.

"It is also exciting to discover evidence from the 2012 Torbrit underground sampling program that mineral deposit forming processes similar in style to the Eskay Creek deposit were at work in the Torbrit area, adding to previous confirmations of the similar valid interpretations at the North Star and Wolf Mines. Our plans for 2013 are to move forward surface and underground diamond drilling at the Torbrit, in particular, to build NI 43-101 compliant mineral resource estimates of the thick silver-mineralized block in both the central and flanking zones.

"Surface work planned for 2013 will also target the Red Point zone, where an extensive, strongly altered and highly anomalous gold-silver outcroppings of rock may be the exposure of a footwall stockwork feeder zone for an associated precious metal-rich VMS deposit located higher in the volcanic stratigraphy."

ABOUT DOLLY VARDEN SILVER CORPORATION

Dolly Varden Silver Corporation controls a total 9,374 hectares of mineral tenures in the Upper Kitsault Valley, located 40 kilometers southeast of Stewart B.C. The property covers an historic area which has reported production of 20 million ounces of high-grade silver from two deposits, the Dolly Varden and Torbrit mines. Two other silver deposits, the North Star and Wolf have been outlined by diamond drilling and underground development, but have not yet seen production.