Dolly Varden Announces Closing of $3.2 Million Strategic Investment from Hecla Mining and Engagement of Haywood Securities as Financial Advisor

VANCOUVER, Sept. 10, 2012 - Dolly Varden Silver Corporation ("Dolly Varden" or the "Company") (TSX VENTURE:DV) (OTCBB:DOLLF) is pleased to announce that, further to the Company's news release of August 21, 2012, it has closed its equity financing pursuant to which a wholly-owned subsidiary of Hecla Mining Company ("Hecla") acquired 20,000,000 common shares of the Company (the "Dolly Shares"), representing 19.9% of the outstanding Dolly Shares, at a price of $0.16 per Dolly Share for total proceeds of $3,200,000 (the "Financing"). Pursuant to the terms of an ancillary rights agreement, Hecla was granted various rights exercisable for so long as Hecla holds more than a 10% interest in Dolly (calculated in accordance with that agreement). These rights include: (a) a right to nominate one person to Dolly Varden's board of directors, (b) a right to nominate one person to a technical committee, to be established to design and execute the Company's exploration programs, (c) a right of first refusal in respect of any proposed transfer or sale by Dolly Varden of its interest in all or any part of its mining properties, including any third party offers to enter into a joint venture; and (d) a pre-emptive right to participate in any future proposed equity offering of Dolly Varden in order to maintain Hecla's pro rata interest. Pursuant to the terms of the ancillary rights agreement, Hecla also agreed to a voting agreement whereby Hecla will vote all Dolly Shares held by it in favour of management's proposals on matters of routine business for a period of 12 months from the closing of the Financing.

All of the securities issued under the Financing are subject to a statutory hold period which will expire on January 5, 2013 in accordance with applicable Canadian securities laws.

The proceeds of the Financing will be used to advance the exploration and development of the Company's Dolly Varden Silver project in British Columbia.


Engagement of Haywood as Financial Advisor

The Company also announces that it has retained Haywood Securities Inc. ("Haywood") as its exclusive financial advisor. Haywood has been mandated to evaluate various strategic and financial alternatives for the Company in advancing the Dolly Varden Silver project. Haywood will also provide assistance in negotiating financial terms and structure for any future transactions, which could include attracting additional strategic partners. Haywood will also continuously assess the market's appetite for additional financing. Any additional funds raised will be used to increase the pace, size and scope of the 2012 and 2013 exploration programs for the Company's Dolly Varden Silver project.

The Company also announces that it has commenced the 2012 exploration program at its Dolly Varden Silver project. The camp at site has been reopened and crews and equipment have been mobilized.


About Dolly Varden

Dolly Varden Silver Corporation is a Canadian based mineral exploration company focused on the exploration and development of the Dolly Varden Silver project located in northwestern British Columbia. The Company's common shares are listed and traded on the TSX-V under the symbol DV and in the U.S. under the symbol DOLLF. The Dolly Varden Silver project consists of 9,400 hectares which includes four well defined high grade silver deposits, two of which have seen historic production totaling 20 million ounces. All four deposits have remaining historic silver resources and are situated in the same geologic setting as the past-producing Eskay Creek deposit. The Company has two strategies for creating value at the Dolly Varden Silver project: to confirm and expand the existing historic silver resources with the goal to re-start the historic deposits; and to explore a major untested Eskay Creek-type gold and silver rich VMS target at the Dolly Varden Silver project.


FORWARD-LOOKING STATEMENTS:

Certain of the statements and information in this press release constitute "forward-looking statements" or "forward-looking information" Any statements or information that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects", "anticipates", "believes", "plans", "estimates", "intends", "targets", "goals", "forecasts", "objectives", "potential" or variations thereof or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements or information. Forward looking statements or information related to, among other things the proposed use of proceeds the Financing, the services expected to be provided by Haywood as the Company's financial advisor, and the use of proceeds from any additional financing.

Forward-looking statements or information are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements or information, including, without limitation, need for additional capital by the Company through financings, and the risk that such funds may not be raised; the speculative nature of exploration and the stages of the Company's properties; the effect of changes in commodity prices; regulatory risks that development of the Company's material properties will not be acceptable for social, environmental or other reasons and the efforts and abilities of the senior management team. This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements or information. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Accordingly, readers should not place undue reliance on forward-looking statements or information.

The Company's forward-looking statements and information are based on the assumptions, beliefs, expectations and opinions of management as of the date of this press release, and other than as required by applicable securities laws, the Company does not assume any obligation to update forward-looking statements and information if circumstances or management's assumptions, beliefs, expectations or opinions should change, or changes in any other events affecting such statements or information. For the reasons set forth above, investors should not place undue reliance on forward-looking statements and information.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES



Contact

Strata Star
Gary Lindsey, Investor Relations
1-720-273-6224
gary@strata-star.com

Dolly Varden Silver Corporation
Ron Nichols, CEO and President
778-383-3083
604-683-2965 (FAX)
www.dollyvardensilver.com