Bayhorse re-discovers old workings in great condition

Canada gold, junior mining companies

If you look to your right you’ll see a news release from Bayhorse Silver.

One of the frustrations of being a junior mining CEO is that news releases have to be written is objective, non-promotional, understated language.

Which means that Graeme O’Neill, CEO of Bayhorse, could not use Trumpian all caps and say that finding 1500 feet of 30 year old mine workings in near perfect condition “IS A BIG F**KING DEAL”.

Three reasons: first, it means the company is not going to have to drift 1500 feet at $1000 a foot. It is literally like finding a million and a half dollars under a rock. Second, while the company has always known the old workings were there, it had no idea what sort of shape they were in and what it was going to take to bring them up to grade. It turns out that the workings are all in good, or at least, fair shape.

The third reason is a bit more complicated. Per the News Release, Bayhorse is working on the 43-101 Resource Estimate. While the company knew that there were historical resources which the previous owner has planned to mine but had not, it had no economically feasible way of reaching the historic mineralized zones to bring them into the resource calculation. With the opening of the old workings it should be possible to sample the newly re-exposed rock and have a chance to include some or all of the historical resource in the new estimate.

These “new” old workings will also give Bayhorse a huge assist when it comes to planning its mining activity. In effect, having 1500 feet of workings gives the company 6000 feet of exposed mineralization to actually mine. Obviously, not all of that will be economic rock. But the last company to work the Bayhorse Mine did not shut down because it had run out of silver, it shut down because the price of silver cratered.

Up until now, Bayhorse has been seen by the market as a relatively small mine with all of the issues small mines can have. Now, without spending very much money at all, Bayhorse has become a significantly larger mine without the upfront costs normally associated with mine expansion.

It will take a little while for the market to catch on. In fact, it may take until the 43-101 is released. Which means that there may be a significant opportunity for investors to buy an option on silver for pennies on the dollar.

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