The British Columbia Securities Commission required Bayhorse Silver (V.BHS) to clarify “its technical disclosure”. The company did so and in a May 10 Press Release stated,
“The Company advises that it does not have current mineral resources or mineral reserves for its Bayhorse Silver Mine property.”
What Bayhorse does have is a great deal of historical data, reports and estimates for the property. The BCSC review gave the company the opportunity to publish a summary of the 1981 Herdrick Report on the Property. It is worth quoting this summary in full.
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In his Examination and Compilation Report dated April 1981, Melvin A. Herdrick, Consulting Geologist, estimated tonnages in the main body, based upon geology, to be as follows.
| Upper level, 329 ft long x 80 ft wide x 22 ft thick to be | 50,688 tons |
| Intermediate Level 200 ft long x 85 ft wide x 22 ft thick to be | 33,660 tons |
| West projection to fault 525 ft x 85 ft wide x 22 ft thick to be | 88,360 tons |
| Less 6,500 tons mined | -6,500 tons |
| Total at 7.5 oz/t cutoff at 17-20 oz Ag/t | 166,208 tons |
While Herdrick’s assumptions, parameters and methods used to calculate the grade and tonnage of the reported historic estimate are unknown, the Company, and its Exploration Manager believe the estimate would have been reliable at the time it was estimated as;
- The Company has obtained directly from Cordex Exploration (Cordex) of Reno, Nevada full results from its comprehensive 1976 underground exploration program in the Bayhorse Mine underground workings.
- Silver King Mines conducted a short mining program at the Bayhorse Mine in 1984, based upon Herdrick’s report, before Mine closure due to the significant drop in the silver price at the time to under US$5.00/ounce. Silver King reported production of 5,718 tons of which 23% graded between 21 and 100 oz/ton silver, 71% graded between 6 and 20 oz/ton silver and 6% was below the cut off grade of 6 oz/ton silver. Bayhorse has acquired all the Silver King exploration and mining program data, that detailed the 1984 mining program.
- The substantial underground work carried out and reported by the Company to date appears to confirm the presence of high silver grades in multiple areas of the underground workings as detailed in both the Cordex and Silver King acquired data. The Silver King data, that included 15,000 feet of underground core drilling, assay data on rounds mined, underground maps and plans, and geologists’ notes and records, supported Herdrick’s conclusion that the mineralized ground extended further along strike in the mine to the West.
The Company is not aware of any work, reports, or assay data, that does not conform to standard geological practices as conducted in North America.
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This is followed, in bold type, with the required disclaimer:
The Company advises however that a qualified person has not done sufficient work to verify the historical estimates nor classify the historical estimates as current mineral resources or mineral reserves for the Bayhorse Silver Mine. The Company is not treating the historical estimates as current mineral resources or mineral reserves.
The Company further advises it is not basing any decision to mine or produce on a feasibility study of mineral reserves demonstrating economic and technical viability and also advises there is increased uncertainty and specific economic and technical risks of failure associated with any such mining or production decision and it is not basing any decision to mine or produce on these historical estimates.
You can read the whole press release here.
In my recent article on Bayhorse I quoted Bob Moriaty,
“I say that mining is the art and science of extracting minerals from the ground at a profit. Mining is not poking a bunch of holes in the ground until a project looks like a giant Swiss cheese. Counting ounces is not mining: It may eventually contribute to profit but for the most part, counting ounces is an expense.
Bayhorse did a couple of thing outside the box. They aren’t drilling until the cows come home. The production decision was based on a Herdrick 1981 technical report showing about 3 million ounces of high-grade silver and 1.2 million ounces of lower grade material. There is no feasibility study and they smile as they say they don’t need one while recognizing the lack of a feasibility study adds risks while saving loads of money…”
Today’s “clarification” gives the precise reason O’Neill and Bayhorse are getting on with mining. With luck and a lot of hard work Bayhorse should soon be in the position to report actual tons mined and ounces of silver recovered. Actuals rather than estimates.
We’ll find out if the historical estimates line up with modern mining reality.