Bayhorse Silver Inc V.BHS

Henrich428- Plaudits to you from HDLR On CEO.CA re below

[hartadd]

Why we continue to hold (From Henrich 428 on SH) The 27th April news release stated that "$1.8 million in warrants and options" had been exercised since the start of this year. Just to remind ourselves yet again what an enormous number $1.8 million is for a company like Bayhorse, and at the risk of seeming even more dull than I already am, consider again: 1) $600,000 a-month is needed to operate the mine (source: Graeme's e-mail to @cornhuskergold, April 2020 https://ceo.ca/bhs?2fd57c944ae); 2) About $2 million was always needed "not to get caught with their trousers down" (quoting Graeme again from that same e-mail); 3) About $3-5 million was always needed truly to get safely into production. (Source: Rick Low the CFO, quoted by Graeme in the Lobo Tiggre interview (https://www.youtube.com/watch?v=4zApsclnlT). The February private placement gave Bayhorse $1.7 million, so put that sum together with the warrants and options exercised and you have $3.5 million. Which is utterly unprecedented territory for Bayhorse. The mine itself cost $7 million to build over 7 years on a pay-as-you-go basis, and money in the bank above and beyond that has always been like water in the desert. The other thing to take into consideration is that the overwhelming majority of these warrants and options have been exercised during the past two months, precisely because of the elevated share price. We know this because, in the 24th March corporate update, we read: "Subsequent to the closing of the financing (i. e. the February PP), over 3,800,000 warrants and options were exercised for gross proceeds of an additional $392,000." So that concerns two months. But then obviously, as I say, since that date, another $1.4 million has been put in, which is an enormous sum during a period of only one month. Imagine if money keeps coming into the treasury at an average rate of (say) $500,000 a-month from these warrants and options. We're also about to get $2-3 million from completion of the initial Ocean deal and, as we trust, transition into a long-term relationship in which we consistently sell silver to them. Put all these circumstances together, the exercising of the warrants and options and the money coming in imminently from actually shipping silver and then consider that we have virtually no debt and it becomes clear that Bayhorse are about to make that long-anticipated transition into a cutting-edge full-scale producer. We know that a lack of working capital was the chief obstacle to the success of BHS. You simply cannot produce silver without getting an enormous cash-injection first. We know that the mine is built, we know that the operation has been "tested to death," we know that Bayhorse have a world-class team of scientists and experienced silver-valley underground miners. But these people have never had an opportunity to prove themselves before now. They are wholly exculpated from any past misgivings to do with the "Bayhorse is a producer that doesn't produce" narrative. Because, as I have said before, the only reason why that was ever the case is because Graeme either couldn't or wouldn't (I prefer wouldn't) get the money to start full-scale production. So Graeme alone can take any blame for all that. Every day we hold and refuse to sell, we are causing more cash to be put into the Bayhorse treasury. And the more cash that comes into the company at this critical early period, the more likely it is that Bayhorse will be a success. It doesn't matter if the share price simply goes sideways or continues to hold firm for a little longer. None of us are here to flip Bayhorse tomorrow or the day after that, none of us care. We are here to support the company for the long-term, because we know the value of what we have. Every single day, we are making Bayhorse stronger and stronger and getting them closer and closer to the finishing line. We consider it a good thing that warrants and options are putting temporary pressure on the share price. And once that Ocean production NR comes out--which might happen at literally ANY hour of ANY day--this stock is going to break through its consolidation immediately, and soar to the moon so quickly that it will leave you speechless. At that point, the success of Bayhorse is confirmed, and success becomes a self-fulfilling prophecy. You suddenly have a fully self-sustainable full-scale producer producing $20 million in cash flow per annum even at $26 silver. With an IMMINENT silver bull market on the horizon. And all of us who got in at the bottom of that (which is even anybody who bought below 0.30 CAD to my mind) shall reap the rewards of it amply. And don't be fooled by any notions that Bayhorse are merely a "small mine" once they get into production. They may be small in size, but not in relative output. I have quoted Don Durrett before as saying that "only 18 companies in the world, which call themselves silver companies, even produce more than 1 million ounces a-year." (https://www.youtube.com/watch?t=909&v=m-qYvxpsQ8E&feature=youtu.be) This is something that even Impact Silver don't do. All those 18 companies of which Durrett speaks are majors or mid-tiers; Bayhorse will be the sole exception to the rule. Bayhorse can not only produce 1.3 million silver ounces per annum but do so at an AISC of $10, conservatively. And the market cap is still only $40 million! To conclude, as if what I have already said is not enough--now imagine if those old mining engineers from U. S. Metal were right about the potential of Bayhorse Mine: that it showed "the biggest possibilities of any property that they had ever seen," and that its proper position was "to advance rapidly to being the largest silver mine in the north-west." Imagine if the already ultra-high grade does get substantially better, as both past and present geologists suggest it will. Even at 200 tpd, that would vastly increase our output of silver ounces. And then imagine that we get the permits for 400 tpd, or that we get Brandywine into production, "the next Eskay Creek" as the geologists call it.--This thesis, and all these considerations, are why we continue to hold.