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Bayhorse Silver Inc V.BHS

Alternate Symbol(s):  BHSIF

Bayhorse Silver Inc. is a junior natural resource company, which is engaged in the acquisition, exploration and development of natural resource properties. The Company has a 100% interest in the Bayhorse Silver Mine, Oregon United States of America. The Bayhorse Silver Mine and the Pegasus Project are 44 kilometers (km) southwest of Hercules Metals’ porphyry copper discovery. The Company also has an option to acquire an 80% interest in the Brandywine Property located in British Columbia, Canada. The Brandywine Property is located near Squamish, British Columbia.


TSXV:BHS - Post by User

Post by Henrich428on May 27, 2021 11:42am
169 Views
Post# 33275735

Production timetable

Production timetable

A good number of people appeared to be interested in the extract on Brandywine from the Lobo Tiggre interview. This led me to believe that the Lobo Tiggre interview must have some more neglected gems in it, and I have been listening to it again quite intently. There were many different things which interested me there. But one curious part in particular has to do with production, from about 49:44 to 53:11 (as timestamps).

https://youtu.be/4zApsclnlTA?t=2984

The discourse at this point is a little disjointed and rambling and technical and I sometimes find it hard to make sense of. In some ways it is also outdated. So I invite people to correct me if I am misinterpreting anything here. But Graeme appears to say four different things here:

1) "Bayhorse would need $3-5 million dollars to get into full-scale production." We already knew this, and they do in fact now have this money from the $1.7 million February 2021 PP + about $2 million dollars in warrants exercised since that date.
2) After getting the necessary cash in the bank, Bayhorse would need about two months to "re-arrange some things" as well as to make some necessary adjustments to the ore-sorter.
3) The initial phase of the ramp-up would involve only 50 tpd ore (Graeme "once we're running, we'll be starting at 50 ton a day").
4) It would require six months for the company to get into free cash flow.

Now, a good number of us read the 16th January 2021 NR where it was said:

"We are ramping up to 10 tonnes a day concentrate on a 24-hour cycle." 

And easily calculated that the 300 tonnes of concentrate for the initial Ocean deal would equate to only 30 days of production at this rate. We also calculated that 10 tpd concentrate amounts to about 150 tpd ore, on the basis of the 93-95% rejection-rate of the ore-sorter. But this 30-days analysis was obviously based on a naive view of the situation where Bayhorse could simply flick a switch and turn the mine to full-scale production from day one. And if, as Graeme says in this interview, the _beginning phase_ of the ramp-up, after getting cash in the bank, would involve only _50_ tpd ore, that would amount only to 3.3 tpd concentrate. At 3.3 tpd concentrate, you would need not 30 but 90 days to get the initial Ocean deal done. And then if, as he also says, you would need to make some necessary "adjustments" during the first couple of months, you would expect the initial Ocean deal to need at least until June to get done.

The "necessary adjustments" to the ore-sorter seem to be encompassed in this part of the 24th March 2021 NR, which is almost two months after PP which closed on 1st Feb. 2021, exactly when we'd expect:

"On our 40 ton/hour Ore-Sorter, Steinert USA has conducted a software upgrade and service, to ensure we can operate continuously at full permitted mining capacity."

Also something to bear in mind is that @HDLR said on ceo.ca on the 14th of May, "The old facility" (i.e. concentrate-processing facility, namely at Fruitland) "is still producing concentrate, the mining is ongoing, and Graeme is at the mine." And despite the permitting delay with respect to the new, larger concentrate-processing facility at Payette, the old operation is nothing to be sneezed at. So it is still quite possible that we may get a production NR at any time, say in June or July.

The summary of what I have said is, on the basis of what Graeme states in this interview, there seems to be nothing unusual in the fact that we have not had a production NR yet. He never claims that Bayhorse could go straight to 150 tpd ore right after getting cash in the bank--he makes a more modest claim of 50 tpd when they are just getting started. He also seems to imply that there would be a period of making some necessary "adjustments," like upgrading the ore-sorter.

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