To our Shareholders & Investors

 

Happy Thanksgiving

 

It has been six months since silver dropped from its last high of US$17.25 to as low as US$13.93 a little over a week ago, and it has been a trying time for silver investors, and particularly Bayhorse shareholders, as we have watched our share price sink to abysmal lows in sync with silver.

 

 

We cannot do much about the price of silver, but we can, and are, doing something by progressing with our high grade Bayhorse Silver Mine.

 

With the news release today, following up our high grade metallurgical sample release last week with BHS2018-24, we have made another significant step towards getting revenue from the high grade silver we are currently mining and processing..

 

Right now we have built the mine, but just as a truck off the assembly line has to have the gas tank filled up before it can go to work, so we need to fill the Bayhorse gas tank so we can finish the job of getting our silver to market and putting cash in the bank.

 

We all know the adage, hold your nose and buy when things look like they are going into the dumpster, and sell when everyone is scrambling to buy. In our opinion, this is the time to back up the truck and start loading up. The silver/gold ratio is at extremes not seen for 25 years and Bayhorse is perfectly poised to run with the silver price bulls when it corrects back towards the norm.

 

Late last year we entered into a Letter of Intent with Mineral Solutions (Minerals) of Coeur d’ Alene Idaho. Some investors/shareholders may know that one of the principals of Minerals, Mike Irish, installed the silver recovery circuit at the Sunshine Mine in Idaho’s silver Valley. What he knows about metallurgy and especially silver can fill volumes. Rick Hurt of Liberty Refiners has a specialty refining operation and is one of the few refiners who can do 5 x nines fine gold, that is used in medical applications, and also supplies the Sunshine Mint, as well as the Canadian Mint. Together they are able to take our direct ship material and not only recover the silver in 4 x nine’s fine, but also the copper, in the form of copper sulphate, that commands a premium to ingot copper.

 

The 20lb sample we shipped Minerals this week contains between 56 - 58 grams of silver and 2 lbs of copper. We expect to get results shortly, at which time we will tell you.

 

There are good economic arguments for producing a Direct Shipping Grade, rather than going the extra steps such as flotation to increase the grade further.

 

It is solely a subject of math. With Flotation, typically 10% is unable to be recovered in the float process and it goes into the tails. So not only do we lose that 10%, but we now have to deal with disposing of the, even though slightly, contaminated tails. A costly undertaking.

 

So many of the smelters are overseas these days, many in China, shipping material to them is costly, they are set up for specific applications, and the deductions are many, so it is incumbent upon us to get the best bang for the buck we can, both for the Company and its shareholders.

 

We have been held up this year, and that has frustrated our shareholders, and us, mainly through lack of adequate financing, brought about by low silver prices. We know our cash costs from over two years of underground mining operations.

 

They are surprisingly low. Under $50/ton. We know our upgrading costs, also low, due to the technology we are using. We are upgrading the mined mineralization ready to ship. We have a refinery to turn it into refined silver. This is happening, no longer tomorrow, but in the right here and now, We know low silver prices will recover.

 

Graeme O'Neill

CEO

Bayhorse Silver Inc