January 21, 2015 – BHS2015-04
Bayhorse Silver Inc. (the “Company” or “Bayhorse”) reports that as a result of a review by the British Columbia Securities Commission (“BCSC”) it is issuing the following news release to clarify its technical disclosure.
With respect to disclosure of an historic silver resource reported at the Bayhorse Silver Mine in the Company’s news releases of January 14, 2014, March 4, 2014, March 31, 2014, May 6, 2014, May 12, 2014 and June 10, 2014, and on the Company’s website http://www.bayhorsesilver.com, the disclosure of the historic resource did not meet the requirements of S. 2.4 and S. 3.4 of National Instrument NI-43-101, in that the disclosure did not include the grade of the historic resource. The Company hereby retracts the disclosure as made in its news releases, and on its website as incomplete and potentially misleading.
The Company hereby restates the disclosure of the historic resource to read:
In his Examination and Compilation Report dated April 1981, Melvin A. Herdrick, Consulting Geologist, estimated probable tonnages in the main orebody, 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 probable ore at 7.5 oz/t cutoff at 17-20 oz Ag/t 166,208 tons”
In his conclusions Herdrick (1981) stated ” Because mineralization is controlled by stratigraphy, close proximity to the fold axis, and co-incidence of the Sunshine Fault near mineralization, continuity of mineralization is projected to extend more than 600 ft westerly, beyond the previous exposures within the mine.”
He further stated “Previous exposures verify that more than 400 ft of ore strike length is exposed from the upper level through the intermediate level. Projections of ore tonnages in the main body, based upon geology, yield a probable tonnage of approximately 160,000 tons within the 7.5 oz cutoff, having an grade of approximately 17 to 20 oz Ag/ton”
Herdrick’s assumptions, parameters and methods used to calculate the grade and tonnage of the reported historic resource are unknown.
Herdrick (1981) also estimated in the report that if on-site milling was contemplated from the two levels and the west projection, he could quantify a larger possible tonnage using a 3.5 oz per ton cutoff, but while determining a possible tonnage, did not ascribe a grade to the tonnage.
The Company advises 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. There can be no assurance that additional work will result in the definition of any current resource or reserve. The Company is not treating the historical estimates as current mineral resources or mineral reserves.
For the historical resource figures to be upgraded or verified to qualify as National Instrument 43-101 resources or reserves would require measuring and resampling of the underground workings, and if needed, core drilling to confirm the potential tonnage The Company has engaged APEX Geoscience (news release dated June 23, 2014) to conduct this work.
The Company has retained Dr. G. E. Ray, P.Geol, to update the current Technical Report on the Bayhorse Mine that includes the reported historic resource.
Further, the Company reports that when the Company changed its name to Bayhorse Silver Inc and created the new website for the Company, it included an incorrect version of the Alexander River NI-43-101 Technical Report dated 23 April, 2013. This incorrect version of the report contained a non-compliant resource estimate that had previously been retracted by the Company in its news release February 19, 2013, the Company further retracts the disclosure as follows:
The Company is fully retracting all prior disclosure of a historic potential resource estimate at the Alexander River Gold Project on its website.
The historic potential resource estimate, as disclosed in these news releases, and in the Company’s promotional videos, was insufficiently compliant with National Instrument NI-43-101 rules for historical disclosure, and was unsupported by a compliant NI-43-101 technical report. The disclosure omitted mandatory cautionary language always required by NI 43-101 with disclosure of a historical resource estimate. Some of the potential resource disclosure was potentially misleading, as it sometimes appeared as disclosure of a current resource estimate, and in a manner restricted by the disclosure requirements of NI-43-101. The Company hereby retracts all prior disclosure of a potential resource at Alexander River as made in its news releases and promotional video and written material.
The correct version of the Alexander River NI-43-101 Report is disclosed on the Company’s website.