Bayhorse Response to TSX-V White Paper

Dear Shareholders and Investors.

Just prior to the Christmas/New Year break, the TSX Venture Exchange put out a White Paper covering many of the irritant issues faced by listed companies, and their shareholders, and what the Exchange intends to do to address these issues.

We are all aware that the Junior Market appears broken, as evidenced by the Venture Exchange Index, and many investors have abandoned the resource sector, or the markets in general, as they have lost a significant amount of their investment capital. Not only that, but companies appear locked into a vicious downward spiral of lower prices and increasing share issuances.

Very few investors realize that due to the mandates from the various Securities Commissions to allow for competition in the market, a number of exchanges now operate in Canada in competition to the TSX-V and TSX, and one more is proposed. This has removed the level playing field investors once enjoyed and caused two significant occurrences.

First, the shorting uptick rule has been removed so anyone can short stocks at anytime with no repercussions, to the detriment of investors and the market. Not only that, but many shorts are apparently naked shorts, and not reported.

Second, market transparency has disappeared, as, unless one subscribes to all the exchange feeds, at a considerable cost, very few investors are able to make head nor tail accurately of just what the bid/ask is, and effect trades with that knowledge.

As President of Bayhorse Silver Inc, I must represent our shareholders interests as best I can to the Exchange to ensure we have a transparent market where all shareholders have equal access to trading information, and no one person, or group, is favored over another. Only in that way can we level the playing field for all.

Accordingly, I have sent the following letter to the TSX-V Exchange, on behalf of our shareholders, in response to the White Paper.

TSX Venture Exchange January 4, 2016
650 West Georgia Street
Vancouver, BC, V6B 4N9

Re: White Paper: Revitalizing TSX Venture Exchange

Attention: John McCoach

Dear Sir,

I have reviewed the White Paper prepared by the Exchange, and while I applaud the Exchange for taking note of, and addressing many of the irritants present in our markets, in my opinion however they are akin to “rearranging the deck chairs on the Titanic”, as they do not address the major issue, Predatory and Manipulative trading practices on the Exchange.

Unless investors and shareholders have confidence the Exchange will protect the companies and the investing public from predatory and manipulative practices, the companies will cease to exist, as will the Exchange.

The first thing your White Paper states is: The public venture market community in Canada has long been recognized as the premier ecosystem in the world for supporting the ambitions of entrepreneurs and the success of early-stage public companies.

It then refers to the interconnected community of stakeholders, which includes entrepreneurs, investors, financiers, brokerage firms, securities lawyers, accountants, industry professionals and regulators.

Other than the entrepreneurs, all other stakeholders noted above derive their living from the money and energy that is created by these entrepreneurs and funded by the investors that believe in their endeavors.

The entrepreneurs, not the professionals, are the ones that should be listened to because it is their energy, drive, and acumen that is at the heart of the Exchange, and this entrepreneur asks the question;

Why are so many companies listed on the Exchange in difficulty, having to constantly issue shares at lower prices to survive, in death spiral financings.

This is not about the “Zombie Companies” Despite the current market conditions, there is a reason the so-called Zombie Companies have developed.

The predatory trading practices of those who manipulate the small cap markets for their own gain, against the general good.

What one single change should be made that can reverse this trend, provide for the needs of the companies, and bring back confidence in the integrity of the Exchange.


If the TSX Venture Exchange is meant to provide a platform for companies to raise money, prosper and grow; how can they do that if someone is continually shorting their stock? Especially in a small cap market.

How can the Exchange prosper if their clients, the listed companies, are continually being ground down?

The ability to Short companies shares on the TSX Venture Exchange is giving the shorts the ability to wage unrestricted economic warfare against companies and management that have no effective defense to the shorts tactics.

The second simple thing that will change the game is to raise the minimum board lot. Once, a hundred dollars was considered a lot of money. Not anymore. Establish new board lot trading parameters. A board lot under one dollar, – 1,000 shares. Under 20 cents – 5,000 shares. Under 10 cents – 10,000 shares, 5 cents and under- 20,000 shares. This one move alone will minimize the damage caused by the numerous 1,000 share downticks that drive share prices down, by making the trade more expensive. After all, what purpose do these low cost, low volume downticks serve?

If an investor cannot afford a $1,000 dollar investment, then maybe that investor should not be in the market.

What is more important? The health of the companies trading on the Exchange, and by extension the Exchange, or those that feed off the Exchange. I believe these two changes will eliminate many of the issues contributing to problems we are experiencing today.

In my opinion the health of the companies is more important as, if they are healthy, only then can they foster a thriving support industry. The other stakeholders do not create the wealth, but they certainly cannot thrive without the wealth that the entrepreneurs create.

There is a war of attrition going on as everyone tries to capture the now very scarce investment dollars. There are now so few independent investment houses that competition in the market has disappeared, leaving the field to the banks, which by their nature will not support the junior markets.

The listed companies are the heart and soul of the Exchange and their health should be paramount, because they attract investors who help create wealth. For Everyone! If this simple fact is not understood, then I see no hope for the future.

Yours truly

Graeme O’Neill

Graeme O’Neill
President & CEO
Bayhorse Silver Inc

BayHorse Silver: Expertise | An Interview with CEO Graeme O’Neill


There are a lot of business models for junior mining companies. Not all work all the time and when times are tight Bayhorse (V.BHS) CEO Graeme O’Neill wants “to deliver value to shareholders as quickly as I can.”

“We have to get out of the fund and spend cycle. Get production at a reasonable rate.” explained O’Neill. At the same time, O’Neill is a realist. “We got our barite mine permitted in 8 months; but the market crashed and no one cared.” (The mine was spun out to German interests and Bayhorse expects production to commence later this year. Bayhorse retained a 30% net profit arrangement with the new operator.)

The sale of the barite interest meant Bayhorse was positioned to act when it was presented with the Bayhorse silver mine opportunity in Eastern Oregon by American Cordilleran Mining Corp, (AMCOR).

“This is a silver mine in Eastern Oregon which was mined in the 1920’s and again in the 1980’s. We have a long standing business relationship with AMCOR and they bring us good quality projects.” said O’Neill. “We waited until the market improved before moving on this project. But we have samples which go as high as 150 kg/ton.”

O’Neill is a New Zealander and, though he’s lived in Canada since 1971, his Kiwi accent comes to the fore when he starts talking about the geology. “I have a rock on my desk which weighs 2kg and contains 8 ounces of silver and is 17% copper.”

“Bayhorse was drilled, underground, in 1984. We have all that information and we’re in touch with the geologist who did all the mapping and the underground work in the 1970s. He called us.”

“These are patented claims. Until the 1930’s any US citizen could stake a claim for 20 acres and, if they did the required work, the claim would become private ground. Right now, work we do on the property is subject to Oregon state law but we can remove 5000 cubic yards of material per year – 15,000 tons – which would be a bulk sample.”

“Back in the 1980s they mined 5700 tons which graded 15.0 ounces per ton. We have an historical resource of 460,000 tons – but it is not 43-101 compliant.” said O’Neill, “We just entered into an agreement with American Mining & Tunneling to make the underground workings safe. Re-pin the underground workings. Then we will resample underground to confirm grades. We have a 43-101 but we don’t have a resource estimate yet. We believe that confirming the grades will give us that estimate.”

Bayhorse’s plan is straightforward. If the grades are confirmed O’Neill believes there is a potential for 225,000+ ounces of silver in the 15,000 ton sample. “Not all that expensive to mine. We have processing facilities within 200-300 miles so we could be toll milling the material.”

Timing on the Oregon property is to try and begin removing material by the end of 2014.

At the same time as Bayhorse is working on its potential silver mine, another business opportunity arose: medical marijuana. April 4, 2014, Bayhorse announced that it had retained the service of two consultants who provide services to the medical and recreational marijuana business in Colorado and Washington.

“We don’t want to get into the grow business.” explained O’Neill, “We want to explore the business opportunities which surround the business. We think there is the opportunity to be to the marijuana industry what the sutlers were to the Gold Rushes.” (Sutlers supplied the gold miners food and clothing and other supplies – the most famous sutler was Levi Strauss who invented blue jeans for the 49ers.)

“The marijuana business is heavily regulated. In Washington every five pounds of marijuana has to be tested. As a mineral exploration company we are used to operating in a highly regulated environment. We deal with labs and permits.”

For Bayhorse the marijuana business is all about buildings, grow systems, dealing with regulations, testing and, in some cases, sourcing the “seed” capital required to get the businesses going.

O’Neill himself brings a wealth of experience to the business, “I was actually a municipal inspector in North Vancouver in the 90′s_. I saw a lot of grow ops and the associated problems. For growing, marijuana is finicky. What a grower wants to do is turn a crop around every six weeks. We hope to provide the expertise and support to make that happen.”

While many juniors have been criticized for diving into the marijuana business without really having anything to actually contribute, O’Neill sees Bayhorse’s participation as a logical extension of its skill set.

“We’re not desperate. We’ve created two spinoff companies over the last few years for our shareholders and we’re looking forward to potential profits from the Barite Mine before the end of 2014. Legal marijuana is a brand new, highly regulated, business opportunity with a brand new business model.”

At time of writing Bayhorse traded at $0.135 with 19.3 million shares outstanding and a market cap of $2.6 million.

Originally posted on:

Bayhorse Silver’s President & CEO Graeme O’Neill Interviewed by InvestmentPitch’s Samantha Deutscher

“In the West Coast of the South Island of New Zealand, in a small mining district that has produced over 8 million ounces of placer gold and 2.2 million ounces of hard rock gold, we have three very highly prospective gold projects, with the flagship past producing Alexander River project, being only 8 kilometres from a historic gold mine that produced over 730,000 ounces and still has resources of approximately 500,000 ounces.”

Read more on and