Debenture Increase to US$1 Million Closes, Gypsy Swap Financing

BHS2017-18 Bayhorse Silver Inc – Gypsy Swap and Increase in Private Placement

Bayhorse Silver Inc. (“Bayhorse” or the “Company”) (TSX-V: BHS) announces that certain directors have sold an aggregate of 4,130,000 common shares of the Company on September 18, 2017 from their personal holdings in an arranged sale through the facilities of the TSX Venture Exchange. The directors will use all of the net proceeds from the sale of these shares to exercise warrants, or to purchase units under Company’s non-brokered private placement debenture financing announced on August 10, 2017.

The issuance of shares to insiders pursuant to the private placement is considered to be a related party transaction subject to TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101. The Company intends to rely on exemptions from the formal valuation and minority shareholder approval requirements provided under sections 5.5(a) and 5.7(a) of Multilateral Instrument 61-101 on the basis that participation in the private placement by insiders will not exceed 25% of the fair market value of the Company’s market capitalization.

Further to its news release dated August 10, 2017, the Company has increased the size of the Debenture Financing announced from US$750,000 to US$1,000,000 and, subject to approval of the TSX Venture Exchange, has now closed the Financing,. Graeme O’Neill, the Company’s CEO has subscribed for US$300,000 in the Debenture, and has exercised 2,543,520 outstanding warrants and options held by him for total funds from the exercises to the Company of C$508,528

The Company has granted incentive stock options to directors, officers and employees to purchase an aggregate of 1,000,000 common shares, which options are exercisable for five years at C$0.25 cents.