Bayhorse Silver Private Placement
My pal, Bayhorse Silver (BHS.V) CEO Graeme O’Neill, just announced a 15 million unit private placement at $0.05 per unit. A unit being one share and a transferable share purchase certificate at $0.09. Accredited investors and existing shareholders only. Total raise, $750,000.
Now, knowing Graeme he has likely subscribed for a significant number of units personally. I also suspect he has commitments from larger shareholders and investors for another significant portion of the raise. But there will still be several million units available. If I had any liquid funds, I might well be participating.
With BHS shares trading at $0.045-0.05.5 subscribers are basically buying at market and getting a “free” right to buy more shares at $0.09. Shares bought are subject to a four-month plus a day holding period.
I know several wealthy investors whose strategy is to buy into private placements, sell the common shares at the end of the hold period and catch a free ride on the share purchase certificates. Which might make a lot of sense in the case of this Bayhorse Private Placement.
As ever, it is a question of timing.
Right now, there is a drill turning to take core from a very prospective “blob” targeted due to the IP work recently completed. There are no guarantees, but the blob is likely to share the characteristics of the blobs mined at the Bayhorse Mine. They are hunting for high-grade silver, 20+ ounces per ton. But there are places in the Bayhorse mine which have graded ten times that. They are also looking for copper, antimony and gold, all of which have been found in significant quantities at the Bayhorse Mine.
It will be a short hole, 200 feet or so, and the core to be assayed will be shorter still. Which means that the turnaround time, from last week’s commencement to final assays could be 4-6 weeks. Which means there will be hard news, likely by the end of May. If that news is, as expected, good news about decent intervals of good to excellent grades, the shares are likely to rise.
The funds raised will be ploughed right back into news-generating activities:
The funds received are to conduct the diamond drilling program on the recently identified IP low-resistivity targets at the Bayhorse Silver Mine, an IP survey to further define drill targets on the Pegasus Project for both Bayhorse style silver mineralization and test for the presence of a porphyry copper deposit, to advance the final Bayhorse Mine permitting,
“The diamond drilling program” suggests that the current hole at the Bayhorse mine is likely to be one of several to sample the IP-generated targets on the Oregon side. News flow right there, and with a two or three month time horizon. BHS owns its own drill which makes short holes relatively inexpensive.
The follow-up IP on the Pegasus project will be interesting on two fronts: first, getting a clearer picture of the possible copper porphyry deposit, second, seeing if the “string of silver pearls” continues along the rhyolite known to exist on the Idaho side of the Snake River. The potential copper porphyry is exciting, but it needs serious drilling, which will cost serious money. Money, which it would be foolish to raise at $0.05. What the porphyry really needs is a deep-pocketed Joint Venture partner.
There are plenty of large companies, Barrick, Rio Tinto, BHP, staking along the Izee/Olds Ferry terrane sutures. Barrick has staked right up to BHS on the Idaho side. But none have “popped the question” so far. Getting better delineation of the potential porphyry with IP may put the copper at Pegasus in play.
The potential for more silver blobs in mining-friendly Idaho is the real sleeper here. In Oregon, permitting takes a long time. BHS is close, but it will still take a while. Idaho is committed to fast-tracking mining permits, particularly where there is the possibility of a defence-critical mineral like antimony alongside the silver. If the IP shows near surface blobs similar to those at the Bayhorse mine, a bit of drilling to prove up grade, and Bayhorse could well have a second silver mine on the Idaho side.
Most of the work outlined in the press release on the Private Placement will be completed over the next few months. Which means a steady news flow. If the news is even a little encouraging, the BHS share price should make the $0.09 share purchase certificates worth something in a few months, just as the hold lifts from the Private Placement shares. Selling the shares for a small profit and exercising the certificates might be a relatively low-risk strategy. (But, hey, BHS is a junior resource company, it is always going to be high risk compared to virtually every other possible investment.)
The Easter Bunny may be bringing a basket of silver, copper, antimony and, maybe, gold eggs. The question is, do you believe in the Easter Bunny?
(Disclaimer: Graeme O’Neill is a friend. I own Bayhorse Silver shares which I may buy or sell at any time. This is not investment advice. Do your own due diligence. Call the CEO.)