Introducing Bayhorse Silver - Marino Pieterse Research - Gold & the Dow - Points to Ponder

January 7, 2018

Dear Friends:

Re: Introducing Bayhorse Silver - Marino Pieterse Research - Gold & the Dow - Points to Ponder

Bayhorse Silver Marries Technology and Mining
Its mantra: “Mines Are Made – Not Found”.

Bayhorse Silver Inc. listed on the TSX-V: BHS, Frankfurt: 7KXN, and US: KXPLF.

I expect the Bayhorse Silver to perform well in early 2018!

The Company and Graeme O’Neill, its CEO, has a highly experienced team of mining engineers, geologists and miners to actively bring its Bayhorse Silver Mine to production.

Graeme O’Neill established the Company and has been President & CEO since its inception. He has been involved in managing junior exploration companies in the minerals sector for a number of years and is experienced in logistics, planning, and operations development. He has a strong background in the regulatory and compliance requirements of public companies.

Using a state-of-the-art Steinert Ore-Sorter, Bayhorse is marrying advanced technology with standard mining techniques to promote environmentally friendly and low-cost mining.
The Company expects to produce between 640,000 to 1,280,000 ounces of Silver over the next 12 months.

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On December 13, 2017 CEO Graeme O’Neill commented on 2017 operations:
“With recent commissioning of the Ore-Sorter, the Bayhorse Mine is now fully operational. Through January 2018, we will upgrade 1300 tons of stockpiled mineralized material through the Ore-Sorter. Before year end a portion of the upgraded material will be shipped to Mineral Solutions of Coeur D’Alene, Idaho, with the balance by the end of January 2018.”

Expenditures to date total $3,580,000 from Mine acquisition in early 2014 to the current production stage. At the time of acquisition projected mining costs were US$79/ton, and total mining and processing costs were projected at US$127/ton. The Company has established an actual mining cost of US$50/ton from the development to date of over 550 feet of underground workings. Both actual processing costs and recovered grades will be established during operation of the Ore-Sorter upgrading the 1300-ton stockpile.

All mining projections are based solely on the Herdrick (1981) Report which estimated remaining shipping material to be 166,000 tons at 17 – 20 opt Ag at a 7.5 opt (233 g/t) Ag cutoff for gross contained ounces of between 2,825,000 and 3,324,000 Ag. He further estimated on-site milling material to be 473,000 tons at a 3 opt (93 g/t) Ag cutoff. Testing by Bayhorse with the Ore-Sorter at the Steinert facility in Kentucky has allowed the Company to establish a lower potential cut-off grade of 2.5 opt (77.8 g/t) Ag (News Release BHS 2017-14, August 10, 2017).

News release BHS2017-24 reported that mineralization intersected 50 feet below the Sunshine and Junction Zones, 160 and 340 feet respectively from the Mine portal, increased the vertical extent of mineralization to 70 feet from 20 feet in thickness. Dr. Bill Willoughby, the Company’s Mining Engineer, tested the recently uncovered mineralized zones using a Niton XRF Analyzer and identified silver grades similar to those previously reported in News Releases, BHS2014-01, BHS2014-09, BHS2016-10, BHS2016-11, BHS2017-17.

Original projections were to mine at 100 tons per day for 300 days per year. However, as we are now operating on a 7-day-week basis, mining from two to three working faces 350 days/year, at up to 200 tons/day, will yield between 35,000 tons to 70,000 tons per year. Based upon Herdrick’s historic grade estimates, annual gross silver production at that mining rate is targeted to be between 640,000 ounces and 1,280,000 ounces.

Dr. Clay Conway, Exploration Manager, through extensive geological modeling, has projected the mineralized zone at the Bayhorse Silver Mine to extend much further to the west beyond the known 840-foot strike.
The Company’s exploration target is to develop a further million tons of mineralization.

Bayhorse advises it is not basing any decision to produce on a feasibility study of mineral reserves demonstrating economic and technical viability and, also advises, there is increased uncertainty and specific economic and technical risks of failure associated with any production decision.
The Company has earned an 80% interest in the historic Bayhorse Silver Mine, Oregon, USA, through current underground development and construction of concentrating facilities.

Bayhorse is also earning a 75% interest in the Bridging the Gap Project, consisting of the past producing historic Crown Point, Silver King, Ranger, Wyoming, Curlew, and Blackhawk silver/lead/zinc mines of ASARCO in Idaho’s Silver Valley.”

Share Structure
Shares Issued: 61,443,660.
Warrants: 2,300,000 @ $0.20 July 31, 2018 - 11,000,000 @ $0.25 Sept 2018-Sept 2019 - 4,000,000 @ $0.30 September 27, 2020
Options: 2,397,000
Fully Diluted: 81,440,660
Shares Holders: Of the 61,443,660 common shares issued, approximately 40% are held by twenty shareholders. Management holds approximately 14% of the total shares issued.

Advisory Board and Consultants
Dr. Stewart A. Jackson, P.Geo.

Dr. Jackson is a long-time exploration specialist. With his public Company, Crown Resource Corporation he discovered and initiated production from multiple gold discoveries totaling several million ounces in Washington State, USA, including the current Buckhorn Mine of Kinross.

He was involved in the acquisition and exploration of multiple gold and silver deposits in North, South and Central America, the Philippines, and Indonesia. He acquired and delineated a major uranium, molybdenum, nickel and vanadium resource in Sweden, and was instrumental in the advancement of the Turnagain nickel deposit in Northern BC, Canada, from a prospect to the status of a very large nickel resource. In addition to metals exploration he has been involved in a broad range of exploration fields, including oil, gas, industrial minerals, and diamonds.

APEX Geoscienece, Consulting.
Apex will undertake a work program to create a wire frame model of the underground workings by digitizing all data developed by the Company, along with all historic data, and the recently acquired Cordex data, and will include new digital and laser surveys of all historic accesses, haulage ways, stopes and drill collars. By incorporating this data into a comprehensive 3-D underground model the Bayhorse will be better able to plan any proposed mining operations along with planning any future underground sampling and drilling programs. Based upon the new survey information and the underground model, APEX will also establish the most effective methods required to convert the reported historic resource into a NI-43-101 resource.

Dr. William Willoughby, PE,
Dr. Willoughby has consented to provide Mine Engineering consulting services to the Company. He is a highly experienced Mining Engineer with 35 years of experience in all aspects of mining projects, including: planning and evaluations, exploration, drilling, underground and surface development, technical studies, permitting and financing.

Bayhorse Silver Mine

Over 550 foot of underground Development work has been completed by the Company at the intermediate level, accessing the mineralized zones of the Bayhorse Silver Mine where active mining of high grade silver is underway.

The Bayhorse Silver Mine is a past producing Silver King mine. Due to extremely low silver prices, the mine had been shut down by Silver King Mines in 1984.

The Company has completed rehabilitation of the portal to the intermediate level that was partially mined in 1984. As disclosed in the National Instrument 43-101 Technical Report on the Bayhorse Mine, there is a known mineralized zone (Herdrick 1981) at the Bayhorse Mine reportedly approximately 840 feet in length, 85 feet in width, and 22 feet thick, estimated to contain 160,000 tons of silver bearing mineralization at a reported grade of 17-20 ounces per ton silver at a 7.5 ounce per ton cut off. Bayhorse miners have driven two crosscuts 50 feet below this mineralized zone and have increased the thickness from 20 feet to more than 70 feet.

The Company advises it is not basing its decision to produce on a feasibility study of mineral reserves demonstrating economic and technical viability and also advises there is increased uncertainty and specific economic and technical risks of failure associated with its production decision.

In conjunction with past historic sampling that can be relied upon where grades as high as 69 oz/t (2,146 g/t) were identified, since 2014 the Company has also conducted significant underground sampling as reported. The Company has confidence in this sampling as it was conducted by the principal of Cordex Mining, Dr. A. Wallace, P. Geo, and the Company has acquired the data directly from Cordex. Other sampling prior to Cordex has identified grades of up to 260 oz/t Ag. In 2014 Bayhorse sampled a bonanza grade of 4,835 oz/ton silver.

A short mining program was undertaken in 1984 by Silver King Mines, however, work ceased when the price of silver fell below $5.00 oz and the mine has remained closed until now. The highest reported grade mined from the 1984 program was approximately 70 tons at 691 oz/t Ag.

In documentation and reports by Silver King Mines prior to closing the mine in 1984, Silver King reportedly blocked out approximately 1,890 tons ready to mine (mine plan maps, Silver King Mines, dated September 1984. Of the approximately 6,000 tons they mined during the short period mining took place in 1984, Silver King reported 23% graded between 20 to 100 oz/t Ag, 71% graded between 6 - 20 oz/t, and the balance (300-500 tons) graded 6 oz/t or less.

Bayhorse has conducted dense media separation (DMS) testing on approximately 500lbs of highly weathered low-grade material (averaging approximately 5.28 opt Ag or 164 g/t Ag) from the historic waste pile on site, and found we were able to upgrade the silver content by up to 8 times and of course at the same time reducing the volume of the rock by 8 times.
Dense Media Separation is a process that uses the difference in specific gravity between mineralization and waste rock to remove the waste and upgrade the mineralized material. Ore sorting uses various methods to identify the difference between mineralized and non-mineralized material and keeps the mineralized and rejects the non-mineralized. They are simple processes and very cost effective. It does not require permitting, unlike a chemical processing or flotation plant.

Led by its Operations Manager, Levi Duncan, Bayhorse has a highly experienced team of miners working at the Bayhorse Mine,
Bridging the Gap Project – Silver Valley

Highlights:
– Claim groups include 6 past producing mines
– Situated between Bunker Hill and Page Mines in Idaho’s prolific “Silver Valley”
– Bunker Hill and Page mined up to Government Gulch claim boundaries
– Patented (private) ground.
– Free from environmental liabilities from prior production
– Complete package of digitized underground mine plans/workings of all the mines

The Bridging the Gap property includes ASARCO’s prior producing Blackhawk, Crown Point, Curlew, Ranger and Wyoming Mines.
A recent drilling program at the historic Crown Point Mine identified multiple mineralized zones. Assays are pending and expected early in this year.

The Crown Point Mine and the Silver King Mine at the Bridging the Gap were mined to the 1,000 level, with average mined grades 10 oz/t Ag and 10% lead, while the Blackhawk Mine was mined between the 800 level to the 1800 level, (US Bureau of Mines filings).

The Page Mine to the west was worked to the 3400 level and the Bunker Hill Mine to the east was worked down to below the 4000 level.

The Blackhawk Mine, which fed the Page Mine Mill to the west, mined 214,116 tons with average grades of 3.5 oz/t Ag, 8.1% lead and 2.2% zinc (US Bureau of Mines filings).

Located in Idaho’s highly prolific “Silver Valley”, the properties lie approximately 1 mile south of the towns of Kellogg and Smelterville off US Interstate I-90. The Bridging the Gap property consists of approximately 500 acres of patented claims and mineral rights that abut the Bunker Hill Mine to the east and the Page Mine to the west. Mining operations were conducted by both the Bunker Hill Mine and the Page Mine right up to the east and west boundaries respectively of the Bridging the Gap group of claims.

Marino Pieterse Research

Marino Pieterse is the Publisher and Editor of the “Goldletter INTERNATIONAL”, an international independent information and advice bulletin for gold and related investments located in the Netherlands.

Marino’s information and investment comments are independently and thoroughly researched by him which he believes correct although he does not give an absolute any guaranty or absolute accuracy. He also says that his readers should make their Investment decisions at their own risk.

In his latest Goldletter Marino gives the Precious and Base Metals price changes from the end of 2016 to the end of 2017:

Gold: $1,159 vs $1,297 = + $ 1.38
Silver: $16.87 vs $16.24 = - $0.35
Zinc: $3,309 vs $2,563 = + $ 0.75
Lead: 1,985 26 vs 2,495 = + $ 5.10
Copper: 5,501 vs 7,157 = + $ 166

If you are interested in his Research, Marino Pieterse can be reached by:
Tel: +31-251-828247 or by E-mail.

Gold & the Dow Jones

NY Gold Nearest Futures

Gold continued its shine in this year. On Tuesday January 2, 2018 Gold Prices were up and hit a more-than-three-month high in early U.S. trading. The slumping US dollar hit a better-than-three-month low on that day, which was bullish for the precious metals markets. The Gold and Silver markets also saw safe-haven demand on heightened geopolitical risks. Gold closed @ $1,319.10 that day.

On Friday January 5, 2018 the Gold trading range was1,314.60 - 1,324.70 and it closed at $1,320.30 for the week. Although that was positive for the week, it basically traded sideways.

Although, we will see gains in Gold during 2018, I continue to believe that the metal will go below $1,000 before the end of the 1^st Quarter so, I kept on selling some of my holdings to create cash to buy it back at lower prices.

Please note: Martin Armstrong is preparing a Special Report for the Metals which will review Gold in various currencies.

Dow Jones Industrials Index Cash

Money is flowing into the US dollar to benefit the US Stock Markets. The Market keeps on ramping up and on Friday January 5, 2018 the Dow traded as high as 25,299.79 and closed at 25.295.87. Please note: Support stands at 24,871.68.

Points to Ponder

1) December 31, 2017 - What Did the Pivot Points Confirm or Deny for 2017? [See below].

My Take:
As per MA: “We warned back in October 2014: “[W]e are looking at a rally into 2017-2018 with the Dow reaching the 25,000-28,000 level.

We can see that we have reached the beginning of our Pivot projections made 10 years ago for this time period. This suggests CAUTION and with our volatility models turning up and a Panic Cycle for 2018, this is not going to be a walk in the park. This will take a lot of skill to trade this one. No emotions and no preconceived expectations. We have to play this by the numbers and cycles – no choice. This is not the time for boasting opinions.

The 2017 Pivots were 21982.03, 1528.79, and 22282.07 with the closing coming in at 24719.22. Here we closed above all three Pivots indicating it is still long-term bullish. Looking at 2018, the Pivots move to 20202.77, 27434.90 and 28054.53.”
The Dow will be long-term Bullish in 2018!

1. January 4, 2018 – Housing Begins to Crash – Australia – New Zealand – London

My Take:
Yes, Politicians worldwide know how to sink economies. Only Donald Trump, who is NOT a Politician, is able to create prosperity for his Country!

1. January 5, 2018 - At What Point do we reach Euphoria in the Equity Markets?

My Take:
I agree with MA who says:
“Now, let us look at the current situation. Again, we do not have a major BUBBLE formation. What we do have is a market that is still expanding and in fact, the high on our Energy Models on the weekly level took place last week. This implies we would still press higher into January and that has been out target once you exceeded the November high.”

1. January 5, 2018 – Climate Change is an OMG Event?

My Take:
Do we face an OMG event in famine with the worst during the 2020-2024 period? My take is NO.

Farming will drastically change as the need for food continues to grow as we move into 2020-2024. New hot house technologies will be developed as we move forward.
Consequently, I am not worried at all.

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Happy New Year from Mining Interactive Corp. rainy and cool Vancouver, Canada

Nick L. Nicolaas
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