Mr. Graeme O'Neill reports

CRUSHING EQUIPMENT DELIVERED TO BAYHORSE SILVER MINE, OREGON, USA

Bayhorse Silver Inc. has received its shipment of crushing and processing equipment at the Bayhorse silver mine in Oregon, United States. Equipment assembly is under way.

Electrical power supply lines to the mine site by Idaho Power are anticipated to be completed by the end of October, at which time the Bayhorse silver mine site will be completely electrified. On completion of crusher assembly and commissioning, a 2,000-ton batch of mineralization already extracted from the mine workings will be tested for silver upgrading utilizing the crushing and shaker table procedures.

During construction of an access ramp to the upper adit a significant zone of mineralization was exposed in the wall rock. This new exposure dips 30 degrees to the north, extending over a thickness of 20 feet for a horizontal distance of 73 feet. This is consistent with the mineralized zone at the Bayhorse mine being approximately 85 feet wide and averaging 20 feet in thickness, as reported by Herdrick in his 1981 report.

The upper adit is being remediated to provide additional mechanized access to mineralized material in the upper level of the historic mine workings.

Graeme O'Neill, chief executive officer of Bayhorse, commented, "Exploration manager Dr. Clay Conway, PGeol, was excited to see the external extent of the mineralization with abundant showings of oxidized tetrahedrite in the form of azurite and malachite that he sampled for assay as it confirms the extent of the mineralization reported in the historic documentation."

Operations at the Bayhorse mine can be conducted year-round. A portable structure 38 feet by 50 feet has been ordered to minimize weather issues affecting the continuous upgrading operations. The company has also reopened the lower 900-foot adit where historically mineralization was drawn from ore shoots from the intermediate-level workings. The opening of the three adits provides additional exits from the mine workings, allows for safer underground operations and provides cross-ventilation within the underground workings.

An underground drill program is planned from the lower adit workings targeting into, and the area ahead of, the known mineralized zone. Prior to closing the mine in late 1984 due to low silver prices, Silver King was reported to have only mined 5,718 tons at an average grade of 16.7 ounces per ton silver using a six-ounce-per-ton silver cut-off.

Bayhorse Silver is earning a 75-per-cent interest in the past-producing Bridging the Gap project, consisting of Asarco's historic Crown Point, Silver King, Ranger, Wyoming, Curlew and Blackhawk silver/lead/zinc mines in Idaho's Silver Valley. Bayhorse is also earning an 80-per-cent interest in the historic Bayhorse silver mine in Oregon, United States.

Dr. S.A. Jackson, PGeo, a qualified person and technical adviser to the company, has prepared and supervised the preparation of or approved the technical content of this press release.