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Capital stock, warrants and stock options (Tables)
 6 Months Ended 9 Months Ended
Dec. 31, 2020
Sep. 30, 2021
Equity [Abstract]    
Schedule of Estimated Using the Binomial Model to Determine the Fair Value of Warrant Liabilities

The fair value of the warrant liabilities related to the various tranches of warrants issued during the period were estimated using the Binomial model to determine the fair value using the following assumptions on the day of issuance and as at December 31, 2020:

 

August 2020 issuance  August 14, 2020   December 31, 2020 
Expected life   1112 days    973 days 
Volatility   100%   100%
Risk free interest rate   1.53%   1.31%
Dividend yield   0%   0%
Share price  $0.42   $0.41 
Fair value  $15,746,380   $14,493,215 
Change in derivative liability       $1,253,165 

 

The warrant liabilities as a result of the December 2017, August 2018, November 2018, June 2019 and August 2019 private placements were revalued as at December 31, 2020 and June 30, 2020 using the Binomial model and the following assumptions:

 

December 2017 issuance  June 30, 2020   December 31, 2020 
Expected life   166 days    Expired 
Volatility   100%     
Risk free interest rate   0.69%     
Dividend yield   0%     
Share price  $0.73      
Fair value  $0   $0 
Change in derivative liability       $0 

 

 

 

Bunker Hill Mining Corp.

Notes to Consolidated Financial Statements

Six Months Ended December 31, 2020 and Years Ended June 30, 2020 and 2019

(Expressed in United States Dollars)

 

 

10. Capital stock, warrants and stock options (continued)

 

Issued and outstanding (continued)

 

August 2018 issuance  June 30, 2020   December 31, 2020 
Expected life   405 days    221 days 
Volatility   100%   100%
Risk free interest rate   1.20%   1.23%
Dividend yield   0%   0%
Share price  $0.73   $0.41 
Fair value  $6,132   $0 
Change in derivative liability       $6,132 

 

November 2018 issuance  June 30, 2020   December 31, 2020 
Expected life  516 days   332 days 
Volatility   100%   100%
Risk free interest rate   1.34%   1.09%
Dividend yield   0%   0%
Share price  $0.73   $0.41 
Fair value  $206,253   $52,540 
Change in derivative liability       $153,713 

 

June 2019 issuance (i)  June 30, 2020   December 31, 2020 
Expected life  363 days   1826 days 
Volatility   100%   100%
Risk free interest rate   1.15%   0.85%
Dividend yield   0%   0%
Share price  $0.73   $0.41 
Fair value  $6,582,920   $3,438,839 
Change in derivative liability       $3,144,081 

 

(i) During the six months ended December 31, 2020, the Company amended the exercise price to C$0.59 per common share and extended the expiry date to December 31, 2025 for 11,660,000 warrants.

 

August 2019 issuance (ii)  June 30, 2020   December 31, 2020 
Expected life   397 days    213-1826 days 
Volatility   100%   100%
Risk free interest rate   1.11%   0.81%
Dividend yield   0%   0%
Share price  $0.73   $0.41 
Fair value  $11,631,921   $5,922,270 
Change in derivative liability       $5,709,651 

 

(ii)During the six months ended December 31, 2020, the Company amended the exercise price to C$0.59 per common share and extended the expiry date to December 31, 2025 for 17,920,000 warrants. The terms of the remaining 2,752,900 warrants remain unchanged.

The fair value of the warrant liabilities related to the various tranches of warrants issued during the period were estimated using the Binomial model to determine the fair value using the following assumptions on the day of issuance and as at September 30, 2021:

 

February 2021 issuance  February 9 and
16, 2021		  

September 30,

2021

 
Expected life   1826 days    1593 days 
Volatility   100%   100%
Risk free interest rate   0.49%   0.89%
Dividend yield   0%   0%
Share price  $0.27 and $0.29   $0.14 
Fair value  $3,813,103   $1,440,591 
Change in derivative liability       $2,372,512 

 

The warrant liabilities as a result of the August 2018, November 2018, June 2019, August 2019, and August 2020 private placements were revalued as at September 30, 2021 and December 31, 2020 using the Binomial model and the following assumptions:

 

August 2018 issuance 

December 31,

2020

  

September 30,

2021

 
Expected life   221 days    Expired  
Volatility   100%     
Risk free interest rate   1.23%     
Dividend yield   0%     
Share price  $0.41   $  
Fair value  $nil   $nil 
Change in derivative liability       $nil 

 

November 2018 issuance 

December 31,

2020

  

September 30,

2021

 
Expected life   332 days    59 days 
Volatility   100%   100%
Risk free interest rate   1.09%   0.92%
Dividend yield   0%   0%
Share price  $0.41   $0.14 
Fair value  $52,540   $nil 
Change in derivative liability       $52,540 

 

 

 

Bunker Hill Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2021

(Expressed in United States Dollars)

Unaudited

 

 

9. Capital stock, warrants and stock options (continued)

 

Issued and outstanding (continued)

 

June 2019 issuance (i) 

December 31,

2020

  

September 30,

2021

 
Expected life   1826 days    1553 days 
Volatility   100%   100%
Risk free interest rate   0.85%   0.84%
Dividend yield   0%   0%
Share price  $0.41   $0.14
Fair value  $3,438,839   $837,368
Change in derivative liability       $2,601,471

 

(i)   In December 2020, the Company amended the exercise price to C$0.59 per common share and extended the expiry date to December 31, 2025 for 11,660,000 warrants.

 

August 2019 issuance (ii) 

December 31,

2020

  

September 30,

2021

 
Expected life   213-1826 days    1553 days 
Volatility   100%   100%
Risk free interest rate   0.81%   0.84%
Dividend yield   0%   0%
Share price  $0.41   $0.14 
Fair value  $5,922,270   $1,282,713 
Change in derivative liability       $4,639,557 

 

(ii)   In December 2020, the Company amended the exercise price to C$0.59 per common share and extended the expiry date to December 31, 2025 for 17,920,000 warrants. The terms of the remaining 2,752,900 warrants remain unchanged.

 

August 2020 issuance 

December 31,

2020

  

September 30,

2021

 
Expected life   973 days    700 days 
Volatility   100%   100%
Risk free interest rate   1.31%   0.41%
Dividend yield   0%   0%
Share price  $0.41   $0.14 
Fair value  $14,493,215   $2,085,987 
Change in derivative liability       $12,407,228 
Schedule of Warrant Activity

 

       Weighted   Weighted 
       average   average 
   Number of   exercise price   grant date 
   warrants   (C$)   value ($) 
             
Balance, June 30, 2019   13,046,484   $0.88   $0.27 
Issued   27,360,284    0.27    0.03 
Expired   (229,464)   8.50    3.54 
Exercised (i)   (2,332,900)   0.25    0.02 
Balance, June 30, 2020   37,844,404   $0.43   $0.09 
Issued   58,284,148    0.50    0.11 
Expired   (350,746)   14.84    5.63 
Balance, December 31, 2020   95,777,806   $0.54   $0.08 

Warrants

 Schedule of Warrant Activity

   Number of   Weighted average exercise price   Weighted average grant date 
   warrants   (C$)   value ($) 
Balance, December 31, 2019   36,452,284   $0.48   $0.16 
Issued   62,238,632    0.49    0.26 
Expired   (346,178)   14.84    5.97 
Exercised (i)   (2,332,900)   0.25    0.02 
Balance, September 30, 2020   96,011,838   $0.47   $0.20 
Balance, December 31, 2020   95,777,806   $0.54   $0.16 
Issued   19,994,080    0.6    0.19 
Expired   (2,913,308)    0.48    0.14 
Balance, September 30, 2021   112,858,578   $0.55   $0.19 

 

(i)   During the nine months ended September 30, 2020, 2,332,900 warrants were exercised at C$0.25 per warrant for gross proceeds of C$583,225 ($417,006). In conjunction with the exercise of warrants, the Company recognized a change in derivative liability of $871,710.
Schedule of Warrants Outstanding Exercise Price

 

           Number of 
   Exercise   Number of   warrants 
Expiry date  price (C$)   warrants   exercisable 
             
August 1, 2021   0.25    2,752,900    2,752,900 
August 9, 2021   4.50    160,408    160,408 
November 28, 2021   1.00    645,866    645,866 
November 13, 2021   0.80    400,000    400,000 
November 13, 2021   0.50    400,000    400,000 
February 26, 2022   0.70    239,284    239,284 
August 31, 2023   0.50    58,284,148    58,284,148 
December 31, 2025   0.59    32,895,200    32,895,200 
        95,777,806   95,777,806 

Expiry date  Exercise price (C$)   Number of warrants   Number of warrants exercisable 
November 13, 2021   0.80    400,000    400,000 
November 13, 2021   0.50    400,000    400,000 
November 28, 2021   1.00    645,866    645,866 
February 26, 2022   0.70    239,284    239,284 
August 31, 2023   0.50    58,284,148    58,284,148 
December 31, 2025   0.59    32,895,200    32,895,200 
February 9, 2026   0.60    17,112,500    17,112,500 
February 16, 2026   0.60    2,881,580    2,881,580 
         112,858,578    112,858,578 
Schedule of Broker Options

 

       Weighted 
   Number of   average 
   broker   exercise price 
   options   (C$) 
         
Balance, June 30, 2019 and June 30, 2020   -   $- 
Issued - August 2020 Compensation Options  3,239,907    0.35 
Balance, December 31, 2020  3,239,907   $0.35 

Broker options

 

   Number of   Weighted average 
   broker options   exercise price (C$) 
Balance, December 31, 2019   -    - 
Issued - August 2020 Compensation Options (i)   3,239,907    0.35 
Balance, December 31, 2020   3,239,907    0.35 
Issued - February 2021 Compensation Options   351,000    0.40 
Balance, September 30, 2021   3,590,907   $0.35 
Schedule of Warrants Outstanding Broker Option Exercise Prices

(i) The grant date fair value of the August 2020 Compensation Options were estimated at $521,993 using the Black-Scholes valuation model with the following underlying assumptions:

 

Risk free interest rate   Dividend yield   Volatility   Stock price   Weighted average life 
 0.31%   0%   100%   C$0.35    3 years 

 

 

Grant Date

  Risk free interest rate   Dividend yield   Volatility   Stock price   Weighted average life 
August 2020    0.31%   0%   100%    

C$0.35

    

3 years

 
February 2021   0.26%   0%   100%   C$0.35    3 years 

 

Expiry date 

Exercise

price (C$)

  

Number of

broker options

   Fair value ($) 
August 31, 2023 (i)   0.35    3,239,907    521,993 
February 16, 2024 (ii)   0.40    351,000    68,078 
         3,590,907    590,071 

 

(i)   Exercisable into one August 2020 Unit

 

(ii)   Exercisable into one February 2021 Unit
Schedule of Warrants Outstanding Broker Option Exercise Prices

 

   Exercise   Number of     
Expiry date  price (C$)   broker options   Fair value ($) 
                
August 31, 2023 (i)  0.35   3,239,907   521,993 

 

(i)Exercisable into one August 2020 Unit

 

Expiry date 

Exercise

price (C$)

  

Number of

broker options

   Fair value ($) 
August 31, 2023 (i)   0.35    3,239,907    521,993 
February 16, 2024 (ii)   0.40    351,000    68,078 
         3,590,907    590,071 

 

(i)   Exercisable into one August 2020 Unit

 

(ii)   Exercisable into one February 2021 Unit
Schedule of Stock Options

The following table summarizes the stock option activity during the years ended December 31, 2020:

       Weighted 
       average 
   Number of   exercise price 
   stock options   (C$) 
         
Balance, June 30, 2019   287,100   $7.50 
Granted (i)(ii)   7,532,659    0.56 
Forfeited  (239,600)   9.78 
Balance, June 30, 2020   7,580,159   $0.62 
Granted (iii)(iv)  435,000    0.55 
Balance, December 31, 2020  8,015,159   $0.62 

 

(i)On October 24, 2019, 1,575,000 stock options were issued to directors and officers of the Company. These options have a 5-year life and are exercisable at C$0.60 per share. The grant date fair value of the stock options was estimated at $435,069. The vesting of these options resulted in stock-based compensation of $74,949 for the six months ended December 31, 2020 (years ended June 30, 2020 and 2019 - $309,211 and $nil, respectively), which is included in operation and administration expenses on the consolidated statements of loss and comprehensive loss.

 

 

 

Bunker Hill Mining Corp.

Notes to Consolidated Financial Statements

Six Months Ended December 31, 2020 and Years Ended June 30, 2020 and 2019

(Expressed in United States Dollars)

 

 

10. Capital stock, warrants and stock options (continued)

 

Stock options (continued)

 

(ii)On April 20, 2020, 5,957,659 stock options were issued to certain directors of the Company. Each stock option entitles the holder to acquire one common share of the Company at an exercise price of C$0.55. The stock options vest in one fourth increments upon each anniversary of the grant date and expire in 5 years. The grant date fair value of the stock options was estimated at $1,536,764. The vesting of these options results in stock-based compensation of $403,456 (years ended June 30, 2020 and 2019 - $162,855 and $nil, respectively), which is included in operation and administration expenses on the consolidated statements of loss and comprehensive loss.

 

(iii)On September 30, 2020, 200,000 stock options were issued to a consultant. Each stock option entitles the holder to acquire one common share of the Company at an exercise price of C$0.60. The stock options vest 50% at 6 months and 50% at 12 months from the grant date and expire in 3 years. The grant date fair value of the options was estimated at $52,909. The vesting of these options resulted in stock-based compensation of $20,259 for the six months ended December 31, 2020 (years ended June 30, 2020 and 2019 - $nil), which is included in operation and administration expenses on the consolidated statements of loss and comprehensive loss.

 

(iv)On October 30, 2020, 235,000 stock options were issued to a former director. Each stock option entitles the holder to acquire one common share of the Company at an exercise price of C$0.50. The stock options vested immediately and expire on December 31, 2022. The grant date fair value of the options was estimated at $46,277. The vesting of these options resulted in stock based compensation of $46,277 for the six months ended December 31, 2020 (years ended June 30, 2020 and 2019 $nil), which is included in operation and administration expenses on the consolidated statements of loss and comprehensive loss.

The following table summarizes the stock option activity during the periods ended September 30, 2021 and 2020:

  

Number of

stock options

  

Weighted

Average exercise price (C$)

 
Balance, December 31, 2019   1,692,500   $1.27 
Granted (i)(ii)   6,157,659    0.55 
Forfeited   (70,000)   10.38 
Balance, September 30, 2020   7,780,159   $0.62 
Balance, December 31, 2020   8,015,159   $0.62 
Granted (iv)   1,037,977    0.34 
Balance, September 30, 2021   9,053,136   $0.58 

 

(i) On October 24, 2019, 1,575,000 stock options were issued to directors and officers of the Company. These options have a 5-year life and are exercisable at C$0.60 per share. The grant date fair value of the stock options was estimated at $435,069. The vesting of these options resulted in stock-based compensation of $10,430 and $48,189, for the three and nine months ended September 30, 2021 respectively (three and nine months ended September 30, 2020 - $45,173 and $186,614, respectively), which is included in operation and administration expenses on the condensed interim consolidated statements of income (loss) and comprehensive income (loss).

 

(ii) On April 20, 2020, 5,957,659 stock options were issued to certain directors of the Company. Each stock option entitles the holder to acquire one common share of the Company at an exercise price of C$0.55. The stock options vest in one-fourth increments upon each anniversary of the grant date and expire in 5 years. The grant date fair value of the stock options was estimated at $1,536,764. The vesting of these options results in stock-based compensation of $104,890 and $427,034, for the three and nine months ended September 30, 2021 respectively (three and nine months ended September 30, 2020 - $201,728 and $357,409, respectively), which is included in operation and administration expenses on the condensed interim consolidated statements of income (loss) and comprehensive income (loss).

 

(iii) On September 30, 2020, 200,000 stock options were issued to a consultant. Each stock option entitles the holder to acquire one common share of the Company at an exercise price of C$0.60. The stock options vest 50% at 6 months and 50% at 12 months from the grant date and expire in 3 years. The grant date fair value of the options was estimated at $52,909. The vesting of these options resulted in stock-based compensation of $6,596 and $32,652, for the three and nine months ended September 30, 2021, respectively (three and nine months ended September 30, 2020 - $218 and $218, respectively), which is included in operation and administration expenses on the condensed interim consolidated statements of income (loss) and comprehensive income (loss).

 

(iv) On February 19, 2021, 1,037,977 stock options were issued to an officer of the Company, of which 273,271 stock options vest immediately and the balance of 764,706 stock options shall vest on December 31, 2021. These options have a 5-year life and are exercisable at C$0.335 per common share. The grant date fair value of the options was estimated at $204,213. The vesting of these options resulted in stock-based compensation of $43,941 and $160,750, for the three and nine months ended September 30, 2021, respectively (three and nine months ended September 30, 2020 - $nil), which is included in operation and administration expenses on the condensed interim consolidated statements of income (loss) and comprehensive income (loss).
Schedule of Estimated Using Black-Scholes Valuation Model for Fair Value of Stock Options

The fair value of these stock options was determined on the date of grant using the Black-Scholes valuation model, and using the following underlying assumptions:

 

    Risk free interest rate   Dividend yield   Volatility   Stock price   Weighted average life 
(i)    1.54%   0%   100%   C$0.50    5 years 
(ii)    0.44%   0%   100%   C$0.50    5 years 
(iii)    0.25%   0%   100%   C$0.58    3 years 
(iv)    0.26%   0%   100%   C$0.49    2.2 years 

The fair value of these stock options was determined on the date of grant using the Black-Scholes valuation model, and using the following underlying assumptions:

 

   

Risk free

interest rate

   Dividend yield   Volatility   Stock price   Weighted average life 
 (i)    1.54%   0%   100%   C$0.50    5 years 
 (ii)    0.44%   0%   100%   C$0.50    5 years 
 (iii)    0.25%   0%   100%   C$0.58    3 years 
 (iv)    0.64%   0%   100%   C$0.34    5 years 
Schedule of Stock Option Issued and Outstanding

The following table reflects the actual stock options issued and outstanding as of December 31, 2020:

 

    Weighted average       Number of     
    remaining   Number of   options     
Exercise   contractual   options   vested   Grant date 
price (C$)   life (years)   outstanding   (exercisable)   fair value ($) 
 10.00    1.33    47,500    47,500    258,013 
 0.50    2.00    235,000    235,000    46,277 
 0.60    2.75    200,000    -    52,909 
 0.60    3.82    1,575,000    975,000    435,069 
 0.55    4.30    5,957,659    -    1,536,764 
        8,015,159   1,257,500   2,329,032 

The following table reflects the actual stock options issued and outstanding as of September 30, 2021:

 

Exercise price

(C$)

  

Weighted average remaining

contractual life (years)

  

Number of

options outstanding

  

Number of

options

vested

(exercisable)

  

Grant date

fair value ($)

 
 10.00    0.59    47,500    47,500    258,013 
 0.50    1.25    235,000    235,000    46,277 
 0.60    2.00    200,000    200,000    52,909 
 0.60    3.07    1,575,000    1,275,000    435,069 
 0.55    3.56    5,957,659    1,489,415    1,536,764 
 0.335    4.39    1,037,977    273,271    204,213 
           9,053,136    3,520,186    2,533,245