UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number:
(Exact Name of Registrant as Specified in its Charter)
| (State of other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| (Address of Principal Executive Offices) | (Zip Code) |
(Registrant’s Telephone Number, including Area Code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ☒ No ☐
Indicate by check mark whether the Registrant
(1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 (“Exchange Act”) during the
preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Indicate by check mark whether the Registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files).
to this Form 10-Q. ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller reporting company | ||
| Emerging Growth Company |
Indicate by check mark whether the Registrant
is a shell company, as defined in Rule 12b-2 of the Exchange Act. Yes ☐
No
Number of shares of Common Stock outstanding as of July 30, 2025:
TABLE OF CONTENTS
| 2 |
Reporting Currency and Other Information
All amounts in this report are expressed in United States (“U.S.”) dollars, unless otherwise indicated.
References to “Bunker Hill”, the “Company,” the “Registrant”, “we,” “our,” and “us” mean Bunker Hill Mining Corp., a Nevada corporation, our predecessors, and consolidated subsidiary, or any one or more of them, as the context requires.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Quarterly Report”), including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 of Part I of this report, contains “forward-looking statements” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”) and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and “forward-looking information” within the meaning of Canadian securities laws (collectively, “forward-looking statements”). Any statements that express or involve discussions with respect to business prospects, predictions, expectations, beliefs, plans, intentions, projections, objectives, strategies, assumptions, future events, performance or exploration and development efforts using words or phrases (including negative and grammatical variations) such as, but not limited to, “expects,” “anticipates,” “plans,” “estimates,” “intends,” “forecasts,” “likely,” “projects,” “believes,” “seeks,” or stating that certain actions, events or results “may,” “could,” “would,” “should,” “might” or “will” be taken, occur or be achieved, are not statements of historical fact and may be forward-looking statements. Although we believe that our plans, intentions, and expectations reflected in these forward-looking statements are reasonable, we cannot be certain that these plans, intentions, and expectations will be achieved. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained in this Quarterly Report. Forward-looking statements in this Quarterly Report include, but are not limited to, statements regarding the following:
| ● | our business, prospects, and overall strategy; | |
| ● | progress in the development of our Bunker Hill Mine as a profitable mining operation (as defined below and currently 66% complete) and the timing of that progress; | |
| ● | planned or estimated expenses and capital expenditures, including the Bunker Hill Mine’s expected costs of construction, commissioning, and operation and the sources of funds to pay for such costs; | |
| ● | our ability to secure required capital, in addition to the previously received funding and announced capital restructure funding, to complete the development of the Bunker Hill Mine and support corporate needs; | |
| ● | our ability to uplist to a national exchange if so determined to be in the best interest of our shareholders; and the timing of any uplisting, if so applied for; | |
| ● | our ability to advance and complete our planned mineral resource expansion and the potential that those results will create additional mineral resource; and | |
| ● | any further initiatives or advancements that may be undertaken relating to the Bunker Hill Mine. |
| 3 |
Forward-looking statements are based on our current expectations and assumptions that are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied by the forward-looking statements. Factors that could cause actual results to differ from those implied by the forward-looking statements in this Form 10-Q are more fully described within Part II, Item 1A, “Risk Factors” in this Form 10-Q and “Part I, Item 1A. Risk Factors” in our Form 10-K. Such risks are not exhaustive. New risk factors emerge from time to time, and it is not possible to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
In addition, statements of belief and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us, as applicable, as of the date of this Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements.
Except as required by law, we disclaim any obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. We qualify all of the forward-looking statements contained in this Quarterly Report by the foregoing cautionary statements. We advise you to carefully review the reports and documents we file from time to time with the U.S. Securities and Exchange Commission (the “SEC”) and with the Canadian securities regulatory authorities, particularly our Annual Report on Form 10-K for the year ended December 31, 2024. The reports and documents filed by us with the SEC are available at www.sec.gov and with the Canadian securities regulatory authorities under the Company’s profile at www.sedarplus.ca.
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PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
The condensed interim consolidated financial statements of Bunker Hill Mining Corp., (“Bunker Hill”, the “Company”, or the “Registrant”) a Nevada corporation, included herein were prepared, without audit, pursuant to rules and regulations of the Securities and Exchange Commission. Because certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.”) were condensed or omitted pursuant to such rules and regulations, these financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2024, and all amendments thereto.
Bunker Hill Mining Corp.
Condensed Interim Consolidated Balance Sheets
(Expressed in U.S. Dollars)
Unaudited
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Restricted cash (note 8) | ||||||||
| Accounts receivable and prepaid expenses (note 3) | ||||||||
| Asset held for sale | ||||||||
| Spare parts inventory | ||||||||
| Total current assets | ||||||||
| Non-current assets | ||||||||
| Long term deposit (note 6) | ||||||||
| Equipment (note 4) | ||||||||
| Right-of-use asset (note 4) | ||||||||
| Land | ||||||||
| Bunker Hill Mine and mining interests (note 6) | ||||||||
| Process plant (note 5) | ||||||||
| Total assets | $ | $ | ||||||
| EQUITY AND LIABILITIES | ||||||||
| Current liabilities | ||||||||
| Accounts payable (note 15) | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Current portion of lease liability (note 7) | ||||||||
| Deferred share units liability (note 11) | ||||||||
| Environment protection agency cost recovery payable (note 8) | ||||||||
| Current portion of silver loan (note 9) | ||||||||
| Current portion of stream debenture (note 9) | ||||||||
| Interest payable (note 9) | ||||||||
| Current income tax payable (note 13) | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities | ||||||||
| Lease liability (note 7) | ||||||||
| Series 1 convertible debenture (note 9) | ||||||||
| Series 2 convertible debenture (note 9) | ||||||||
| Series 3 convertible debenture (note 9) | ||||||||
| Stream debenture (note 9) | ||||||||
| Silver loan (note 9) | ||||||||
| Debt facility (note 9) | ||||||||
| Environment protection agency cost recovery liability, net of discount (note 8) | ||||||||
| Derivative warrant liability (note 10) | ||||||||
| Total liabilities | ||||||||
| Shareholders’ equity (deficiency) | ||||||||
| Preferred shares, $ par value, preferred shares authorized; preferred shares issued and outstanding (note 10) | ||||||||
| Common shares, $ par value, and common shares authorized; and shares of common stock issued and outstanding, respectively (note 10) | ||||||||
| Additional paid-in-capital (note 10) | ||||||||
| Accumulated other comprehensive income | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total shareholders’ equity (deficiency) | ( | ) | ||||||
| Total shareholders’ equity (deficiency) and liabilities | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
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Bunker Hill Mining Corp.
Condensed Interim Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)
(Expressed in United States Dollars)
Unaudited
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30 | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Operating expenses (note 14) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other income or gain (expense or loss) | ||||||||||||||||
| Interest income | ||||||||||||||||
| Change in derivative liabilities (note 10) | ( | ) | ( | ) | ||||||||||||
| Gain (loss) on FV of debentures (note 9) | ( | ) | ( | ) | ||||||||||||
| Loss on FV of silver loan (note 9) | ( | ) | ( | ) | ||||||||||||
| Interest expense (note 7,8,9) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Finance costs (note 9) | ( | ) | ( | ) | ||||||||||||
| (Loss) gain on stream debentures (note 9) | ( | ) | ||||||||||||||
| Gain on debt modification silver loan (note 9) | ||||||||||||||||
| Gain on debt settlement (note 9) | ||||||||||||||||
| Loss on debt settlement (note 9) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income | ||||||||||||||||
| Loss on foreign exchange | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income (loss) for the period pre tax | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Deferred tax recovery (note 13) | ||||||||||||||||
| Income (loss) for the period | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Other comprehensive income, net of tax: | ||||||||||||||||
| Gain on change in FV on own credit risk (note 9) | ||||||||||||||||
| Other comprehensive income | ||||||||||||||||
| Comprehensive income (loss) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Net income (loss) per common share – basic | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Net income (loss) per common share – fully diluted | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Weighted average common shares – basic | ||||||||||||||||
| Weighted average common shares – fully diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
| 6 |
Bunker Hill Mining Corp.
Condensed Interim Consolidated Statements of Cash Flows
(Expressed in U.S. Dollars)
Unaudited
| Six Months | Six Months | |||||||
| Ended | Ended | |||||||
| June 30, 2025 | June 30, 2024 | |||||||
| Operating activities | ||||||||
| Net income (loss) for the period | $ | $ | ( | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock-based compensation (note 10) | ||||||||
| Depreciation expense (note 4) | ||||||||
| Change in fair value of warrant liability (note 10) | ( | ) | ||||||
| Deferred tax expense (note 13) | ( | ) | ||||||
| Change in fair value of silver loan (note 9) | ||||||||
| Interest expense on lease liability (note 7) | ||||||||
| Financing costs | ( | ) | ||||||
| (Gain) on debt settlement (note 9) | ( | ) | ||||||
| Loss on debt settlement (note 9) | ||||||||
| (Gain) on debt modification (note 9) | ( | ) | ( | ) | ||||
| Accretion of liabilities (note 8, 9) | ||||||||
| (Gain) loss on fair value of convertible debentures (note 9) | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable and prepaid expenses | ( | ) | ( | ) | ||||
| Accounts payable | ( | ) | ||||||
| Accrued liabilities | ( | ) | ||||||
| Current income tax payable | ( | ) | ||||||
| Interest payable | ||||||||
| Net cash (used in) operating activities | ( | ) | ( | ) | ||||
| Investing activities | ||||||||
| Process plant | ( | ) | ( | ) | ||||
| Mine improvements | ( | ) | ( | ) | ||||
| Purchase of machinery and equipment | ( | ) | ||||||
| Net cash (used in) investing activities | ( | ) | ( | ) | ||||
| Financing activities | ||||||||
| Proceeds from issuance of common shares, net | ||||||||
| Proceeds from debt facility | ||||||||
| Proceeds from Teck promissory note | ||||||||
| Repayment of Teck promissory note | ( | ) | ||||||
| Lease payments | ( | ) | ( | ) | ||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Net change in cash | ( | ) | ||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Supplemental disclosures | ||||||||
| Non-cash activities | ||||||||
| Interest payable settled with common shares | $ | $ | ||||||
| Services settled with common shares | $ | $ | ||||||
| Loan Facility settled with common shares | $ | $ | ||||||
| Stream settled with common shares | $ | $ | ||||||
| Reconciliation from Cash Flow Statement to Balance Sheet: | ||||||||
| Cash and restricted cash end of period | $ | $ | ||||||
| Less restricted cash | ||||||||
| Cash end of period | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
| 7 |
Bunker Hill Mining Corp.
Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity (Deficiency)
(Expressed in U.S. Dollars)
Unaudited
| Accumulated | ||||||||||||||||||||||||
| Additional | other | |||||||||||||||||||||||
| Common stock | paid-in- | comprehensive | Accumulated | |||||||||||||||||||||
| Shares | Amount | capital | income | deficit | Total | |||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||
| Shares issued for interest payable | ||||||||||||||||||||||||
| Shares issued for RSUs vested | ( | ) | ||||||||||||||||||||||
| Shares issued for services | ||||||||||||||||||||||||
| Shares issued for private placement | ||||||||||||||||||||||||
| Shares issued for debt | ||||||||||||||||||||||||
| Initial recognition of CD1, CD2, and CD3 | - | |||||||||||||||||||||||
| OCI | - | |||||||||||||||||||||||
| Net (loss) for the period | - | |||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||
| Shares issued for interest payable | ||||||||||||||||||||||||
| Shares issued for DSUs vested | ||||||||||||||||||||||||
| Shares issued for RSUs vested | ( | ) | ||||||||||||||||||||||
| OCI | - | ( | ) | ( | ) | |||||||||||||||||||
| Net (loss) for the period | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
| 8 |
Bunker Hill Mining Corp.
Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)
Three and Six Months Ended June 30, 2025
(Expressed in U.S. Dollars)
1. Nature and Continuance of Operations
Bunker Hill Mining Corp. (“we”, “us”, “Bunker Hill”, or the “Company”) was incorporated under the laws of the state of Nevada, U.S.A. on February 20, 2007, under the name Lincoln Mining Corp. Pursuant to a Certificate of Amendment dated February 11, 2010, the Company changed its name to Liberty Silver Corp., and on September 29, 2017, the Company changed its name to Bunker Hill Mining Corp. The Company’s registered office is located at 1802 N. Carson Street, Suite 212, Carson City, Nevada 89701, and its Canadian office is located at 300-1055 West Hastings Street, Vancouver, British Columbia, Canada, V6E 2E9. As of the date of this Form 10-Q, the Company had one subsidiary, Silver Valley Metals Corp. (“Silver Valley”, formerly American Zinc Corp.), an Idaho corporation created to facilitate the work being conducted at the Bunker Hill Mine in Kellogg, Idaho (“Bunker Hill Mine”).
The Company was incorporated for the purpose of engaging in mineral exploration, and exploitation activities, and is currently focused on the development and planned operations of the Bunker Hill Mine.
Bunker Hill holds a
We are currently focused on the construction of the Bunker Hill Mine mill facilities and upgrades to the Bunker Hill Mine historic underground infrastructure as well as further delineating the mine’s mineral resources.
Going Concern
These condensed interim consolidated
financial statements have been prepared on a going concern basis. As is typical for a pre-production mining development company,
the Company has incurred losses since inception resulting in an accumulated deficit of $
These condensed interim consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
| 9 |
2. Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the U.S. and the rules and regulations of the U.S. Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, shareholders’ deficiency, or cash flows. It is management’s opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The unaudited condensed interim consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, which contains the annual audited consolidated financial statements and notes thereto, together with the Management’s Discussion and Analysis, for the year ended December 31, 2024. The interim results for the period ended June 30, 2025 are not necessarily indicative of the results for the full fiscal year. The unaudited condensed interim consolidated financial statements are presented in United States dollars, which is the Company’s functional currency.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes for items such as mineral reserves, useful lives and depreciation methods, potential impairment of long-lived assets, sale of mineral properties for the accounting of the conversion of the royalty convertible debenture (the “RCD”), deferred income taxes, settlement pricing of commodity sales, fair value of stock based compensation, accrued liabilities, estimation of asset retirement obligations and reclamation liabilities, convertible debentures, stream obligation, and warrants. Estimates are based on historical experience and various other assumptions that the Company believes to be reasonable. Actual results could differ from those estimates.
3. Accounts receivable and prepaid expenses
Accounts receivable and prepaid expenses consists of the following:
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Prepaid expenses and deposits | $ | $ | ||||||
| HST and interest receivable | ||||||||
| U.S. Environment Protection Agency overpayment (note 8) | ||||||||
| Total | $ | $ | ||||||
4. Equipment, Right-of-Use Asset
Equipment consists of the following:
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Equipment | $ | $ | ||||||
| Less accumulated depreciation | ( | ) | ( | ) | ||||
| Equipment, net | $ | $ | ||||||
The total depreciation expense relating to equipment
during the three and six months ended June 30, 2025, was $
| 10 |
Right-of-use asset consists of the following:
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Right-of-use asset | ||||||||
| Less accumulated depreciation | ( | ) | ( | ) | ||||
| Right-of-use asset, net | $ | $ | ||||||
The total depreciation expense during the three
and six months ended June 30, 2025, was $
5. Process Plant
On May 13, 2022, the Company purchased a comprehensive package of equipment and parts inventory from Teck Resources Limited (“Teck”) a related party as of June 5, 2025 (note 15). The package comprised substantially all processing equipment of value located at the Pend Oreille mine site, including complete crushing, grinding and flotation circuits suitable for a planned ~1,500 ton-per-day operation at the Bunker Hill site, and total inventory of nearly 10,000 components and parts for mill, assay lab, conveyer, field instruments, and electrical spares.
The process plant was purchased in an assembled state in the seller’s location, and included major processing systems, significant components, and a large inventory of spare parts. The Company has disassembled and transported it to the Bunker Hill site, and is reassembling it as an integral part of the Company’s future operations. The Company determined that the transaction would be accounted for as an asset acquisition, with the process plant representing a single asset, with the exception of the inventory of spare parts, which has been separated out on the condensed interim consolidated balance sheets as a non-current asset. As the plant is demobilized, transported and reassembled, installation and other costs associated with these activities are being captured and capitalized as components of the asset.
Process plant consists of the following:
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Mill purchase, detailed engineering, and construction costs | $ | $ | ||||||
| Capitalized interest (note 9) | ||||||||
| Disposal of grinding circuits | ( | ) | ( | ) | ||||
| Process Plant | $ | $ | ||||||
In August 2024, the Company sold a grinding circuit
previously purchased from Teck as part of the Pend Oreille Mill purchase for $
6. Bunker Hill Mine and Mining Interests
The Company purchased the Bunker Hill Mine (the “Mine”) in January 2022.
The carrying cost of the Mine is comprised of the following:
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Bunker Hill Mine purchase | $ | $ | ||||||
| Capitalized development | ||||||||
| Sale of mineral properties (note 9) | ( | ) | ( | ) | ||||
| Land | ||||||||
| Definition drilling | ||||||||
| Bunker Hill mine | $ | $ | ||||||
| 11 |
Land purchase and leases
The Company owns a 225-acre surface land parcel valued at its original
purchase price of $
On March 3, 2023, the Company
entered into a lease agreement with C & E Tree Farm LLC for the lease of a land parcel overlaying a portion of the Company’s
existing mineral claims package. The Company is committed to making monthly payments of $
Sale of Mineral Properties
On June 5, 2025, as consideration for Sprott stream
conversion as described in note 9, the Company granted a royalty for
On January 17, 2025, as consideration for Sprott
advancing the debt facility, as described in note 9, the Company granted a royalty for
On December 19, 2024, as consideration for Sprott
advancing the debt facility, as described in note 9, the Company granted a royalty for
On December 12, 2024, as consideration for Sprott
advancing the debt facility, as described in note 9, the Company granted a royalty for
As a result of
These Sprott transactions were treated as a sale
of mineral interest. The portion of the mineral interest sold was determined based on an analysis of discounted
life-of-mine royalty payments relative to discounted future cash flows generated from the mine net of capital and operating costs,
applied to the carrying value of the Bunker Hill Mine as of above funding dates, before consideration of the sale of mineral
properties.
| 12 |
7. Lease Liability
As of June 30, 2025, and December 31, 2024, The Company’s undiscounted lease obligations consisted of the following:
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Gross lease obligation – minimum lease payments | ||||||||
| 1 year | $ | $ | ||||||
| 2- 3 years | ||||||||
| 4-5 years | ||||||||
| Future interest expense on lease obligations | ( | ) | ( | ) | ||||
| Total lease liability | ||||||||
| Current lease liability | ||||||||
| Non-current lease liability | ||||||||
| Total lease liability | ||||||||
Interest expense for the three and six months
ended June 30, 2025, was $
8. Environmental Protection Agency (“EPA”) Settlement Agreement and Water Treatment Liabilities
Effective December 19, 2021, the Company entered
into an amended Settlement Agreement between the Company, Idaho Department of Environmental Quality, U.S. Department of Justice, and the
EPA (the “Amended Settlement”). Upon the effectiveness of the Amended Settlement, the Company would become fully compliant
with its payment obligations to these parties. The Amended Settlement modified the payment schedule and payment terms for recovery of
the historical environmental response costs. Pursuant to the terms of the Amended Settlement, upon purchase of the Bunker Hill Mine and
the satisfaction of financial assurance commitments (as described below), the $
| Date | Amount | |||
| Within 30 days of Settlement Agreement | $ | |||
| November 1, 2024 | $ | |||
| November 1, 2025 | $ | |||
| November 1, 2026 | $ | |||
| November 1, 2027 | $ | |||
| November 1, 2028 | $ | |||
| November 1, 2029 | $ | |||
In addition to the changes in payment terms and schedule, the Amended Settlement includes a commitment by the Company to secure financial assurance for the principle outstanding in the form of performance bonds or letters of credit deemed acceptable to the EPA. The financial assurance can be drawn on by the EPA in the event of non-performance by the Company of its payment obligations under the Amended Settlement (the “Financial Assurance”). The amount of the bonds will decrease over time as individual payments are made.
In December 2024, the Company made the
second payment under the 2021 Amended Settlement Agreement in the amount of $
| 13 |
The Company recorded accretion expense on the
liability of $
Water Treatment Charges – Idaho Department of Environmental Quality (“IDEQ”)
Separate to the cost recovery liability under the EPA Settlement Agreement obligations above, the Company has agreed to pay ongoing water treatment charges. Water treatment charges incurred through December 31, 2021 were payable to the EPA, and charges thereafter became payable to the Idaho Department of Environmental Quality (“IDEQ”) following a change in management for the Central Treatment Plant (“CTP”) from the EPA to the IDEQ as of that date.
The Company is currently charged a monthly
amount of $
9. Promissory Notes Payable, Convertible Debentures, and Silver Loan
$6,000,000 Convertible Debenture (CD1)
CD1 bore interest at an annual rate of
In June 2025, the Company and Sprott agreed to
amend the rate of interest of CD1 reducing it from
$15,000,000 Series 2 Convertible Debenture (CD2)
CD2 bore interest at an annual rate of
In August 2024, the Company and Sprott agreed
to amend
In June 2025, the Company and Sprott agreed to
amend the rate of interest of CD2 reducing it from
Prior to the extinguishment on June 5, 2025, the Company determined that in accordance with ASC 815 Derivatives and Hedging, each debenture will be valued and recorded as a single instrument, with the periodic changes to fair value accounted through earnings, profit and loss.
| 14 |
Consistent with the approach above, the following table summarizes the key valuation inputs as at applicable valuation dates:
| Reference (1,2,3) | Valuation date | Maturity date | Contractual Interest rate | Stock price (US$) | Expected equity volatility | Credit spread | Risk-free rate | Risk- adjusted rate | ||||||||||||||||||||
| CD1 note | 12-31-24 | % | % | % | % | % | ||||||||||||||||||||||
| CD2 note | 12-31-24 | % | % | % | % | % | ||||||||||||||||||||||
| CD1 note | 03-31-25 | % | % | % | % | % | ||||||||||||||||||||||
| CD2 note | 03-31-25 | % | % | % | % | % | ||||||||||||||||||||||
| (1) | ||
| (2) | ||
| (3) |
The gain (loss) on changes in fair value of convertible
debentures recognized on the condensed interim consolidated statements of income (loss) and comprehensive income (loss) during the three
and six months ended June 30, 2025, was $
The portion of changes in fair value that is attributable
to changes in the Company’s credit risk is accounted for within other comprehensive income. During the three and six months ended
June 30, 2025, the Company recognized $
Interest expense on the pre extinguished CD1 from
January 1, 2025 to June 5, 2025 was $
For the three and six months ended June 30, 2025,
the Company recognized $
For the three and six months ended June 30, 2025,
the Company recognized $
The Company recorded accretion expense on host
debt of CD1 of $
The Company recorded accretion expense on the
host debt of CD2 of $
At June 30, 2025 interest of $
| 15 |
$4,000,000 Series 3 Convertible Debenture (CD3)
The Company closed the $
The Company recorded accretion expense on host
debt of CD3 of $
The Company performs quarterly testing of the covenants in the CD1, CD2, CD3 and was in compliance with all such covenants as of June 30, 2025.
The Stream
The Company determined that in accordance with ASC 815 derivatives and hedging, the Stream does not meet the criteria for treatment as a derivate instrument as the quantities of metal to be sold thereunder are not subject to a minimum quantity, and therefore a notional amount is not determinable. The Company has therefore determined that in accordance with ASC 470, the stream obligation should be treated as a liability based on the indexed debt rules thereunder. The initial recognition has been made at fair value based on cash received, net of transaction costs, and the discount rate calibrated so that the future cash flows associated with the Stream, using forward commodity prices, equal the cash received. The measurement of the stream obligation is accounted for at amortized cost with accretion at the discount rate. Subsequent changes to the expected cash flows associated with the Stream will result in the adjustment of the carrying value of the stream obligation using the same discount rate, with changes to the carrying value recognized in the condensed interim consolidated statements of income (loss) and comprehensive income (loss).
The Company determined the effective
interest rate of the Stream obligation to be
On June 5, 2025, the existing metals purchase
agreement (the “Metals Purchase Agreement”) dated June 23, 2023, by and among the Company, Silver Valley, and Sprott Streaming, pursuant
to which Sprott Streaming previously advanced a $
| 16 |
$15,000,000 Debt Facility
On June 23, 2023, the Company closed a $
On January 31, 2025, the Company drew $
On June 5, 2025, the Company and Sprott
agreed to amend the Terms of the debt Facility, specifically the Company agreed to changes to the interest payment mechanism,
specifically the removal of capitalized interest and the insertion of the ability to pay interest via shares in addition to a $
The Company recorded accretion expense on
the debt facility of $
The Company performs quarterly testing of the covenants in the Debt Facility and was in compliance with all such covenants as of June 30, 2025.
Silver Loan
On August 8, 2024, the Company entered into definitive
agreements with Monetary Metals Bond III LLC, an entity established by Monetary Metals & Co., for a silver loan in an amount of U.S.
dollars equal to up to
In June 2025, the Company and Monetary
Metals & Co. agreed to amend the rate of interest of the silver loan reducing it from
| 17 |
The Company determined that in accordance with ASC 815 Derivatives and Hedging, the Silver Loan is valued and recorded as a single instrument, with the periodic changes to fair value accounted through earnings, profit and loss.
The fair value of the Silver Loan was determined using the Black-Derman-Toy (“BDT”) model. BDT models the evolution of interest rates over time using a binomial tree structure by capturing level of interest rates and volatility and estimates the value of the prepayment option by assessing how the borrower’s incentive to prepay changes with interest rate movements. The key inputs include:
| Reference | Valuation Date | Maturity Date | Contractual Interest Rate | Interest Rate Volatility | Risk-free rate | Credit Spread | Risk-adjusted rate | |||||||||||||||||
| Tranche 1, 2, 3, 4, & 5 | Dec 31, 2024 | % | % | % | % | % | ||||||||||||||||||
| Tranche 1, 2, 3, 4, & 5 | Mar 31, 2025 | % | % | % | % | % | ||||||||||||||||||
| Tranche 1, 2, 3, 4, & 5 | June 30, 2025 | % | % | % | % | % | ||||||||||||||||||
The resulting fair values of the Silver Loan at June 30, 2025, and December 31, 2024, and as of the issuance date, were as follows:
| Reference | June 30, 2025 | Dec 31, 2024 | ||||||
| Silver Loan | $ | $ | ||||||
The loss on changes in fair value of Silver Loan
recognized on the condensed interim consolidated statements of income (loss) and comprehensive income (loss) during the three and six
months ended June 30, 2025, was $
The Company performs quarterly testing of the covenant of the Silver Loan and was in compliance with all such covenants as of June 30, 2025.
Teck Promissory Note
On March 21, 2025, the Company closed an
unsecured promissory note for an aggregate principal amount of up to $
On June 6, 2025, the Company repaid principal
and accrued interest on the unsecured Note. As of June 30, 2025, the principal and interest outstanding on the unsecured Note is $
($ at December 31, 2024) on the condensed interim consolidated balance sheets. Interest expense for the three and six months ended
June 30, 2025, was $
$10,000,000 Teck Standby Facility
On
June 5, 2025, the Company closed an uncommitted demand standby prepayment credit facility with Teck for $
| 18 |
10. Capital Stock, Warrants, Stock Options and Restricted Share Units
Authorized
The total authorized capital is as follows:
| ● | ( as of December 31, 2024) Common Shares with a par value of $ per Common Share; and |
| ● | preferred shares with a par value of $ per preferred share. |
Issued and outstanding
In January 2025, the Company issued
shares of common stock in connection with its election to satisfy financing cooperation fee relating to the Cooperation Agreement
for the six months ended September 30, 2024. In January 2025, the Company issued
shares of common stock in connection with its election to satisfy financing cooperation fee relating to the Cooperation Agreement for the three months ended December
31, 2024. The Company recognized a loss on debt settlement of $ and $
In January 2025, the Company issued shares of common stock in connection with its election to satisfy interest payments under the outstanding convertible debentures for the three months ending December 31, 2024.
In January 2025, the Company issued shares of common stock in connection with settlement of RSUs.
In April 2025 the Company issued shares of common stock in connection with its election to satisfy interest payments under the outstanding convertible debenture for the three months ending March 31, 2024.
On June 5, 2025, we, closed the brokered
private placement (the “Brokered Offering”) for aggregate cash consideration of $
As part of the Equity Offerings, we issued an aggregate of our units (“Units”) at a price of C$ per Unit (the “Offering Price”). Each Unit issued under the Equity Offerings consisted of one share of our common stock and one-half of one share of common stock purchase warrant (a “Warrant”). Each whole Warrant will be exercisable to acquire one additional share of our common stock (a “Warrant Share”) at a price of C$ per Warrant Share for a period of three years following the date of issuance, subject to customary adjustments.
In the Brokered Offering, Units were sold at the Offering Price by a syndicate of agents led by BMO Capital Markets, CIBC Capital Markets and Red Cloud Securities Inc., as joint bookrunners, and including National Bank Financial Inc. (collectively, the “Agents”), of which Sprott Streaming acquired Units (the “Sprott Subscription”). In the Non-Brokered Offering, Teck acquired Units (the “Teck Units”) at the Offering Price. We intend to use the net proceeds of the Equity Offerings to support the construction, start-up and ramp-up of the Bunker Hill Mine.
The Equity Offerings, including both the brokered and non-brokered components, were conducted on a private placement basis pursuant to applicable exemptions from the requirements of securities laws under National Instrument 45-106 – Prospectus Exemptions and the United States Securities Act of 1933, as amended (the “Securities Act”), in such other jurisdictions outside of Canada and the United States pursuant to applicable exemptions from the prospectus, registration or other similar requirements in such other jurisdictions. All securities issued pursuant to the Equity Offerings (i) are subject to a four month plus one day hold period in accordance with applicable Canadian securities laws and, if applicable, the policies of the TSX Venture Exchange (the “TSX-V”) and (ii) have not been registered under the Securities Act or any U.S. state securities laws and may not be offered or sold in the United States without registration under the Securities Act and all applicable state securities laws or compliance with requirements of an applicable exemption therefrom.
| 19 |
Sprott Stream Conversion
On June 5, 2025, the existing metals purchase
agreement (the “Metals Purchase Agreement”) dated June 23, 2023, by and among us, Silver Valley, and Sprott Streaming, pursuant
to which Sprott Streaming previously advanced a $
Sprott Streaming Debt Settlements
On June 5, 2025, The Company and Silver Valley entered
into the debt settlement agreements with Sprott Streaming (collectively, the “Sprott Debt Settlement Agreements”), pursuant
to which an aggregate of shares of our common stock were issued to Sprott Streaming at the Offering Price in full satisfaction
of (i) $
Additional Debt Settlements
The Company agreed to settle outstanding receivables and
other amounts owing (including, where applicable, accrued and unpaid interest thereon) in aggregate amounts of approximately $
In connection with the Debt Settlements, the Company issued:
(a) Units to MineWater, for a financing cooperation fee;
(b) shares of our common stock to four of our directors for their services for the period beginning on March 1, 2025, and ending on April 30, 2025; and
(c)
Units to certain other arm’s length creditors or contractors of the Company to settle certain other outstanding receivables
and other amounts owing in the aggregate amount of approximately $
Equity Payment
Silver Valley and C & E Tree Farm, L.L.C.
(“C&E”) previously entered into an option agreement dated March 3, 2023 (the “Option Agreement”), pursuant
to which Silver Valley has an option to purchase certain real property in Idaho, USA, from C&E upon making a cash payment of $
The Company recognized a gain on debt settlement of $
| 20 |
In January 2024, the Company issued shares of common stock in connection with its election to satisfy interest payments under the outstanding convertible debentures for the three months ending December 31, 2023.
In March 2024, the Company issued shares of common stock in connection with settlement of RSUs.
In April 2024, the Company issued shares of common stock in connection with settlement of RSUs.
In April 2024, the Company issued shares of common stock in connection with its election to satisfy interest payments under the outstanding convertible debentures for the three months ending March 31, 2024.
The Company has accounted for the warrants in accordance with ASC Topic 815. The warrants are considered derivative instruments as they were issued in a currency other than the Company’s functional currency of the U.S. dollar. The estimated fair value of warrants accounted for as liabilities was determined on the date of issue and marked to market at each financial reporting period. The change in fair value of the warrant is recorded in the condensed interim consolidated statements of income (loss) and comprehensive income (loss) as a gain or loss and is estimated using the Binomial model.
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 as at June 30, 2025 and December 31, 2024:
| June 2025 warrants | June 30, 2025 | Grant Date | ||||||
| Expected life | ||||||||
| Volatility | % | % | ||||||
| Risk free interest rate | % | % | ||||||
| Dividend yield | % | % | ||||||
| Share price (C$) | $ | $ | ||||||
| Fair value | $ | $ | ||||||
| Change in derivative liability | $ | ( | ) | |||||
| January 2025 warrants | June 30, 2025 | Grant Date | ||||||
| Expected life | ||||||||
| Volatility | % | % | ||||||
| Risk free interest rate | % | % | ||||||
| Dividend yield | % | % | ||||||
| Share price (C$) | $ | $ | ||||||
| Fair value | $ | $ | ||||||
| Change in derivative liability | $ | ( | ) | |||||
| November 2024 warrants | June 30, 2025 | December 2024 | ||||||
| Expected life | ||||||||
| Volatility | % | % | ||||||
| Risk free interest rate | % | % | ||||||
| Dividend yield | % | % | ||||||
| Share price (C$) | $ | $ | ||||||
| Fair value | $ | $ | ||||||
| Change in derivative liability | $ | ( | ) | |||||
| October 2024 warrants | June 30, 2025 | December 2024 | ||||||
| Expected life | ||||||||
| Volatility | % | % | ||||||
| Risk free interest rate | % | % | ||||||
| Dividend yield | % | % | ||||||
| Share price (C$) | $ | $ | ||||||
| Fair value | $ | $ | ||||||
| Change in derivative liability | $ | ( | ) | |||||
| 21 |
| August 2024 warrants | June 30, 2025 | December 2024 | ||||||
| Expected life | ||||||||
| Volatility | % | % | ||||||
| Risk free interest rate | % | % | ||||||
| Dividend yield | % | % | ||||||
| Share price (C$) | $ | $ | ||||||
| Fair value | $ | $ | ||||||
| Change in derivative liability | $ | ( | ) | |||||
| March 2023 warrants | June 30, 2025 | December 31, 2024 | ||||||
| Expected life | ||||||||
| Volatility | % | % | ||||||
| Risk free interest rate | % | % | ||||||
| Dividend yield | % | % | ||||||
| Share price (C$) | $ | $ | ||||||
| Fair value | $ | $ | ||||||
| Change in derivative liability | $ | ( | ) | |||||
| April 2022 special warrants issuance | June 30, 2025 | December 31, 2024 | ||||||
| Expected life | Expired | |||||||
| Volatility | N/A | % | ||||||
| Risk free interest rate | N/A | % | ||||||
| Dividend yield | N/A | % | ||||||
| Share price (C$) | $ | N/A | $ | |||||
| Fair value | $ | $ | ||||||
| Change in derivative liability | $ | ( | ) | |||||
| April 2022 non-brokered issuance |
June 30, 2025 |
December 31, 2024 |
||||||
| Expected life | Expired | |||||||
| Volatility | N/A | % | ||||||
| Risk free interest rate | N/A | % | ||||||
| Dividend yield | N/A | % | ||||||
| Share price (C$) | $ | N/A | $ | |||||
| Fair value | $ | $ | ||||||
| Change in derivative liability | $ | ( |
) | |||||
| June 2022 issuance |
June 30, 2025 |
December 31, 2024 |
||||||
| Expected life | Expired | |||||||
| Volatility | N/A | % | ||||||
| Risk free interest rate | N/A | % | ||||||
| Dividend yield | N/A | % | ||||||
| Share price (C$) | $ | N/A | $ | |||||
| Fair value | $ | $ | ||||||
| Change in derivative liability | $ | ( |
) | |||||
| 22 |
| February 2021 issuance | June 30, 2025 |
December 31, 2024 |
||||||
| Expected life | ||||||||
| Volatility | % | % | ||||||
| Risk free interest rate | % | % | ||||||
| Dividend yield | % | % | ||||||
| Share price (C$) | $ | $ | ||||||
| Fair value | $ | $ | ||||||
| Change in derivative liability | $ | ( |
) | |||||
| June 2019 issuance | June 30, 2025 |
December 31, 2024 |
||||||
| Expected life | ||||||||
| Volatility | % | % | ||||||
| Risk free interest rate | % | % | ||||||
| Dividend yield | % | % | ||||||
| Share price (C$) | $ | $ | ||||||
| Fair value | $ | $ | ||||||
| Change in derivative liability | $ | ( |
) | |||||
| August 2019 issuance | June 30, 2025 |
December 31, 2024 |
||||||
| Expected life | ||||||||
| Volatility | % | % | ||||||
| Risk free interest rate | % | % | ||||||
| Dividend yield | % | % | ||||||
| Share price (C$) | $ | $ | ||||||
| Fair value | $ | $ | ||||||
| Change in derivative liability | $ | ( |
) | |||||
| 23 |
Outstanding warrants at June 30, 2025 and December 31, 2024 were as follows:
| Weighted | Weighted | |||||||||||
| average | average | |||||||||||
| Number of | exercise price | grant date | ||||||||||
| warrants | (C$) | value ($) | ||||||||||
| Balance, December 31, 2023 | $ | $ | ||||||||||
| Issued | ||||||||||||
| Balance, December 31, 2024 | $ | $ | ||||||||||
| Balance, December 31, 2024 | $ | $ | ||||||||||
| Issued | ||||||||||||
| Expired | ( | ) | ||||||||||
| Balance, June 30, 2025 | $ | $ | ||||||||||
At June 30, 2025, the following warrants were outstanding:
| Exercise | Number of | Number of warrants | ||||||||||
| Expiry date | price (C$) | warrants | exercisable | |||||||||
Compensation options
At June 30, 2025, and December 31, 2024 the following broker options were outstanding:
| Weighted | ||||||||
| Number of | average | |||||||
| broker | exercise price | |||||||
| options | (C$) | |||||||
| Balance, December 31, 2023 | $ | |||||||
| Expired – February 2024 | ( | ) | ||||||
| Expired – April 2024 | ( | ) | ||||||
| Balance, December 31, 2024 | ||||||||
| Balance, December 31, 2024 (i) | ||||||||
| Balance, June 30, 2025 (i) | ||||||||
| (i) |
| 24 |
| Grant Date | Risk free interest rate | Dividend yield | Volatility | Stock price | Weighted average life | |||||||||||||||
| March 2023 | % | % | % | C$ | years | |||||||||||||||
| Exercise | Number of | Grant date Fair value | ||||||||||
| Expiry date | price (C$) | broker options | ($) | |||||||||
| $ | $ | |||||||||||
| i) | Exercisable into one March 2023 Unit. |
Stock options
| Weighted | ||||||||
| average | ||||||||
| Number of | exercise price | |||||||
| stock options | (C$) | |||||||
| Balance, December 31, 2023 | $ | |||||||
| Granted August 1, 2024 | $ | |||||||
| Expired October 24, 2024 | ( | ) | $ | |||||
| Expired October 31, 2024 | ( | ) | $ | |||||
| Balance, December 31, 2024 | $ | |||||||
| Balance, December 31, 2024 | $ | |||||||
| Expired April 20, 2025 | ( | ) | $ | |||||
| Balance, June 30, 2025 | $ | |||||||
| Number of | ||||||||||||||||||
| remaining | Number of | options | ||||||||||||||||
| Exercise | contractual | options | vested | Grant date | ||||||||||||||
| price (C$) | life (years) | outstanding | (exercisable) | fair value ($) | ||||||||||||||
| $ | ||||||||||||||||||
The vesting of stock options during the three and six months ending June 30, 2025, resulted in stock based compensation expense of $ and $, respectively ($ and $ for the three and six months ending June 30, 2024, respectively).
Restricted Share Units
Effective March 25, 2020, the Board of Directors approved a Restricted Share Unit (“RSU”) Plan to grant RSUs to its officers, directors, key employees and consultants.
| 25 |
| Weighted | ||||||||
| average | ||||||||
| grant date | ||||||||
| fair value | ||||||||
| Number of | per share | |||||||
| shares | (C$) | |||||||
| Unvested as at December 31, 2023 | $ | |||||||
| Granted | $ | |||||||
| Vested | ( | ) | $ | |||||
| Forfeited | ( | ) | $ | |||||
| Unvested as at December 31, 2024 | $ | |||||||
| Unvested as at December 31, 2024 | $ | |||||||
| Vested | ( | ) | ||||||
| Unvested as at June 30, 2025 | $ | |||||||
| (i) | On January 29, 2024, the Company granted RSUs to the CFO of the Company, which vest on January 29, 2025. The vesting of these RSUs resulted in stock-based compensation of $ and $, respectively, for the three and six months ended June 30, 2025, which is included in operating expenses condensed interim consolidated statements of income (loss) and comprehensive income (loss), compared to $12,432 and $21,311 for the three and six months ended June 30, 2024, respectively. | |
| (ii) | On March 13, 2024, the Company granted RSUs to certain executives and employees of the Company, which vest in one-third increments on March 13 of 2025, 2026 and 2027. The vesting of these RSUs resulted in stock-based compensation of $ and $, respectively, for the three and six months ended June 30, 2024, which is included in operating expenses condensed interim consolidated statements of income (loss) and comprehensive income (loss) compared to $ and $, for the three and six months ended June 30, 2024, respectively. |
The vesting of RSU’s during the three and six months ending June 30, 2025, resulted in stock based compensation expense of $ and $ respectively ($ and $for the three and six months ending June 30, 2024, respectively).
Effective April 21, 2020, the Board of Directors approved a Deferred Share Unit (“DSU”) Plan to grant DSUs to its directors. The DSU Plan permits the eligible directors to defer receipt of all or a portion of their retainer or compensation until termination of their services and to receive such fees in the form of cash at that time.
Upon vesting of the DSUs or termination of service as a director, the director will be able to redeem DSUs based upon the then market price of the Company’s Common Share on the date of redemption in exchange for cash.
| Weighted | ||||||||
| average | ||||||||
| grant date | ||||||||
| fair value | ||||||||
| Number of | per share | |||||||
| shares | (C$) | |||||||
| Unvested as at December 31 2023 | $ | |||||||
| Granted | $ | |||||||
| Vested | ( | ) | $ | |||||
| Unvested as at December 31 2024 | $ | |||||||
| Unvested as at December 31 2024, and June 30, 2025 | $ | |||||||
The vesting of DSU’s during the three and six months ended June 30, 2025, resulted in a recovery of stock based compensation expense of $ and $, respectively. The vesting of DSU’s during the three and six months ending June 30, 2024, resulted in stock based compensation expense of $ and $, respectively. The fair value of each DSU is $ as of June 30, 2025, and $ as of June 30, 2024.
| 26 |
12. Commitments and Contingencies
EPA and IDEQ Obligations
As stipulated in the agreement with the EPA and as described in Note 8, the Company is required to make two types of payments to the EPA and IDEQ, one for historical water treatment cost-recovery to the EPA, and the other for ongoing water treatment. Water treatment costs incurred through December 2021 are payable to the EPA, and water treatment costs incurred thereafter are payable to the IDEQ. The IDEQ (as done formerly by the EPA) invoices the Company on an annual basis for the actual water treatment costs, which may exceed the recognized estimated costs significantly. When the Company receives the water treatment invoices, it records any liability for actual costs over and above any estimates made and adjusts future estimates as required based on these actual invoices received. The Company is required to pay for the actual costs regardless of the periodic required estimated accruals and payments made each year.
Crescent Legal Proceeding
On July 28, 2021, a lawsuit was filed in the U.S. District Court for the District of Idaho brought by Crescent Mining, LLC (“Crescent” or “Plaintiff”). The named defendants include Placer Mining, Robert Hopper Jr., and the Company. The lawsuit alleges that Placer Mining and Robert Hopper Jr. intentionally flooded the Crescent Mine during the period from 1991 and 1994, and that the Company is jointly and severally liable with the other defendants for unspecified past and future costs associated with the presence of acid mine drainage in the Crescent Mine. The Plaintiff requested unspecified damages. On September 20, 2021, the Company filed a motion to dismiss Crescent’s claims against it, contending that such claims are facially deficient. On March 2, 2022, the court granted in part and denied in part the Company’s motion to dismiss. The court granted the Company’s motion to dismiss in respect of Crescent’s cost recovery claim under CERCLA Section 107(a), and declaratory judgment, tortious interference, trespass, nuisance and negligence claims. These claims were dismissed without prejudice. The court denied the motion to dismiss filed by Placer Mining Corp. for Crescent’s trespass, nuisance and negligence claims. Crescent later filed an amended complaint on April 1, 2022. Placer Mining Corp. and Bunker Hill Mining Corp are named as co-defendants. Bunker Hill responded to the amended filing, refuting and denying all allegations made in the complaint except those that are assertions of fact as a matter of public record. The Company believes Crescent’s lawsuit is without merit and is defending the claims on behalf of itself and Placer Mining Corp. pursuant to an indemnification granted by Company of Placer Mining Corp. granted pursuant to the sale and purchase agreement executed between the companies for the Mine on December 15, 2021. The lawsuit is currently in the discovery phase, in which information is gathered and exchanged.
13. Deferred Tax liability
The Company incurred
Current liabilities at June 30, 2025, and
December 31, 2024, include an income tax payable of $
A valuation allowance is provided for deferred tax assets for which it is more likely than not that the related tax benefits will not be realized. The Company analyzes its deferred tax assets and, if it is determined that the Company will not realize all or a portion of its deferred tax assets, it will record or increase a valuation allowance. Conversely, if it is determined that the Company will likely ultimately be able to realize all or a portion of the related benefits for which a valuation allowance has been provided, all or a portion of the related valuation allowance will be reduced.
| 27 |
14. Operating Expenses
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30 | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Operating expenses | ||||||||||||||||
| General administration expenses | $ | $ | $ | $ | ||||||||||||
| Salaries, wages, and consulting fees | ||||||||||||||||
| Total | ||||||||||||||||
15. Related party transactions
The Company’s key management personnel have the authority and responsibility for planning, directing and controlling the activities of the Company and consists of the Company’s executive management team and management directors.
| Three Months Ended | Three Months Ended | Six Months Ended | Six Months Ended | |||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Consulting fees & wages | $ | $ | $ | $ | ||||||||||||
At June 30, 2025 and June 30, 2024, $
Sprott Transactions
In January 2025, the Company drew $
In January 2025, the Company issued shares of common stock to Sprott in connection with its election to satisfy interest payments under the outstanding convertible debentures owned by Sprott for the three months ended December 31, 2024.
On June 5, 2025, the following transactions occurred:
Equity Raise Participation
Sprott Streaming acquired Units in the Brokered Offering. at a price of C$ per Unit (the “Offering Price”). Each Unit issued under the Equity Offerings consisted of one share of our common stock and one-half of one share of common stock purchase warrant (a “Warrant”). Each whole Warrant will be exercisable to acquire one additional share of our common stock (a “Warrant Share”) at a price of C$ per Warrant Share for a period of three years following the date of issuance, subject to customary adjustments.
Stream Conversion
On June 5, 2025, the existing metals
purchase agreement (the “Metals Purchase Agreement”) dated June 23, 2023, by and among us, Silver Valley, and Sprott Streaming,
pursuant to which Sprott Streaming previously advanced a $
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Sprott Streaming Debt Settlements
On June 5, 2025, we and Silver Valley
entered into the debt settlement agreements with Sprott Streaming (collectively, the “Sprott Debt Settlement Agreements”),
pursuant to which an aggregate of shares of our common stock were issued to Sprott Streaming at the Offering Price in full
satisfaction of (i) $
Teck Transactions
On March 21, 2025, the Company closed an
unsecured promissory note for an aggregate principal amount of up to $
On June 5, 2025, the Company closed a non-brokered
private placement (the “Non-Brokered Offering”) with Teck Resources Limited for Units at a price of US$ per
Unit for aggregate gross proceeds to the Corporation of US$
16. Geographic and Segment Information
The Company has
17. Subsequent Events
Share Issuance
On July 9, 2025, the Company issued shares of common stock in connection with its election to satisfy interest payments under the outstanding convertible debentures for the three months ended June 30, 2025 and the debt facility for the six months ended June 30, 2025.
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Item 2. Management’s Discussion and Analysis of Financial Condition or Plan of Operation
The following management’s discussion and analysis of the consolidated financial results and condition of Bunker Hill Mining Corp. (collectively, “we,” “us,” “our,” “Bunker Hill” or the “Company”) for the three and six months ended June 30, 2025, has been prepared based on information available to us as of July 30, 2025. This discussion should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto included herewith and the audited Consolidated Financial Statements of Bunker Hill for the year ended December 31, 2024, and the related notes thereto filed with our Annual Report on Form 10-K, which have been prepared in accordance with U.S. GAAP. This discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results, performance, or achievements may differ materially from those anticipated in these forward-looking statements as a result of many factors, including, but not limited to, those set forth elsewhere in this report. See “Cautionary Note Regarding Forward-Looking Statements.”
All currency amounts are expressed in U.S. dollars.
Description of Business
Corporate Information
The Company was incorporated under the laws of the State of Nevada, U.S.A on February 20, 2007, under the name Lincoln Mining Corp. On February 11, 2010, the Company changed its name to Liberty Silver Corp and subsequently, on September 29, 2017, the Company changed its name to Bunker Hill Mining Corp. The Company’s registered office is located at 1802 N. Carson Street, Suite 212, Carson City Nevada 89701, and its Canadian office is located at 300-1055 West Hastings Street Vancouver, British Columbia, V6E 2E9, and its telephone number is 604.417.7952. The Company’s website is www.bunkerhillmining.com. Information appearing on the website is not incorporated by reference into this report.
Overview and Outlook
Our primary focus is the development and restart of our 100% owned Bunker Hill Mine (the “Bunker Hill Mine”) in Kellogg, Idaho, USA. The Bunker Hill Mine was the largest single producing mine by tonnage in the Silver Valley region of northwest Idaho, producing over 165 million ounces of silver and 5 million tons of base metals between 1885 and 1981. The Bunker Hill Mine is located within Operable Unit 2 of the Bunker Hill Superfund site (EPA National Priorities Listing IDD048340921), where cleanup activities have been completed.
The Company was incorporated for the initial purpose of mineral exploration at the Bunker Hill Mine. The Company has moved into the development stage concurrent with (i) purchasing the mine and a process plant, (ii) completing successive technical and economic studies, including an early-stage analysis that assesses the viability of a potential mining project, providing a preliminary assessment of its economic and technical feasibility (“Prefeasibility Study”), (iii) delineating mineral reserves, and (iv) advancing the construction of the facilities for commissioning and operations in the first half of 2026, with nameplate 1,800 tons per day production expected in 2026.
In May 2025, we initiated a mineral resource expansion and exploration drilling program in support of the staged restart plan. The program included 8,975 feet of core to be drilled from underground to further define and expand a portion of the existing resource that is in close proximity to where initial mining will occur.
Current External Factors Impacting our Business
In 2022, the United States Geological Survey included zinc as one of the primary metals at Bunker Hill along with lead and silver as a critical material that is essential to the U.S. economy and national security, because the domestic supply chain is vulnerable to disruption due to China’s supply dominance. Zinc uses include incorporation in metal products, rubber and medicines. About three-fourths of zinc used is consumed as metal, mainly as a coating to protect iron and steel from corrosion (galvanized metal), as alloying metal to make bronze and brass, as zinc-based die casting alloy, and as rolled zinc.
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Due to the dominance of China over certain critical materials production, including zinc, the U.S. federal government is taking certain actions to support the domestic critical materials supply chain, including tax incentives and federal loan programs specifically designed to support critical materials producers, and to strengthen the defense industrial base with respect to critical minerals including zinc. During the first six months of 2025, we have monitored the many Trump Administration actions, including executive orders covering critical minerals and materials, including zinc. On January 20, 2025, President Trump issued the “Unleashing American Energy” Executive Order, which included (1) several urgent critical mineral directives, including the immediate review of all agency actions that potentially burden the development of domestic energy resources with particular attention to critical minerals; (2) directing the Secretary of Energy to ensure that critical mineral projects, including the processing of critical minerals, receive consideration for federal support; and (3) directing the Secretary of Defense to consider the needs of the U.S. in supplying and maintaining the national defense stockpile to provide a robust supply of critical minerals, which will create jobs and prosperity at home, strengthen supply chains for the U.S. and its allies, and reduce the global influence of malign and adversarial states.
In March 2025, President Trump issued the “Immediate Measures to Increase American Mineral Production” Executive Order. In this Executive Order, President Trump directed the federal agencies, including the EXIM Bank, to unlock the permitting, funding and issuance of off-take agreements for critical minerals. The Executive Order includes near-term actions to be determined and implemented by the federal agencies to mobilize capital for mineral producers and create off-take agreements for the strategic stockpiling of minerals critical to the United States’ defense, technology and energy.
In addition, the impacts of other external influences (such as the Russia/Ukraine war and conflicts in the Middle East, including the Israel war) have further focused the U.S. government on the importance of implementing secure domestic supply chains, including for critical and base metal materials. The Company monitors and intends to participate in these initiatives as they are critical to the production of domestic defense and other technologies.
Results of Operations
The following discussion and analysis provides information that is believed to be relevant to an assessment and understanding of the results of operation and financial condition of the Company for the three and six months ended June 30, 2025, and June 30, 2024.
Comparison of the three six months ended June 30, 2025 and 2024
Revenue
During the three and six months ended June 30, 2025, and 2024, respectively, we generated no revenue.
Expenses
During the three months ended June 30, 2025, and 2024, we reported total operating expenses of $3,110,392 and $4,150,114, respectively. The decrease in total operating expenses was primarily due to a decrease in the volume of transactions associated with construction of the process plant during the quarter ended June 30, 2025.
During the six months ended June 30, 2025, and 2024, we reported total operating expenses of $6,019,766 and $7,937,745, respectively. The decrease in total operating expenses was primarily due to a decrease in the volume of transactions associated with construction of the process plant during the six months ended June 30, 2025.
Net Income and Comprehensive Income
We had net income of $20,459,888 for the three months ending June 30, 2025 (compared to a loss of $3,902,404 for the three months ended June 30, 2024). The net income the three months ended June 30, 2025 was primarily due to a gain on a debt settlement related to the stream debenture of $29,580,954 compared to $nil in the 2024 period, together with a change in derivative liabilities $1,832,864 in the 2025 period compared to ($351,402) in the 2024 period which was driven by warrants with an exercise price less than the market price of Bunker Hill Mining Corp’s closing price on June 30, 2025. These second quarter gains were partially offset by a loss on the fair value of silver loan of $2,961,015 for the three months ended June 30, 2025, compared to $nil for the three months ended June 30, 2024 and a loss on revaluation of stream debenture of $549,854 for the three months ended June 30, 2025 (compared to a gain of $2,748,000 for the three months ended June 30, 2024), due to updated key assumptions including commodity prices and timing of production. Additionally, financing costs of $1,007,750 ($nil for the three months ended June 30, 2024) relating to debt restructuring that occurred during the three months ended June 30, 2025.
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We had net income of $14,113,675 for the six months ending June 30, 2025 (compared to a loss of $9,484,440 for the three months ended June 30, 2024). The net income the three months ended June 30, 2025, was primarily due to a gain on debt settlement of the stream debenture of $29,580,954 compared to $nil in the 2024 period, together with a change in derivative liabilities of $2,295,627 in the 2025 period compared to a loss of ($615,345) in the 2024 period which was driven by warrants with an exercise price less than the market price of Bunker Hill Mining Corp’s closing price on June 30, 2025. These gains in the during the first six months of 2025 were partially offset by a loss on fair value of silver loan of $9,029,947 for the six months ended June 30, 2025, compared to $nil for the six months ended June 30, 2024 and a gain on revaluation of stream debenture of $4,149,606 compared to gain of $2,531,000 for the six months ended June 30, 2024), due to updated key assumptions including commodity prices and timing of production. Financing costs of $1,014,866 ($nil for the six months ended June 30, 2024) relating to debt restructuring that occurred in the three months ended June 30, 2025.
We had a comprehensive income of $23,811,117 and $19,497,446 for the three and six months ended June 30, 2025 (comprehensive loss of $3,426,642 and $8,720,306 for the three and six months ended June 30, 2024), respectively. Comprehensive income for the three and six months ending June 30, 2025, is inclusive of a $3,351,229 and $5,383,771 gain on change in fair value on own credit risk ($475,762 and $764,134 for the three and six months ended June 30, 2024).
Liquidity and Capital Resources
Going Concern
These condensed interim consolidated financial statements have been prepared on a going concern basis. The Company has incurred losses since inception resulting in an accumulated deficit of $96,253,046 and further losses are anticipated in the development of its business. The Company does not have sufficient cash to fund normal operations and meet debt obligations for the next 12 months without deferring payment on certain current liabilities and/or raising additional funds. In order to continue to meet its fiscal obligations in the current fiscal year and beyond, the Company must seek additional financing. This raises substantial doubt about the Company’s ability to continue as a going concern. Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The accompanying condensed interim consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
These condensed interim consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
Current Assets and Total Assets
As of June 30, 2025, the Company had total current assets were $11,829,696, compared to total current assets of $9,332,639 at December 31, 2024 – an increase of $2,497,057; and total assets of $116,563,473, compared to total assets of $97,601,550 at December 31, 2024 – an increase of $18,961,923. During the six months ended June 30, 2025, our current and non-current assets increased due to debt and equity financings that occurred partially offset by cash expenditures on the process plant and additions to the Bunker Hill Mine.
Current Liabilities and Total Liabilities
As of June 30, 2025, our total current liabilities of $12,215,705 and total liabilities of $87,781,551, compared to total current liabilities of $29,644,412 and total liabilities of $149,736,915 at December 31, 2024.
Total liabilities decreased due to the termination and exchange of the stream obligation under the Exchange Agreement (discussed in Note 9 to the financial statements), the repayment of $6,000,000 of principal on the Sprott debt facility through the issuance of Common Stock, the repayment of the Teck promissory note in full all of which occurred in the 6 months ending June 30, 2025 and a decrease in accounts payable and accrued liabilities as the Company utilized the equity raise to decrease its current obligations to its vendors, all of which occurred in June 2025. This was offset by an $11,000,000 drawdown on the Sprott debt facility in January 2025 and the $3,973,205 increase in the fair value of the silver loan due to the change in inputs, including an increase in the silver price during the six months ended June 30, 2025.
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Working Capital and Shareholders’ Deficit
As of June 30, 2025, we had working capital deficit of $386,009 and a shareholders’ equity of $28,781,922, compared to working capital deficit of $20,311,773 and shareholders deficiency of $52,135,365, respectively, as of December 31, 2024. The significant improvement in working capital and shareholders equity from December 31, 2025 to June 30, 2025 is primarily the result of a major capital restructuring along with combined equity financings from a brokered and non-brokered private placement and debt settlements during the first six months of 2025.
Cash Flow
During the six months ended June 30, 2025, we had a net cash increase of $2,327,904, primarily due to cash provided by financing activities, specifically proceeds from the issuance of shares of common stock and proceeds from Sprott debt facility, offset by cash used in operating and investing activities primarily related to expenditures on the Bunker Hill Mine process plant.
Subsequent Events
Share Issuance
On July 9, 2025, the Company issued 15,378,473 shares of common stock in connection with its election to satisfy interest payments under the outstanding convertible debentures for the three months ended June 30, 2025 and the debt facility for the six months ended June 30, 2025.
Critical accounting estimates
The preparation of the interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Estimates and judgments are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual outcomes can differ from these estimates. The key sources of estimation uncertainty that have a significant risk of causing material adjustment to the amounts recognized in the financial statements are:
Share-based payments
Management determines costs for share-based payments using market-based valuation techniques. The fair value of the share awards and warrant liabilities are determined at the date of grant using generally accepted valuation techniques and for warrant liabilities at each balance sheets date thereafter. Assumptions are made and judgment used in applying valuation techniques. These assumptions and judgments include estimating the future volatility of the stock price and expected dividend yield. Such judgments and assumptions are inherently uncertain. Changes in these assumptions affect the fair value estimates.
Convertible Loans, Promissory Notes, Stream Obligation and Warrants
Estimating the fair value of derivative warrant liability requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the issuance. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the warrants derivative liability, volatility and dividend yield and making assumptions about them.
The fair value estimates of the convertible loans use inputs to the valuation model that include risk-free rates, equity value per share of common stock, USD-CAD exchange rates, expected equity volatility, discount for lack of marketability, credit spread.
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The stream obligation inputs used to determine the future cash flows and effective interest for the amortized cost calculation include futures prices of minerals and expected mineral production over the life of the mine.
The fair value estimates of the silver loan use inputs to the valuation model that include risk-free rates, spot and futures prices of minerals, and expected volatility in minerals prices.
The fair value estimates may differ from actual fair values and these differences may be significant and could have a material impact on the Company’s balance sheets and the consolidated statements of operations. Assets are reviewed for an indication of impairment at each reporting date. This determination requires significant judgment. Factors that could trigger an impairment review include, but are not limited to, significant negative industry or economic trends, interruptions in exploration activities or a significant drop in precious metal prices.
Accrued liabilities
The Company has to make estimates to accrue for certain expenditures due to delay in receipt of third-party vendor invoices. These accruals are made based on trends, history and knowledge of activities. Actual results may be different.
The Company makes monthly estimates of its water treatment costs, with a true-up to the annual invoice received from the IDEQ. Using the actual costs in the annual invoice, the Company will then reassess its estimate for future periods. Given the nature, complexity and variability of the various actual cost items included in the invoice, the Company has used the most recent invoice as its estimate of the water treatment costs for future periods.
Incremental Borrowing rate
The Company estimates the incremental borrowing rate to determine the present value of future lease payments. Actual results may be different from estimates.
Borrowing Cost Capitalization rate
The Company makes estimates to determine the percentage of borrowing costs that are capitalized into property plant and equipment. Actual results may be different.
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not applicable.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Securities and Exchange Commission (“SEC”) defines the term “disclosure controls and procedures” to mean a company’s controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Exchange Act is recorded, processed, summarized and reported within the time periods specified under the SEC’s rules and forms and that information required to be disclosed is accumulated and communicated to principal executive and principal financial officers to allow timely decisions regarding disclosure.
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As of the end of the period covered by this report, the Company made an evaluation of the effectiveness of the design and operation of the disclosure controls and procedures over financial reporting for the timely alert to material information required to be included in the Company’s periodic SEC reports and of ensuring that such information is recorded, processed, summarized and reported within the time periods specified. This evaluation resulted in the conclusion that the design and operation of the disclosure controls and procedures were effective as of June 30, 2025.
Internal Control Over Financial Reporting
The management of the Company is responsible for the preparation of the financial statements and related financial information appearing in this report. The financial statements and notes have been prepared in conformity with accounting principles generally accepted in the United States of America. The management of the Company also is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. A company’s internal control over financial reporting is defined as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that: i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the Company; and iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Management, including the CEO and CFO, does not expect that the Company’s disclosure controls, procedures and internal control over financial reporting will prevent all error and all fraud. Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable, not absolute, assurance that the objectives of the control system are met and may not prevent or detect misstatements. Further, over time, control may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
With the participation of the CEO and CFO, the Company’s management evaluated the effectiveness of the Company’s internal control over financial reporting as of June 30, 2025 to ensure that information required to be disclosed by the Company in the reports filed or submitted by the Company under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, including to ensure that information required to be disclosed by the Company in the reports filed or submitted by the Company under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, the Company’s CEO and CFO have concluded that the internal control over financial reporting was effective as of June 30, 2025.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings
Other than as described below, neither the Company nor its property is the subject of any current, pending, or threatened legal proceedings. The Company is not aware of any other legal proceedings in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of the Company’s voting securities, or any associate of any such director, officer, affiliate or security holder of the Company, is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries.
On July 28, 2021, a lawsuit was filed in the U.S. District Court for the District of Idaho brought by Crescent Mining, LLC (“Crescent” or “Plaintiff”). The named defendants include Placer Mining, Robert Hopper Jr., and the Company. The lawsuit alleges that Placer Mining and Robert Hopper Jr. intentionally flooded the Crescent Mine during the period from 1991 and 1994, and that the Company is jointly and severally liable with the other defendants for unspecified past and future costs associated with the presence of acid mine drainage in the Crescent Mine. The Plaintiff requested unspecified damages. On September 20, 2021, the Company filed a motion to dismiss Crescent’s claims against it, contending that such claims are facially deficient. On March 2, 2022, the court granted in part and denied in part the Company’s motion to dismiss. The court granted the Company’s motion to dismiss in respect of Crescent’s cost recovery claim under CERCLA Section 107(a), and declaratory judgment, tortious interference, trespass, nuisance and negligence claims. These claims were dismissed without prejudice. The court denied the motion to dismiss filed by Placer Mining Corp. for Crescent’s trespass, nuisance and negligence claims. Crescent later filed an amended complaint on April 1, 2022. Placer Mining Corp. and Bunker Hill Mining Corp are named as co-defendants. Bunker Hill responded to the amended filing, refuting and denying all allegations made in the complaint except those that are assertions of fact as a matter of public record. The Company believes Crescent’s lawsuit is without merit and is defending the claims on behalf of itself and Placer Mining Corp. pursuant to an indemnification granted by Company of Placer Mining Corp. granted pursuant to the sale and purchase agreement executed between the companies for the Mine on December 15, 2021. The lawsuit is currently in the discovery phase, in which information is gathered and exchanged.
Item 1A. Risk Factors
The Company’s business, reputation, results of operations and financial condition, as well as the price of the Company’s common stock, can be affected by a number of factors, whether currently known or unknown, including those described in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “Form 10-K”). When any one or more of these risks materialize from time to time, the Company’s business, reputation, results of operations and financial condition, as well as the price of the Company’s common stock, can be materially and adversely affected. There have been no material changes to the risk factors disclosed in our Form 10-K, except as noted below.
| ● | Access to timely and sufficient capital. The ability to raise sufficient and timely capital on a tight schedule during 2025 and before existing cash reserves are exhausted is at risk given the impact of commodity price volatility and market uncertainty related to ongoing Canada-USA trade discussions. This risk is offset to a degree by the significant strengthening of the Company’s balance sheet following the concurrent equity injection and debt restructuring and engagement with US EXIM Bank, but it is nonetheless the most material risk to the Company and its business plan at this time. | |
| ● | Project schedule and budget. The ability to maintain the project on schedule and budget is at risk primarily due to the uncertainty of financing, but also due to general inflationary trends and supply chain pressures. This is offset to a degree by the fact that 98% of all procurement has been concluded and the fact that the project is now 66% complete but still remains as a significant risk. | |
| ● | Hiring and retaining key staff. The ability to recruit in a timely way and then retain key staff is negatively affected by the on-going financing uncertainty and a competitive skilled labor market. This is offset to a degree by use of contractors but is nonetheless a material risk that increases in direct proportion to the degree of financing uncertainty. |
Item 2. Unregistered Sales of Equity Securities and Use Of Proceeds
Not Applicable.
Item 3. Defaults upon Senior Securities
None.
Item 4. Mine Safety Disclosure
Pursuant to Section 1503(a) of the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, issued under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”) by the Mine Safety and Health Administration (the “MSHA”), as well as related assessments and legal actions, and mining-related fatalities.
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The following table provides information for the three months ended June 30, 2025:
| Mine | Mine Act §104 Violations (1) | Mine Act §104(b) Orders (2) | Mine Act §104(d) Citations and Orders (3) | Mine Act §110(b)(2) Violations (4) | Mine Act §107(a) Orders (5) | Proposed Assessments from MSHA (In dollars $) | Mining Related Fatalities | Mine Act §104(e) Notice (yes/no) (6) | Pending Legal Action before Federal Mine Safety and Health Review Commission (yes/no) | |||||||||||||||||||||||||
| Bunker Hill Mine | 1 | 0 | 0 | 0 | 0 | $ | 151.00 | 0 | 0 | No | ||||||||||||||||||||||||
| (1) | The total number of violations received from MSHA under §104 of the Mine Act, which includes citations for health or safety standards that could significantly and substantially contribute to a serious injury if left unabated. |
| (2) | The total number of orders issued by MSHA under §104(b) of the Mine Act, which represents a failure to abate a citation under §104(a) within the period of time prescribed by MSHA. |
| (3) | The total number of citations and orders issued by MSHA under §104(d) of the Mine Act for unwarrantable failure to comply with mandatory health or safety standards. |
| (4) | The total number of flagrant violations issued by MSHA under §110(b)(2) of the Mine Act. |
| (5) | The total number of orders issued by MSHA under §107(a) of the Mine Act for situations in which MSHA determined an imminent danger existed. |
| (6) | A written notice from the MSHA regarding a pattern of violations, or a potential to have such pattern under §104(e) of the Mine Act. |
Item 5. Other Information
None.
Item 6. Exhibits
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| ‡ | Certain schedules or similar attachments to this exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K. The registrant hereby agrees to furnish supplementally to the Securities and Exchange Commission upon request a copy of any omitted schedule or attachment to this exhibit. |
| †† | Portions of this exhibit have been omitted in accordance with Item 601(b)(10) of Regulation S-K. The omitted information is not material, and the registrant treats such information as private and confidential. The registrant hereby agrees to furnish supplementally an unredacted copy of this exhibit to the Securities and Exchange Commission upon request. |
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SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the Registrant has caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: July 31, 2025 | ||
| BUNKER HILL MINING CORP. | ||
| By | /s/ Sam Ash | |
| Sam Ash, Chief Executive Officer and President | ||
In accordance with Section 12 of the Securities Exchange Act of 1934, the Registrant has caused Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: July 31, 2025 | ||
| BUNKER HILL MINING CORP. | ||
| By | /s/ Gerbrand van Heerden | |
| Gerbrand van Heerden, Chief Financial Officer and Corporate Secretary | ||
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