Executive Summary / Key Takeaways

• Bunker Hill Mining Corp. ($BHLL) is focused on restarting the historic Bunker Hill Mine in Idaho, aiming to become a significant domestic producer of zinc, lead, and silver, metals deemed critical by the U.S. government.
• The company is currently in the development stage, investing heavily in mine rehabilitation and process plant construction, targeting commissioning in H2 2025 and nameplate production (1,800 tpd) in H1 2026.
• Recent financial results reflect the pre-production phase, showing losses and significant capital expenditures, leading to a substantial working capital deficit and shareholders deficiency, raising substantial doubt about the company's ability to continue as a going concern without further funding.
• A recently announced major capital restructuring and equity financing initiative, including significant participation from Teck Resources and Sprott, is designed to address near-term liquidity needs and fund project completion, with $31 million in combined equity financings and debt settlements closing in June 2025.
• Key risks include the successful and timely finalization of remaining financing, execution risk in achieving production targets, commodity price volatility, and managing environmental liabilities and ongoing litigation.

Setting the Scene: Reawakening a Giant in the Silver Valley

Bunker Hill Mining Corp. is not just another junior miner; it is undertaking the ambitious task of reawakening a legendary producer, the Bunker Hill Mine in Kellogg, Idaho. This mine, which operated for nearly a century until 1981, was historically the largest single producer by tonnage in the prolific Silver Valley region, yielding vast quantities of silver and base metals. Today, Bunker Hill Mining holds 100% interest in this historic asset, positioning itself to capitalize on renewed interest in domestic production of critical minerals.

The company's strategy centers on a phased restart of the mine, leveraging existing infrastructure while integrating modern mining and processing techniques. This approach aims to bring the mine back into production efficiently and cost-effectively. The metals targeted – zinc, lead, and silver – are increasingly vital, particularly zinc, which the U.S. Geological Survey has identified as a critical material essential for the U.S. economy and national security due to vulnerabilities in the domestic supply chain and the dominance of foreign supply. This strategic context aligns Bunker Hill's project with broader U.S. government initiatives aimed at strengthening domestic critical mineral supply chains, potentially opening avenues for federal support and off-take agreements.

In the competitive landscape of North American base and precious metals mining, Bunker Hill operates alongside larger, more established players like Teck Resources (TECK), Hecla Mining Company (HL), and Lundin Mining Corporation (LUN). While these competitors benefit from significant scale, diversified assets, and established production, Bunker Hill aims to carve out a niche through its focus on restarting a high-grade, well-known deposit with a potentially lower initial capital intensity compared to developing a greenfield site.

Bunker Hill's technological approach involves modernizing the historic mine infrastructure and integrating contemporary processing solutions. This includes the acquisition and reassembly of a comprehensive process plant from Teck, designed for a planned 1500-ton-per-day operation. The company is also employing definition drilling and geophysical surveys to enhance understanding and delineation of its mineral resources. While specific, quantifiable performance metrics comparing Bunker Hill's planned technology directly against competitors' established operations are not extensively detailed, the strategy implies leveraging modern techniques like 3D modeling for improved resource efficiency in specific high-grade areas, potentially offering localized efficiency gains compared to the broader operations of larger peers. The focus on utilizing existing infrastructure, combined with modern methods, is intended to enable a rapid restart cycle.

However, Bunker Hill's smaller scale relative to giants like Teck presents inherent disadvantages, including potentially higher energy consumption per unit and lower throughput capacity. Furthermore, while the company is adopting modern techniques, larger competitors with greater financial resources may possess advantages in the speed of technological innovation and the ability to implement advanced automation across vast operations.

Development Progress and Financial Realities

Bunker Hill is currently deeply immersed in the development phase of the Bunker Hill Mine restart. This involves significant capital expenditures on rehabilitating underground workings and constructing the surface process plant facilities. The company's stated goal is to achieve commissioning and initial operations in the second half of 2025, with the ramp-up to nameplate production capacity of 1,800 tons per day expected in the first half of 2026. An ongoing mineral resource expansion and exploration drilling program is also anticipated to continue through the second half of 2025, aiming to further define and potentially expand resources near the planned initial mining areas.

The financial results for the three months ended March 31, 2025, reflect the company's pre-production status. Bunker Hill reported no revenue for the period, consistent with its development stage. Total operating expenses decreased to $2.91 million from $3.79 million in the comparable prior-year period, primarily due to a decrease in the volume of transactions associated with process plant construction during the quarter.

The net loss for the three months ended March 31, 2025, was $6.35 million, compared to $5.58 million for the same period in 2024. This loss was significantly impacted by non-cash items, including a $6.07 million loss on the revaluation of the Silver Loan and a $4.70 million gain on the revaluation of the stream debenture. These fair value adjustments are sensitive to changes in commodity price projections and expected production timelines.

On the balance sheet, total assets increased to $102.93 million as of March 31, 2025, from $97.60 million at December 31, 2024. This increase was primarily driven by substantial investments in the process plant, which grew to $74.15 million from $66.41 million, and additions to the Bunker Hill Mine and mining interests, which increased to $19.09 million from $18.80 million. These capital expenditures underscore the advanced stage of the restart project.

However, the development phase has also placed significant strain on the company's liquidity. Total liabilities increased to $158.20 million from $149.74 million over the same period. This rise was mainly attributable to drawing $11.00 million on the Sprott debt facility, the issuance and drawing of $3.10 million on the Teck promissory note, and the non-cash $6.10 million loss on the revaluation of the silver loan.

As of March 31, 2025, the company held cash and restricted cash totaling $5.33 million, down from $8.26 million at the end of 2024.

This financial position resulted in a working capital deficit of $18.17 million and a shareholders deficiency of $55.28 million as of March 31, 2025. The company explicitly states that it does not have sufficient cash to fund normal operations and meet debt obligations for the next 12 months without deferring payments or raising additional funds, which raises substantial doubt about its ability to continue as a going concern.

Strategic Financing and Future Outlook

Recognizing the critical need for capital to complete the restart, Bunker Hill announced a major capital restructuring and equity financing initiative in the first quarter of 2025. This initiative, involving key partners like Teck, Sprott, and Monetary Metals, is designed to provide the necessary funding to support construction, start-up, and ramp-up activities.

A significant milestone was achieved in June 2025 with the closing of $31 million in combined equity financings and debt settlements. This included a brokered private placement and a non-brokered private placement with Teck Resources, demonstrating strategic support from a major industry player who is also a potential customer for Bunker Hill's concentrates. Teck's participation, including a substantial equity investment and the provision of a new $10 million standby facility, is a key validation of the project's potential and provides crucial near-term liquidity. The restructuring also involves amending existing debt, stream, and royalty agreements with Sprott and Monetary Metals, converting some debt to equity and modifying terms to better align with the project's development timeline.

The successful execution of this financing plan is paramount for Bunker Hill to meet its stated operational targets: commissioning in H2 2025 and achieving nameplate production in H1 2026. These timelines are contingent upon the timely finalization of the remaining financing components and successful project execution. The company is also exploring potential debt funding from the Export-Import Bank of the United States (EXIM) and future equity financings for medium to long-term needs.

The strategic partnership with Teck is particularly noteworthy. Teck, a major zinc producer and refiner, has invested in Bunker Hill to secure a source of zinc and lead feed for its Trail Operations. This partnership provides Bunker Hill with a strategic customer relationship and financial backing from a significant industry participant, potentially enhancing its competitive position against other base metal producers by securing a key off-take partner early.

Risks and Challenges

Despite the recent financing progress, Bunker Hill faces significant risks. The most immediate is the going concern uncertainty, which persists until the full financing plan is successfully finalized and the company can generate sufficient cash flow from operations. There is no guarantee that all announced transactions will close timely or on the terms anticipated.

Operational risks are also substantial. Bringing a historic mine back into production is complex and subject to potential delays and cost overruns. Achieving the targeted commissioning in H2 2025 and nameplate production of 1,800 tpd in H1 2026 requires successful completion of construction, mine rehabilitation, and process plant integration. Failure to meet these timelines would increase capital needs and further strain liquidity.

Environmental liabilities represent another material risk. The company is responsible for historical EPA cost recovery payments ($14 million remaining as of March 31, 2025, secured by payment bonds) and ongoing water treatment charges payable to the IDEQ. The actual water treatment costs can exceed estimates, potentially creating additional liabilities. Furthermore, the ongoing lawsuit filed by Crescent Mining, LLC regarding acid mine drainage in the adjacent Crescent Mine poses a contingent liability, although the company is vigorously defending itself.

Commodity price volatility for zinc, lead, and silver could significantly impact the project's profitability and the company's ability to service its debt and fund future operations. While the U.S. critical minerals focus provides some strategic tailwind, market prices remain subject to global supply and demand dynamics.

Finally, the company's stock is thinly traded and deemed a penny stock, which can lead to price volatility and make it difficult for investors to trade shares. Future equity financings, while necessary, will result in significant dilution to existing shareholders.

Conclusion

Bunker Hill Mining Corp. is at a pivotal juncture, transitioning from a development-focused entity to a planned producer aiming to leverage a historic asset in the context of increasing demand for critical domestic minerals. The investment thesis hinges on the successful restart of the Bunker Hill Mine, targeting commissioning in late 2025 and production ramp-up in early 2026. The recent closing of $31 million in combined financings and debt settlements, anchored by strategic support from Teck Resources and Sprott, represents a crucial step towards de-risking the project's funding needs and addressing immediate liquidity concerns.

However, significant challenges remain, including the need to finalize the full financing package, execute the complex mine restart on schedule and budget, and navigate ongoing environmental and legal liabilities. While the company's strategic focus on critical minerals and its partnerships provide potential advantages in the competitive landscape, its smaller scale and financial constraints compared to larger peers necessitate careful execution and continued access to capital. Investors should closely monitor the company's progress towards securing the remaining required funding, achieving its