What changed in this filing

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Item 1. Business

2020-12-04 compared with 2020-11-24 · 33 added, 29 removed, 68 unchanged (48% of the section changed)

5 unchanged sentences

The Company’s registered office is located at 1802 N.

Carson Street, Suite 212, Carson City Nevada 89701, and its head office is located at 82 Richmond Street East, Toronto, Ontario, Canada, M5C 1P1, and its telephone number is 416-477-7771.

Carson Street, Suite 212, Carson City Nevada 89701, and its head office is located at 401 Bay Street, Suite 2702, Toronto, Ontario, Canada, M5H 2Y4, and its telephone number is 416-477-7771.

Current Operations

2 unchanged sentences

The “Bunker Hill Lease with Option to Purchase” is between the Company and Placer Mining Corporation (“Placer Mining”), the current owner of the Mine.

On October 22, 2019, the lease was amended and continues until August 1, 2020.

On October 2, 2018, the Company announced that it was in default of its Lease with Option to Purchase Agreement with Placer Mining.

The default arose as a result of missed lease and operating cost payments, totaling $400,000, which were due at the end of September and on October 1, 2018.

As per the Agreement, the Company had 15 days, from the date notice of default was provided (September 28, 2018), to remediate the default by making the outstanding payment.

While Management worked with urgency to resolve this matter, Management was ultimately unsuccessful in remedying the default, resulting in the lease being terminated.

On November 13, 2018, the Company announced that it was successful in renewing the lease.

The 24-month lease continues until October 31, 2019.

The lease period can be extended by a further 12 months at the Company’s discretion.

Under the revised terms of its agreement, during the term of the lease, the Company must make $60,000 monthly mining lease payments and previously accrued outstanding amounts.

However, if and when the Company exercises its purchase of the mine (as described below), these deferred payments are waived by the mine owner.

Under the revised term, the Company has an option to purchase 100% of the marketable assets of the Bunker Hill Mine for a purchase price of $11 million at any time before the end of the lease.

The purchase price also includes the negotiable United States Environmental Protection Agency (“EPA”) costs of $20 million.

An additional term of the amended lease provides for the elimination of all royalty payments that were to be paid to the mine owner.

Upon signing the amended agreement, the Company paid a one-time, non-refundable cash payment of $300,000 to the mine owner.

This payment will be applied to the purchase price upon execution of the purchase option.

In the event the Company elects not to exercise the purchase option, the payment shall be treated as an additional care and maintenance payment.

In addition to the payments to Placer Mining, pursuant to an agreement with the EPA whereby for so long as Bunker leases, owns and/or occupies the Bunker Hill Mine, the Company will make payments to the EPA on behalf of the current owner in satisfaction of the EPA’s claim for cost recovery.

Under the revised terms of its agreement, during the term of the lease, the Company must make $60,000 monthly mining lease payments.

A monthly amount of $140,000 is deferred and becomes payable if the Company exercises its purchase option, making the deferred amount payable.

The Company is accruing for these payments and includes them in accounts payable.

The Company has an option to purchase the Bunker Hill Mine assets (“the Bunker Assets”) at any time before the end of the lease and any extension for a purchase price of $25 million with purchase payments to be made over a ten-year period.

Under terms of the agreement, there is a 3% net smelter return royalty (“NSR”) on sales during the Lease and a 1.5% NSR on the sales after the purchase option is exercised, which post-acquisition NSR is capped at $60 million.

In addition to the payments to Placer Mining, pursuant to an agreement with the United States Environmental Protection Agency (“EPA”) whereby for so long as Bunker leases, owns and/or occupies the Bunker Hill Mine, the Company will make payments to the EPA on behalf of the current owner in satisfaction of the EPA’s claim for cost recovery.

These payments, if all are made, will total $20 million.

1 unchanged sentence

In addition to these payments, the company is to make semi-annual payments of $480,000 on June 1 and December 1 of each year, to cover the EPA’s costs of maintaining the water treatment facility.

The November 1, 2018, December 1, 2018, June 1, 2019 and November 1, 2019 payments were not made.

The November 1 and December 1, 2018 payments were not made, and the Company is having discussions with the EPA to amend and defer payments.

The Company also has received invoices from the EPA for water treatment charges for the periods from December 2017 to October 2019.

This was for a total of $3,269,388, with $2,229,408 outstanding as at June 30, 2020 The Company is having discussions with the EPA to review and, where appropriate, have the additional water treatment charges amended.

This was for a total of $3,269,388, with $1,209,530 additional accruals required as at June 30, 2019.

The Company is having discussions with the EPA to review and, where appropriate, have the additional water treatment charges amended.

The unpaid EPA balance is subject to interest at the rate specified for interest on investments of the EPA Hazardous Substance Superfund.

Management believes this amended lease and option will provide the Company time to complete exploratory drilling, produce a mine plan and raise the money needed to move forward.

Management continues to push forward and advance the timeline to realizing shareholder value.

The Bunker Hill Mine remains the largest single producing mine by tonnage in the Coeur d'Alene lead, zinc and silver mining district in Northern Idaho.

Management continues to push forward and advance the time line to realizing shareholder value.

The Bunker Hill Mine was the largest producing mine in the Coeur d'Alene zinc, lead and silver mining district in northern Idaho.

Historically, the mine produced over 35M tonnes of ore grading on average 8.76% lead, 3.67% zinc, and 155 g/t silver (Bunker Hill Mines Annual Report 1980).

The Company believes that there are numerous targets of opportunity left in the mine from top to bottom, and particularly on a strike to the west where more recent past drilling has resulted in major discoveries such as the Quill body of mineralized material.

The Bunker Hill Mine is the Company’s only focus, with a view to raising capital to rehabilitate the mine and put it back into production.

The Company believes that there are numerous exploration targets of opportunity left in the mine from surface, in parallel to known and mined mineralisation and at depth, below existing workings.

In addition to the Zinc-rich zones, these also include high-grade Lead-Silver veins which are currently the primary focus of the company’s exploration programs.

The Bunker Hill Mine is a Lead-Silver-Zinc Mine.

When back in production, the Company intends to mill mineralized material on-site or at a local third-party mill to produce both Lead-Silver and Zinc concentrates which will then be shipped to third party smelters for processing.

The Company will continue to explore the property with a view to proving additional resources.

The Bunker Hill Mine is a Zinc-Silver-Lead Mine.

When back in production, the Company will mill mineralized material on-site or at a local third-party mill and plans to produce concentrates to be shipped to third party smelters for processing.

The Company will continue to explore the property with a view to proving resources.

Infrastructure

12 unchanged sentences

Property Description

The Company’s agreement (as amended) with Placer Mining Corporation includes mineral rights to approximately 440 patented mining claims covering over 5700 acres.

Of these claims, 35 include surface ownership of approximately 259 acres.

The transaction also includes certain parcels of fee property which includes mineral and surface rights but not patented mining claims.

The Company’s agreement with Placer Mining Corporation includes mineral rights to 434 patented mining claims covering 5769.467 acres of those 35 include surface ownership over approximately 259.1 acres.

The transaction also includes certain parcels of fee property which includes mineral and surface rights but are not patented mining claims.

Mining claims and fee properties are located in Townships 47, 48 North, Range 2 East, Townships 47, 48 North, Range 3 East, Boise Meridian, Shoshone County, Idaho.

The agreement (as amended) specifically excludes the following:

the Machine Shop Building and Parcel number 21 including all fixed equipment located inside the building and personal property located upon this parcel;

unmilled ore located at the mine yard, and residual lead/zinc ore mined and broken, but not removed from the Bunker Hill Mine.

The agreement specifically excludes the following:

the Machine Shop Building and Parcel, including all fixed equipment located inside the building and personal property located upon the parcel;

unmilled ore on deck and residual lead/zinc ore mined and broken, but not removed from the Bunker Hill Mine;

the historic Caledonia Mine;

the Crystal Vug;

and the Silver Ridge exploration property.

Surface rights were originally owned by various previous owners of the claims until the acquisition of the properties by Bunker Limited Partners (“BLP”).

18 unchanged sentences

The Company expects to take on the water treatment responsibility in the future and obtain an appropriate discharge permit.

If the Company is able to purchase the EPA’s water treatment plant the water discharge permit comes along with the water treatment plant.

The Company competes with other mining and exploration companies in connection with the acquisition of mining claims and leases on zinc and other base and precious metals prospects as well as in connection with the recruitment and retention of qualified employees.

Many of these companies are much larger than the Company, have greater financial resources and have

been in the mining business for much longer than it has.

Many of these companies are much larger than the Company, have greater financial resources and have been in the mining business for much longer than it has.

As such, these competitors may be in a better position through size, finances and experience to acquire suitable exploration and development properties.

1 unchanged sentence

Given the size of the world market for base precious metals such as silver, lead and zinc, relative to the number of individual producers and consumers, it is believed that no single company has sufficient market influence to significantly affect the price or supply of these metals in the world market.

The Company is currently managed by Sam Ash, President and CEO and Wayne Parsons, Chief Financial Officer.

The Company is currently managed by John Ryan, President and CEO and Wayne Parsons, Chief Financial Officer.

Reports to Security Holders

9 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K/A

Item 1. Business