What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-11-15 compared with 2021-08-16 · 466 added, 522 removed, 513 unchanged (66% of the section changed)

4 unchanged sentences

these financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included

in the Company’s Form 10-KT for the six months ended December 31, 2020, and all amendments thereto.

in the Company’s Form 10-KT for the nine months ended December 31, 2020, and all amendments thereto.

HILL MINING CORP.

INTERIM CONSOLIDATED FINANCIAL

AND SIX MONTHS ENDED

AND NINE MONTHS ENDED

IN UNITED STATES DOLLARS)

Bunker Hill Mining Corp.

Hill Mining Corp.

Interim Consolidated Balance Sheets

2 unchanged sentences

current assets

assets (note 4)

asset (note 4)

term deposit (note 5)

4 unchanged sentences

liability (note 11)

notes payable (note 7)

portion of lease liability (note 8)

3 unchanged sentences

Shareholders’

shares, $ 0.000001

par value, 10,000,000

preferred shares authorized;

shares, $ 0.000001 par value, 10,000,000 preferred shares authorized;

Nil preferred shares issued and outstanding (note 9)

12 unchanged sentences

accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

Bunker Hill Mining Corp.

Hill Mining Corp.

Interim Consolidated Statements of Income (loss) and Comprehensive Income (loss) (Expressed in United States Dollars)

Three Months Ended June 30, 2021

Three Months Ended June 30, 2020

Six Months Ended June 30, 2021

Six Months Ended June 30, 2020

Operating expenses

Operation and administration (notes 9, 10 and 11)

Legal and accounting

Consulting (note 14)

Loss from operations

( 5,295,557 )

( 3,589,361 )

( 9,919,531 )

( 4,952,321 )

Other income or gain (expense or loss)

Change in derivative liability (notes 7 and 9)

( 19,060,232 )

( 8,214,828 )

Accretion expense (notes 6 and 7)

Financing costs (note 7)

Gain (loss) on foreign exchange

Interest expense (notes 6 and 7)

Loss on loan extinguishment (note 6)

Loss on debt settlement (note 9)

Net income (loss) and comprehensive income (loss) for the period

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

and administration (notes 9, 10 and 11)

and accounting

from operations

( 2,464,945 )

( 6,105,916 )

Dilutive effect of warrant

( 12,384,474 )

( 11,058,237 )

Diluted net income (loss)

and comprehensive income (loss) for the period (Note 12)

income or gain (expense or loss)

in derivative liability (notes 7 and 9)

( 1,096,476 )

expense (notes 6 and 7)

costs (note 7)

(loss) on foreign exchange

expense (notes 6 and 7)

on private placement (note 9)

issuance costs (note 9)

on loan extinguishment (note 6)

on debt settlement (note 9)

income (loss) and comprehensive income (loss) for the period

$ ( 267,859 )

$ ( 13,848,837 )

Net income (loss) per common share (note 12)

- fully diluted (note 12)

Weighted average number of common shares (note 12)

income (loss) per common share (note 12)

fully diluted

average number of common shares (note 12)

fully diluted

accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

Bunker Hill Mining Corp.

Hill Mining Corp.

Interim Consolidated Statements of Cash Flows

2 unchanged sentences

$ ( 13,848,837 )

to reconcile net loss to net cash used in operating activities:

to reconcile net income (loss) to net cash used in operating activities:

in fair value of warrant liability

( 22,172,681 )

( 1,096,476 )

on loan extinguishment

2 unchanged sentences

on debt settlement

on private placement

in operating assets and liabilities:

Accounts receivable

cash used in operating activities

3 unchanged sentences

cash used in investing activities

from issuance of common stock

from issuance of common stock, net of issuance costs

from warrants exercised

1 unchanged sentence

of promissory note

( 2,017,706 )

cash provided by financing activities

6 unchanged sentences

accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

Bunker Hill Mining Corp.

Hill Mining Corp.

Interim Consolidated Statements of Changes in Shareholders’ Deficiency

in United States Dollars)

accumulated during the

December 31, 2019

$ ( 50,343,441 )

$ ( 23,334,737 )

issued at $ 0.42 per share (i)

Units issued at $0.32 per unit (iii)

Units issued at $0.32 per share, shares

issued for debt settlement at $ 0.42 per share (i)

Units issued for debt settlement at $0.45 per unit (iv)

Units issued for debt settlement at $0.42 per share, shares

Shares issued for RSUs vested

Shares issued for RSUs vested, shares

warrants issued

exercised at $ 0.18 per share (ii)

issued at $ 0.26 per

issued for debt settlement at $ 0.67 per unit

Shares issued for RSUs vested

Shares issued for RSUs vested, shares

issued at $ 0.32 per

issued at $0.32 per unit, shares

issued for debt settlement at $ 0.45 per unit (v)

Units issued for debt settlement at

loss for the period

( 13,580,978 )

June 30, 2020

$ ( 63,924,419 )

$ ( 33,241,919 )

September 30, 2020

December 31, 2020

$ ( 66,088,873 )

$ ( 31,537,597 )

issued at $0.32 per unit (iii)

issued for debt settlement at $0.45 per unit (iv)

issued at $ 0.32 per

issued for debt settlement at $ 0.45 per unit (v)

issued for RSUs vested

( 3,813,103 )

income for the period

income (loss) for the period

June 30, 2021

$ ( 60,206,008 )

$ ( 22,370,235 )

September 30, 2021

issued at C$ 0.56 , converted to US at $ 0.42 (note 9)

(ii) Shares issued upon warrants exercised at C$0.25, converted to US at $0.18 (note 9)

issued upon warrants exercised at C$ 0.25 , converted to US at $ 0.18 (note 9)

issued at C$ 0.35 , converted to US at $ 0.26 (note 9)

issued at C$ 0.40 , converted to US at $ 0.32 (note 9)

issued at C$ 0.57 , converted to US at $ 0.45 (note 9)

accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

1 unchanged sentence

to Condensed Interim Consolidated Financial Statements

and Six Months Ended June 30, 2021

and Nine Months Ended September 30, 2021

in United States Dollars)

16 unchanged sentences

The Company has incurred losses

since inception resulting in an accumulated deficit of $ 60,206,008 and further losses are anticipated in the development of its business.

since inception resulting in an accumulated deficit of $ 56,245,378

and further losses are anticipated in the

development of its business.

The Company does not have sufficient working capital needed to meet its current fiscal obligations and commitments.

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.

is considering various financing alternatives including, but not limited to, raising capital through the capital markets and debt financing.

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

as a going concern.

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.

is considering various financing alternatives including, but not limited to, raising capital through the capital markets, debt

financing, and royalty/streaming arrangements.

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 as a going concern.

ability of the Company to emerge from the exploration stage is dependent upon, among other things, obtaining additional financing to

11 unchanged sentences

to Condensed Interim Consolidated Financial Statements

and Six Months Ended June 30, 2021

and Nine Months Ended September 30, 2021

in United States Dollars)

4 unchanged sentences

Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation

of financial position, results of operations, shareholders’ equity 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/T, which contains the annual audited consolidated financial statements and notes

thereto, together with the Management’s Discussion and Analysis, for the six months ended December 31, 2020.

The interim results

for the period ended June 30, 2021 are not necessarily indicative of the results for the full fiscal year.

The unaudited interim condensed

consolidated financial statements are presented in USD, which is the functional currency.

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/T, which contains the annual audited consolidated financial statements and notes thereto, together with the

Management’s Discussion and Analysis, for the six months ended December 31, 2020.

The interim results for the period ended

September 30, 2021 are not necessarily indicative of the results for the full fiscal year.

The unaudited interim condensed consolidated

financial statements are presented in USD, which is the functional currency.

consists of the following:

Less accumulated depreciation

Equipment, net

total depreciation expense during the three and six months ended June 30, 2021 was $ 34,566 and $ 64,396 , respectively (three and six months

ended June 30, 2020 - $ 14,392 and $ 16,673 , respectively).

Schedule of Equipment

accumulated depreciation

total depreciation expense during the three and nine months ended September 30, 2021 was $ 34,565

and $ 98,961 ,

respectively (three and nine months ended September 30, 2020 - $ 14,392

and $ 16,673 ,

respectively), which is included in operation and administration expenses on the condensed interim consolidated statements of income

(loss) and comprehensive income (loss).

Right-of-use asset

asset consists of the following:

of Right-of-Use Asset

Less accumulated depreciation

Right-of-use asset, net

total depreciation expense during the three and six months ended June 30, 2021 was $ 26,594 and $ 53,189 , respectively (three and six months

ended June 30, 2020 - $ 27,430 and $ 53,362 , respectively).

Schedule of Right-of-use Asset

accumulated depreciation

total depreciation expense during the three and nine months ended September 30, 2021 was $ 26,594

and $ 79,783 ,

respectively (three and nine months ended September 30, 2020 - $ 20,034

and $ 73,396 ,

respectively), which is included in operation and administration expenses on the condensed interim consolidated statements of income

(loss) and comprehensive income (loss).

Hill Mining Corp.

to Condensed Interim Consolidated Financial Statements

and Six Months Ended June 30, 2021

and Nine Months Ended September 30, 2021

in United States Dollars)

33 unchanged sentences

November 13, 2018, the Company announced that it was successful in renewing the Agreement, effectively with the original Agreement intact,

except that monthly payments were reduced to $ 60,000 per month for 12 months, with the accumulated reduction in payments of $ 140,000

per month (“deferred payments”) being accrued.

As at June 30, 2021, the Company has accrued for a total of $ nil (December

31, 2020 - $ nil ), which is included in accounts payable.

These deferred payments will be waived should the Company choose to exercise

except that monthly payments were reduced to $ 60,000

per month for 12 months, with the accumulated

reduction in payments of $ 140,000

per month (“deferred payments”) being

These deferred payments would be waived if the Company had chosen to exercise its option.

The accruals for the deferred payment were waived

pursuant to the November 20, 2020 Amended Agreement described below.

As a result, as at September 30, 2021, the Company had accrued

a total of $nil (December 31, 202 - $nil).

Hill Mining Corp.

to Condensed Interim Consolidated Financial Statements

and Six Months Ended June 30, 2021

and Nine Months Ended September 30, 2021

in United States Dollars)

21 unchanged sentences

Company will continue to make monthly care and maintenance payments to Placer Mining of $ 60,000 until exercising the option to purchase ;

purchase price was reduced to $ 7,700,000 in cash, with $ 5,700,000 payable in cash (with an aggregate of $ 300,000

to be credited toward the purchase price of the Bunker Assets as having been previously paid by the Company and an aggregate of $ 5,400,000

payable in cash outstanding) and $ 2,000,000 in common shares.

The reference price for the payment in common shares will be based

on the common share price of the last equity raise before the option is exercised;

purchase price was reduced to $ 7,700,000 , with $ 5,700,000 payable in cash (with an aggregate of $300,000 to be credited toward

the purchase price of the Bunker Assets as having been previously paid by the Company and an aggregate of $ 5,400,000 payable in cash

outstanding) and $ 2,000,000 in common shares.

The reference price for the payment in common shares will be based on the common share

price of the last equity raise before the option is exercised;

Company’s contingent obligation to settle $ 1,787,300 of accrued payments due to Placer Mining has been waived.

As a result, the Company

recorded a gain on settlement of accounts payable of $ 1,787,300 during the six months ended December 31, 2020;

Company is to make an advance payment of $ 2,000,000 (paid) to Placer Mining which shall be credited toward the purchase price if

and when the Company elects to exercise its purchase right.

In the event that the Company irrevocably elects not to exercise its

purchase right, the advance payment of $ 2,000,000 will be repaid to the Company within

twelve months from the date of such election.

the Company recorded a gain on settlement of accounts payable of $ 1,787,300 during the six months ended December 31, 2020;

Company made an advance payment of $ 2,000,000

to Placer Mining which shall be credited toward the purchase price if and when the Company elects to exercise its purchase

In the event that the Company irrevocably elects not to exercise its purchase right, the advance payment of $ 2,000,000

will be repaid to the Company within twelve months from

the date of such election.

The amount has been recorded as a long term deposit.

This payment had the effect of

decreasing the remaining amount payable to purchase the Bunker Assets to an aggregate of $ 3,400,000 payable in cash and $ 2,000,000

This payment had the effect of decreasing the remaining

amount payable to purchase the Bunker Assets to an aggregate of $ 3,400,000

payable in cash and $ 2,000,000

in Common Shares of the Company.

1 unchanged sentence

to Condensed Interim Consolidated Financial Statements

and Six Months Ended June 30, 2021

and Nine Months Ended September 30, 2021

in United States Dollars)

3 unchanged sentences

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.

claim for cost recovery, excluding water treatment charges.

These payments, if all are made, will total $ 20,000,000 .

1 unchanged sentence

30 days after a fully ratified agreement was signed followed by a payment schedule detailed below:

of Payments for Mining

Schedule of Payments for Mining

30 days of the effective date

addition to these cost recovery 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 operating and maintaining the water treatment facility that treats the water being discharged from

the Bunker Hill Mine.

Prior to July 2021, the Company had received invoices from the EPA for water treatment charges for the periods

from December 2017 to October 2019.

The Company received the supporting details from the EPA and began the process of reconciling and

reviewing these invoices in September 2020.

to June 30, 2021, the Company received an invoice from the EPA for water treatment charges for the period from November 2019 to October

November 1, 2018

November 1, 2019

November 1, 2020

November 1, 2021

November 1, 2022

November 1, 2023

November 1, 2024

addition to these cost recovery 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 operating and maintaining the water treatment facility that treats the water being discharged from the Bunker

Prior to July 2021, the Company had received invoices from the EPA for water treatment charges for the periods from December

2017 to October 2019, which exceeds the semi-annual payments outlined in the agreement, which would have resulted in annual payment

of $960,000 .

The Company received the supporting details from the EPA and began the process of reconciling and reviewing these invoices

in September 2020.

July 2021, the Company received an invoice from the EPA for water treatment charges for the period from November 2019 to October 2020,

in the amount of approximately $ 2,500,000 ,

Based on preliminary review, the Company believes that this increase in water treatment

charges is not consistent with the EPA’s cost to treat water from the Mine, and plans to initiate a discussion with the EPA in

A material increase in water treatment charges had not been anticipated, and the Company had therefore been accruing $ 133,000

per month for water treatment charges from the November 2019 to March 2021 period, consistent with the invoice relating to the November

2018 to October 2019 period.

As a result of the new estimate based on the invoice received in July 2021, an additional accrual

of approximately $ 1,309,000 has been made to exploration expense.

An additional $ 630,000

has been accrued for the three months ending June 30, 2021.

total of $ 4,977,186 for water treatment charges, net

of payments made, was accrued for as at June 30, 2021 (December 31, 2020 - $ 3,136,055 ).

The unpaid EPA balance is subject to interest

at the rate specified for interest on investments of the EPA Hazardous Substance Superfund.

As at June 30, 2021, the interest accrued

on the unpaid EPA balance is $ 258,154 (December 31, 2020 - $ 162,540 ).

The Company has included all unpaid and accrued EPA payments and

accrued interest in accounts payable and accrued liabilities amounting to $ 13,235,340 (December 31, 2020 - $ 11,298,594 ).

higher than the invoice received in 2020 for the period of November 2018 to October 2019 of approximately $ 1,600,000 .

Based on preliminary review, the Company believes that this increase in water treatment charges is not consistent with the EPA’s

cost to treat water from the Mine, and a discussion with the EPA has been initiated.

August 2021, the Company received an interim invoice from the EPA for water treatment charges for the period from November 2020 to May

2021, and accordingly reversed the previously accrued estimate amount of $ 1,309,000 and recorded $ 1,155,000 to exploration expenses based

on the interim invoice for the period from November 2020 to May 2021.

Additionally, $660,000 or $165,000 per month has been accrued for

the period from June 1, 2021 to September 30, 2021 , reflecting the Company’s best estimate of future water treatment costs, informed

by the August 2021 invoice.

total of $ 4,872,186

for water treatment charges, net of payments

made, was accrued for as at September 30, 2021 (December 31, 2020 - $ 3,136,055 ).

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

As at September 30, 2021, the interest accrued on the unpaid EPA balance is $ 306,136

(December 31, 2020 - $ 162,540 ).

The Company has included all unpaid and accrued EPA payments and accrued interest in accounts payable and accrued liabilities amounting

to $ 13,178,322

(December 31, 2020 - $ 11,298,594 ).

The Company initiated a discussion with the EPA regarding the amount and payment schedule.

Hill Mining Corp.

to Condensed Interim Consolidated Financial Statements

and Six Months Ended June 30, 2021

and Nine Months Ended September 30, 2021

in United States Dollars)

42 unchanged sentences

June 2020, Hummingbird agreed to extend the scheduled maturity date of the loan to July 31, 2020 .

October 2020, the Company settled the full amount of the outstanding loan by issuing 5,572,980 common shares at a deemed price of C$ 0.49

October 2020, the Company settled the full amount of the outstanding loan by issuing 5,572,980

common shares at a deemed price of C$ 0.49

based on the fair value of the shares issued.

As a result, the Company recorded a gain on debt settlement.

As a result, the Company recorded a gain on debt settlement of $ 23,376 for the year ended December 31, 2020.

Hill Mining Corp.

to Condensed Interim Consolidated Financial Statements

and Six Months Ended June 30, 2021

and Nine Months Ended September 30, 2021

in United States Dollars)

6 unchanged sentences

was determined on the date of issuance and marked to market at each financial reporting period.

expense for the three and six months ended June 30, 2021 was $ nil and $ nil , respectively (three and six months ended June 30, 2020 -

$ 37,380 and $ 75,093 , respectively) based on effective interest rate of 16 % after the loan extension.

expense for the three and six months ended June 30, 2021 was $ nil and $ nil , respectively (three and six months ended June 30, 2020 -

$ 40,329 and $ 83,945 , respectively).

As at June 30, 2021, the Company has an outstanding interest payable of $ nil (December 31, 2020 -

of Convertible Loan Outstanding Interest Payable

Balance, December 31, 2019

Accretion expense

Loss on loan extinguishment

Partial extinguishment

Loan extinguishment

expense for the three and nine months ended September 30, 2021 was $ nil (three and nine months ended September 30, 2020 - $ nil and $ 75,093 ,

respectively) based on effective interest rate of 16 % after the loan extension.

expense for the three and nine months ended September 30, 2021 was $ nil (three and nine months ended September 30, 2020 - $ 101,827 and

$ 185,772 , respectively).

As at September 30, 2021, the Company has an outstanding interest payable of $ nil (December 31, 2020 - $ nil ).

Schedule of Convertible Loan Outstanding Interest Payable

December 31, 2019

on loan extinguishment

extinguishment

( 1,600,000 )

Balance, December 31, 2020 and June 30, 2021

December 31, 2020 and September 30, 2021

Promissory notes payable

21 unchanged sentences

to Condensed Interim Consolidated Financial Statements

and Six Months Ended June 30, 2021

and Nine Months Ended September 30, 2021

in United States Dollars)

Promissory notes payable (continued)

(i) (continued)

fair value of the warrants were estimated using the Binomial model to determine the fair value of the derivative warrant liabilities

fair values of the warrants were estimated using the Binomial model to determine the fair value of the derivative warrant liabilities

using the following assumptions:

of Fair Value of Derivative Warrant Liability Assumptions

November 2019 issuance

December 31, 2020

June 30, 2021

Expected life

Risk free interest rate

Dividend yield

Change in derivative liability

April 2020 issuance

December 31, 2020

June 30, 2021

Expected life

Risk free interest rate

Dividend yield

Change in derivative liability

expense for the three and six months ended June 30, 2021 was $ nil , respectively (three and six months ended June 30, 2020 -

$ 48,379 and $ 118,916 , respectively) based on an effective interest rate of 11 % after the loan extension.

expense for the three and six months ended June 30, 2021 was $ nil , respectively (three and six months ended June 30, 2020 -

$ 9,600 and $ 18,600 , respectively).

As at June 30, 2021, the Company has an outstanding interest payable of $ nil (December 31, 2020 -

May 12, 2020, the Company issued a promissory note in the amount of $ 362,650 (C$ 500,000 ), net of $ 89,190 of debt issue costs.

bore no interest and was due on demand after 90 days after the issue date.

This promissory note was repaid during the six months ended

December 31, 2020.

Accretion expense for the three and six months ended June 30, 2021 was $ nil (three and six months ended June 30, 2020

- $ 41,453 ) based on effective interest rate of 7 %.

May 12, 2020, the Company issued a promissory note in the amount of $ 141,704 (C$ 200,000 ), net of $ 35,676 of debt issue costs.

bore no interest and was due on demand after 90 days after the issue date.

During the six months ended December 31, 2020, the Company

settled the promissory note in full by issuing 714,285 common shares.

Accretion expense for the three and six months ended June 30, 2021

was $ nil (three and six months ended June 30, 2020 - $ 16,547 ) based on effective interest rate of 8 %.

Schedule of Fair Value of Derivative Warrant Liability Assumptions

2019 issuance

September 30,

free interest rate

in derivative liability

2020 issuance

September 30,

free interest rate

in derivative liability

expense for the three and nine months ended September 30, 2021 was $ nil (three and nine months ended September 30, 2020 - $ 51,522 and

$ 170,438 , respectively) based on an effective interest rate of 11 % after the loan extension.

expense for the three and nine months ended September 30, 2021 was $ nil (three and nine months ended September 30, 2020 - $ 5,600 and

$ 24,200 , respectively).

As at September 30, 2021, the Company has an outstanding interest payable of $ nil (December 31, 2020 - $ nil ).

On May 12, 2020, the Company issued a promissory note in the amount of $ 362,650 (C$ 500,000 ), net of $ 89,190 of debt issue costs.

note bore no interest and was due on demand after 90 days after the issue date.

This promissory note was repaid during the nine months

ended September 30, 2020.

Accretion expense for the three and nine months ended September 30, 2021 was $ nil (three and nine months ended

September 30, 2020 - $ 47,737 and $ 89,190 , respectively) based on effective interest rate of 7 % .

On May 12, 2020, the Company issued a promissory note in the amount of $ 141,704 (C$ 200,000 ), net of $ 35,676 of debt issue costs.

note bore no interest and was due on demand after 90 days after the issue date.

During the nine months ended September 30, 2020, the

Company settled the promissory note in full by issuing 714,285 common shares.

Accretion expense for the three and nine months ended September

30, 2021 was $ nil (three and nine months ended September 30, 2020 - $ 19,129 and $ 35,676 , respectively) based on effective interest rate

Hill Mining Corp.

to Condensed Interim Consolidated Financial Statements

and Six Months Ended June 30, 2021

and Nine Months Ended September 30, 2021

in United States Dollars)

Promissory notes payable (continued)

June 30, 2020, the Company issued a promissory note in the amount of $ 75,000 , net of $ 15,000 of debt issue costs.

The note bore no interest

and was due on demand.

This promissory note was repaid in full during the six months ended December 31, 2020.

Financing cost for the

three and six months ended June 30, 2021 was $ nil (three and six months ended June 30, 2020 - $ 15,000 ).

June 30, 2020, the Company issued a promissory note in the amount of $ 75,000 to a director of the Company.

On June 30, 2020, the Company issued a promissory note in the amount of $ 75,000 , net of $ 15,000 of debt issue costs.

The note bore no

interest and was due on demand.

This promissory note was repaid in full during the nine months ended September 30, 2020.

Financing cost

for the three and nine months ended September 30, 2021 was $ nil (three and nine months ended September 30, 2020 - $ nil and $ 15,000 , respectively).

On June 30, 2020, the Company issued a promissory note in the amount of $ 75,000 to a director of the Company.

The note bore no interest

and was due on demand.

This promissory note was repaid in full during the six months ended December 31, 2020.

This promissory note was repaid in full during the nine months ended September 30, 2020.

Financing cost for the

three and six months ended June 30, 2021 was $ nil (three and six months ended June 30, 2020 - $ 15,000 ).

three and nine months ended September 30, 2021 was $ nil (three and nine months ended September 30, 2020 - $ nil and $ 15,000 , respectively).

On July 13, 2020, the Company issued a promissory note in the amount of $ 1,200,000 , net of $ 360,000 debt issue costs.

The note bore no

interest and was due on August 31, 2020.

This promissory note was repaid in full during the nine months ended September 30, 2020.

cost for the three and nine months ended September 30, 2021 was $ nil (three and nine months ended September 30, 2020 - $ 360,000 ).

On September 22, 2021, the Company issued a non-convertible promissory note in the amount of $ 2,500,000

bearing interest of 15 %

per annum and payable at maturity.

The promissory

note is scheduled to mature on the earlier of March

15, 2022 , or the date at which the Company raises

more than $ 10,000,000

in equity financing in aggregate, beginning September

The Company is considering a land parcel purchase of approximately $200,000, which will be used as security for the

promissory note.

Interest expense for the three and nine months ended September 30, 2021 was $ 8,219 .

Lease liability

Company has an operating lease for office space that expires in 2022.

Below is a summary of the Company’s lease liability as of June

of Operating Lease Liability

Balance, December 31, 2019

Interest expense

Lease payments

Foreign exchange loss

Balance, December 31, 2020

Interest expense

Lease payments

Foreign exchange loss

Balance, June 30, 2021

Below is a summary of the Company’s lease liability as of

September 30, 2021:

Schedule of Operating Lease Liability

December 31, 2019

exchange loss

December 31, 2020

exchange loss

September 30, 2021

current portion

Long-term lease liability

lease liability

addition to the minimum monthly lease payments of C$ 13,504 , the Company is required to make additional monthly payments amounting to

C$ 12,505 for certain variable costs.

The schedule below represents the Company’s obligations under the lease agreement in Canadian dollars.

of Lease Obligations

Less than 1 year

Additional rent

The schedule below represents the Company’s obligations under the lease agreement in Canadian

Schedule of Lease Obligations

monthly rental expenses are offset by rental income obtained through a series of short-term subleases held by the Company.

Hill Mining Corp.

to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended June 30, 2021

in United States Dollars)

Notes to Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2021

(Expressed in United States Dollars)

Capital stock, warrants and stock options

8 unchanged sentences

loan facility (see note 6).

the three months ended March 31, 2020, the Company issued 1,403,200 June 2019 Units and 1,912,000 August 2019 Units at a deemed price

of C$ 0.05 as finder’s fees with a total value of C$ 165,760 ($ 125,180 ) to a shareholder of the Company.

the nine months ended September 30, 2020, the Company issued 3,315,200 units at a deemed price of C$ 0.05 as finder’s fees

with a total value of C$ 165,760 ($ 125,180 ) to a shareholder of the Company.

Each unit consisted of one common share of the Company

and one common share purchase warrant.

Each whole warrant entitles the holder to acquire one common share at a price of C$ 0.25 per common

share for a period of two years .

May 12, 2020, the Company closed a non-brokered private placement, issuing 107,143 common shares of the Company at C$ 0.56 per common

4 unchanged sentences

Each August 2020 Unit consisted of one common share of the Company and one common share purchase

warrant of the Company (each, an “August 2020 Warrant”), which entitles the holder to acquire a common share of the Company

warrant of the Company (each, a “August 2020 Warrant”), which entitles the holder to acquire a common share of the Company

at C$ 0.50 per common share until August 31, 2023.

7 unchanged sentences

Hill Mining Corp.

to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended June 30, 2021

in United States Dollars)

Notes to Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2021

(Expressed in United States Dollars)

Capital stock, warrants and stock options (continued)

32 unchanged sentences

to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended June 30, 2021

and Nine Months Ended September 30, 2021

in United States Dollars)

2 unchanged sentences

fair value of the warrant liabilities related to the various tranches of warrants issued during the period were estimated using the Binomial

model to determine the fair value using the following assumptions on the day of issuance and as at June 30, 2021:

of Estimated Using the Binomial Model to Determine the Fair Value of Warrant Liabilities

February 2021 issuance

February 9 and

June 30, 2021

Expected life

Risk free interest rate

Dividend yield

$ 0.27 and $ 0.29

Change in derivative liability

model to determine the fair value using the following assumptions on the day of issuance and as at September 30, 2021:

Schedule of Estimated Using the Binomial Model to Determine the Fair Value of Warrant Liabilities

2021 issuance

free interest rate

in derivative liability

warrant liabilities as a result of the August 2018, November 2018, June 2019, August 2019, and August 2020 private placements were revalued

as at June 30, 2021 and December 31, 2020 using the Binomial model and the following assumptions:

August 2018 issuance

December 31, 2020

June 30, 2021

Expected life

Risk free interest rate

Dividend yield

Change in derivative liability

November 2018 issuance

December 31, 2020

June 30, 2021

Expected life

Risk free interest rate

Dividend yield

Change in derivative liability

as at September 30, 2021 and December 31, 2020 using the Binomial model and the following assumptions:

2018 issuance

September 30,

free interest rate

in derivative liability

2018 issuance

September 30,

free interest rate

in derivative liability

Hill Mining Corp.

to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended June 30, 2021

and Nine Months Ended September 30, 2021

in United States Dollars)

1 unchanged sentence

and outstanding (continued)

June 2019 issuance (i)

December 31, 2020

June 30, 2021

Expected life

Risk free interest rate

Dividend yield

Change in derivative liability

(i) In December 2020,

the Company amended the exercise price to C$ 0.59

per common share and extended the expiry date

31, 2025 for 11,660,000

August 2019 issuance (ii)

December 31, 2020

June 30, 2021

Expected life

213 - 1826 days

32 - 1645 days

Risk free interest rate

Dividend yield

Change in derivative liability

(ii) In December 2020,

the Company amended the exercise price to C$ 0.59 per common share and extended the expiry date to December 31, 2025 for 17,920,000 warrants.

2019 issuance (i)

September 30,

free interest rate

in derivative liability

December 2020, the Company amended the exercise price to C$ 0.59 per common share and extended the expiry date to December 31, 2025

for 11,660,000 warrants.

2019 issuance (ii)

free interest rate

in derivative liability

December 2020, the Company amended the exercise price to C$ 0.59 per common share and extended the expiry date to December 31, 2025

for 17,920,000 warrants.

The terms of the remaining 2,752,900 warrants remain unchanged.

August 2020 issuance

December 31, 2020

June 30, 2021

Expected life

Risk free interest rate

Dividend yield

Change in derivative liability

2020 issuance

September 30,

free interest rate

in derivative liability

Hill Mining Corp.

to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended June 30, 2021

and Nine Months Ended September 30, 2021

in United States Dollars)

1 unchanged sentence

Schedule of Warrant Activity

Weighted average exercise price

Weighted average grant date

Balance, December 31, 2019

Exercised (i)

average exercise price

average grant date

December 31, 2019

( 2,332,900 )

Balance, June 30, 2020

September 30, 2020

Balance, December

Balance, June 30, 2021

(i) During the six

months ended June 30, 2020, 2,332,900 warrants were exercised at C$ 0.25 per warrant for gross proceeds of C$ 583,225 ($ 417,006 ).

In conjunction

with the exercise of warrants, the Company recognized a change in derivative liability of $ 871,710 .

( 2,913,308 )

September 30, 2021

the nine months ended September 30, 2020, 2,332,900 warrants were exercised at C$ 0.25 per warrant for gross proceeds of C$ 583,225

($ 417,006 ).

In conjunction with the exercise of warrants, the Company recognized a change in derivative liability of $ 871,710 .

of Warrants Outstanding Exercise Price

Exercise price (C$)

Number of warrants

August 1, 2021

August 9, 2021

November 28, 2021

of warrants exercisable

November 13, 2021

4 unchanged sentences

February 9, 2026

February 16, 2026

Hill Mining Corp.

to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended June 30, 2021

and Nine Months Ended September 30, 2021

in United States Dollars)

Capital stock, warrants and stock options (continued)

of Broker Options

Schedule of Broker Options

Weighted average

1 unchanged sentence

exercise price (C$)

Balance, December 31, 2019 and June 30, 2020

Balance, December 31, 2019

Issued - August 2020 Compensation Options (i)

Balance, December 31, 2020

Issued - February 2021 Compensation Options

Balance, June 30, 2021

The grant date fair value of the February 2021 Compensation Options were estimated at $ 68,078 using the Black-Scholes valuation model

with the following underlying assumptions:

of Estimated Using Black-Scholes Valuation Model for Fair Value of Broker Options

Risk free interest rate

Dividend yield

Weighted average life

of Warrants Outstanding Broker Option Exercise Prices

broker options

Fair value ($)

August 31, 2023 (i)

February 16, 2024 (ii)

(i) Exercisable into

one August 2020 Unit

(ii) Exercisable into

one February 2021 Unit

Balance, September 30, 2021

The grant date fair values of the August 2020 Compensation

Options and February 2021 Compensation Options were estimated at $ 521,993 and $ 68,078 , respectively, using the Black-Scholes valuation

model with the following underlying assumptions:

Schedule of Estimated Using Black-Scholes Valuation Model for Fair Value of Broker Options

free interest rate

February 2021

Schedule of Warrants Outstanding Broker Option Exercise Prices

16, 2024 (ii)

into one August 2020 Unit

into one February 2021 Unit

Hill Mining Corp.

to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended June 30, 2021

and Nine Months Ended September 30, 2021

in United States Dollars)

Capital stock, warrants and stock options (continued)

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

of Stock Options

stock options

Average exercise price (C$)

Balance, December 31, 2019

Granted (i)(ii)

Balance, June 30, 2020

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

Schedule of Stock Options

exercise price (C$)

December 31, 2019

September 30, 2020

Balance, December

Balance, June 30, 2021

October 24, 2019, 1,575,000 stock options were issued to directors and officers of the Company.

These options have a 5 -year life and are exercisable at C$ 0.60 per share.

The grant date

fair value of the stock options was estimated at $ 435,069 .

The vesting of these options resulted

in stock-based compensation of $ 13,946 and $ 37,759 , respectively for the three and six months

ended June 30, 2021 (three and six months ended June 30, 2020 - $ 55,550 and $ 141,441 , respectively),

which is included in operation and administration expenses on the condensed interim consolidated

statements of income (loss) and comprehensive income (loss).

April 20, 2020, 5,957,659 stock options were issued to certain directors of the Company.

Each stock option entitles the holder to acquire one common share of the Company at an exercise

price of C$ 0.55 .

The stock options vest in one fourth increments upon each anniversary of

the grant date and expire in 5 years.

The grant date fair value of the stock options was

estimated at $ 1,536,764 .

The vesting of these options results in stock-based compensation

of $ 124,802 and $ 322,144 , respectively (three and six months ended June 30, 2020 - $ 155,681

and $ 155,681 , respectively), which is included in operation and administration expenses on

the condensed interim consolidated statements of income (loss) and comprehensive income (loss).

(iii) On September 30,

September 30, 2021

On October 24,

2019, 1,575,000

stock options were issued to a consultant.

stock option entitles the holder to acquire one common share of the Company at an exercise price of C$ 0.60 .

The stock options vest 50 %

at 6 months and 50 %

at 12 months from the grant date and expire in 3

The grant date fair value of the options

was estimated at $ 52,909 .

stock options were issued to directors and officers of the Company.

These options have a 5 -year life and are exercisable at C$ 0.60

The grant date fair value of the stock options was estimated at $ 435,069 .

The vesting of these options resulted in stock-based compensation of $ 10,430

and $ 48,189 ,

respectively for the three and six months ended June 30, 2021 (three and six months ended June 30, 2020 - $ nil

for the three and nine months ended September 30, 2021 respectively (three and nine months ended September 30, 2020 - $ 45,173

and $ 186,614 ,

respectively), which is included in operation and administration expenses on the condensed interim consolidated statements of income

(loss) and comprehensive income (loss).

February 19, 2021, 1,037,977 stock options were issued to an officer of the Company, of which

273,271 stock options vest immediately and the balance of 764,706 stock options shall vest

on December 31, 2021.

These options have a 5 -year life and are exercisable at C$ 0.335 per

common share.

The grant date fair value of the options was estimated at $ 204,213 .

of these options resulted in stock-based compensation of $ 43,463 and $ 116,809 , respectively

for the three and six months ended June 30, 2021 (three and six months ended June 30, 2020

- $ nil and $ nil , respectively), which is included in operation and administration expenses

on the condensed interim consolidated statements of income (loss) and comprehensive income

On April 20, 2020, 5,957,659 stock options were issued to certain

directors of the Company.

Each stock option entitles the holder to acquire one common share of the Company at an exercise price of C$ 0.55 .

The stock options vest in one-fourth increments upon each anniversary of the grant date and expire in 5 years.

The grant date fair value

of the stock options was estimated at $ 1,536,764 .

The vesting of these options results in stock-based compensation of $ 104,890 and $ 427,034 ,

for the three and nine months ended September 30, 2021 respectively (three and nine months ended September 30, 2020 - $ 201,728 and $ 357,409 , respectively), which is included in operation and

administration expenses on the condensed interim consolidated statements of income (loss) and comprehensive income (loss).

On September 30, 2020, 200,000 stock options were issued to

a consultant.

Each stock option entitles the holder to acquire one common share of the Company at an exercise price of C$ 0.60 .

options vest 50 % at 6 months and 50 % at 12 months from the grant date and expire in 3 years.

The grant date fair value of the options

was estimated at $ 52,909 .

The vesting of these options resulted in stock-based compensation of $ 6,596 and $ 32,652 , for the three

and nine months ended September 30, 2021, respectively (three and nine months ended September 30, 2020 - $ 218 and $ 218 , respectively),

which is included in operation and administration expenses on the condensed interim consolidated statements of income (loss) and comprehensive

income (loss).

On February 19, 2021, 1,037,977 stock options were issued to

an officer of the Company, of which 273,271 stock options vest immediately and the balance of 764,706 stock options shall vest on December

These options have a 5 -year life and are exercisable at C$ 0.335 per common share.

The grant date fair value of the options

was estimated at $ 204,213 .

The vesting of these options resulted in stock-based compensation of $ 43,941 and $ 160,750 , for the

three and nine months ended September 30, 2021, respectively (three and nine months ended September 30, 2020 - $ nil ), which is

included in operation and administration expenses on the condensed interim consolidated statements of income (loss) and comprehensive

income (loss).

Hill Mining Corp.

to Condensed Interim Consolidated Financial Statements

and Six Months Ended June 30, 2021

and Nine Months Ended September 30, 2021

in United States Dollars)

3 unchanged sentences

underlying assumptions:

of Estimated Using Black-Scholes Valuation Model for Fair value of Stock Options

Risk free interest rate

Dividend yield

Weighted average life

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

of Stock Option Issued and Outstanding

Exercise price

Weighted average remaining

contractual life (years)

of options outstanding

Number of options

vested (exercisable)

fair value ($)

Schedule of Estimated Using Black-Scholes Valuation Model for Fair value of Stock Options

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

Schedule of Stock Option Issued and Outstanding

average remaining

(exercisable)

Hill Mining Corp.

to Condensed Interim Consolidated Financial Statements

and Six Months Ended June 30, 2021

and Nine Months Ended September 30, 2021

in United States Dollars)

2 unchanged sentences

key employees and consultants.

following table summarizes the RSU activity during the periods ended June 30, 2021 and 2020:

following table summarizes the RSU activity during the periods ended September 30, 2021 and 2020:

Schedule of Restricted Share Units

Unvested as at December 31, 2019

Granted (i)(ii)

Unvested as at June 30, 2020

average grant date fair value per share

as at December 31, 2019

Unvested as at September

Unvested as at December

Unvested as at June 30, 2021

(i) On April 20, 2020,

the Company granted 400,000

RSUs to a certain officer of the Company.

RSUs vest in one fourth increments upon each anniversary of the grant date.

The vesting of these RSUs results in stock-based compensation

and $ 43,160 ,

respectively for the three and six months ended June 30, 2021 (three and six months ended June 30, 2020 - $ 23,073 ),

which is included in operation and administration expenses on the condensed interim consolidated statements of income (loss) and comprehensive

income (loss).

(ii) On April 20, 2020,

the Company granted 200,000

RSUs to a certain director of the Company.

RSUs vest in one fourth increments upon each anniversary of the grant date.

The vesting of these RSUs results in stock-based compensation

Unvested as at September

On April 20, 2020, the Company granted 400,000 RSUs to a certain

officer of the Company.

The RSUs vest in one-fourth increments upon each anniversary of the grant date.

The vesting of these RSUs results

in stock-based compensation of $ 14,334 and $ 57,494 , respectively for the three and nine months ended September 30, 2021 (three

and nine months ended September 30, 2020 $ 27,568 and $ 50,641 , respectively), which is included in operation and administration expenses

on the condensed interim consolidated statements of income (loss) and comprehensive income (loss).

On April 20, 2020, the Company granted 200,000 RSUs to a certain

director of the Company.

The RSUs vest in one-fourth increments upon each anniversary of the grant date.

The vesting of these RSUs results

in stock-based compensation of $ 5,785 and $ 14,933 , respectively for the three and nine months ended September 30, 2021 (three

and nine months ended September 30, 2020 $ 9,352 and $ 16,569 , respectively), which is included in operation and administration expenses

on the condensed interim consolidated statements of income (loss) and comprehensive income (loss).

November 16, 2020, the Company granted 168,000

RSUs to certain directors

of the Company.

The RSUs vest in one-fourth increments upon each anniversary of the grant date.

The vesting of these RSUs results in

stock-based compensation of $ 8,174

and $ 24,255 ,

respectively for the three and six months ended June 30, 2021 (three and six months ended June 30, 2020 - $ 7,217 ),

respectively for the three and nine months ended September 30, 2021 (three and nine months ended September 30, 2020 - $ nil ),

which is included in operation and administration expenses on the condensed interim consolidated statements of income (loss) and comprehensive

income (loss).

(iii) On November 16,

2020, the Company granted 168,000

RSUs to certain directors of the Company.

RSUs vest in one fourth increments upon each anniversary of the grant date.

On December 6, 2020, the Company granted 220,990 RSUs to a

consultant of the Company.

The RSUs vest in one-sixth increments per month.

The vesting of these RSUs results in stock-based compensation

and $ 16,081 ,

respectively for the three and six months ended June 30, 2021 (three and six months ended June 30, 2020 - $ nil ),

which is included in operation and administration expenses on the condensed interim consolidated statements of income (loss) and comprehensive

income (loss).

(iv) On December 6,

2020, the Company granted 220,990

RSUs to a consultant of the Company.

vest in one sixth increments per month.

The vesting of these RSUs results in stock-based compensation of $ 9,628

and $ 58,740 ,

respectively for the three and six months ended June 30, 2021 (three and six months ended June 30, 2020 - $ nil ),

which is included in operation and administration expenses on the condensed interim consolidated statements of income (loss) and

comprehensive income (loss).

As at June 30, 2021, these RSUs were fully exercised and settled in Common Shares of the Company.

(v) On January 1, 2021,

the Company granted 735,383

RSUs to a consultant of the Company.

Of the 735,383

RSUs, 245,128

RSUs vested immediately, and the remaining 490,255

RSUs vested in 1/12 increments per month.

vesting of these RSUs results in stock-based compensation of $ 52,223

and $ 265,101 ,

respectively for the three and six months ended June 30, 2021 (three and six months ended June 30, 2020 - $ nil ),

which is included in operation and administration expenses on the condensed interim consolidated statements of income (loss) and comprehensive

income (loss).

As at June 30, 2021, 449,400

of these RSU’s were exercised and settled in Common Shares of the Company.

of $ nil and $ 58,740 , respectively for the three and nine months ended September 30, 2021 (three and nine months ended September 30, 2020

- $ nil ), which is included in operation and administration expenses on the condensed interim consolidated statements of income (loss)

and comprehensive income (loss).

On January 1, 2021, the Company granted 735,383 RSUs to a consultant

of the Company.

Of the 735,383 RSUs, 245,128 RSUs vested immediately, and the remaining 490,255 RSUs vested in 1/12 increments per month.

The vesting of these RSUs results in stock-based compensation of $ 26,263 and $ 291,364 , respectively for the three and nine months

ended September 30, 2021 (three and nine months ended September 30, 2020 - $ nil ), which is included in operation and administration expenses

on the condensed interim consolidated statements of income (loss) and comprehensive income (loss).

On July 1, 2021, the Company granted 17,823 RSUs to a consultant

of the Company, vesting immediately.

The vesting of these RSUs resulted in stock-based compensation of $ 4,026 for the three and

nine months ended September 30, 2021 (three and nine months ended September 30, 2020 - $ nil ), which is included in operation and administration

expenses on the condensed interim consolidated statements of income (loss) and comprehensive income (loss).

On August 5, 2021, the Company granted 595,228 RSUs to consultants

of the Company, vesting immediately.

The vesting of these RSUs resulted in stock-based compensation of $ 100,022 for the three

and nine months ended September 30, 2021 (three and nine months ended September 30, 2020 - $ nil ), which is included in operation and

administration expenses on the condensed interim consolidated statements of income (loss) and comprehensive.

Hill Mining Corp.

to Condensed Interim Consolidated Financial Statements

and Six Months Ended June 30, 2021

and Nine Months Ended September 30, 2021

in United States Dollars)

5 unchanged sentences

of the Company’s common share on the date of redemption in exchange for cash.

following table summarizes the DSU activity during the periods ended June 30, 2021:

of Deferred Share Units

following table summarizes the DSU activity during the periods ended September 30, 2021:

Schedule of Deferred Share Units

Unvested as at December

Unvested as at June 30, 2020, December 31, 2020 and June 30, 2021

(i) On April 21, 2020,

the Company granted 7,500,000

The DSUs vest in one fourth increments

upon each anniversary of the grant date and expire in 5

During the three and six months ended

June 30, 2021, the Company recognized $ 54,186

as at September 30, 2020, December 31, 2020 and September 30, 2021

April 21, 2020, the Company granted 7,500,000

The DSUs vest in

one-fourth increments upon each anniversary of the grant date and expire in 5

During the three

and nine months ended September 30, 2021, the Company recognized $ 291,243

and $ 430,964 ,

respectively recovery of stock-based compensation related to the DSUs (three and six months ended June 30, 2020 - $ 549,664

of stock-based compensation expensed),

which is included in operation and administration expenses on the condensed interim consolidated statements of income and comprehensive

respectively, recovery of stock-based compensation related to the DSUs (three and nine months ended September 30, 2020 $ 204,127

and $ 753,791 ,

respectively expensed), which is included in operation and administration expenses on the condensed interim consolidated statements

of income (loss) and comprehensive income (loss).

Hill Mining Corp.

to Condensed Interim Consolidated Financial Statements

and Six Months Ended June 30, 2021

and Nine Months Ended September 30, 2021

in United States Dollars)

4 unchanged sentences

Schedule of Income per Share

Six Months Ended

Net income (loss) and comprehensive income (loss) for the period

$ ( 22,882,575 )

$ ( 13,580,978 )

Basic income (loss) per share Weighted average number of common shares - basic

Net income (loss) per share – basic

Net income (loss) and comprehensive income (loss) for the period

$ ( 22,882,575 )

$ ( 13,580,978 )

Dilutive effect of warrants on net income

Diluted net income (loss) and comprehensive income (loss) for the period

$ ( 130,760 )

income (loss) and comprehensive income (loss) for the period

$ ( 267,859 )

$ ( 13,848,837 )

Diluted income (loss) per share

income (loss) per share

Weighted average number of common shares - basic

Diluted effect:

Warrants, broker options, and stock options

Weighted average number of common shares

- fully diluted

Net income (loss) per share - fully diluted

income (loss) per share – basic

Diluted income (loss)

Weighted average number of common shares - basic

RSUs, broker options, and stock options

average number of common shares - fully diluted

income (loss) per share - fully diluted

Commitments and contingencies

3 unchanged sentences

cost-recovery, and the other for water treatment.

As at June 30, 2021, $ 13,235,340 payable to the EPA has been included in accounts payable

and accrued liabilities.

As at September 30, 2021, $ 13,178,322 payable to the EPA has been included in accounts

payable and accrued liabilities.

The Company is now engaged with the EPA to discuss an amendment to or deferral of these payments.

2 unchanged sentences

by rental income obtained through a series of short-term subleases held by the Company.

On or about June 14, 2021, a lawsuit was filed

in the US District Court for the District of Idaho brought by a purported personal representative of the estate of a minority shareholder

of Placer Mining.

The named defendants include Placer Mining, certain of Placer Mining’s shareholders, the Company, and certain

of the Company’s shareholders.

The lawsuit alleges that Placer Mining entered into a series of transactions, including amendments

to the Company’s lease with Placer Mining, in breach of an agreement dated August 31, 2018, which allegedly restricted the sale

of shares in Placer Mining by certain shareholders.

On August 13, 2021, the Company filed a motion to dismiss the claim for lack of jurisdiction

and standing.

On July 28, 2021, a lawsuit was filed in the US

District Court for the District of Idaho brought by Crescent Mining, LLC (“Crescent”).

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 AMD in the Crescent Mine.

The plaintiff has requested unspecified damages.

The Company believes the claims in both lawsuits,

as they relate to Bunker Hill, are without merit and intends to defend them vigorously.

or about June 14, 2021, a lawsuit was filed in the US District Court for the District of Idaho brought by a purported personal

representative of the estate of a minority shareholder of Placer Mining.

The named defendants include Placer Mining, certain of

Placer Mining’s shareholders, the Company, and certain of the Company’s shareholders.

The lawsuit alleges that Placer

Mining entered into a series of transactions, including amendments to the Company’s lease with Placer Mining, in breach of an

agreement dated August 31, 2018, which allegedly restricted the sale of shares in Placer Mining by certain shareholders.

13, 2021, the Company filed a motion to dismiss the claim for lack of jurisdiction and standing.

On September 3, 2021, the plaintiff

responded to the motion to dismiss and agreed that Placer Mining should be dismissed for lack of jurisdiction.

as well as other named defendants, filed replies in support of the motions to dismiss and argued that Placer Mining is an

indispensable party and with dismissal of Placer Mining the lawsuit should be dismissed.

The US District Court has not ruled on the

motions to dismiss but the Company believes the motion to dismiss will be granted and the lawsuit dismissed.

July 28, 2021, a lawsuit was filed in the US District Court for the District of Idaho brought by Crescent Mining, LLC (“Crescent”).

The named defendants include Placer Mining, Robert Hopper Jr., and the Company.

The lawsuit alleges that Placer Mining and Robert Hopper

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 AMD in the Crescent Mine.

The plaintiff

has requested unspecified damages.

Company believes the claims in both lawsuits, as they relate to Bunker Hill, are without merit and intends to defend them vigorously.

Hill Mining Corp.

to Condensed Interim Consolidated Financial Statements

and Six Months Ended June 30, 2021

and Nine Months Ended September 30, 2021

in United States Dollars)

3 unchanged sentences

of the Company and consists of the Company’s executive management team and management directors.

of Related Party Transactions

Three Months Ended

Six Months Ended

Consulting fees

June 30, 2021, $ 69,835 is owed to key management personnel (December 31, 2020 - $ 45,000 ) with all amounts included in accounts

Schedule of Related Party Transactions

September 30, 2021, $ 102,235 is owed to key management personnel (December 31, 2020 - $ 45,000 ) with all amounts included in accounts

payable and accrued liabilities

subscriptions

the six months ended June 30, 2021, the CEO of the Company subscribed for 208,860 units in the February 2021 Offering.

the six months ended June 30, 2021, the Company issued 208,860 February 2021 Units at a deemed price of $ 0.45 to settle

the nine months ended September 30, 2021, the CEO of the Company subscribed for 208,860 units in the February 2021 Offering.

the nine months ended September 30, 2021, the Company issued 208,860 February 2021 Units at a deemed price of $ 0.45 to settle $ 66,000

of debt owed to the CFO.

the six months ended June 30, 2021, the Company issued 208,860 February 2021 Units at a deemed price of $ 0.45 to settle $ 66,000 of debt

owed to a consultant that is deemed to be a related party.

the nine months ended September 30, 2021, the Company issued 208,860 February 2021 Units at a deemed price of $ 0.45 to settle $ 66,000

of debt owed to a consultant that is deemed to be a related party.

Hill Mining Corp.

to Condensed Interim Consolidated Financial Statements

and Six Months Ended June 30, 2021

and Nine Months Ended September 30, 2021

in United States Dollars)

Financial instruments

carrying amounts reported in the condensed interim consolidated balance sheets for cash and cash equivalents, accounts receivable excluding

HST, accounts payable, accrued liabilities, DSU liability and lease liability, all of which are financial instruments, are a reasonable

estimate of fair value because of the short period of time between the origination of such instruments and their expected realization

and current market rate of interest.

The Company measured its DSU liability at fair value on recurring basis using level 1 inputs and

derivative warrant liabilities at fair value on recurring basis using level 3 inputs.

There were no transfers of financial instruments

between levels 1, 2, and 3 during the period ended June 30, 2021 and year ended December 31, 2020.

carrying amounts reported in the condensed interim consolidated balance sheets for cash and cash equivalents, accounts receivable

excluding HST, accounts payable, accrued liabilities, DSU liability, lease liability and promissory note payable, all

of which are financial instruments, are a reasonable estimate of fair value because of the short period of time between the

origination of such instruments and their expected realization and current market rate of interest.

The Company measured its DSU

liability at fair value on recurring basis using level 1 inputs and derivative warrant liabilities at fair value on recurring basis

using level 3 inputs.

There were no transfers of financial instruments between levels 1, 2, and 3 during the period ended September

30, 2021 and year ended December 31, 2020.

currency risk

38 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-Q

Item 1. Financial Statements