What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-05-16 compared with 2021-11-15 · 310 added, 467 removed, 53 unchanged (94% of the section changed)

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), the “Company”

refers to Bunker Hill Mining Corp.

and its consolidated subsidiaries, except where the context requires otherwise.

You should read this

discussion in conjunction with the Company’s consolidated financial statements, the related MD&A and the discussion of our

Business and Properties in its report on Form 10-KT for the six months ended December 31, 2020, filed with the SEC.

The results of operations

reported and summarized below are not necessarily indicative of future operating results (refer to “Special Note of Caution Regarding

Forward-Looking Statements” above for further discussion).

References to “Notes” are Notes included in the Company’s

Notes to Interim Condensed Consolidated Financial Statements (Unaudited).

Management’s Discussion and Analysis of Financial Condition or Plan of Operation

NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS

statements in this report, including statements in the following discussion, are what are known as “forward looking statements”,

which are basically statements about the future.

For that reason, these statements involve risk and uncertainty since no one can accurately

predict the future.

Words such as “plans,” “intends,” “will,” “hopes,” “seeks,”

“anticipates,” “expects “and the like often identify such forward looking statements, but are not the only indication

that a statement is a forward-looking statement.

Such forward looking statements include statements concerning the company’s plans

and objectives with respect to the present and future operations of the company, and statements which express or imply that such present

and future operations will or may produce revenues, income or profits.

Numerous factors and future events could cause the company to

change such plans and objectives or fail to successfully implement such plans or achieve such objectives, or cause such present and future

operations to fail to produce revenues, income or profits.

Therefore, the reader is advised that the following discussion should be considered

in light of the discussion of risks and other factors contained in this report and in the company’s other filings with the sec.

No statements contained in the following discussion should be construed as a guarantee or assurance of future performance or future results.

Coronavirus Pandemic Response and Impact

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to the potential additional impacts COVID-19 could have on our operations and financial results for the year.

Russia/Ukraine Crisis:

Company’s operations could be adversely affected by the effects of the escalating Russia/Ukraine crisis and the effects of sanctions

imposed against Russia or that country’s retributions against those sanctions, embargos or further-reaching impacts upon energy

prices, food prices and market disruptions.

The Company cannot accurately predict the impact the crisis will have on its operations and

the ability of contractors to meet their obligations with the Company, including uncertainties relating the severity of its effects,

the duration of the conflict, and the length and magnitude of energy bans, embargos and restrictions imposed by governments.

the crisis could adversely affect the economies and financial markets of the United States in general, resulting in an economic downturn

that could further affect the Company’s operations and ability to finance its operations.

Additionally, the Company cannot predict

changes in precious metals pricing or changes in commodities pricing which may alternately affect the Company either positively or negatively.

Company was incorporated under the laws of the State of Nevada, U.S.A on February 20, 2007 under the name Lincoln Mining Corp.

6 unchanged sentences

Information appearing on the website is not incorporated by reference into this

Company was incorporated for the purpose of engaging in sustainable mineral exploration, development and mining activities.

The Company’s

sole focus is the Bunker Hill mine and assets related thereto (the “Mine”), as described below.

August 28, 2017, the Company announced that it signed a definitive agreement with Placer Mining Corporation (“Placer Mining”),

the current owner of the Mine, for the lease and option to purchase the Mine in Idaho (the “Lease and Option Agreement”).

November 1, 2019, the Lease and Option Agreement was amended (the “Amended Agreement”).

Under the terms of the Amended Agreement,

the Company has an option to purchase the marketable assets of the Mine for a purchase price of $11,000,000 at any time prior to the

expiration of the Amended Agreement, payable $6,200,000 in cash, and $4,800,000 in unregistered Common Shares of the Company (calculated

using the market price at the time of exercise of the purchase option).

Upon signing the Amended Agreement, the Company paid a one-time,

non-refundable cash payment of $300,000 to Placer Mining.

This payment will be applied to the cash portion of 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.

An additional term of the Amended Agreement provides for the elimination of all royalty payments

that were to be paid to Placer Mining.

the terms of the Amended Agreement, during the term of the lease, the Company must make care and maintenance payments in the amount of

$60,000 monthly plus other expenses, i.e., taxes, utilities and mine rescue payments.

July 27, 2020, the Company announced that it secured, for a $150,000 cash payment, a further extension to the Lease and Option, Amended

and Extension Agreements to purchase the Mine from Placer Mining (the “Second Extension”).

The Second Extension is for a

further 18 months and is in addition to the 6-month extension.

This Second Extension expires on August 1, 2022.

November 20, 2020, the Company successfully renegotiated the Amended Agreement.

Under the new terms, the purchase price has been decreased

from $11,000,000 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 Mine 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 of the Company.

The reference price for the payment in Common Shares will be based on the share price of the last equity

raise before the option is exercised.

The Company will continue to make a monthly care and maintenance payment of $60,000 to the Lessor

in return for on-going technical support to the Company.

Under this amendment to the Amended Agreement, the Company’s contingent

obligation to settle $1,787,300 of accrued payments due to the Lessor has been waived.

Further, under the amendment to the Amended Agreement,

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

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.

made this advance payment, which had the effect of decreasing the remaining amount payable to purchase the Mine to an aggregate of $3,400,000

Company’s sole focus is the development and restart of its 100% owned flagship asset, the Bunker Hill mine (the “Mine”).

The Mine remains 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 Mine is located within Operable Unit 2 of the

Bunker Hill Superfund site (EPA National Priorities Listing IDD048340921), where cleanup activities have been completed.

In early 2020, a new management team

comprised of former executives from Barrick Gold Corp.

assumed leadership of the Company.

Since that time, the Company has conducted

multiple exploration campaigns, published multiple economic studies, purchased the Mine, entered into an agreement to purchase a

process plant, and advanced the rehabilitation and development of the Mine.

The Company is focused on completing the financing for,

and execution of, a potential restart of operations at the Mine.

Lease and Purchase of the Bunker Hill Mine

The Company purchased the Mine in

January 2022, as described below.

Prior to purchasing the Mine, the Company had

entered into a series of agreements with Placer Mining Corporation (“Placer Mining”), the prior owner, for the

lease and option to purchase the Mine.

The first of these agreements was announced on August 28, 2017, with subsequent amendments

and/or extensions announced on November 1, 2019, July 7, 2020, and November 20, 2020.

Under the terms of the November 20, 2020 amended

agreement (the “Amended Agreement”), a purchase price of $7,700,000 was agreed, with $5,700,000 payable

in cash (with an aggregate of $300,000 to be credited toward the purchase price of the Mine as having been previously paid by the Company)

and $2,000,000 in Common Shares of the Company.

The Company agreed to make an advance payment of $2,000,000, credited toward the purchase

price of the Mine, which had the effect of decreasing the remaining amount payable to purchase the Mine to an aggregate of $3,400,000

payable in cash and $2,000,000 in Common Shares of the Company.

a part of the purchase price, the Amended Agreement also requires payments pursuant to an agreement with the U.S.

Environmental Protection

Agency (“EPA”) whereby for so long as the Company leases, owns and/or occupies the Mine, the Company will make payments to

the EPA on behalf of Placer Mining in satisfaction of the EPA’s claim for cost recovery.

These payments, if all are made, will

total $20,000,000.

The agreement calls for payments starting with $1,000,000 30 days after a fully ratified agreement was signed (which

payment was made) followed by $2,000,000 on November 1, 2018 and $3,000,000 on each of the next 5 anniversaries with a final $2,000,000

payment on November 1, 2024.

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 estimated costs of maintaining and treating water at the water treatment facility with a true-up

to be paid by the Company once the actual costs are determined.

The November 1, 2018, December 1, 2018, June 1, 2019, November 1, 2019

and November 1, 2020 payments, totaling $8,960,000, were not made, and concurrent with discussions concerning the long-term water management

solutions the Company is having discussions with the EPA in an effort to reschedule these payments in ways that enable the sustainable

operation of the Mine as a viable long-term business.

Mine remains the largest single producing mine by tonnage in the Coeur d’Alene lead, zinc and silver mining district in Northern

Historically and according to the Bunker Hill Mines Annual Report 1980, the Mine produced over 35,000,000 tonnes of ore grading

on average 8.76% lead, 3.67% zinc, and 155 g/t silver.

The Mine is the Company’s only focus, with a view to raising capital to

rehabilitate the mine and put it back into production.

Company believes that there are numerous exploration targets of opportunity left in the Mine from surface, in parallel to known and mined

mineralization 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.

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.

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

Infrastructure

acquisition of the Mine includes all mining rights and claims, surface rights, fee parcels, mineral interests, easements, existing infrastructure

at Milo Gulch, and the majority of machinery and buildings at the Kellogg Tunnel portal level, as well as all equipment and infrastructure

anywhere underground at the Bunker Hill Mine Complex.

The acquisition also includes all current and historic data relating to the Bunker

Hill Mine Complex, such as drill logs, reports, maps, and similar information located at the Mine site or any other location.

Regulation and Approval

current exploration activities and any future mining operations are subject to extensive laws and regulations governing the protection

of the environment, waste disposal, worker safety, mine construction, and protection of endangered and protected species.

has made, and expects to make in the future, significant expenditures to comply with such laws and regulations.

Future changes in applicable

laws, regulations and permits or changes in their enforcement or regulatory interpretation could have an adverse impact on the Company’s

financial condition or results of operations.

is anticipated that it may be necessary to obtain the following environmental permits or approved plans:

and Closure Plan

Discharge Permit

Quality Operating Permit

Water Rights for Operations

Amended Agreement 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.

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.

Amended Agreement 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 Mine.

rights were originally owned by various previous owners of the claims until the acquisition of the properties by Bunker Limited Partners

BLP sold off surface rights to various parties over the years while maintaining access to conduct mining operations

and exploration activities as well as easements to a cross over and access other of its properties containing mineral rights.

were reserved to its assigns and successors in continuous perpetuity.

Idaho Law also allows mineral right holders access to mine and

explore for minerals on properties to which they hold minerals rights.

to all patented mining claims included in the transaction was transferred from Bunker Hill Mining Co.

by Warranty Deed in

The sale of the property was approved of by the U.S.

Trustee and U.S.

Bankruptcy Court.

90% of surface ownership of patented mining claims not owned by Placer Mining is owned by different landowners.

These include:

Riley Creek Lumber Co.;

C & E Tree Farms;

and Northern Lands LLC.

mining claims in the State of Idaho do not require permits for underground mining activities to commence on private lands.

Other permits

associated with underground mining may be required, such as water discharge and site disturbance permits.

The water discharge is being

handled by the EPA at the existing CTP.

The Company expects to take on the water treatment responsibility in the future and obtain an

appropriate discharge permit.

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.

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

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

and development properties.

The Company may not be able to compete against these companies in acquiring new properties and/or qualified

people to work on its current project, or any other properties that may be acquired in the future.

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.

Company has two employees in executive positions.

The balance of the Company’s operations is contracted for as consultants.

Work and Future Plan of Operations

as of January 12, 2021, the Board appointed Mr.

David Wiens to the role of Chief Financial Officer and Corporate Secretary of the Company,

replacing Mr.

Wayne Parsons, who continues to serve on the Board.

February 24, 2021, the Company closed a non-brokered private placement of 19,994,080 Units of the Company at C$0.40 per Unit for

gross proceeds of $6,618,069 (C$7,830,544).

Each Unit consists of one Common Share of the Company and one Common Share

purchase warrant.

Each whole warrant entitles the holder to acquire one Common Share of the Company at a price of C$0.60 per Common

Share for a period of five years.

Pursuant to the offering, certain directors and officers of the Company acquired 626,580 Units.

This issuance of such Units in connection with the offering was considered a “related party transaction” as such term is

defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI

with the digitization work, and since March 2020, the Company has been working systematically to bring a number of mineralized zones

into accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”)

through drilling and channel sampling of the open stopes.

This work focused upon the mineralization that is closest to the existing infrastructure

and above the current water-level.

March 19, 2021, the Company announced an updated mineral resources estimate consisting of a total of 4.4 million tons in the Indicated

category, containing 3.0 million ounces of silver, 487 million pounds of zinc, and 176 million pounds of lead;

and a total of 5.6 million

tons in the Inferred category, containing 8.3 million ounces of silver, 548 million pounds of zinc, and 312 million pounds of lead.

May 3, 2021, the Company filed a technical report entitled “Technical Report for the Bunker Hill Mine, Coeur d’Alene Mining

District, Shoshone County, Idaho, USA” with an effective date of March 22, 2021 prepared in accordance with NI 43-101 in support

of such mineral resources estimate.

Further details regarding the Company’s mineral resources estimate, including estimation methodologies,

can be found in the technical report filed on EDGAR and SEDAR .

should be noted that mineral resources as stated above, including those delineated in the Inferred, Measured and Indicated categories,

are not mineral reserves as defined by SEC guidelines, and do now show demonstrated economic viability.

Due to the uncertainty that may

be attached to Inferred mineral resources, it cannot be assumed that all or any part of an Inferred mineral resource will be upgraded

to an Indicated or Measured mineral resource as a result of continued exploration.

the completion of exploration drilling related to the updated mineral resources estimate as announced on March 19, 2021 (as described

above), the Company’s exploration strategy has been focused on high-grade silver targets within the upper areas of the Mine that

have been identified by the data review and digitization process.

The aim of this program is to identify, develop and add high-grade

silver resources in ways that materially increase the quantity of silver resources relative to lead and zinc.

with that strategy and concurrent with the announcement of the updated mineral resources estimate, the Company announced the identification

of a new silver exploration opportunity in the hanging wall of the Cate Fault which it intends to include in its ongoing drilling campaign.

In conjunction with this drilling campaign, continued digitization, geologic modeling and interpretation will continue to focus on identifying

additional high grade silver exploration targets.

March 29, 2021, the Company announced multiple high-grade silver mineralization results through chip-channel sampling of newly accessible

areas of the Mine identified through the Company’s proprietary 3D digitization program, and as part of its ongoing silver-focused

drilling program.

An area was identified on the 9-level that resulted in ten separate chip samples greater than 900 g/t AgEq (1) ,

each with minimum 0.6m length.

Mineralization remains open up dip, down dip and along strike from the sampling location.

also reported drill results including a 3.8m intercept with a grade of 996.6 g/t AgEq (1) , intersected at the down-dip extension

of the UTZ zone at the 5-level.

The Company will continue to report mineralized drill intercepts concurrent with the receipt of data

from its exploration program.

September 23, 2021, the Company announced that it has completed an extensive ground geophysical survey spanning approximately

1,200 acres of previously un-explored ground immediately to the south and south-west of historic underground workings, conducted as a

high-resolution 3D IP (DCIP) survey method.

The coverage area will extend to a depth of approximately 1,300 feet, with the objective

of identifying near-surface drilling targets that are directly accessible from existing workings.

The program was completed during the

third quarter of 2021 and finalized data from the geophysics is expected in November 2021.

used to calculate Ag Eq are as follows:

and Ag=$20/oz.

Management Optimization

EPA currently provides mine water treatment services for the Mine to ensure compliance with existing discharge standards.

via its management of the EPA’s Central Treatment Plant (“CTP”), located adjacent and downstream to the Mine.

it also treats other contaminated water collected from other sources in the vicinity, with respect to its service to the Mine, this facility

treats all the water that exits the Kellogg Tunnel before it is discharged into the South Fork of the Coeur d’Alene River.

September 2020, the Company began its water management program with the goal of improving the understanding of the Mine’s water

system and enacting immediate improvement in the water quality of effluent leaving the mine for treatment at the CTP.

Informed by historical

research provided by the EPA, the Company initiated a study of the water system of the mine to:

i) identify of the areas where sulphuric

acid (Acid Mine Drainage, or “AMD”) is generated in the greatest and most concentrated quantities, and ii) understand the

general flow paths of AMD on its way through and out of the mine as it travels to the CTP.

its improved understanding through this study, on February 11, 2021, the Company announced the successful commissioning of a water pre-treatment

plant located within the Mine, designed to significantly improve the quality of Mine water discharge, which in turn would support a rapid

restart of the Mine.

Specifically, the water pre-treatment plant achieves this goal by reducing significantly the amount of treatment

required at the CTP, and the associated costs, before the Mine water is discharged into the south fork of the Coeur d’Alene

River, removing over 70% of the metals from water before it leaves the Mine, with the potential for further improvements.

an effort to improve transparency to all stakeholders with regard to the results of this system, the Company launched a water quality

tracking platform on its website on March 15, 2021, which uploads real-time data every five minutes and provides an interactive database

to allow detailed historical analysis.

Infrastructure

Mine main level is termed the nine level and is the largest level in the Mine.

It is connected to the surface by the approximately 12,000

foot-long Kellogg Tunnel.

Three major inclined shafts with associated hoists and hoistrooms are located on the nine level.

1 shaft, which is used for primary muck hoisting in the main part of the Mine;

2 shaft, which is a primary shaft for

men and materials in the main part of the Mine;

3 Shaft, which is used for personnel, materials and muck hoisting for development

in the northwest part of the Mine.

top stations of these shafts and the associated hoistrooms and equipment have all been examined by Company personnel and are in moderately

good condition.

The Company believes that all three shafts remain in a condition that they are repairable and can be bought back into

good working order over the next few years.

water level in the Mine is held at approximately the ten level of the Mine, roughly 200 feet below the nine level.

The Mine was historically

developed to the 27 level, although the 25 level was the last major level that underwent significant development and past mining.

level is approximately 200 feet vertically apart.

southeastern part of the Mine was historically serviced by the Cherry Raise, which consisted of a two-compartment shaft with double drum

hoisting capability that ran at an incline up from the nine level to the four level.

The central part of the Mine was serviced upward

by the Last Chance Shaft from the nine level to the historic three or four level.

Neither the Cherry Raise or the Last Chance shaft are

serviceable at this time.

However, the upper part of the Mine from eight level up to the four level has been developed by past operators

by a thorough-going rubber tire ramp system, which is judged to be about 65% complete.

Company has repaired the first several thousand feet of the Russell Tunnel, which is a large rubber-tire capable tunnel with an entry

point at the head of Milo Gulch.

This tunnel will provide early access to the UTZ Zone, and Quill and Newgard Zones, following ramp and

access development.

The Company has made development plans to provide interconnectivity of the ramp system from the Russell Tunnel at

the four level down to the eight level, with further plans to extend the ramp down to the nine level.

Thus rubber-tired equipment will

be used for mining and haulage throughout the upper Mine mineral zones, which have already been identified, and for newly found zones.

Kellogg Tunnel will be used as a tracked rail haulage tunnel for supply of personnel and materials into the Mine and for haulage of mined

material out of the Mine.

Historically, the Kellogg Tunnel was used in this manner when the Mine was producing upwards of 3,000 tons

per day of mined material.

The Company has inspected the Kellogg Tunnel for its entire length and has determined that significant timbered

sections of the tunnel will need extensive repairs.

These are areas that intersect various faults passing through the Kellogg Tunnel

at normal to oblique angles and create unstable ground.

Company has determined that all of the track, as well as spikes, plates and ties holding the track will need to be replaced, and has

started that process in support of the on-going exploration program.

Additionally, the water ditch that runs parallel to the track will

need to be thoroughly cleaned out and new timber supports and boards that keep the water contained in its path will need to be installed.

All new water lines, compressed air lines and electric power feeds will also need to be installed.

The total cost estimate for this Kellogg

Tunnel work is still in process as of the date hereof, but the time estimate for these repairs is approximately twelve months.

Hill Mine Restart Developments and Preliminary Economic Assessment

November 2020, the Company launched a Preliminary Economic Assessment (“PEA”) to assess the potential for a rapid restart

of the Mine for minimal capital by focusing on the de-watered upper areas of the Mine, utilizing existing infrastructure, and based

on truck haulage and toll milling methods.

support the Company’s strategy of targeting a rapid production restart as outlined above, development drilling subsequent

to November 2020 focused on targets in the upper levels of the Mine located in close proximity to existing infrastructure, aimed at expanding

the resource base for the PEA.

January 2021, the Company reported continued progress towards completing a PEA and further detailed the potential parameters of the restart,

i) low up-front capital costs through utilization of existing infrastructure, potentially enabling a rapid production restart;

ii) a staged approach to mining, potentially supporting a long-life operation;

iii) underground processing and tailings deposition

with potential for high recovery rates;

iv) development of a sustainable operation with minimal environmental footprint;

and v) potential

increase in the existing resource base.

April 20, 2021, the Company reported the results of its PEA for the Mine.

The PEA contemplates a $42 million initial capital cost (including

20% contingency) to rapidly restart the Mine, generating approximately $20 million of annual average free cash flow over a 10-year mine

life, and producing over 550 million pounds of zinc, 290 million pounds of lead, and 7 million ounces of silver at all-in sustaining

costs of $0.65 per payable pound of zinc (net of by-products).

The PEA contemplates a low environmental footprint, long-term water management

solution, and significant positive economic impact for the Shoshone County, Idaho community.

The PEA is based on the mineral resources

estimate described above and published on March 22, 2021, following the drilling program conducted in 2020 and early 2021 to validate

the historical reserves.

The PEA includes a mining inventory of 5.5Mt, which represents a portion of the 4.4Mt Indicated mineral resource

and 5.6Mt Inferred mineral resource.

Further details regarding the PEA can be found in the news release dated April 20, 2021 on EDGAR,

SEDAR and the Company’s website www.bunkerhillmining.com .

In addition, on June 4, 2021, the Company filed the Preliminary

Economic Assessment report, entitled “NI 43-101 Technical Report and Preliminary Economic Assessment of the Bunker Hill Mine”

There were no material differences between the key results, assumptions and estimates contained in the report filed on June

4, 2021 and the news release dated April 20, 2021.

PEA is preliminary in nature and includes Inferred mineral resources that are considered too speculative geologically to have the economic

considerations applied to them that would enable them to be categorized as mineral reserves.

There is no certainty that the project described

in the PEA will be realized.

Mineral resources that are not mineral reserves do not have demonstrated economic viability.

April 27, 2021, the Company announced that it had engaged Cutfield Freeman & Co.

to provide independent advice on all aspects of

restart mining finance related to the Mine.

should be noted that mineral resources as stated above, including those delineated in the Inferred, Measured and Indicated

categories, are not mineral reserves as defined by SEC guidelines, and do now show demonstrated economic viability.

uncertainty that may be attached to Inferred mineral resources, it cannot be assumed that all or any part of an Inferred mineral

resource will be upgraded to an Indicated or Measured mineral resource as a result of continued exploration.

On September 20, 2021,

the Company reported the results of its new PEA for the Mine.

The PEA contemplates a $44 million initial capital cost (including 20%

contingency) to rapidly restart the Mine, generating approximately $25 million of annual average free cash flow over a 11-year mine

life, and producing over 591 million pounds of zinc, 323 million pounds of lead, and 8 million ounces of silver at all-in sustaining

costs of $0.47 per payable pound of zinc (net of by-products).

The PEA contemplates a low environmental footprint, long-term water

management solution, and significant positive economic impact for the Shoshone County, Idaho community.

The PEA is based on the

mineral resources estimate described above and published on March 22, 2021, following the drilling program conducted in 2020 and

early 2021 to validate the historical reserves.

The PEA includes a mining inventory of 6.4Mt, which represents a portion of the

4.4Mt Indicated mineral resource and 5.6Mt Inferred mineral resource.

Further details regarding the PEA can be found in the news

release dated September 20, 2021 on EDGAR, SEDAR and the Company’s website www.bunkerhillmining.com .

There were no material differences between the key results,

assumptions and estimates contained in the report filed on June 4, 2021 and the news release dated April 20, 2021.

Mining District Joint Venture

October 4, 2021, the Company announced its intention to enter into a joint venture with MineWater Finance LLC to explore the mineral

potential of the London gold mine, and the surrounding district, in Colorado, USA.

London Mining District produced gold and silver from

1875 to 1942, including over 650,000 gold ounces from the London Mine.

The Amended Agreement also required

payments pursuant to an agreement with the U.S.

Environmental Protection Agency (“EPA”) whereby for so long as the Company

leases, owns and/or occupies the Mine, the Company would make payments to the EPA on behalf of Placer Mining in satisfaction of

the EPA’s claim for historical water treatment cost recovery in accordance with the Settlement Agreement reached

with the EPA in 2018.

Immediately prior to the purchase of the Mine, the Company’s liability to EPA

in this regard totaled $11,000,000.

The Company completed the purchase of the Mine on January 7, 2022.

The terms of the purchase price were modified to $5,400,000 in cash, from $3,400,000 of cash and $2,000,000

of Common Shares.

Concurrent with the purchase of the Mine, the Company assumed incremental liabilities of $8,000,000 to the EPA, consistent

with the terms of the amended Settlement Agreement with the EPA that was executed in December 2021 (see “EPA Settlement Agreement”

section below).

EPA 2018 Settlement Agreement & 2021 Amended

Settlement Agreement

Hill entered into a Settlement Agreement and Order on Consent with the EPA on May 15, 2018.

This agreement limits the Company’s

exposure to the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) liability for past environmental

damage to the mine site and surrounding area to obligations that include:

of $20,000,000 for historical water treatment cost recovery for amounts paid by the EPA from 1995 to 2017

of for water treatment services provided by the EPA at the Central Treatment Plant (“CTP”) in Kellogg, Idaho until

such time that Bunker Hill either purchases or leases the CTP or builds a separate EPA-approved water treatment facility

a work program as described in the Ongoing Environmental Activities section of this study

December 2021, in conjunction with its intention to purchase the mine complex, the Company entered into an amended Settlement Agreement

(the “Amendment”) between the Company, Idaho Department of Environmental Quality, US Department of Justice and the EPA modifying

the payment schedule and payment terms for recovery of historical environmental response costs at the Mine incurred by the EPA.

With the purchase of the mine subsequent to the end of the period, the remaining payments of the EPA cost recovery liability would be

assumed by the Company, resulting in a total of $19,000,000 liability to the Company, an increase of $8,000,000.

The new payment schedule

included a $2,000,000 payment to the EPA within 30 days of execution of this amendment, which was made.

The remaining $17,000,000 will

be paid on the following dates:

November 1, 2024

November 1, 2025

November 1, 2026

November 1, 2027

November 1, 2028

November 1, 2029

$ 2,000,000 plus accrued interest

resumption of payments in 2024 were agreed in order to allow the Company to generate sufficient revenue from mining activities at the Mine to address remaining payment obligations from free cash flow.

addition to the cost recovery payments outlined above, the Amendment includes an initial payment for outstanding water treatment costs

that have been incurred over the period from 2018 through 2021.

This approximately $2,900,000 settlement payment was to be made

within 90 days of the execution of the Amendment.

changes in payment terms and schedule, are contingent upon the Company securing Financial Assurance in the form of performance bonds

or letters of credit deemed acceptable to the EPA totaling $17,000,000.

These assurances correspond to the Company’s cost recovery

obligations to be paid in 2024 through 2029 as outlined above.

Should the Company fail to make its scheduled payment, the EPA can draw

against this financial assurance.

The amount of the bonds or letters of credit will decrease over time as individual payments are made.

If the Company does not post an Interim Financial Assurance within 90 days of execution of the Amendment, or fail to post the Final Financial

Assurance within 180 days of the execution of the Amendment, the terms of the original agreement will be reinstated.

On March 22, 2022, the Company reported that in

consultation with the EPA, it has committed to meet the $2,900,000 payment and Financial Assurance obligations by 180 days from the effective

date of the Amended Settlement Agreement.

As at March 31, 2022, the Company had

not secured the interim financial assurance, and therefore the contingency had not been removed or satisfied.

Further, as of the date

of this filing, the financial assurance has not been secured, and as a result, the liability to the EPA is accounted for with no effectivity

of the Amendment, with the liabilities each reflected as current liabilities.

EPA liability schedule in effect at March 31, 2022 was:

November 1, 2021

$ 11,000,000 (aggregate amounts from 2018,

2019, 2020 and 2021)

November 1, 2022

November 1, 2023

November 1, 2024

$ 2,000,000 plus accrued interest

Project Finance Package

December 20, 2021, the Company announced the execution of a non-binding term sheet outlining a $50 million project finance package with

Sprott Private Resource Streaming and Royalty Corp.

non-binding term sheet with SRSR outlined a $50,000,000 project financing package that the Company expects to fulfill the majority of

its funding requirements to restart the Mine.

The financing package consisted of an $8,000,000 royalty convertible debenture

(the “Royalty Convertible Debenture”), a $5,000,000 convertible debenture (the “Convertible Debenture”), and

a multi-metals stream of up to $37,000,000 (the “Stream”, together with the Royalty Convertible Debenture and the Convertible

Debenture, the “Project Financing Package”).

closed the $8,000,000 Royalty Convertible Debenture in January 2022.

The Royalty Convertible Debenture bears interest at

an annual rate of 9.0%, payable in cash or Common Shares at the Company’s option, until such time that SRSR elects to convert a

royalty, with such conversion option expiring at the earlier of advancement of the Stream or 18 months.

In the event of conversion, the

Royalty Convertible Debenture will cease to exist and the Company will grant a royalty for 1.85% of life-of-mine gross revenue from mining

claims considered to be historically worked, contiguous to current accessible underground development, and covered by the Company’s

2021 ground geophysical survey (the “SRSR Royalty”).

A 1.35% rate will apply to claims outside of these areas.

Convertible Debenture is secured by a share pledge of the Company’s operating subsidiary, Silver Valley, until a full security

package was put in place concurrent with the consummation of the Convertible Debenture.

In the event of non-conversion,

the principal of the Royalty Convertible Debenture will be repayable in cash.

The Company also closed the $6,000,000 Convertible

Debenture in January 2022, which was increased from the previously-announced $5,000,000.

The Convertible Debenture bears

interest at an annual rate of 7.5%, payable in cash or shares at the Company’s option, and matures on July 7, 2023.

the closing of the Stream, the Convertible Debenture is convertible into Common Shares at a price of C$0.30 per Common Share, subject

to stock exchange approval.

Alternatively, SRSR may elect to retire the Convertible Debenture with the cash proceeds from the Stream.

The Company may elect to repay the Convertible Debenture early;

if SRSR elects not to exercise its conversion option at such time, a

minimum of 12 months of interest would apply.

Oreille Process Plant

January 25, 2022, the Company announced that it had entered into a non-binding Memorandum of Understanding (“MOU”) with Teck

Resources Limited (“Teck”) for the purchase of a comprehensive package of equipment and parts inventory from its Pend Oreille

site (the “Pend Oreille Mill”) in eastern Washington State, approximately 145 miles from the Mine by road.

comprises substantially all processing equipment of value located at the site, including complete crushing, grinding and flotation circuits

suitable for a planned ~1,500 ton-per-day operation at Bunker Hill, and total inventory of nearly 10,000 components and parts for mill,

assay lab, conveyer, field instruments, and electrical spares.

The MOU outlined a purchase price under two scenarios, at Teck’s

an all-cash $2,750,000 purchase price, or a $3,000,000 purchase price comprised of cash and Bunker Hill shares.

Each option includes

a $500,000 non-refundable deposit, which was paid by the Company in January 2022.

On March 7, 2022, the Company announced the signing

of an Asset Purchase agreement for the purchase of the Pend Oreille Mill.

March 31, 2022, the Company announced that it had reached an agreement with a subsidiary of Teck to satisfy the remaining purchase price

for the Pend Oreille Mill by way of an equity issuance of the Company.

Teck will receive 10,416,667 units of the Company (the “Teck

Units”) at a deemed issue price of C$0.30 per unit.

Each Teck Unit consists of one Common Share and one Common Share purchase warrant

(the “Teck Warrants”).

Each whole Teck Warrant entitles the holder to acquire one Common Share at a price of C$0.37 per Common

Share for a period of three years.

The equity issuance occurred on May 13, 2022.

March 3, 2022, the Company purchased a 225-acre surface land parcel for $202,000.

The Company intends this property to serve as a strategic

asset for the restart of the Mine, optimizing construction efficiency and costs while providing improved access to prospective areas

identified by our recent geophysics survey.

of Operations

following discussion and analysis provides information that the Company believes is relevant to an assessment and understanding of its

results of operation and financial condition for the three and nine months ended September 30, 2021 as compared to the three and

nine months ended September 30, 2020.

Unless otherwise stated, all figures herein are expressed in U.S.

dollars, which is the functional

currency of the Company.

of the Three and Nine Months Ended September 30, 2021 and September 30, 2020

the three and nine months ended September 30, 2021 and September 30, 2020, the Company generated no revenue.

the three months ended September 30, 2021, the Company reported total operating expenses of $2,464,945 as compared to $6,105,916

during the three months ended September 30, 2020, a decrease of $3,640,971 or approximately 60%.

decrease in total operating expenses during the three months ended September 30, 2021 was primarily due to a decrease in exploration

expense of $3,745,464 ($1,465,157 in the three months ended September 30, 2021 compared to $5,210,621 in the three months ended September

30, 2020) due to lower drilling activity and related expenses.

The decrease in operation and administration expenses ($221,451 in the

three months ended September 30, 2021 compared to $552,789 in the three months ended September 30, 2020) was mostly due to lower stock-based

compensation expensed during the three months ended September 30, 2021.

The increase in legal and accounting, and consulting

in the three months ended September 30, 2021 compared to the three months ended September 30, 2020 was due to increased corporate activity,

and legal, professional and consulting expenses related to completion of the updated PEA.

the nine months ended September 30, 2021, the Company reported total operating expenses of $12,384,474 as compared to $11,058,237

during the nine months ended September 30, 2020, an increase of $1,326,237 or approximately 12%.

increase was due to significant additional accrual for water treatment charges from the EPA and additional exploration expenses resulting

from the Company’s drilling activities in the first half of 2021, and additional legal and consulting expenses related to the

completion of the updated PEA.

following discussion and analysis provide 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 months ended March 31, 2022 and March 31, 2021.

Unless otherwise stated,

all figures herein are expressed in U.S.

dollars, which is the Company’s functional currency.

of the three months ended March 31, 2022 and 2021

the three months ended March 31, 2022, and 2021, respectively, the Company generated no revenue.

the three months ended March 31, 2022 and 2021, the Company reported total operating expenses of $5,486,674 and $4,623,974, respectively.

increase in total operating expenses is due to an increase in mine preparation costs in the most recent quarter as the Company ramps

up its preparations to put the mine into production and legal and accounting expenses and consulting expenses required to accomplish

the significant events of the quarter (convertible debentures, mine purchase and preparation of the placement of Special Warrants that

closed the day after the close of the quarter) when compared to the three-month period ended March 31, 2021.

financial accounting purposes, the Company reports all direct exploration expenses under the exploration expense line item of the condensed

Interim Consolidated Statements of Income and Comprehensive Income.

Certain indirect expenses may be reported as operation and administration

expense or consulting expense on the statement of operations.

Income and Comprehensive Income

Company reported net income and comprehensive income of $3,960,630 for the three months ended September 30, 2021, compared to

net loss and comprehensive loss of $267,859 for the three months ended September 30, 2020, an increase of $4,228,489.

also reported net income and comprehensive income of $9,843,495 for the nine months ended September 30, 2021, compared to net

loss and comprehensive loss of $13,848,837 for the nine months ended September 30, 2020.

The increase in net income and comprehensive

income was primarily due to a gain related to the change in derivative liability of $6,460,513 for the three months ended September 30,

2021, and $22,172,681 for the nine months ended September 30, 2021, as compared to a gain of $9,311,304 for the three months ended

September 30, 2020, and a gain of $1,096,476 for the nine months ended September 30, 2020.

The gain in the three and nine months ended

September 30, 2021 related mostly to the fair value decrease of the Company’s outstanding warrants due to a decrease in the Company’s

OF FINANCIAL CONDITION

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

Management determined that costs of the mine in

the most recent quarter constituted mine preparation costs rather than exploration costs, since it was not focused on expanding the mineral

resources, but was invested to execute on the tasks and projects required to get the mine into shape for production activities.

indirect expenses may be reported as operation and administration expense or consulting expense on the condensed interim consolidated

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

and Capital Resources

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

associated with the acquisition of the Mine.

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.

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

markets and debt financing.

noted previously, the Company has engaged Cutfield Freeman & Co.

to provide independent advice on all aspects of restart mining financing

related to the Mine, including the acquisition of the Mine.

Management is considering various financing alternatives including, but

not limited to, raising capital through the capital markets, debt financing and royalty/streaming arrangements.

Company is also working to secure adequate capital to continue making lease payments, payments to the EPA, conduct exploration activities

on site and cover general and administrative expenses associated with managing a public company.

February 2021, the Company closed a non-brokered private placement of 19,994,080 units of the Company at C$0.40 per unit for gross

cash proceeds of $6,168,069 (C$7,830,544).

Each unit consists of one Common Share of the Company and one Common Share purchase

warrant, which entitles the holder to acquire one Common Share at a price of C$0.60 per Common Share for a period of five years.

connection with the financing, the Company paid a cash commission of C$140,400 and issued 351,000 finder options, which are

exercisable into units at an exercise price of C$0.40 for a period of three years.

Pursuant to the offering, certain directors and

officers of the Company acquired 626,580 Units.

This issuance of such Units in connection with the offering was considered a

“related party transaction” as such term is defined under MI 61-101.

Company has accounted for the warrants issued through units issuance in accordance with ASC Topic 815.

These warrants issued through

units issuance are considered derivative instruments as they were issued in a currency other than the Company’s functional currency

The estimated fair value of warrants accounted for as liabilities was determined on the date of issue and marks to

market at each financial reporting period.

The change in fair value of the warrant liability is recorded in the interim condensed consolidated

statements of income and comprehensive income as a gain or loss and is estimated using the Binomial model.

Company’s operations could be significantly adversely affected by the effects of a widespread global outbreak of a contagious disease,

including the current outbreak of respiratory illness caused by COVID-19.

The Company cannot accurately predict the impact COVID-19 will

have on its operations and the ability of others to meet their obligations with the Company, including uncertainties relating to the

ultimate geographic spread of the virus, the severity of the disease, the duration of the outbreak, and the length of travel and quarantine

restrictions imposed by governments of affected countries.

In addition, a significant outbreak of contagious diseases in the human population

could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting

in an economic downturn that could further affect the Company’s operations and ability to finance its operations.

unaudited 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 $75,372,036 and further losses are anticipated in the

development of its business.

Additionally, the Company owes a total of $12,000,000 to the EPA (see Note 6) that is classified

as current liability unless and until the Company can consummate financial assurances that would reclassify this liability to

long-term debt.

The Company owes an additional $5,185,706 to the EPA and IDEQ that is due within 12

The Company owes a total of $3,540,852, net of discount, to the EPA that is classified as long-term debt.

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.

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

These 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.

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

operations, explore and develop the mineral properties and the discovery, development, and sale of reserves.

Debentures and Mine Purchase

described above, in January 2022, the Company closed on two convertible debentures totaling $14,000,000 and used the proceeds to purchase

the Mine for a total capitalized cost of $14,247,210, also as described above, as well as satisfy the $2,000,000 EPA

payment requirement, the $500,000 deposit requirement on the upcoming plant equipment purchase, the purchase of 225 acres and fund its

continuing working capital requirements.

Assets and Total Assets

of September 30, 2021, the Company’s balance sheet reflects that the Company had:

i) total current assets of $2,930,905 compared

to total current assets of $4,045,618 at December 31, 2020, a decrease of $1,114,713 or approximately 28%;

and ii) total assets of $5,510,252,

compared to total assets of $6,709,016 at December 31, 2020, a decrease of $1,198,764 or approximately 18%.

The decrease in current assets

was mostly impacted by the decrease in cash and cash equivalents, primarily due to the Company’s spending related to exploration

partially offset by proceeds of $6,008,672 from the non-brokered private placement closed on February 24, 2021, and $2,500,000

of proceeds from the Company’s promissory note issued on September 22, 2021.

Current Liabilities and Total Liabilities

of September 30, 2021, the Company’s balance sheet reflects that the Company had total current liabilities of $17,949,659

and total liabilities of $23,596,319, compared to total current liabilities of $14,178,553 and total liabilities of $38,246,613

as of December 31, 2020.

The increase in current liabilities is impacted by the new promissory note issued in September and accruals

related to water treatment charges from the EPA.

The decrease in non-current and total liabilities is primarily due to a decrease in

derivative warrant liability as a result of a decrease in the Company’s share price over the nine months ended September 30, 2021.

of September 30, 2021, the Company had negative working capital of $15,018,754 compared to negative working capital of $10,132,935

as of December 31, 2020.

The increase in negative working capital was due to the decrease in cash and cash equivalents primarily related

to exploration activity, and additional liability accrued in relation to water treatment charges from the EPA.

the nine months ended September 30, 2021, cash was primarily used to fund activities at the Mine operations including exploration and

property payments.

The Company reported a net decrease in cash of $1,055,412 during the nine months ended September 30, 2021 compared

to a net increase of $8,555,910 during the nine months ended September 30, 2020.

The decrease in cash during the nine months ended September

30, 2021 is a result of $9,372,253 of net cash used in operating activities, $94,693 used in investing activities, and $8,411,534 of

net cash provided by financing activities including the non-brokered private placement closed on February 24, 2021 and proceeds from

the promissory note issued on September 22, 2021.

unaudited interim condensed consolidated financial statement filings have been prepared on the going concern basis, which assumes that

adequate sources of financing will be obtained as required and that the Company’s assets will be realized, and liabilities settled

in due course of business.

Accordingly, the interim condensed consolidated unaudited financial statements do not include any adjustments

related to the recoverability of assets and classification of assets and liabilities that might be necessary should the Company not be

able to continue as a going concern.

The going concern assumption is discussed in the financial statements Note 1 – Nature and

Continuance of Operations and Going Concern .

of March 31, 2022, the Company had:

i) total current assets of $4,116,206, compared to total current assets of $3,622,548 at December

31, 2021 – an increase of $493,658;

and ii) total assets of $19,089,557, compared to total assets of $4,071,796 at

December 31, 2021 – an increase of $15,017,761.

The increase in current assets was due to an increase in available cash

as a result of the proceeds from the convertible debentures and the deposit toward the purchase of the Pend Oreille Mill, offset

by a decrease in prepaid mine acquisition costs held at December 31, 2021 toward the purchase of the Mine and financing activities related

to the convertible debentures.

Total assets increased principally due to the increase in cash and the purchase of the Mine and mining

interest assets, offset by the decrease in prepaid costs related to the anticipated mine acquisition and financing activities.

Current Liabilities and Liabilities

of March 31, 2022, the Company had total current liabilities of $24,872,184 and total liabilities of $54,291,835,

compared to total current liabilities of $22,795,277 and total liabilities of $38,314,164 at December 31, 2021.

The increase in the

current liabilities is reflective of increases in accrued liabilities, interest payable and EPA water treatment payable and current

portion of the EPA liability assumed upon the purchase of the Mine, offset by decreases in accounts payable and the short-term DSU

Total liabilities increased as a result of the two convertible debentures, the net present value of the long-term portion

of the EPA liability assumed with the purchase of the Mine and subscriptions payable for cash received during the quarter for

the financing which closed subsequent to the end of the quarter, offset by the decrease in the long-term derivative warrant

the quarter ended March 31, 2022, the Company had a net cash increase of $2,524,017, which represents cash provided from convertible

debentures and subscriptions received, with proceeds used to fund mining operations and purchase the Mine and real estate

assets and make a deposit on future equipment purchases.

the quarter ended March 31, 2022, cash of $6,839,679 was used in operating activities.

This compares with cash used in operating

activities of $4,031,935 for the quarter ended March 31, 2021.

the quarter ended March 31, 2022, cash of $6,379,672 was used in investing activities for the purchase of the Mine,

equipment, real estate and a deposit on the purchase of plant equipment, compared with no cash used for investing activities in the quarter

ended March 31, 2021

the quarter ended March 31, 2022, cash of $15,743,368 was provided by financing activities by the two convertible debentures and subscriptions

received for an upcoming financing, offset by cash used for lease payments, compared with cash of $5,976,675 provided by financing activities

in the quarter ended March 31, 2021

April 1, 2022, the Company announced that it had closed the private placement of 37,849,325 Special Warrants, and concurrent non-brokered

private placement of 1,471,644 units of the Company (the “Non-Brokered Units”) for aggregate gross proceeds of approximately

$11,796,297 (the “Offering”).

Of this amount, $1,775,790 was received prior to the end of the quarter and is included

in Subscriptions received in the equity section of the balance sheet.

to the Offering, the Company issued 37,849,325 Special Warrants at a price of $0.30 per Special Warrant.

Each Special Warrant is automatically

exercisable (without payment of any further consideration and subject to customary anti-dilution adjustments) into one unit of the Company

(a “Brokered Unit”) on the date that is the earlier of:

(i) the date that is three business days following the date on which

the Company has obtained both (A) a receipt from the Canadian security commission in each of the each of the provinces of Canada in which

the purchasers of the Special Warrants were sold for a (final) short-form Prospectus qualifying the distribution of the common stock

of the Company (“Common Shares”) and common stock purchase warrants of the Company (the “Warrants”) issuable

upon exercise of the Special Warrants (the “Final Qualification Prospectus”);

and (B) notification that the registration

statement, of which this Prospectus is a part, has been declared effective by the SEC (the “Registration Statement”);

(ii) October 1, 2022.

Brokered Unit consists of one Common Share and one Warrant.

Each whole Warrant will entitle the holder to acquire one Common Share (a

“Warrant Share”) for C$0.37 until April 1, 2025.

The Warrants shall also be exercisable on a cashless basis in the event

the Registration ‎Statement has not been made effective by the SEC prior to the date of exercise.

addition, pursuant to the Offering, the Company issued 1,471,644 Non-Brokered Units at a price of $0.30 per Non-Brokered Units.

Non-Brokered Unit consists of one Common Share and one Warrant.

Each whole Warrant will entitle the holder to acquire one Warrant Share

for C$0.37 until April 1, 2025.

parties, including management and members of the Board of Directors purchased 4,537,160 of Non-Brokered Units for a total of $1,361,148

of cash proceeds to the Company.

On May 13, 2022, the

Company issued 10,416,667 units of the Company to Teck Resources Limited at an issue price of C$0.30 per unit, or C$3,125,000 (US$2,500,000),

which together with the $500,000 cash payment made in January 2022, satisfies the purchase price of $3,000,000 and applicable sales taxes

for the Pend Oreille Mill.

Each unit consists of one common share and one common share purchase warrant.

Each whole warrant entitles

the holder to acquire one common share at a price of C$0.37 for a period of three years.

accounting estimates

25 unchanged sentences

Actual results may be different.

Company makes monthly estimates of its water treatment costs, with a true-up to the annual invoice received from the IDEQ.

actual costs in the annual invoice, the Company will then reassess its estimate for future periods.

Financing Transactions

Company has entered into convertible debentures that contain embedded derivatives arising from contractual terms that allow prepayment,

payment of interest with shares of the Company’s stock, conversion of the debentures into shares of the Company’s stock,

or conversion into a royalty stream.

These embedded derivatives require the use of valuation models, techniques and assumptions that

utilize estimates of several key valuation inputs.

The embedded derivatives require revaluation at each quarter end, with updates to

and re-evaluation of each of the key valuation inputs at each revaluation.

Sheet Arrangements

Company has no off-balance sheet arrangements.

AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Quantitative and Qualitative Disclosures about Market Risk

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 2. Management’s Discussion and Analysis