What changed in this filing

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Item 1. Financial Statements

2022-11-04 compared with 2022-08-15 · 506 added, 463 removed, 643 unchanged (60% of the section changed)

10 unchanged sentences

in United States Dollars)

September 30,

Current assets

Restricted Cash (note 6)

Accounts receivable

Prepaid expenses (note 6)

Accounts receivable and prepaid expenses (note 6)

Short-term deposit (note 3)

28 unchanged sentences

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

preferred shares issued and outstanding (note 9)

Nil preferred shares issued and outstanding (note 9)

Common shares, $ 0.000001 par value, 1,500,000,000 common shares authorized;

11 unchanged sentences

Hill Mining Corp.

Interim Consolidated Statements of Income and Comprehensive Income

(Expressed in United States Dollars)

Interim Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)

in United States Dollars)

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Operating expenses

8 unchanged sentences

Other income or gain (expense or loss)

Change in derivative liability

Change in derivative liability (note 9)

Gain (loss) on foreign exchange

Gain on FV of debentures

Gain on EPA settlement

Gain on fair value of convertible debentures

Gain on EPA debt extinguishment (note 6)

Interest expense

( 1,026,233 )

Debenture finance costs

( 2,143,840 )

Debenture finance costs

( 1,230,539 )

6 unchanged sentences

Comprehensive income

Dilutive effect of convertible debentures

Dilutive effect of warrant

$ ( 175,816 )

$ ( 520,066 )

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

$ ( 130,760 )

Net income per common share – basic

6 unchanged sentences

in United States Dollars)

September 30,

Operating activities

3 unchanged sentences

Depreciation expense

Change in fair value of warrant liability

Change in derivative liability

( 18,538,380 )

2 unchanged sentences

Imputed interest expense on lease liability

Interest expense

Finance costs

15 unchanged sentences

Prepaid expenses

( 1,064,109 )

Accounts payable

13 unchanged sentences

( 5,524,322 )

Mine improvements

Purchase of Process plant

6 unchanged sentences

Proceeds from issuance of shares, net of issue costs

Proceeds from promissory note

Repayment of promissory note

8 unchanged sentences

Non-cash activities

Units issued to settle accounts

payable and accrued liabilities

Shares issued to settle interest payable

Units issued to settle accounts payable and accrued liabilities

Units issued to settle interest payable

Mill purchase for shares and warrants

4 unchanged sentences

in United States Dollars)

Stock subscriptions

Accumulated other

subscriptions

comprehensive

3 unchanged sentences

Stock-based compensation

Stock subscription received for units

Stock subscription payable

Net loss for the period

8 unchanged sentences

Shares issued for RSUs vested

Non brokered shares issued for $0.30 CAD

Special warrant shares issued for $ 0.30 CAD

Non brokered shares issued for C$ 0.30

Special warrant shares issued for C$ 0.30

( 1,775,790 )

Contractor shares issued for $0.30 CAD

Shares issued for Mill purchase

Contractor shares issued for C$ 0.30

Shares issued for Process plant purchase

Shares issued @ $0.32 per share

Shares issued @ $0.32 per share, shares

Shares issued for debt settlement at $0.45

Shares issued for debt settlement at $0.45, shares

Warrant valuation

6 unchanged sentences

$ ( 19,447,575 )

Stock-based compensation

Shares issued for RSUs vested

Shares issued for interest payable

Gain on fair value from change in credit risk

Net income for the period

Balance, September 30, 2022

$ ( 59,626,902 )

$ ( 14,735,169 )

Balance, December 31, 2020

2 unchanged sentences

Stock-based compensation

Shares issued at $ 0.32 per share

Shares issued for debt settlement at $ 0.45 per share

Shares issued at C $ 0.40

Shares issued for debt settlement at C$ 0.58

Shares issued for RSUs vested

6 unchanged sentences

$ ( 22,696,011 )

Stock-based compensation

Shares issued for RSUs vested

Net income for the period

Balance, June 30, 2021

$ ( 60,206,008 )

$ ( 22,370,235 )

Beginning balance, value

4 unchanged sentences

Net income for the period

Balance, June 30, 2021

Net income (loss)

Balance, September 30, 2021

$ ( 56,245,378 )

5 unchanged sentences

Hill Mining Corp.

Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)

and Six Months Ended June 30, 2022

to the Condensed Interim Consolidated Financial Statements (Unaudited)

and Nine Months Ended September 30, 2022

in United States Dollars)

11 unchanged sentences

As of the date of this Form 10-Q, the Company had one subsidiary, Silver Valley Metals Corp.

American Zinc Corp.), an Idaho corporation created to facilitate the work being conducted at the Bunker Hill Mine in Kellogg, Idaho.

Valley”, formerly American Zinc Corp.), an Idaho corporation created to facilitate the work being conducted at the Bunker Hill

Mine in Kellogg, Idaho.

Company was incorporated for the purpose of engaging in mineral exploration activities.

17 unchanged sentences

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, and multi-metals stream

These unaudited condensed interim consolidated financial statements do not include any adjustments relating to the

recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in

the event the Company cannot continue in existence.

ability of the Company to emerge from the exploration stage is dependent upon, among other things, closing on the multi-metals

stream transaction (see note 7), obtaining additional financing to continue operations, exploring and developing the mineral

properties and the discovery, development, and sale of reserves.

The accompanying unaudited 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, and

closing on the multi-metals stream transaction (see note 7).

These unaudited condensed interim consolidated financial statements do not include

any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of

liabilities that might be necessary in the event the Company cannot continue in existence.

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

or other health crises, including the recent outbreak of respiratory illness caused by the novel coronavirus (“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.

Although the pandemic has subsided significantly, the Company cannot accurately predict the impact a COVID-19 resurgence would 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.

Russia/Ukraine Crisis:

10 unchanged sentences

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

Bunker Hill Mining Corp.

Notes to the Condensed Interim Consolidated

Financial Statements (Unaudited)

Three and Six Months Ended June 30, 2022

(Expressed in United States Dollars)

Hill Mining Corp.

to the Condensed Interim Consolidated Financial Statements (Unaudited)

and Nine Months Ended September 30, 2022

in United States Dollars)

Basis of Presentation

accompanying unaudited condensed interim consolidated financial statements of the Company have been prepared in accordance with

accounting principles generally accepted in the United States of America and the rules and regulations of the United States

Securities and Exchange Commission for interim financial information.

Accordingly, they do not include all the information and

footnotes necessary for a comprehensive presentation of financial position, results of operations, shareholders’ deficiency,

or cash flows.

It is management’s opinion, however, that all material adjustments (consisting of normal recurring adjustments)

have been made which are necessary for a fair financial statement presentation.

The unaudited condensed interim consolidated

financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, which contains the annual

audited consolidated financial statements and notes thereto, together with the Management’s Discussion and Analysis, for the

year ended December 31, 2021.

The financial results for the three and six months ended June 30, 2022 are not necessarily

indicative of the results for the full fiscal year.

The unaudited interim condensed consolidated financial statements are presented

in United States dollars, which is the Company’s functional currency.

accompanying unaudited condensed interim consolidated financial statements of the Company have been prepared in accordance with accounting

principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange

Commission for interim financial information.

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

presentation of financial position, results of operations, shareholders’ deficiency, or cash flows.

It is management’s opinion,

however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial

statement presentation.

The unaudited condensed interim consolidated financial statements should be read in conjunction with the Company’s

Annual Report on Form 10-K, which contains the annual audited consolidated financial statements and notes thereto, together with the

Management’s Discussion and Analysis, for the year ended December 31, 2021.

The financial results for the three and nine months

ended September 30, 2022 are not necessarily indicative of the results for the full fiscal year.

The unaudited interim condensed consolidated

financial statements are presented in United States dollars, which is the Company’s functional currency.

Plant & Equipment

consists of the following:

September 30,

Equipment, gross

1 unchanged sentence

Equipment, net

total depreciation expense during the three and six months ended June 30, 2022 was $ 38,692 and $ 77,091 , respectively.

Compared to the

three and six months ended June 30, 2021 was $ 34,566 and $ 64,396 , respectively.

total depreciation expense for equipment during the three and nine months ended September 30, 2022 was $ 42,814 and $ 119,905 , respectively.

Compared to the three and nine months ended September 30, 2021 was $ 34,565 and $ 98,961 , respectively.

See Note 4 for additional depreciation

on the right-of-use asset.

Plant Purchase from Teck Resources Limited

January 25, 2022, the Company entered into a non-binding Memorandum of Understanding (“MOU”) with a subsidiary of 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”).

package 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 the Bunker Hill site, and total inventory of nearly 10,000

components and parts for mill, assay lab, conveyer, field instruments, and electrical spares.

The Company paid a

$500,000 non-refundable deposit in January

March 31, 2022, the Company reached an agreement to satisfy the remaining purchase price by way of an equity

issuance of the Company.

Teck received 10,416,667 units of the Company (the “Teck Units”) at a deemed issue price of C$ 0.30

Each Teck Unit consists of one common share of the Company 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 and purchase of the mill occurred on May 13, 2022.

May 13, 2022, the Company completed purchase of a comprehensive package of equipment and parts inventory from Teck Resources Limited

package comprises substantially all processing equipment of value located at the Pend Oreille mine site, including complete

crushing, grinding and flotation circuits suitable for a planned ~1,500 ton-per-day operation at the Bunker Hill site, and total

inventory of nearly 10,000 components and parts for mill, assay lab, conveyer, field instruments, and electrical

purchase of the mill has been valued at:

consideration given, comprised of $ 500,000 nonrefundable deposit remitted on January 7,

2022 and $ 231,000 sales tax remitted on May 13, 2022, a total of $ 731,000 cash remitted.

Hill Mining Corp.

Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)

and Six Months Ended June 30, 2022

in United States Dollars)

consideration given, comprised of $ 500,000 nonrefundable deposit remitted on January 7, 2022 and $ 231,000 sales tax remitted on May

13, 2022, a total of $ 731,000 cash remitted.

of common shares issued on May 13, 2022 at the market price of that day, a value of $ 1,970,264 .

value of the warrants issued together with the inputs, as determined by a binomial model,

resulted in a fair value of $ 1,273,032 .

value of the warrants issued together with the inputs, as determined by a binomial model, resulted in a fair value of $ 1,273,032 .

a result, the total value of the mill purchase was determined to be $ 3,974,296 .

The process plant was purchased in an assembled state

in its current location, including major processing systems, significant components, and a large inventory of spare parts.

intends to disassemble and transport it to the Bunker Hill site, reassembling it as an integral part of the Company’s future operations.

The Company determined that the transaction should be accounted for as an asset acquisition, with the process plant representing a single

asset with the exception of the inventory of spare parts, which has been separated out and appears on the balance sheet as a current asset

in accordance with a preliminary purchase price allocation.

As the plant is demobilized, transported and reassembled, installation and

other costs associated with these activities will be captured and capitalized as components of the asset.

June 30, 2022, the asset consists of the following:

Hill Mining Corp.

to the Condensed Interim Consolidated Financial Statements (Unaudited)

and Nine Months Ended September 30, 2022

in United States Dollars)

process plant was purchased in an assembled state in the seller’s location, and included major processing systems, significant

components, and a large inventory of spare parts.

The Company has disassembled and transported it to the Bunker Hill site, and will be

reassembling it as an integral part of the Company’s future operations.

The Company determined that the transaction should be accounted

for as an asset acquisition, with the process plant representing a single asset, with the exception of the inventory of spare parts,

which has been separated out and appears on the balance sheet as a current asset in accordance with a preliminary purchase price allocation.

As the plant is demobilized, transported and reassembled, installation and other costs associated with these activities will be captured

and capitalized as components of the asset.

September 30, 2022, the asset consists of the following:

of Plant Asset Consists

June 30, 2022

September 30,

Sales tax paid

7 unchanged sentences

Additionally,

at June 30, 2022, the Company has paid a refundable deposit of $ 1,000,000

to Teck as security while demobilization activities are ongoing.

This is classified as a short-term deposit on the balance

at September 30, 2022, the Company has paid a refundable deposit of $ 1,000,000 to Teck as security while demobilization activities are

This is classified as a short-term deposit on the balance sheet.

August 30, 2022, the Company entered into an agreement to purchase a ball mill from D’Angelo International LLC for $ 675,000 .

purchase of the mill is to be made in three cash payments:

by September 15, 2022 as a non-refundable deposit (paid)

by October 15, 2022 (paid)

by December 15, 2022

September 30, 2022, the Company paid $ 100,000 towards the purchase as a non-refundable deposit.

Right-of-Use Asset

1 unchanged sentence

of Right-of-use Asset

September 30,

Less accumulated depreciation

Right-of-use asset, net

total depreciation expense during the three and six months ended June 30, 2022 was $ 24,442 and $ 52,353 , respectively.

Compared to the

three and six months ended June 30, 2021 was $ 26,594 and $ 53,189 , respectively.

total depreciation expense for the right-of-use asset during the three and nine months ended September 30, 2022 was $ nil and $ 52,353 ,

respectively.

Compared to the three and nine months ended September 30, 2021 was $ 26,594 and $ 79,783 , respectively.

Hill Mining Corp.

to the Condensed Interim Consolidated Financial Statements (Unaudited)

and Nine Months Ended September 30, 2022

in United States Dollars)

Mining Interests

5 unchanged sentences

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

Bunker Hill Mining Corp.

Notes to the Condensed Interim Consolidated

Financial Statements (Unaudited)

Three and Six Months Ended June 30, 2022

(Expressed in United States Dollars)

the terms of the November 20, 2020 amended agreement (the “Amended Agreement”), a purchase price of $ 7,700,000 was agreed,

9 unchanged sentences

to the purchase of the Mine, the Company’s liability to EPA in this regard totaled $ 11,000,000 .

(See also Note 6 Environmental

Protection Agency Agreement and Water Treatment Liabilities).

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 (previously $ 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).

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).

$ 5,400,000 contract cash paid at purchase was the $ 7,700,000 less the $ 2,000,000 deposit and $ 300,000 credit given by the seller for

9 unchanged sentences

has determined the purchase to be an acquisition of a single asset as guided by ASU 805-10.

During the three and nine months ended September

30, 2022, the Company has spent an additional $ 356,149 and $ 356,149 , respectively, in mine improvements.

March 3, 2022, the Company purchased a 225-acre surface land parcel for $ 202,000 which includes the surface rights to portions of 24

2 unchanged sentences

Cost Recovery Payables

a part of the lease of the Mine, the Company was required to make payments pursuant to an agreement with the Environmental Protection Agency (the “EPA”) whereby for so long

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

of the EPA’s claim for cost recovery related to historical treatment costs paid by the EPA from 1995 to 2017.

These payments, if

all are made, will total $ 20,000,000 .

The agreement called 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 five anniversaries

with a final $ 2,000,000 payment on November 1, 2024.

The November 1, 2018, November 1, 2019, November 1, 2020, and November 1, 2021,

payments were not made.

As a result, a total of $ 11,000,000 was outstanding as of December 31, 2021, accounted for within current liabilities.

As the purchase of the Bunker Hill Mine (which would trigger the immediate recognition of the remaining liabilities due through November

1, 2024) had not yet taken place, the remaining $ 8,000,000 cost recovery liabilities were not recognized on the Company’s balance

sheet as of December 31, 2021.

a part of the lease of the Mine, the Company was required to make payments pursuant to an agreement with the Environmental Protection

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

make payments to the EPA on behalf of Placer Mining in satisfaction of the EPA’s claim for cost recovery related to historical

treatment costs paid by the EPA from 1995 to 2017.

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

The agreement called 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 five anniversaries with a final $ 2,000,000 payment on November 1, 2024.

1, 2018, November 1, 2019, November 1, 2020, and November 1, 2021, payments were not made.

As a result, a total of $ 11,000,000 was outstanding

as of December 31, 2021, accounted for within current liabilities.

As the purchase of the Bunker Hill Mine (which would trigger the immediate

recognition of the remaining liabilities due through November 1, 2024) had not yet taken place, the remaining $ 8,000,000 cost recovery

liabilities were not recognized on the Company’s balance sheet as of December 31, 2021.

Hill Mining Corp.

Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)

and Six Months Ended June 30, 2022

to the Condensed Interim Consolidated Financial Statements (Unaudited)

and Nine Months Ended September 30, 2022

in United States Dollars)

2021, the Company engaged in 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.

2021, the Company engaged in discussions with the EPA to reschedule these payments in ways that enable the sustainable operation of the

Mine as a viable long-term business.

December 19, 2021, the Company entered into an amended Settlement Agreement between the Company, Idaho Department of Environmental Quality,

25 unchanged sentences

with the purchase of the Mine, the Company assumed the balance of the EPA liability totaling $ 17,000,000 , an increase of $ 8,000,000 .

of March 31, 2022, the financial assurance had not yet been secured, and as such the

Company accounted for the $17,000,000 liabilities according to the previous payment schedule, resulting in $12,000,000 classified as

a current liability and $5,000,000 as a long-term liability.

The long-term portion was discounted at an interest rate of 16.5% to

arrive at a net present value of $3,402,425 after discount.

of March 31, 2022, the financial assurance had not yet been secured, and as such the Company accounted for the $17,000,000 liabilities

according to the previous payment schedule, resulting in $12,000,000 classified as a current liability and $5,000,000 as a long-term

The long-term portion was discounted at an interest rate of 16.5% to arrive at a net present value of $3,402,425 after discount.

the quarter ended June 30, 2022, the Company was successful in obtaining the final financial assurance.

Specifically, a $ 9,999,000

payment bond and a $ 7,001,000

letter of credit were secured and provided to the EPA.

This milestone provides for the Company to recognize the effects of the

change in terms of the EPA liability as outlined in the December 19, 2021 agreement.

Once the financial assurance was put into

place, the restructuring of the payment stream under the Amendment occurred with the entire $ 17,000,000

liability being recognized as long-term in nature.

Specifically, a $ 9,999,000 payment

bond and a $ 7,001,000 letter of credit were secured and provided to the EPA.

This milestone provides for the Company to recognize the

effects of the change in terms of the EPA liability as outlined in the December 19, 2021 agreement.

Once the financial assurance was

put into place, the restructuring of the payment stream under the Amendment occurred with the entire $ 17,000,000 liability being recognized

as long-term in nature.

The aforementioned payment bond is secured by a $ 2,475,000 letter of credit.

and $ 7,001,000

letters of credit are secured by $9,476,000 of cash deposits under an agreement with a commercial bank.

These cash deposits comprise

the $ 9,476,000

of restricted cash shown within current assets as of June 30, 2022.

ASC 470-50, Debt Modifications and Extinguishments, the Company performed a comparison of NPV’s of the pre-settlement Cost

Recovery obligation to the post-settlement schedule of Cost Recovery obligation to determine this was an extinguishment of debt.

Company recorded a gain on extinguishment of debt totaling $ 8,614,103 .

The old debt, including any discount, was written off and the new payment stream of the amended $ 17,000,000

table, including the new discount of $ 9,927,590

using the effective interest rate of 19.95% was recorded to result in a net liability of $ 7,072,410 ,

which is due long-term.

Bunker Hill Mining Corp.

Notes to the Condensed Interim Consolidated

Financial Statements (Unaudited)

Three and Six Months Ended June 30, 2022

(Expressed in United States Dollars)

The $ 2,475,000 and $ 7,001,000 letters

of credit are secured by $ 9,476,000 of cash deposits under an agreement with a commercial bank.

These cash deposits comprise the $ 9,476,000

of restricted cash shown within current assets as of September 30, 2022.

ASC 470-50, Debt Modifications and Extinguishments, the Company performed a comparison of NPV’s of the pre-settlement Cost Recovery

obligation to the post-settlement schedule of Cost Recovery obligation to determine this was an extinguishment of debt.

The Company recorded

a gain on extinguishment of debt totaling $ 8,614,103 .

The old debt, including any discount, was written off and the new payment stream

of the amended $ 17,000,000 table, including the new discount of $ 9,927,590 , using the effective interest rate of 19.95 %, was recorded

to result in a net liability of $ 7,072,410 , which is due long-term.

During the three and nine months ended September 30, 2022, the Company

recorded combined discount amortization expense of $ 347,614 and $ 631,701 on the discounted pre- and post-extinguishment liability, respectively,

bringing the net liability to $ 7,420,024 as of September 30, 2022.

As at September 30, 2022 interest of $ 192,923 ($ 306,501 at December

31, 2021) is included in interest payable on the condensed consolidated balance sheet.

Hill Mining Corp.

to the Condensed Interim Consolidated Financial Statements (Unaudited)

and Nine Months Ended September 30, 2022

in United States Dollars)

Treatment Charges – EPA

to the cost recovery liabilities outlined above, the Company is responsible for the payment of ongoing water treatment charges.

Water treatment charges incurred through December 31, 2021 are payable to the EPA, and charges thereafter are payable to the Idaho

Department of Environmental Quality (“IDEQ”) given a handover of responsibilities for the Central Treatment Plant from

the EPA to the IDEQ as of that date.

The Company previously estimated a balance due to the EPA of $ 5,110,706

for ongoing water treatment through December 31, 2021.

During the six months ended June 30, 2022, the Company received an invoice

from the EPA for water treatment through October 2021.

As a result, the Company reversed its previous accruals for this period and

adjusted its estimated charges for November and December 2021.

Through recent discussions with the EPA, the Company has confirmed

that payments to the IDEQ for water treatment charges cannot be netted against invoices payable to the EPA.

After taking this into

account, the additional invoice received from the EPA, and a $ 1,000,000

payment made in April 2022, the Company has estimated water treatment payables to the EPA of $ 3,847,141

as of June 30, 2022 which is reflected in current liabilities.

treatment charges incurred through December 31, 2021 are payable to the EPA, and charges thereafter are payable to the Idaho Department

of Environmental Quality (“IDEQ”) given a handover of responsibilities for the Central Treatment Plant from the EPA to the

IDEQ as of that date.

The Company previously estimated a balance due to the EPA of $ 5,110,706 for ongoing water treatment through December

During the six months ended June 30, 2022, the Company received an invoice from the EPA for water treatment through October

As a result, the Company reversed its previous accruals for this period and adjusted its estimated charges for November and December

Through recent discussions with the EPA, the Company has confirmed that payments to the IDEQ for water treatment charges cannot

be netted against invoices payable to the EPA.

After taking this into account, the additional invoice received from the EPA, and a $ 1,000,000

payment made in April 2022, the Company has estimated water treatment payables to the EPA of $ 3,847,141 as of September 30, 2022 and

$ 5,110,706 at December 31, 2021, which is reflected in current liabilities.

Treatment Charges – IDEQ

2 unchanged sentences

The Company also pays an agreed-upon monthly amount of $ 140,000 , with a true-up to

be recorded and paid by the Company once the actual annual costs are determined each year.

At June 30, 2022, the Company has accrued

$ 480,000 for water treatment costs to IDEQ and has prepaid $ 840,000 leaving a net prepaid of $ 360,000 which is included in prepaids on

the unaudited condensed interim consolidated balance sheet.

be recorded and credited to or paid by the Company once the actual annual costs are determined each year.

At September 30, 2022, the

Company has accrued $ 720,000 for water treatment costs to IDEQ and has prepaid $ 1,260,000 , leaving a net prepaid of $ 540,000 ($ nil at

December 31, 2021) which is included in prepaid expenses on the unaudited condensed interim consolidated balance sheet.

Promissory Note Payable and Convertible Debentures

8 unchanged sentences

$ 202,000 on March 3, 2022, which may be used as security for the promissory note.

At June 30, 2022, the Company owes $ 1,500,000 in promissory

notes payable and is included in current liabilities on the condensed consolidated balance sheet.

Interest expense for the six months

ended June 30, 2022 and 2021 was $ 167,877 and $ nil , respectively.

At June 30, 2022 interest of $ 270,616 is included in interest payable

on the condensed consolidated balance sheet.

At September 30, 2022, the Company owes $ 1,500,000

in promissory notes payable, which is included in current liabilities on the condensed consolidated balance sheet.

Interest expense for

the three and nine months ended September 30, 2022 was $ 56,712 and $ 224,589 , respectively.

For the three and nine months ended September

30, 2021, interest expense was $ 8,219 and $ 8,219 , respectively.

At September 30, 2022 interest of $ 327,329 ($ 102,740 at December 31,

2021) is included in interest payable on the condensed consolidated balance sheet.

Finance Package with Sprott Private Resource Streaming & Royalty Corp.

6 unchanged sentences

The CD1 was subsequently increased to $ 6,000,000 , increasing the project financing package to $ 51,000,000 .

June 17, 2022, the Company consummated a new $ 15,000,000

convertible debenture (the “CD2”).

As a result, total potential funding from SRSR was further increased to $ 66,000,000

including the RCD, CD1, CD2 and the Stream (together, the “Project Financing Package”).

Hill Mining Corp.

to the Condensed Interim Consolidated Financial Statements (Unaudited)

and Nine Months Ended September 30, 2022

in United States Dollars)

June 17, 2022, the Company consummated a new $ 15,000,000 convertible debenture (the “CD2”).

As a result, total potential

funding from SRSR was further increased to $ 66,000,000 including the RCD, CD1, CD2 and the Stream (together, the “Project Financing

Royalty Convertible Debenture (RCD)

11 unchanged sentences

In the event of non-conversion, the principal of the RCD will be repayable in cash.

Hill Mining Corp.

Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)

and Six Months Ended June 30, 2022

in United States Dollars)

with the funding of the CD2 in June 2022, the Company and SRSR agreed to a number of amendments to the terms of the RCD, including

an amendment of the maturity

date from July 7, 2023 to March 31, 2025 .

The parties also agreed to enter into a Royalty Put Option such that in the event

the RCD is converted into a royalty as described above, the holder of the royalty will be entitled to resell the royalty to the

Company for $ 8,000,000

upon default under the CD1 or CD2 until such time that the CD1 and CD2 are paid in full.

The Company determined that the amendments in the terms of the RCD should not be treated as an extinguishment of

the RCD, and have therefore been accounted for as modifications.

with the funding of the CD2 in June 2022, the Company and SRSR agreed to a number of amendments to the terms of the RCD, including an

amendment of the maturity date from July 7, 2023 to March 31, 2025.

The parties also agreed to enter into a Royalty Put Option such that

in the event the RCD is converted into a royalty as described above, the holder of the royalty will be entitled to resell the royalty

to the Company for $ 8,000,000 upon default under the CD1 or CD2 until such time that the CD1 and CD2 are paid in full.

The Company determined

that the amendments in the terms of the RCD should not be treated as an extinguishment of the RCD, and have therefore been accounted

for as a modification as a result of the treatment the Company reported a gain of $607,261 in the statement of operations for the period

ended September 30, 2022.

Series 1 Convertible Debenture (CD1))

12 unchanged sentences

with the funding of the CD2 in June 2022, the Company and SRSR agreed to a number of amendments to the terms of the CD1, including that

date would be amended from July 7, 2023 to March 31, 2025 ,

and that the CD1 would remain outstanding until the new maturity date regardless of whether the Stream is advanced, unless the Company

elects to exercise its option of early repayment.

The Company determined that the amendments in the terms of the RCD should not

be treated as an extinguishment of the CD1, and have therefore been accounted for as modifications.

the maturity date would be amended from July 7, 2023 to March 31, 2025 , and that the CD1 would remain outstanding until the new maturity

date regardless of whether the Stream is advanced, unless the Company elects to exercise its option of early repayment.

The Company determined

that the amendments in the terms of the RCD should not be treated as an extinguishment of the CD1, and have therefore been accounted

for as a modification as a result of the treatment the Company reported a gain of $ 179,046 in the statement of operations for the period

ended September 30, 2022

Series 2 Convertible Debenture (CD2)

6 unchanged sentences

for project finance has been removed.

The Company determined that in accordance with ASC

815, each debenture will be valued and carried as a single instrument, with the periodic changes to fair value accounted through earnings,

profit and loss.

with the approach above, the following table summarizes the key valuation inputs:

Company determined that in accordance with ASC 815, each debenture will be valued and carried as a single instrument, with the periodic

changes to fair value accounted through earnings, profit and loss.

Hill Mining Corp.

to the Condensed Interim Consolidated Financial Statements (Unaudited)

and Nine Months Ended September 30, 2022

in United States Dollars)

with the approach above, the following table summarizes the key valuation inputs as at applicable valuation dates:

Schedule of Key Valuation Inputs

Reference (2)(4) (5)

Interest rate

Stock price (US$)

Expected equity volatility

Credit spread

Risk-free rate

adjusted rate

CD1 note (1)(3)

6 unchanged sentences

RCD note (stream advanced) scenario

CD carries a Discount for Lack of Marketability (“DLOM”) of 5.0 %.

instruments carry an instrument-specific spread of 7.23 %

conversion price of the CD is $ 0.235

RCD note (stream not advanced)

RCD note (stream advanced)

CD’s carries a Discount for Lack of Marketability (“DLOM”) of 5.0 %.

and RCD carry an instrument-specific spread of 7.23 %, CD2 carries an instrument-specific spread of 9.32 %

conversion price of the CD1 is $ 0.219 and CD2 is $ 0.212

project risk rate of 13.0 % was used for all scenarios of the RCD fair value computations

probabilities for the stream being advanced and the stream not being advanced is 59 % and 41 %, respectively.

Bunker Hill Mining Corp.

Notes to the Condensed Interim Consolidated

Financial Statements (Unaudited)

Three and Six Months Ended June 30, 2022

(Expressed in United States Dollars)

resulting fair values of the CD1, RCD, and CD2 at the issuance dates, March 31, 2022, and as of June 30, 2022 were as follows:

resulting fair values of the CD1, RCD, and CD2 at the issuance dates, June 30, 2022, and as of September 30, 2022 were as follows:

of Fair Value Derivative Liability

Instrument Description

Issuance date

March 31, 2022

June 30, 2022

The total gain on fair value of debentures recognized

during the three and six months ended June 30, 2022 was $ 1,813,456 and $ 1,739,987 , respectively.

The portion of changes in fair value

that is attributable to changes in the Company’s credit risk is accounted for within other comprehensive income.

During the three

and six months ended June 30, 2022, the Company recognized $ 371,255 within other comprehensive income.

Company performs quarterly testing of the covenants in the RCD, CD1 and CD2, and was in compliance with all such covenants as of June

Issuance date CD1 and RCD

Issuance date CD2

September 30,

total gain on fair value of debentures recognized during the three and nine months ended September 30, 2022 was $ 1,301,069 and $ 3,041,056 ,

respectively.

The portion of changes in fair value that is attributable to changes in the Company’s credit risk is accounted for

within other comprehensive income.

During the three and nine months ended September, 2022, the Company recognized $ 625,050 and $ 996,636 ,

respectively, within other comprehensive income.

Company performs quarterly testing of the covenants in the RCD, CD1 and CD2, and was in compliance with all such covenants as of September

Hill Mining Corp.

to the Condensed Interim Consolidated Financial Statements (Unaudited)

and Nine Months Ended September 30, 2022

in United States Dollars)

minimum of $ 27,000,000 and a maximum of $ 37,000,000 (the “Stream Amount”) will be made available under the Stream, at the

11 unchanged sentences

funding, and at a 1.65x multiple of the Stream Amount between the third and fourth anniversary of the date of funding.

As of June 30,

As of September

30, 2022, the Stream had not been advanced.

3 unchanged sentences

Company had an operating lease for office space that expired in May 2022.

Below is a summary of the Company’s lease liability

as of June 30, 2022:

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

of September 30, 2022:

Schedule of Operating Lease Liability

7 unchanged sentences

Foreign exchange loss

Balance, June 30, 2022

Bunker Hill Mining Corp.

Notes to the Condensed Interim Consolidated

Financial Statements (Unaudited)

Three and Six Months Ended June 30, 2022

(Expressed in United States Dollars)

Balance, September 30, 2022

Capital Stock, Warrants and Stock Options

5 unchanged sentences

February 2021, the Company closed a non-brokered private placement of units of the Company (the “February 2021 Offering”),

issuing 19,576,360

units of the Company (“February 2021 Units”)

per February 2021 Unit for gross proceeds of

issuing 19,576,360 units of the Company (“February 2021 Units”) at C$ 0.40 per February 2021 Unit for gross proceeds of $ 6,168,069

(C$ 7,830,544 ).

Each February 2021 Unit consisted of one common

share of the Company and one common share purchase warrant of the Company (each, “February 2021 Warrant”), which entitles

the holder to acquire a common share of the Company at C$ 0.60

per common share for a period of five

In connection with the February 2021 Offering,

the Company incurred share issuance costs of $ 154,630

and issued 351,000

compensation options (the “February 2021

Compensation Options”).

Each February 2021 Compensation Option is exercisable into one February 2021 Unit at an exercise price

for a period of three years.

Each February 2021 Unit consisted of one common share of the Company and one common share purchase warrant of the Company

(each, “February 2021 Warrant”), which entitles the holder to acquire a common share of the Company at C$ 0.60 per common

share for a period of five years .

In connection with the February 2021 Offering, the Company incurred share issuance costs of $ 154,630

and issued 351,000 compensation options (the “February 2021 Compensation Options”).

Each February 2021 Compensation Option

is exercisable into one February 2021 Unit at an exercise price of C$ 0.40 for a period of three years.

Hill Mining Corp.

to the Condensed Interim Consolidated Financial Statements (Unaudited)

and Nine Months Ended September 30, 2022

in United States Dollars)

Company also issued 417,720 February 2021 Units to settle $ 132,000 of accrued liabilities at a deemed price of $ 0.45 based on the fair

1 unchanged sentence

As a result, the Company recorded a loss on debt settlement of $ 56,146 .

April 2022, the Company closed a private placement of 37,849,325 Special Warrants and a non-brokered private placement of 1,471,664

units of the Company for aggregate gross proceeds of approximately C$ 11,796,297 .

Related parties, including management, directors, and consultants,

participated in the Special Warrant private placement for a total of 4,809,160 shares (included in the total above).

April 2022, the Company closed a private placement of 37,849,325 Special Warrants and a non-brokered private placement of 1,471,664 units

of the Company for aggregate gross proceeds of approximately $ 9,384,622 (C$ 11,796,297 ).

Related parties, including management, directors,

and consultants, participated in the Special Warrant private placement for a total of 4,809,160 shares (included in the total above).

Special Warrants were issued at a price of C$ 0.30 per special warrant.

16 unchanged sentences

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

Hill Mining Corp.

Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)

and Six Months Ended June 30, 2022

in United States Dollars)

May 31, 2022, the Company announced that it had received a receipt from the Ontario Securities Commission for its final short-form Canadian

19 unchanged sentences

Each warrant entitles the holder to acquire one warrant

share for $ 0.37 until May 13, 2025.

share for C$ 0.37 until May 13, 2025.

June 2022, the Company issued 1,218,000 units to contractors for bonuses accrued during the three months ended March 31, 2022.

1 unchanged sentence

Each warrant entitles the holder to acquire one warrant share for C$ 0.37 until April 1,

July 2022, the Company issued 1,975,482 common shares in connection with its election to satisfy interest payments under the outstanding

convertible debentures for the three months ended June 30, 2022.

Hill Mining Corp.

to the Condensed Interim Consolidated Financial Statements (Unaudited)

and Nine Months Ended September 30, 2022

in United States Dollars)

each financing, the Company has accounted for the warrants in accordance with ASC Topic 815.

The warrants are considered derivative

instruments as they were issued in a currency other than the Company’s functional currency of the U.S.

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 is recorded in the unaudited condensed interim consolidated statements of

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

The warrants are considered derivative instruments

as they were issued in a currency other than the Company’s functional currency of the U.S.

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.

change in fair value of the warrant is recorded in the unaudited condensed interim consolidated statements of income and comprehensive

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

warrant liabilities as a result of the June 2019, August 2019, August 2020, February 2021, April 2022 special warrants, April 2022 non-brokered,

May 2022 Teck purchase, and June 2022 contractor private placements were revalued as at June 30, 2022 and December 31, 2021 using the

Binomial model and the following assumptions:

May 2022 Teck purchase, and June 2022 contractor private placements were revalued as at September 30, 2022, issuance date in 2022, and

December 31, 2021 using the Binomial model and the following assumptions:

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

April 2022 special warrants issuance

June 30, 2022

December 31, 2021

September 30,

Expected life

1 unchanged sentence

Dividend yield

Share price (C$)

Change in derivative liability

$ ( 4,458,884 )

April 2022 non-brokered issuance

June 30, 2022

December 31, 2021

September 30,

Expected life

1 unchanged sentence

Dividend yield

Share price (C$)

Change in derivative liability

Bunker Hill Mining Corp.

Notes to the Condensed Interim Consolidated

Financial Statements (Unaudited)

Three and Six Months Ended June 30, 2022

(Expressed in United States Dollars)

$ ( 128,321 )

May 2022 Teck issuance

June 30, 2022

December 31, 2021

September 30,

Expected life

1 unchanged sentence

Dividend yield

Share price (C$)

Change in derivative liability

$ ( 848,979 )

June 2022 issuance

June 30, 2022

December 31, 2021

September 30,

Expected life

1 unchanged sentence

Dividend yield

Share price (C$)

Change in derivative liability

Hill Mining Corp.

to the Condensed Interim Consolidated Financial Statements (Unaudited)

and Nine Months Ended September 30, 2022

in United States Dollars)

February 2021 issuance

June 30, 2022

December 31, 2021

Expected life

Risk free interest rate

Dividend yield

Change in derivative liability

$ ( 1,587,675 )

$ ( 329,358 )

August 2020 issuance

June 30, 2022

December 31, 2021

September 30,

Expected life

1 unchanged sentence

Dividend yield

Share price (C$)

Change in derivative liability

1 unchanged sentence

$ ( 329,358 )

June 2019 issuance (i)

June 30, 2022

December 31, 2021

Expected life

Risk free interest rate

Dividend yield

Change in derivative liability

$ ( 1,004,285 )

2020 issuance

free interest rate

in derivative liability

( 7,703,052 )

During the six months ended December 31, 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.

August 2019 issuance (ii)

June 30, 2022

December 31, 2021

Expected life

Risk free interest rate

Dividend yield

Change in derivative liability

2019 issuance (i)

free interest rate

in derivative liability

( 1,371,346 )

(i) During the six

months ended December 31, 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

( 2,744,785 )

During the six months ended December 31, 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.

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

Bunker Hill Mining Corp.

Notes to the Condensed Interim Consolidated

Financial Statements (Unaudited)

Three and Six Months Ended June 30, 2022

(Expressed in United States Dollars)

(ii) During the six

months ended December 31, 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.

Schedule of Warrant Activity

1 unchanged sentence

Balance, December 31, 2020

Balance, June 30, 2021

( 2,913,308 )

Balance, September 30, 2021

Balance, December 31, 2021

Balance, June 30, 2022

the six months ended June 30, 2022, 239,284 February 2020 broker warrants expired.

June 30, 2022, the following warrants were outstanding:

Balance, September 30, 2022

the nine months ended September 30, 2022, 239,284 February 2020 broker warrants expired.

Hill Mining Corp.

to the Condensed Interim Consolidated Financial Statements (Unaudited)

and Nine Months Ended September 30, 2022

in United States Dollars)

September 30, 2022, the following warrants were outstanding:

Schedule of Warrants Outstanding Exercise Price

4 unchanged sentences

April 1, 2025

June 30, 2022, the following broker options were outstanding:

Schedule of Broker Options

September 30, 2022, the following compensation options were outstanding:

of Compensation Options

exercise price

4 unchanged sentences

Issued – April 2022 Compensation Options

Balance, June 30, 2022

Bunker Hill Mining Corp.

Notes to the Condensed

Interim Consolidated Financial Statements (Unaudited)

Three and Six Months Ended June 30,

(Expressed in United States Dollars)

Balance, September 30, 2022

grant date fair value of the August 2020 and February 2021, and April 2022 Compensation Options were estimated at $ 521,993 , $ 68,078 and

1 unchanged sentence

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

Risk free interest rate

Dividend yield

Weighted average life

February 2021

Schedule of Warrants Outstanding Broker Option Exercise Prices

Schedule of Broker Exercise Prices

broker options

2 unchanged sentences

April 1, 2024 (iii)

Exercisable into one August 2020 Unit

Exercisable into one February 2021 Unit

Exercisable into one April 2022 Unit

following table summarizes the stock option activity during the six months ended June 30, 2022:

(i) Exercisable into

one August 2020 Unit

(ii) Exercisable into

one February 2021 Unit

(iii) Exercisable into

one April 2022 Unit

Hill Mining Corp.

Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)

Three and Nine Months Ended September

(Expressed in United States Dollars)

following table summarizes the stock option activity during the nine months ended September 30, 2022:

Schedule of Stock Options

4 unchanged sentences

Expired May 01, 2022

Balance, June 30, 2022

(i) On February 19,

2021, 1,037,977 stock options were issued to an officer of the Company, of which 273,271 stock options vested immediately and the balance

of 764,706 stock options vested on December 31, 2021.

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

Balance, September 30, 2022

February 19, 2021, 1,037,977 stock options were issued to an officer of the Company, of which 273,271 stock options vested immediately

and the balance of 764,706 stock options vested 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 .

The vesting of these options resulted in stock-based compensation

of $ 204,213 for the year ended December 31, 2021, which is included in operation and administration expenses on the consolidated statements

The vesting of these options resulted in stock-based

compensation of $nil for the three and nine months ended September 30, 2022, compared to $ 43,941 and $ 160,750 for the three and nine

months ended September 30, 2021, respectively, which is included in operation and administration expenses on the consolidated statements

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

August 24, 2022, 300,000

stock options were issued to an employee of the Company, of which 150,000

vested immediately and the remaining balance of outstanding options to vest equally over the next two anniversaries of the grant date.

options have a 5 -year

life and are exercisable at C$ 0.15

per common share.

The grant fair value of the options was estimated at $ 28,930 .

The vesting of these options resulted in stock-based compensation of $ 14,465

for the three and nine months ended September 30, 2022, which is included in the operation and administration expense of the

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

fair value of these stock options was determined on the date of grant using the Black-Scholes valuation model, and using the following

1 unchanged sentence

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

interest rate

Dividend yield

Bunker Hill Mining Corp.

Notes to the Condensed Interim Consolidated

Financial Statements (Unaudited)

Three and Six Months Ended June 30, 2022

(Expressed in United States Dollars)

following table reflects the actual stock options issued and outstanding as of June 30, 2022:

Weighted average

(ii) On August 24, 2022,

300,000 stock options were issued to an employee of the Company, of which 150,000 stock options vested immediately and the balance

of 150,000 stock options will vest equally over two years on the anniversary date of issuance.

These options have a 5 -year life and are

exercisable at C$ 0.15 per common share.

The grant date fair value of the options was estimated at $ 28,930 .

The vesting of these options

resulted in stock-based compensation of $ 14,465 for the period ended September 30, 2022, which is included in operation and administration

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

fair value of these stock options was determined on the date of grant using the Black-Scholes valuation model, and using the following

underlying assumptions:

Dividend yield

following table reflects the actual stock options issued and outstanding as of September 30, 2022:

of Actual Stock Options Issued and Outstanding

(exercisable)

4 unchanged sentences

of Income Per Share

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

September 30,

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

Basic income (loss) per share

Weighted average number of common shares - basic

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

Net income (loss) per share – basic

1 unchanged sentence

Dilutive effect of convertible debentures

( 1,945,686 )

Dilutive effect of warrants on net income

8 unchanged sentences

Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)

and Six Months Ended June 30, 2022

in United States Dollars)

Three and Nine Months Ended September

(Expressed in United States Dollars)

Restricted Share Units

1 unchanged sentence

key employees, and consultants.

following table summarizes the RSU activity during the six months ended June 30, 2022:

following table summarizes the RSU activity during the nine months ended September 30, 2022:

Schedule of Restricted Share Units

2 unchanged sentences

Unvested as at December 31, 2021

Unvested as at June 30, 2022

Unvested as at September 30, 2022

On April 14, 2020, the Company granted 400,000 RSUs to a certain officer of the Company.

1 unchanged sentence

each anniversary of the grant date.

The vesting of these RSUs resulted in stock-based compensation of $ 22,663 and $ 43,161 for the six

months ended June 30, 2022 and 2021, respectively, which is included in operation and administration expenses on the condensed interim

consolidated statements of income and comprehensive income.

The vesting of these RSUs resulted in stock-based compensation of $ 30,380 and $ 57,495 for the nine

months ended September 30, 2022 and 2021, 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.

1 unchanged sentence

each anniversary of the grant date.

The vesting of these RSUs resulted in stock-based compensation of $ 7,834 and $ 14,934 for the six

months ended June 30, 2022 and 2021, respectively, which is included in operation and administration expenses on the condensed interim

The vesting of these RSUs resulted in stock-based compensation of $ 10,452 and $ 19,796 for the nine

months ended September 30, 2022 and 2021, respectively, which is included in operation and administration expenses on the condensed interim

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

2 unchanged sentences

each anniversary of the grant date.

The vesting of these RSUs resulted in stock-based compensation of $ 8,362 and $ 16,081 for the six

months ended June 30, 2022 and 2021, respectively, which is included in operation and administration expenses on the condensed interim

The vesting of these RSUs resulted in stock-based compensation of $ 12,612 and $ 24,255 for the nine

months ended September 30, 2022 and 2021, 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.

Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)

Three and Nine Months Ended September

(Expressed in United States Dollars)

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 resulted in stock-based compensation of $ nil and $ 58,740 for the six months ended June 30, 2022 and 2021, respectively,

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

income (loss).

The vesting of these RSUs resulted in stock-based compensation of $ nil and $ 58,740 for the nine months ended September 30, 2022 and 2021,

respectively, 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.

4 unchanged sentences

The vesting of these RSUs

resulted in stock-based compensation of $ nil and $ 265,101 for the six months ended June 30, 2022 and 2021, respectively.

resulted in stock-based compensation of $ nil and $ 265,101 for the nine months ended September 30, 2022 and 2021, respectively.

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 $ nil for the six months ended June 30, 2022 and 2021, respectively.

Hill Mining Corp.

Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)

and Six Months Ended June 30, 2022

in United States Dollars)

in stock-based compensation of $ nil and $ 4,026 for the nine months ended September 30, 2022 and 2021, respectively.

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 $ nil for the six months ended June 30, 2022 and 2021, respectively.

in stock-based compensation of $ nil and $ 100,022 for the nine months ended September 30, 2022 and 2021, respectively.

On January 10, 2022, the Company granted 500,000 RSUs to a consultant of the Company, vesting immediately.

The vesting of these RSUs

resulted in stock-based compensation of $ 122,249 for the six months ended June 30, 2022, which is included in operation and administration

resulted in stock-based compensation of $ 122,249 for the nine months ended September 30, 2022, which is included in operation and administration

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

1 unchanged sentence

The vesting of these RSUs

resulted in stock-based compensation of $ 16,800 for the six months ended June 30, 2022, which is included in operation and administration

resulted in stock-based compensation of $ 16,800 for the nine months ended September 30, 2022, which is included in operation and administration

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

1 unchanged sentence

The vesting of these RSUs resulted

in stock-based compensation of $ 2,328 for the six months ended June 30, 2022, which is included in operation and administration expenses

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

in stock-based compensation of $ 2,328 for the nine months ended September 30, 2022, which is included in operation and administration

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

On September 29, 2022 the Company granted 33,000 RSUs to two consultants of the Company, vesting immediately.

The vesting of these RSUs

resulted in stock-based compensation of $ 2,889 for the nine months ended September 30, 2022, which is included in operation and administration

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

Deferred Share Units

4 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 six months ended June 30, 2022 and 2021:

Hill Mining Corp.

Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)

Three and Nine Months Ended September

(Expressed in United States Dollars)

following table summarizes the DSU activity during the nine months ended September 30, 2022 and 2021:

Schedule of Deferred Share Units

Unvested as at December 31, 2020 and March 31, 2021 (i)

Unvested as at December 31, 2020 and September 30, 2021 (i)

Unvested as at December 31, 2021

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( 3,125,000 )

Unvested as at June 30, 2022

Unvested as at September 30, 2022

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

The DSUs vest in one fourth increments

upon each anniversary of the grant date and expire in 5 years.

During the six months ended

June 30, 2022, and 2021 the Company recognized $ 507,398 and $ 139,721 , respectively, recovery

of stock-based compensation related to the DSUs, which is included in operation and administration

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

income (loss).

Upon redemption of the 2,500,000 DSUs (see (iii)) the fair value of the remaining

DSU liability at June 30, 2022 was $ 635,993 .

March 31, 2022, the Board approved the early vesting of 625,000 DSUs for one of the Company’s

the three months ended June 30, 2022, the director redeemed 2,500,000 DSUs for C$ 750,000 ,

and elected to use net proceeds to subscribe for 375,000 units in the Company’s April

2022 special warrant issuance at C$ 0.30 per unit, with the balance of the redeemed amount

payable in cash after applicable withholding tax deductions.

Hill Mining Corp.

Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)

and Six Months Ended June 30, 2022

in United States Dollars)

The DSUs vest in one fourth increments upon each anniversary of the grant date

and expire in 5 years.

On July 1, 2022 the Company granted 210,000 DSU’s, these DSU’s vest after 12 months of the issuance

During the nine months ended September 30, 2022, and 2021 the Company recognized $ 493,060 and $ 430,964 , respectively, recovery

of stock-based compensation related to the DSUs, which is included in operation and administration expenses on the condensed interim

consolidated statements of income (loss) and comprehensive income (loss), as DSU’s were settled in cash during the 9 months

ended September 30, 2022.

Upon redemption of the 2,500,000 DSUs (see (iii)) the fair value of the remaining DSU liability at September

30, 2022 was $ 363,648 .

March 31, 2022, the Board approved the early vesting of 625,000 DSUs for one of the Company’s Directors.

the nine months ended September 30, 2022, the director redeemed 2,500,000 DSUs for C$ 750,000 , and elected to use net proceeds to

subscribe for 375,000 units in the Company’s April 2022 special warrant issuance at C$ 0.30 per unit, with the balance of the

redeemed amount payable in cash after applicable withholding tax deductions.

The DSU’s were therefore all accelerated to vest.

Commitments and Contingencies

3 unchanged sentences

incurred through December 2021 are payable to the EPA, and water treatment costs incurred thereafter are payable to the IDEQ.

(formerly the EPA) invoices the Company on an annual basis for the actual water treatment costs, which may exceed the recognized estimated

costs significantly.

When the Company receives the water treatment invoices, it records any liability for actual costs over and above

any estimates made and adjusts future estimates as required based on these actual invoices received.

The Company is required to pay for

the actual costs regardless of the periodic required estimated accruals and payments made each year.

(as done formerly by the EPA) invoices the Company on an annual basis for the actual water treatment costs, which may exceed the recognized

estimated costs significantly.

When the Company receives the water treatment invoices, it records any liability for actual costs over

and above any estimates made and adjusts future estimates as required based on these actual invoices received.

The Company is required

to pay for the actual costs regardless of the periodic required estimated accruals and payments made each year.

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

2 unchanged sentences

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.

On September 20, 2021, the Company filed a motion to dismiss Crescent’s claims against it, contending

that such claims are facially deficient.

On March 2, 2022, Chief US District Court Judge, David C.

Nye granted in part and denied

in part the Company’s motion to dismiss.

The court granted the Company’s motion to dismiss Crescent’s Cost Recovery

claim under CERCLA Section 107(a), Declaratory Judgment, Tortious Interference, Trespass, Nuisance and Negligence claims.

were dismissed without prejudice.

with the other defendants for unspecified past and future costs associated with the presence of acid mine drainage (“AMD”)

in the Crescent Mine.

The plaintiff has requested unspecified damages.

On September 20, 2021, the Company filed a motion to dismiss Crescent’s

claims against it, contending that such claims are facially deficient.

On March 2, 2022, Chief US District Court Judge, David

Nye granted in part and denied in part the Company’s motion to dismiss.

The court granted the Company’s motion to dismiss

Crescent’s Cost Recovery claim under CERCLA Section 107(a), Declaratory Judgment, Tortious Interference, Trespass, Nuisance and

Negligence claims.

These claims were dismissed without prejudice.

The court denied the motion to dismiss filed by Placer Mining Corp.

for Crescent’s trespass,

nuisance and negligence claims.

for Crescent’s trespass, nuisance and negligence claims.

Crescent later filed an amended complaint on April 1, 2022.

Placer Mining Corp.

and Bunker Hill Mining

Corp are named as co-defendants.

Bunker Hill responded to the amended filing, refuting and denying all allegations made in the complaint

except those that are assertions of fact as a matter of public record.

The Company believes the lawsuit against Placer Mining Corp.

without merit and intends to defend Placer Mining Corp.

vigorously pursuant to the Company’s indemnification of Placer Mining Corp

in the Sale and Purchase agreement executed between the companies for the Mine on December 15, 2021.

The court is in the process of ruling

with respect to the timeline for next steps in the legal process.

Placer Mining

and Bunker Hill Mining Corp are named as co-defendants.

Bunker Hill responded to the amended filing, refuting and denying all allegations

made in the complaint except those that are assertions of fact as a matter of public record.

The Company believes Crescent’s is

without merit and intends to vigorously defend itself, as well as Placer Mining Corp.

pursuant to the Company’s indemnification

of Placer Mining Corp in the Sale and Purchase agreement executed between the companies for the Mine on December 15, 2021.

Hill Mining Corp.

Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)

Three and Nine Months Ended September

(Expressed in United States Dollars)

Related party transactions

2 unchanged sentences

Schedule of Related Party Transactions

Consulting fees

June 30, 2022 and June 30, 2021, $ 1,049,304 and $ 69,835 , respectively is owed to key management personnel with all amounts included in

accounts payable and accrued liabilities.

September 30,

Consulting fees and wages

September 30, 2022 and September 30, 2021, $ 15,000 and $ 102,235 , respectively is owed to key management personnel with all amounts included

in accounts payable and accrued liabilities.

July 1, 2022 the Company issued 210,000 DSU’s to a director of the Company.

Subsequent Events

July 2022, the Company issued 1,975,482 common shares in connection with its election to satisfy interest payments under the outstanding

convertible debentures for the three months ending June 30, 2022.

July 29, 2022, the Company held its Annual General Meeting during which all director nominations and other proposals were approved.

included the re-appointment of Dr.

Mark Cruise, whose initial appointment was announced on June 30, 2022, replacing Mr.

Wayne Parsons.

The following notable proposals were approved:

(i) an increase in the authorized common share capital of the Company to 1,500,000,000

common shares, (ii) authorization for a share consolidation of up to 50:1 if enacted within the following two years, and (iii) an increase

in the maximum RSUs issuable under the Company’s Restricted Share Unit plan.

October 2022, the Company issued 8,252,940 common shares in connection with its election to satisfy interest payments under the outstanding

convertible debentures for the three months ending September 30, 2022.

October 2022, the Company reported that it has been successful in securing a new payment bond to secure a portion of its cost recovery

obligations to the US Environmental Protection Agency (the “US EPA”), resulting in a $ 3,000,000 improvement in liquidity.

As reported in the Company’s financial statements for the period ending September 30, 2022, the Company held restricted cash of

$ 9,476,000 as of September 30, 2022 which included $ 7,001,000 as collateral for a letter of credit to the US EPA.

This letter of credit

has been reduced to $ 2,000,001 as a result of a new $ 5,000,000 payment bond obtained through an insurance company.

The collateral for

the new payment bond is comprised of a $ 2,000,000 letter of credit and land pledged by third parties, with whom the Company has entered

into a financing cooperation agreement that contemplates a monthly fee of $ 20,000 (payable in cash or common shares of the Company, at

the Company’s election).

The new payment bond is scheduled to increase to $ 7,001,000 (from $ 5,000,000 ) upon the advance of the

multi-metals Stream from Sprott Private Resource Streaming & Royalty Corp.

(see the Company’s news release of December 20, 2021

for further detail), which would result in a further $ 2,001,000 improvement in liquidity for the Company from the release of restricted

October 2022, the Company reported that it awarded a new water management consulting services contract to MineWater LLC (“MineWater”)

for strategic environmental support at the Bunker Hill Mine through September 30, 2023.

Pursuant to the contract, the Company agreed

to pay MineWater $ 60,000 in cash and issue 1,599,150 Restricted Share Units, which were issued and vested immediately to common shares

of the Company that are subject to customary resale restrictions in Canada and the United States.

November 2022, the Company awarded 4,396,741 Restricted Share Units to certain executives in relation to an annual grant under its Long-Term

Incentive Plan.

The RSUs vest in one-third increments on March 31 of 2023, 2024, and 2025.

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