What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-09 compared with 2023-11-13 · 487 added, 816 removed, 331 unchanged (80% of the section changed)

Financial Statements

unaudited condensed interim consolidated financial statements of Bunker Hill Mining Corp., (“Bunker Hill”, the

“Company”, or the “Registrant”) a.

Nevada corporation, included herein were prepared, without audit,

pursuant to rules and regulations of the Securities and Exchange Commission.

Because certain information and notes normally included

in financial statements prepared in accordance with accounting principles generally accepted in the United States of America

(“U.S.”) were condensed or omitted pursuant to such rules and regulations, these financial statements should be read in

conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Form 10-K for the

year ended December 31, 2022.

condensed interim consolidated financial statements of Bunker Hill Mining Corp., (“Bunker Hill”, the “Company”,

or the “Registrant”) a Nevada corporation, included herein were prepared, without audit, pursuant to rules and regulations

of the Securities and Exchange Commission.

Because certain information and notes normally included in financial statements prepared in

accordance with accounting principles generally accepted in the United States of America (“U.S.”) were condensed or omitted

pursuant to such rules and regulations, these financial statements should be read in conjunction with the audited consolidated financial

statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2023, and all amendments thereto.

Hill Mining Corp.

Condensed Interim Consolidated Balance Sheets

Interim Consolidated Balance Sheets

in United States Dollars)

September 30,

Current assets

Restricted cash

Accounts receivable and prepaid expenses (note 3)

Restricted cash (note 8)

receivable and prepaid expenses (note 3)

Total current assets

Non-current assets

Spare parts inventory

Spare parts inventory (note 5)

Long term deposit

Equipment (note 4)

Right-of-use asset (note

Long term deposit

Bunker Hill Mine and mining interests (note 5)

Process plant (note 4)

Bunker Hill Mine and mining

interests (note 6)

plant (note 5)

EQUITY AND LIABILITIES

Current liabilities

Accounts payable

Accounts payable (note 16)

Accrued liabilities

Current portion of lease liability

Derivative warrant liability (note 8)

Deferred share units liability (note 10)

Interest payable (note 7)

Promissory notes payable (note 7)

Current portion of lease

liability (note 7)

Deferred share units liability

Environment protection

agency cost recovery payable (note 8)

Current portion of stream

payable (note 9)

Total current liabilities

Non-current liabilities

Bridge loan (note 7)

Series 1 convertible debenture (note 7)

Series 2 convertible debenture (note 7)

Stream obligation (note 7)

Royalty convertible debenture (note 7)

Environmental protection agency cost recovery liability, net of discount (note 6)

Deferred tax liability (note 12)

Derivative warrant liabilities (note 8)

Total liabilities

Lease liability (note 7)

Series 1 convertible debenture

Series 2 convertible debenture

Stream debenture (note

Environment protection

agency cost recovery liability, net of discount (note 8)

Deferred tax liability

warrant liability (note 10)

Shareholders’ Deficiency

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

Nil preferred shares issued and outstanding (note 8)

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

317,444,482 and 229,501,661 common shares issued and outstanding, respectively (note 8)

Additional paid-in-capital (note 8)

Accumulated other comprehensive income

Accumulated deficit

Preferred shares, $ 0.000001 par value, 10,000,000

preferred shares authorized

Common shares, $ 0.000001 par value, 1,500,000,000

common shares authorized

Additional paid-in-capital

Accumulated other comprehensive

( 90,607,134 )

( 85,025,098 )

Total shareholders’ deficiency

shareholders’ deficiency

( 30,818,372 )

( 26,367,162 )

Total shareholders’ deficiency and liabilities

shareholders’ deficiency and liabilities

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

Hill Mining Corp.

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

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

in United States Dollars)

Three Months Ended

Nine Months Ended

September 30,

Operating expenses

Operation and administration

Mine preparation

Legal and accounting

Consulting and wages

Loss from operations

( 2,771,722 )

( 3,824,948 )

expenses (note 15)

$ ( 3,787,631 )

$ ( 2,185,488 )

Other income or gain (expense or loss)

Other income or gain (expense

Interest income

Change in derivative liabilities (note 8)

Gain on FV of debentures (note 7)

Gain on EPA settlement

Gain on debt settlement (note 5)

Gain on warrant settlement

Change in derivative liability

(Loss) gain on FV of convertible

debentures (note 9)

Gain on modification of

warrants (note 10)

Gain (loss) on foreign

Interest expense (note

1 unchanged sentence

( 1,324,629 )

( 5,006,692 )

( 2,143,840 )

Debenture finance costs

( 1,230,539 )

Finance costs (note 7, 8)

Loss on debt modification (note 7)

Loss on debt settlement (note 7)

Other (loss) income

(Loss) on foreign exchange

(Loss) income for the period pre tax

$ ( 5,013,034 )

Deferred tax recovery (expense) (note 12)

Financing costs (note 10)

Loss on stream debentures

Loss on debt settlement

(Loss) income for the period

( 6,281,956 )

Net (loss) income for the period

Deferred income tax

recovery (note 14)

income for the period

( 5,582,036 )

Other comprehensive income, net of tax:

Gain on change in FV on own credit risk

Other comprehensive income

Comprehensive (loss) income

$ ( 7,116,440 )

Dilutive effect of derivative warrant liabilities

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

(loss), net of tax

Gain on change in FV

on own credit risk (note 9)

comprehensive income

Comprehensive

(loss) income

( 5,293,664 )

Net income (loss) per common share – basic

Net income (loss) per common share – fully diluted

Net (loss)/income per common share

Net (loss)/income per

common share – fully diluted

Weighted average common shares – basic

Weighted average common shares – fully diluted

Weighted average common shares –

fully diluted

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

Hill Mining Corp.

Condensed Interim Consolidated Statements of Cash Flows

Interim Consolidated Statements of Cash Flows

in United States Dollars)

September 30,

Operating activities

Net (loss) income for the period

Net (loss) income for the

$ ( 5,582,036 )

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

Adjustments to reconcile net loss to net cash

used in operating activities:

Stock-based compensation

Depreciation expense

Change in fair value of warrant liability

Change in fair value of

warrant liability

( 4,226,574 )

Deferred tax expense

Gain on warrant settlement

Gain on warrant extinguishment

Units issued for services

Interest expense on lease liability

Interest expense

Interest expense on lease

liability (note 7)

Financing costs

Foreign exchange loss (gain)

Foreign exchange loss (gain) on re-translation of lease

Loss on debt modification

Loss on debt settlement

Loss (gain) on fair value of debentures

( 2,256,437 )

( 3,041,056 )

Accretion of non-current liabilities

Gain on debt settlement

( 7,117,420 )

Gain on EPA debt settlement

( 8,614,103 )

Changes in operating assets and liabilities:

Accounts receivable and prepaid expenses

Loss on debt modification

Accretion of liabilities

Loss (gain) on fair value

of derivatives

( 1,689,701 )

Changes in operating assets

and liabilities:

Accounts receivable and

prepaid expenses

Accounts payable

( 1,393,749 )

Accrued liabilities

Accrued EPA/IDEQ water treatment

Prepaid finance costs

Deposit on plant demobilization

( 1,000,000 )

EPA cost recovery payable

( 2,000,000 )

Interest payable - EPA

Interest payable

Net cash used in operating activities

cash used in operating activities

( 2,863,167 )

1 unchanged sentence

Investing activities

Additions to Bunker Hill Mine and mining interests

( 1,094,037 )

( 5,880,471 )

Land purchase

Process plant

( 2,596,535 )

( 2,815,398 )

Purchase of equipment

Purchase of spare parts inventory

Net cash used in investing activities

( 7,132,476 )

Mine improvements

of machinery and equipment

cash used in investing activities

( 3,356,219 )

Financing activities

Proceeds from stream obligation

Transaction costs stream obligation

Proceeds from convertible debentures

Proceeds from issuance of shares, net of issue costs

Proceeds from issuance of special warrants

Proceeds from warrants exercise

Proceeds from promissory note

Repayment of bridge loan

( 5,000,000 )

Repayment of promissory notes

( 1,000,000 )

Lease payments

Net cash provided by financing activities

Proceeds from issuance

of special warrants

Proceeds from warrants

Proceeds from promissory

cash (used) provided by financing activities

Net change in cash

Cash and restricted cash, beginning of period

Cash and restricted cash, end of period

( 6,418,054 )

Cash, beginning of

Cash, end of period

Supplemental disclosures

Cash interest paid

Non-cash activities

Accounts payable, accrued liabilities, and promissory notes settled with special warrants issuance

Mill purchase for shares and warrants

Units issued to settle DSU/RSU/Bonuses

Interest payable settled with common shares

Reconciliation from Cash Flow Statement to Balance Sheet:

Cash and restricted cash end of period

Less restricted cash

Accounts payable, accrued

liabilities, and promissory notes settled with special warrants issuance

Interest payable settled

with common shares

Reconciliation from Cash Flow Statement to

Balance Sheet:

Cash and restricted cash

end of period

restricted cash

Cash end of period

1 unchanged sentence

Hill Mining Corp.

Condensed Interim Consolidated Statements of Changes in Shareholders’ Deficiency

Interim Consolidated Statements of Changes in Shareholders’ Deficiency

in United States Dollars)

subscriptions

comprehensive

4 unchanged sentences

Compensation options

Shares issued for RSUs vested

Non brokered shares issued for $0.30 CAD

Stock subscription received for units

Contractor shares issued for $0.30 CAD

Shares issued for Mill purchase

Warrant valuation

Shares issued for interest

Shares issued for RSUs

Shares issued for warrant exercise

Shares issued for interest payable

Special warrant shares issued for $ 0.15 CAD

Net income (loss) for the period

Special warrants

income (loss) for the period

( 5,582,036 )

Balance, September 30, 2023

Balance, March 31, 2024

$ ( 90,607,134 )

7 unchanged sentences

Compensation options

Shares issued for interest payable

Shares issued for RSUs vested

Non brokered shares issued for $ 0.30 CAD

Stock subscription received for units

Special warrant shares issued for $ 0.30 CAD

( 1,775,790 )

Contractor shares issued for $ 0.30 CAD

Shares issued for Mill purchase

Warrant valuation

( 6,246,848 )

Net income (loss) for the period

Balance, September 30, 2022

Shares issued for interest

Shares issued for warrant exercise

Special warrants

income (loss) for the period

Balance, March 31, 2023

$ ( 69,801,410 )

4 unchanged sentences

Hill Mining Corp.

to the Unaudited Condensed Interim Consolidated Financial Statements

and Nine Months Ended September 30, 2023

to the Condensed Interim Consolidated Financial Statements (Unaudited)

Months Ended March 31, 2024

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, and exploitation activities.

3 unchanged sentences

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, 2022.

The interim results for the period ended September 30, 2023, are not necessarily indicative of the

results for the full fiscal year.

The unaudited condensed interim 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, 2023.

The interim results for the period ended March 31,

2024, 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.

preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management

10 unchanged sentences

Schedule of Accounts receivable and prepaid expenses

September 30,

Prepaid expenses and deposits

Environment protection agency overpayment (note 6)

Equipment, Right-of-Use asset, and Process Plant

HST Receivable

Environment protection

agency overpayment (note 8)

Equipment, Right-of-Use Asset

consists of the following:

Schedule of Equipment

September 30,

Equipment, gross

Less accumulated depreciation

Less accumulated

Equipment, net

total depreciation expense relating to equipment during the three and nine months ended September 30, 2023, was $ 30,344 and $ 106,769 ,

total depreciation expense relating to equipment during the three months ended March 31, 2024, and March 31, 2023 was $ 46,465 and $ 44,692 ,

respectively.

Compared to the three and nine months ended September 30, 2022, was $ 42,814 and $ 119,905 , respectively.

May 13, 2022, the Company completed the purchase of a package of equipment and parts inventory from Teck Resources Limited’s (“Teck”)

Pend Oreille operation.

The package comprises substantially all the mineral processing equipment 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 components

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

purchase of the mill has been valued at:

consideration given, comprised of $ 500,000 non-refundable 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 .

a result, the total value of the mill at the time of purchase was determined to be $ 3,974,296 , including $ 341,004 of spare parts

process plant was purchased in an assembled state, 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 sheets as a non-current asset in accordance with the 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.

asset consists of the following:

Schedule of Right-of-use Asset

Right-of-use asset

Less accumulated

Right-of-use asset,

total depreciation expense during the three months ended March 31, 2024, and March 31, 2023, was $ 44,349

(relating to an expired lease), respectively.

The Company is a party primarily to lease contracts for mining related mobile

Process Plant

Company purchased a comprehensive package of equipment and parts inventory from Teck Resources Limited (“Teck”).

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 spares.

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 condensed interim consolidated balance sheets as a non-current asset in accordance with

a purchase price allocation.

As the plant is demobilized, transported and reassembled, installation and other costs associated

with these activities is being captured and capitalized as components of the asset.

plant consists of the following:

Schedule of Plant Asset Consists

September 30,

Plant purchase price less inventory

Ball mill purchase

Demobilization

Site preparation costs

Capitalized interest

Process Plant

June 30, 2023, the Company made the final payment of $ 545,626 to D’Angelo International LLC to complete the purchase of a ball

mill for a total $ 745,626 (inclusive of two previously paid deposits of $ 100,000 from the Company to D’Angelo International

The ball mill is capable of delivering the 1,800 ton per day mine plan envisaged in the Company’s Prefeasibility Study, and

subject to future detailed engineering and mine planning, the mill could also potentially support a throughput increase.

asset consists of the following:

Schedule of Right-of-use Asset

September 30,

Loader leases

Loader leases accumulated depreciation

Right-of-use asset, net

total depreciation expense during the three and nine months ended September 30, 2023, was $ 6,887 and $ 19,656 , respectively.

to the three and nine months ended September 30, 2022, was $ nil and $ 52,353 , (relating to an expired lease) respectively.

Bunker Hill Mine and Mining Interests

Hill Mine Purchase

Company purchased the Bunker Hill Mine (the “Mine”) in January 2022, as described below.

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.

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

towards 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.

Amended Agreement also required payments pursuant to an agreement with the 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 as per the Settlement Agreement reached with the

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

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).

$ 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

prior years’ maintenance payments.

purchase of the mine has been valued on January 7, 2022:

purchase price of $ 7,700,000 less $ 300,000 credit by seller for prior maintenance payments.

present value of water treatment cost recovery liability assumed of $ 6,402,425 .

legal and closing costs of $ 444,785 .

a result, the total value of the mine at the time of purchase was determined to be $ 14,247,210 .

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).

has determined the purchase to be an acquisition of a single asset.

on October 1, 2022, the Company capitalizes mine development.

Through September 30, 2023, a total of $ 2,218,439 had been capitalized.

of Mineral Properties

June 23, 2023, as consideration for the extinguishment of the RCD, as described in note 7, the Company granted a royalty for 1.85 % of

life-of-mine gross revenue (the “Royalty”) from mining claims considered to be historically worked, contiguous to current

accessible underground development, and covered by the Company’s 2021 ground geophysical survey.

A 1.35% rate will apply to claims

outside of these areas.

transaction is treated as a sale of mineral interest to Sprott.

The portion of the mineral interest sold was determined based on an

analysis of discounted life-of-mine royalty payments relative to discounted future cash flows generated from the mine net of capital

and operating costs, applied to the carrying value of the Bunker Hill Mine as of June 23, 2023 before consideration of the sale of

mineral properties.

This analysis utilized a discount rate of 13% and long-term metal prices of $1.09/lb, $0.98/lb and $25.51/oz for

zinc, lead and silver respectively, consistent with assumptions utilized in the valuation of the RCD at extinguishment.

has recognized a gain of $ 6,980,932

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

(loss) income.

Company purchased the Bunker Hill Mine (the “Mine”) in January 2022.

carrying cost of the Mine is comprised of the following:

Schedule of Mining Interests

September 30,

Bunker Hill Mine purchase

Capitalized development

Sale of mineral properties (note 7)

Sale of mineral properties

( 1,973,840 )

Bunker Hill mine

purchase and lease

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

patented mining claims, for which the Company already owns the mineral rights.

the nine months ended September 30, 2023, the Company entered into a lease agreement with C & E Tree Farm LLC for the lease of a

land parcel overlaying a portion of the Company’s existing mineral claims package.

purchase and leases

Company owns a 225-acre surface land parcel valued at its original purchase price of $ 202,000 which includes the surface rights

to portions of 24 patented mining claims, for which the Company already owns the mineral rights.

the three months ended March 31, 2023, the Company entered into a lease agreement with C & E Tree Farm LLC for the lease of a land

parcel overlaying a portion of the Company’s existing mineral claims package.

The Company is committed to making monthly payments

1 unchanged sentence

The Company has the option to purchase the land parcel through March 1, 2026, for $ 3,129,500 less 50%

of the payments made through the date of purchase (note 11).

of the payments made through the date of purchase.

Lease Liability

of March 31, 2024, The Company’s undiscounted lease obligations consisted of the following:

of Lease Liability

Gross lease obligation – minimum lease

Future interest expense

on lease obligations

Total lease liability

Current lease liability

Non-current lease liability

Total lease liability

Environmental Protection Agency and Water Treatment Liabilities (“EPA”)

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

US Department of Justice, and the EPA (the “Amended Settlement”).

Upon the effectivity of the Amended Settlement, the Company

would become fully compliant with its payment obligations to these parties.

The Amended Settlement modified the payment schedule and

payment terms for recovery of the historical environmental costs.

Pursuant to the terms of the Amended Settlement, upon purchase of the

Bunker Hill Mine and the satisfaction of financial assurance commitments (as described below), the $ 19,000,000

of cost recovery liabilities will be paid by

the Company to the EPA on the following dates:

Department of Justice, and the EPA (the “Amended Settlement”).

Upon the effectiveness of the Amended Settlement, the

Company would become fully compliant with its payment obligations to these parties.

The Amended Settlement modified the payment schedule

and payment terms for recovery of the historical environmental response costs.

Pursuant to the terms of the Amended Settlement, upon

purchase of the Bunker Hill Mine and the satisfaction of financial assurance commitments (as described below), the $ 19,000,000 of cost

recovery liabilities will be paid by the Company to the EPA on the following dates:

Schedule of Amended Settlement Environmental Protection Agency Agreement

Within 30 days of Settlement Agreement

Within 30 days of Settlement

November 1, 2024

5 unchanged sentences

plus accrued interest

addition to the changes in payment terms and schedule, the Amended Settlement included a commitment by the Company to secure $ 17,000,000

of financial assurance in the form of performance bonds or letters of credit deemed acceptable to the EPA within 180 days from the effective

date of the Amended Settlement.

Once in place, the financial assurance can be drawn on by the EPA in the event of non-performance by

the Company of its payment obligations under the Amended Settlement (the “Financial Assurance”).

The amount of the bonds

will decrease over time as individual payments are made.

Company completed the purchase of the Mine (see note 5) and made the initial $ 2,000,000

cost recovery payment on January 7, 2022.

Concurrent 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 from $ 9,000,000 .

This was capitalized as $ 6,402,425

to the carrying value of the Bunker Hill Mine at time of purchase, comprised of $ 3,000,000

of incremental current liabilities and $ 5,000,000

of non-current liabilities (discounted to $ 3,402,425 ).

the year ended 2022, the financial assurance was put into place, enabling the restructuring of the payment under the Amendment Settlement

with the entire $ 17,000,000 liability being recognized as long-term.

As of September 30, 2023 (unchanged from December 31, 2022), the

Company had two payment bonds of $ 9,999,000 and $ 5,000,000 , and a $ 2,001,000 letter of credit, in place to secure this liability.

collateral for the payment bonds is comprised of two letters of credit of $ 4,475,000 in aggregate, as well as 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 letters of credit of $ 6,476,000 in aggregate are secured by cash

deposits under an agreement with a commercial bank, which comprise the $ 6,476,000 of restricted cash shown within current assets as of

September 30, 2023.

Company recorded accretion expense on the liability of $ 420,518 and $ 1,191,487 for the three and nine months ended September 30, 2023,

respectively, bringing the net liability to $ 9,132,953 (previously accrued interest of $ 154,743 ) as of September 30, 2023.

Treatment Charges – Idaho Department of Environmental Quality

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

Water treatment

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

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

addition to the changes in payment terms and schedule, the Amended Settlement includes a commitment by the Company to secure $ 17,000,000

of financial assurance in the form of performance bonds or letters of credit deemed acceptable to the EPA.

of March 31, 2024 (unchanged from December 31, 2023), the Company had two payment bonds of $ 9,999,000 and $ 5,000,000 , and a $ 2,001,000

letter of credit, in place to secure this liability.

The collateral for the payment bonds is comprised of two letters of credit of $ 4,475,000

in aggregate, as well as 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).

of credit of $ 6,476,000 in aggregate are secured by cash deposits under an agreement with a commercial bank, which comprise the $ 6,476,000

of restricted cash shown within current assets as of March 31, 2024, and December 31, 2023.

The financial assurance can be drawn on by the EPA

in the event of non-performance by the Company of its payment obligations under the Amended Settlement (the “Financial Assurance”).

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

Company recorded accretion expense on the liability of $ 452,807 for the three months ended March 31, 2024 ($ 374,306 for the three months

ended March 31, 2023), bringing the net liability to $ 10,026,947 (inclusive of interest payable of $ 156,343 ).

Treatment Charges – Idaho Department of Environmental Quality (“IDEQ”)

Separate to the cost recovery liability outlined above,

the Company is responsible for the payment of ongoing water treatment charges.

Water treatment charges incurred through December 31, 2021,

were payable to the EPA, and charges thereafter are payable to the Idaho Department of Environmental Quality (“IDEQ”) following

a handover of responsibilities for the Central Treatment Plant from the EPA to the IDEQ as of that date.

Company currently makes monthly payments of $ 100,000 to the IDEQ as instalments toward the cost of treating water at the Central Treatment

3 unchanged sentences

cost of water treatment.

As of September 30, 2023, a prepaid expense of $ 90,000 (December 31, 2022:

$ 170,729 ) represents the difference

between the estimated cost of water treatment and net payments made by the Company to the IDEQ to date.

This balance has been recognized

on the unaudited condensed interim balance sheets as accounts receivable and prepaid expenses.

Promissory Notes Payable and Convertible Debentures

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

bearing interest of 15 %

per annum and payable at maturity.

The Company purchased a land parcel for approximately $ 202,000

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

The promissory note was originally scheduled to mature on

March 15, 2022, however, was extended multiple times and is currently due on December

Principal payments of $ 1,000,000

in aggregate were made in the year ended December 31, 2022.

Principal payment of $ 504,315

was made during the 9 months ended September 30, 2023.

The Company incurred a one-time penalty of 10 %

of the outstanding principal on June 30, 2023, of $ 99,569

which is included in loss on modification of debt in the unaudited condensed interim consolidated statements of income.

February 21, 2023, the Company issued a non-convertible promissory note to a related party of $ 120,000 , and a separate non-convertible

promissory note of $ 120,000 to another party.

Each promissory note bore fixed interest of $ 18,000 per annum, payable at maturity, which

was the earlier of one year or the receipt of an equity or debt financing.

Both promissory notes, including interest, were settled on

March 27, 2023 through participating in the March 2023 Offering (Note 8).

June 2023, the Company issued a non-convertible promissory note in the amount of $ 150,000 .

The promissory note bore fixed interest of

$ 15,000 per annum, payable at maturity, which was the earlier of one year or the receipt of an equity or debt financing.

The promissory

note, including interest, was settled in June 2023.

September 30, 2023, the Company owes $ 1,095,253

in promissory notes payable, which is included in current liabilities on the unaudited condensed interim consolidated balance

Interest expense for the three and nine months ended September 30, 2023, was $ 41,410

and $ 151,821

respectively.

Compared to the three and nine months ended September 30, 2022, was $ 56,712

and $ 224,589

respectively.

At September 30, 2023 financing costs of $ 44,560

at December 31, 2022) is included in interest payable on the unaudited condensed interim balance sheet.

The effective interest rate

of the promissory note is 15 %.

As of March 31, 2024, a prepaid expense of $ nil (December 31, 2023:

$ 94,582 ) represented the difference between

the estimated cost of water treatment and net payments made by the Company to the IDEQ to date.

This balance has been recognized on the

condensed interim consolidated balance sheets as accounts receivable and prepaid expenses.

Convertible Debentures

Finance Package with Sprott Private Resource Streaming & Royalty Corp.

December 20, 2021, the Company executed a non-binding term sheet outlining a $ 50,000,000 project finance package with SRSR.

December 20, 2021, the Company executed a non-binding term sheet outlining a $ 50,000,000 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 expected to fulfill the majority of

1 unchanged sentence

The term sheet consisted of an $ 8,000,000 royalty convertible debenture (the “RCD”),

a $ 5,000,000 convertible debenture (the “CD1”), and a multi-metals Stream of up to $ 37,000,000 .

The CD1 was subsequently

increased to $ 6,000,000 , increasing the project financing package to $ 51,000,000 .

a $ 5,000,000 convertible debenture (the “CD1”), and a multi-metals stream of up to $ 37,000,000 (the “Stream”).

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”).

13 unchanged sentences

to extend the maturities of the CD1 and CD2 to March 31, 2026, when the full $ 6 million and $ 15 million, respectively, will become due.

The Company incurred $ 254,220 of

financing costs on the unaudited condensed interim consolidated statements of (loss) income and comprehensive (loss) income relating

to the modification of CD1, CD2, the extinguishment of RCD and the closing of the $ 21,000,000 debt

Royalty Convertible Debenture

13 unchanged sentences

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

The parties also agreed to enter 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

3 unchanged sentences

for as a modification.

June 23, 2023, the funding date of the Stream, the RCD was repaid by the Company granting a royalty for 1.85% of life-of-mine gross

revenue (the “Royalty”) from mining claims historically worked as described above.

A 1.35% rate will apply to claims

outside of these areas.

The Company recorded a gain on sale of mineral properties of $ 6,980,932

in the unaudited condensed interim consolidated statements of income (loss).

Additionally, on settlement of the RCD, $ 347,499

of previously deferred to other comprehensive (loss) income was recognized in the net income (loss on FV of convertible debentures)

on the unaudited condensed interim consolidated statement of income (loss).

The Royalty Put Option permits SRSR Streaming to resell

the royalty to the Company for $ 8

million upon default under the Series 1 Convertible Debentures or Series 2 Convertible Debentures until such time that they are

repaid in full.

The Company has accounted for the Royalty as a sale of mineral properties (refer to Note 5 for further

June 23, 2023, the funding date of the Stream, the RCD was repaid by the Company granting a royalty for 1.85 % of life-of-mine gross revenue

(the “Royalty”) from mining claims historically worked as described above.

A 1.35 % rate will apply to claims outside of these

The Company has accounted for the Royalty as a sale of mineral properties (refer to note 6 for further detail).

Convertible Debenture (CD1)

1 unchanged sentence

The CD1 bears interest

at an annual rate of 7.5 %, payable in cash or shares at the Company’s option, and initially had a maturity date of the earlier

of July 7, 2023 (subsequently amended, as described below) or the closing of the $ 37,000,000 stream that was announced on December 20,

The CD1 is secured by a pledge of the Company’s properties and assets, and is convertible into Common Shares at a price of

C$ 0.30 per Common Share at SRSR’s election at any time through the maturity date.

The Company may elect to repay the CD1 early;

if SRSR elects not to exercise its conversion option at such time, a minimum of 12 months of interest would apply.

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

as described below).

The CD1 is secured by a pledge of the Company’s properties and assets.

Until the closing of the Stream, the

CD1 was to be convertible into Common Shares at a price of C$ 0.30 per Common Share, subject to stock exchange approval (subsequently

amended, as described below).

Alternatively, SRSR may elect to retire the CD1 with the cash proceeds from the Stream.

The Company may

elect to repay the CD1 early;

if SRSR elects not to exercise its conversion option at such time, a minimum of 12 months of interest would

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

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 or SRSR elects

to exercise its share conversion option.

The Company determined that the amendments in the terms of the CD1 should not be treated as

an extinguishment of the CD1, and have therefore been accounted for as a modification.

with the funding of the Stream in June 2023, the Company and SRSR agreed to amend the maturity date of CD1 from March 31, 2025, to March

31, 2026, and that CD1 would remain outstanding until the new maturity date unless the company elects to exercise its option of early

The Company determined that the amendments to the terms of the CD1 should not be treated as an extinguishment of the CD1 and

have therefore been accounted for as a modification.

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 CD1 should not be treated as an extinguishment of the CD1 and have therefore been accounted

for as a modification.

with the funding of the Stream in June 2023, the Company and Sprott agreed to amend the maturity date of CD1 from March 31, 2025, to

March 31, 2026 , and that CD1 would remain outstanding until the new maturity date unless the company elects to exercise its option of

early repayment.

The Company determined that the amendments to the terms of the CD1 should not be treated as an extinguishment of the

CD1 and have therefore been accounted for as a modification.

Series 2 Convertible Debenture (CD2)

Company closed the $ 15,000,000 CD2 on June 17, 2022.

The CD2 bears interest at an annual rate of 10.5 %, payable in cash or shares at

the Company’s option, and matured on March 31, 2025.

CD2 bears interest at an annual rate of 10.5 %, payable in cash or shares at

the Company’s option, and matures on March 31, 2025 .

The CD2 is secured by a pledge of the Company’s properties and assets.

and is convertible into Common Shares at a price of C$ 0.29 per Common Share at SRSR’s election at any time through the maturity

The repayment terms include 3 quarterly payments of $ 2,000,000 each beginning June 30, 2024, and $ 9,000,000 on the maturity date.

with the funding of the Stream in June 2023, the Company and SRSR agreed to amend the maturity date of the CD2 from 3 quarterly payments

with the funding of the Stream in June 2023, the Company and Sprott agreed to amend the maturity date of the CD2 from 3 quarterly payments

of $ 2,000,000 each beginning June 30, 2024, and $ 9,000,000 on March 31, 2025, to payment in full on March 31, 2026, and that the CD2

would remain outstanding until the new maturity date unless the company elects to exercise its option of early repayment or SRSR elects

would remain outstanding until the new maturity date unless the Company elects to exercise its option of early repayment or Sprott elects

to exercise its share conversion option.

1 unchanged sentence

an extinguishment of the CD2 and have therefore been accounted for as a modification.

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

Company determined that in accordance with ASC 815 Derivatives and Hedging, each debenture will be valued and recorded as a single instrument,

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

1 unchanged sentence

Schedule of Key Valuation Inputs

Reference (2)(4) (5)

Interest rate

Stock price (US$)

Expected equity volatility

Credit spread

Risk-free rate

adjusted rate

(2)(4 )(5)(3)

CD1 note (1)(2)(3)

CD2 note (1)(2)(3)

CD1 note (1)(2)(3)

CD2 note (1)(2)(3)

Convertible Debenture (1)(2)(3)

CD1 carried a Discount for Lack of Marketability (“DLOM”) of 5.0 % as of the issuance date and as of September 30, 2023.

CD2 carried a DLOM of 10.0 % as of the issuance date and September 30, 2023

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 $ 0.226 as of September 30, 2023, and $ 0.219 and CD2 is $ 0.212 as of December 31, 2022

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

valuation of the RCD is driven by the aggregation of (i) the present value of future potential cash flow to the royalty holder, in

the event that the RCD is converted to a royalty, utilizing an estimate of future metal sales and Monte Carlo simulations of future

metal prices, and (ii) the computation of the present value assuming no conversion to the 1.85 % gross revenue royalty.

The valuation

of (i) is compared to the valuation of (ii) for each simulation, with the higher value used in the aggregation to arrive at the fair

value of the RCD.

This results in an implied probability of the RCD being converted to the royalty, in the event that the Stream

Based on this methodology, as of June 30, 2023 (pre-modification), the implied probability of the RCD being converted

to a 1.85 % royalty, in the event that the Stream is advanced, was 77 %.

Credit spread, Risk-free rate, and Risk-adjusted rate shown

for the RCD are applicable to the scenario where the Stream is not advanced.

There are immaterial differences in these inputs for

the scenario where the Stream is advanced.

resulting fair values of the CD1, RCD, and CD2 at September 30, 2023, and as of December 31, 2022, were as follows:

CD1 carried a Discount for Lack of Marketability (“DLOM”) of 5.0 % as of the issuance date and as of March 31, 2022.

CD2 carried a DLOM of 10.0 % as of the issuance date and June 30, 2022

CD1 carries an instrument-specific spread of 7.23 %, CD2 carries an instrument-specific spread of 9.32 %

conversion price of the CD1 is $ 0.221 and CD2 is $ 0.214 as of March 31, 2024.

The conversion price of the CD1 is $ 0.227 and CD2 is

$ 0.219 as of December 31, 2023.

resulting fair values of the CD1 and CD2 at March 31, 2024, and as of December 31, 2023, were as follows:

Schedule of Fair Value Derivative Liability

Instrument Description

September 30,

total gain on fair value of debentures recognized during the three and nine months ended September 30, 2023 was $ 2,450,968 and

$ 2,256,437 ,

respectively, and $ 1,301,069 and

$ 3,041,056 for

the three and nine months ended September 30, 2022, respectively.

The portion of changes in fair value attributable to changes in

the Company’s credit risk is accounted for within other comprehensive (loss) income during the three and nine months ended

September 30, 2023 was $ 68,738 and

respectively.

Compared to the three and nine months ended September 30, 2022 was $ 625,050 and

respectively.

Interest expense for the three and nine months ended September 30, 2023 was $ 510,411 and

$ 1,857,822 ,

respectively.

Compared to the three and nine months ended September 30, 2022 was $ 691,111 and

$ 1,279,849 ,

respectively.

At September 30, 2023 interest of $ 510,411 ($ 691,890 at

December 31, 2022) is included in interest payable on the consolidated balance sheets.

For the three and nine months ended September

30, 2023 the Company recognized $ nil and

respectively, loss on debt settlement in the unaudited condensed interim consolidated statements of (loss) income and comprehensive

(loss) income as a result of settling interest by issuance of shares ( 0

(loss) gain on changes in FV of convertible debentures recognized on the condensed interim consolidated statements of (loss) Income

during the three months ended March 31, 2024, and March 31, 2023, was $ ( 157,232 )

and $ 1,689,701 ,

shares for the three and nine months ending September 30, 2023 respectively).

Compared to the three and nine months ended September

30, 2022 was $ nil and

respectively.

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

December 6, 2022, the Company closed a $ 5,000,000 loan facility with Sprott (the “Bridge Loan”).

The Bridge Loan is secured

by the same security package in place for the RCD, CD1, and CD2.

The Bridge Loan bears interest at 10.5% per annum and matures at the

earlier of (i) the advance of the Stream, or (ii) June 30, 2024.

In addition, the minimum quantity of metal delivered under the Stream,

if advanced, would increase by 5 % relative to amounts previously announced.

June 23, 2023 the Company repaid the outstanding principal and interest on the Bridge Loan recognizing a loss on extinguishment of

debt of $ 222,754

in the unaudited condensed interim consolidated statements of (loss) income.

At September 30, 2023 interest of $ nil

at December 31, 2022) is included in interest payable on the unaudited condensed interim balance sheets.

Interest expense for three

and nine months ended September 30, 2023, was $ 168,166

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 months ended March 31, 2024, and March 31, 2023, the Company recognized

and $ 807,012

respectively.

Compared to the three and nine months ended September 30, 2022, was $ nil

respectively, within other comprehensive income.

Interest expense for the three months ended March 31, 2024, and 2023 was $ 504,863

and $ 676,849

respectively.

June 23, 2023, all conditions were met for the closing of the Stream, and $ 46,000,000

was advanced to the Company.

The Stream applies to 10% of all payable metals sold until a minimum quantity of metal is delivered

consisting of, individually, 63.5 million pounds of zinc, 40.4 million pounds of lead, and 1.2 million ounces of silver

(subsequently amended, as described below).

Thereafter, the Stream would apply to 2% of payable metals sold.

The delivery price of

streamed metals will be 20% of the applicable spot price.

The Company may buy back 50% of the Stream Amount at a 1.40x multiple of

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

between the third and fourth anniversary of the date of funding.

The Company incurred $ 824,156

of transactions costs directly related to the Stream which were capitalized against the initial recognition of the Stream of $ 45,175,844

on the unaudited condensed interim consolidated balance sheets.

At March 31, 2024 interest of $ 504,863

at December 31, 2023) is included in interest payable on the condensed interim consolidated balance sheets.

For the three months

ended March 31, 2024, and March 31, 2023, the Company recognized $ 70,093

and $ 250,086 ,

respectively, loss on debt settlement on the condensed interim consolidated statements of (loss) income and comprehensive (loss)

income as a result of settling interest by issuance of shares.

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

June 23, 2023, all conditions were met for the closing of the Stream, and $ 46,000,000 was advanced to the Company.

The Stream is secured

by the same security package that is in place with respect to the RCD, CD1, and CD2.

The Stream is repayable by applying 10% of all payable

metals sold until a minimum quantity of metal is delivered consisting of, individually, 63.5 million pounds of zinc, 40.4 million pounds

of lead, and 1.2 million ounces of silver (subsequently amended, as described below).

Thereafter, the Stream would be repayable by applying

2% of payable metals sold.

The delivery price of streamed metals will be 20% of the applicable spot price.

At the Company’s option,

the Company may buy back 50% of the Stream Amount at a 1.40x multiple of the Stream Amount between the second and third anniversary of

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

Company incurred $ 740,956 of transactions costs directly related to the Stream which were capitalized against the initial recognition

of the Stream.

Company determined that in accordance with ASC 815 derivatives and hedging, the Stream does not meet the criteria for treatment as a

1 unchanged sentence

amount is not determinable.

The Company has therefore determined that in accordance with ASC 470, the stream obligation should be

treated as a liability based on the indexed debt rules thereunder.

The initial recognition has been made at fair value based on cash

received, net of transaction costs, and the discount rate calibrated so that the future cash flows associated with the Stream, using

forward commodity prices, equal the cash received.

The measurement of the stream obligation is accounted for at amortized cost with

accretion at the discount rate.

Subsequent changes to the expected cash flows associated with the Stream will result in the

adjustment of the carrying value of the stream obligation using the same discount rate, with changes to the carrying value

recognized in the unaudited condensed interim consolidated statements of income.

The Company has therefore determined that in accordance with ASC 470, the stream obligation should be treated

as a liability based on the indexed debt rules thereunder.

The initial recognition has been made at fair value based on cash received,

net of transaction costs, and the discount rate calibrated so that the future cash flows associated with the Stream, using forward commodity

prices, equal the cash received.

The measurement of the stream obligation is accounted for at amortized cost with accretion at the discount

Subsequent changes to the expected cash flows associated with the Stream will result in the adjustment of the carrying value of

the stream obligation using the same discount rate, with changes to the carrying value recognized in the condensed interim consolidated

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

Company determined the effective interest rate of the Stream obligation to be 10.8 % and recorded accretion expense on the liability of

$ 1,321,000 and $ 1,406,000 respectively for the three and nine months ended September 30, 2023 ($ nil for the three and nine months 2022),

bringing the liability to $ 46,665,044 as of September 30, 2023.

$ 1,099,060 for the three months ended March 31, 2024 ($ nil for the three months ended March 31, 2023) recognized in the consolidated

statement of (loss) income and comprehensive (loss) income, accretion expense on the liability of $ 258,940 for the three months ended

March 31, 2024 ($ nil for the three months ended March 31, 2023) capitalized into the process plant (note 5) on the condensed interim

consolidated balance sheets and loss on revaluation of the liability of $ 217,000 for the three months ended March 31, 2024 ($ nil for

the three months ended March 31, 2023), bringing the liability to $ 52,713,000 as of March 31, 2024.

The revaluation is because of a change

in projections.

The key assumptions used in the revaluation are production of 700,000,000 lbs of zinc, 385,000,000 lbs of lead, 8,700,000

oz of silver over 14 years and commodity prices of 1.17 $/lb to 1.22 $/lb for zinc, 0.94 $/lb to 0.96 $/lb for lead, and 23.00 $/oz to

$24.50 $/oz for silver.

$21,000,000 Debt Facility

June 23, 2023 the Company closed a $ 21,000,000 debt facility with SRSR which is available for draw at the Company’s election for

a period of 2 years.

As of June 23, 2023, and June 30, 2023, the company has not drawn on the facility.

Any amounts drawn will bear interest

of 10 % per annum, payable annually in cash or capitalized until three years from closing of the Debt Facility at the Company’s

election, and thereafter payable in cash only.

The maturity date of any drawings under the Debt Facility will be June 23, 2027 .

$ 5 million or part thereof advanced under the Debt Facility, the Company will grant a new 0.5% life-of-mine gross revenue royalty, on

the same terms as the Royalty, to a maximum of 2.0% on the Primary Claims and 1.4% on the Secondary Claims.

The Company may buy back

50% of these royalties for $ 20 million.

The Company determined that no recognition is required on the financial statements as of September

30, 2023 as no amount has been drawn from the facility.

On June 23, 2023, the Company closed a $ 21,000,000

debt facility with Sprott which is available for draw at the Company’s election for a period of 2 years .

As of March 31, 2024, the

Company has not drawn on the facility.

Any amounts drawn will bear interest of 10 % per annum, payable annually in cash or capitalized

until three years from closing of the Debt Facility at the Company’s election, and thereafter payable in cash only.

date of any drawings under the Debt Facility will be June 23, 2027 .

For every $ 5 million or part thereof advanced under the Debt Facility,

the Company will grant a new 0.5% life-of-mine gross revenue royalty, on the same terms as the Royalty, to a maximum of 2.0% on the Primary

Claims and 1.4% on the Secondary Claims.

The Company may buy back 50% of these royalties for $ 20 million.

The Company determined that

no recognition is required on the financial statements as of March 31, 2024, as no amount has been drawn from the facility.

Capital Stock, Warrants and Stock Options

4 unchanged sentences

and outstanding

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

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

Each Special Warrant shall be 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 (3) 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 which the purchasers

and Agents (as defined herein) are residents where the Special Warrants are sold (the “Qualifying Jurisdictions”) 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 “Qualification Prospectus”);

and (B) notification that the registration statement, under U.S.

securities laws, of the Company filed with the United States Securities

and Exchange Commission (the “SEC”) has been declared effective by the SEC (the “Registration Statement”);

(ii) the date that is six months following April 1, 2022 (the “Closing ‎Date”).

Each unit consists of one common share

and one warrant.

Each warrant entitles the holder to acquire one common 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

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

prospectus qualifying the distribution of the common stock of the Company and common stock purchase warrants of the Company issuable

upon exercise of the special warrants of the Company that were issued on April 1, 2022.

The Company also announced that it received notice

from the United States Securities and Exchange Commission that its Form S-1 has been declared effective as of May 27, 2022.

of obtaining the receipt for the Canadian prospectus and the declaration of effectiveness for the Form S-1, each unexercised Special

Warrant was automatically exercised into one Common Share and one Warrant without further action on the part of the holders.

non-brokered 1,471,664 units were issued at a price of C$ 0.30 per unit.

Each unit consists of one common share and one

Each warrant entitles the holder to acquire one warrant share for C$ 0.37 until April 1, 2025.

connection with the special warrants offering, the agents earned a cash commission in the amount of C$ 563,968 and compensation options

exercisable to acquire an aggregate of 1,879,892 units of the Company at C$ 0.30 a unit until April 1, 2024.

Each compensation

unit consists of one common share and one warrant.

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

April 1, 2024.

April 2022, the Company issued 1,315,856 common shares in connection with its election to satisfy interest payments under the

outstanding convertible debentures for the three months ended March 31, 2022.

May 2022, the Company issued 10,416,667 units to Teck Resources Limited in consideration towards the purchase of the Pend Oreille

Processing Plant at C$ 0.245 per unit.

Each unit consists of one common share and one warrant.

Each warrant entitles the holder to

acquire one warrant 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.

Each unit consists of one common share and one warrant.

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

April 1, 2025.

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.

March 2023, the Company amended the exercise price and expiry date of 10,416,667

warrants previously issued in a private placement to Teck Resources (“Teck”) on May 13, 2022 in consideration for the

Company’s acquisition of the Pend Oreille processing plant.

The warrant entitled the holder to purchase one Common Share of

the Company at an exercise price of C$ 0.37

per Warrant at any time on or prior to May 12, 2025.

The Company amended the exercise price from C$ 0.37

per Warrant and the expiry date from May 12, 2025, to March

31, 2023 , resulting in a gain on modification of warrants of $ 214,714 .

In March 2023, Teck exercised all 10,416,667

warrants at an exercise price of C$ 0.11 ,

for aggregate gross proceeds of 837,460

(C$ 1,145,834 )

to the Company.

During the three and nine months ending September 30, 2023 the Company recognized a change (gain) in derivative

liability of $ nil

and $( 400,152 )

respectively, relating to the Teck warrants using the following assumptions:

volatility of 120 %,

stock price of C$ 0.11 ,

interest rate of 3.42 %

and dividend yield of 0 %.

March 2023, the Company closed a brokered private placement of special warrants (the “March 2023 Offering”), issuing 51,633,727

special warrants of the Company (“March 2023 Special Warrants”) at C$ 0.12 per March 2023 Special Warrant for $ 4,536,020 (C$ 6,196,047 ),

of which $ 3,661,822 was received in cash and $ 874,198 was applied towards settlement of accounts payable, accrued liabilities and promissory

March 2023 Unit consists of one share of Common Share of the Company (each, a “Unit Share”) and one common stock purchase

In January 2024, the Company issued 6,377,272 shares

of common stock in connection with its election to satisfy interest payments under the outstanding convertible debentures for the three

months ending December 31, 2022.

March 2023, the Company issued 9,803,574 shares of common stock in connection with its election to satisfy interest payments under the

outstanding convertible debentures for the three months ending March 31, 2023.

March 2023, the Company amended the exercise price and expiry date of 10,416,667 warrants which were previously issued in a private placement

to Teck Resources (“Teck”) on May 13, 2022 in consideration for the Company’s acquisition of the Pend Oreille process

The warrant entitled the holder thereof to purchase one share of Common Share of the Company at an exercise price of C$ 0.37 per

Warrant at any time on or prior to May 12, 2025.

The Company amended the exercise price of the warrants from C$ 0.37 to C$ 0.11 per Warrant

and the expiry date from May 12, 2025, to March 31, 2023 , resulting in a gain on modification of warrants of $ 214,714 .

In March 2023,

Teck exercised all 10,416,667 warrants at an exercise price of C$ 0.11 , for aggregate gross proceeds of C$ 1,145,834 to the Company.

the quarter the Company recognized a change in derivative liability of $ 400,152 relating to the Teck warrants using the following assumptions:

volatility of 120 %, stock price of C$ 0.11 , interest rate of 3.42 % to 4.06 %, and dividend yield of 0 %.

March 2023, the Company closed a brokered private placement of special warrants of the Company (the “March 2023 Offering”),

issuing 51,633,727 special warrants of the Company (“March 2023 Special Warrants”) at C$ 0.12 per March 2023 Special Warrant

for $ 4,536,020 (C$ 6,196,047 ), of which $ 3,661,822 was received in cash and $ 874,198 was applied towards settlement of accounts payable,

accrued liabilities and promissory notes.

March 2023 Unit consists of one share of common stock of the Company (each, a “Unit Share”) and one common stock purchase

warrant of the Company (each, a “Warrant”).

Each whole Warrant entitles the holder thereof to acquire one Common Share of

the Company (a “Warrant Share”, and together with the Unit Shares, the “Underlying Shares”) at an exercise price

of C$0.15 per Warrant Share until March 27, 2026, subject to adjustment in certain events.

Each whole Warrant entitles the holder thereof to acquire one share of common

stock of the Company (a “Warrant Share”, and together with the Unit Shares, the “Underlying Shares”) at an exercise

price of C$0.15 per Warrant Share until March 27, 2026, subject to adjustment in certain events.

In the event that the Registration Statement

has not been declared effective by the SEC on or before 5:00 p.m.

(EST) on July 27, 2023, each unexercised Special Warrant will be deemed

had not been declared effective by the SEC on or before 5:00 p.m.

(EST) on July 27, 2023, each unexercised Special Warrant would be deemed

to be exercised on the Automatic Exercise Date into one penalty unit of the Company (each, a “Penalty Unit”), with each Penalty

6 unchanged sentences

into one Unit Share and one Warrant Share.

Special Warrants issued on March 27, 2023 were converted to 51,633,727 Common Shares and common stock purchase warrants on July 24, 2023.

The Company determined that in accordance with ASC 815 derivatives and hedging, each Special Warrant will be valued and carried as a

single instrument, with the periodic changes to fair value accounted through earnings, profit and loss until the common shares and common

stock purchase warrants are issued.

fair value of the Special Warrant is determined through the valuation of the Unit Share based on the observed price of the Company’s

Common Shares, a Level 1 input, together with a valuation of the warrant component of the March 2023 Unit using the Binomial model calibrated

with inputs as shown in the table below.

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

Schedule of Estimated Fair Value of Special Warrant Liabilities

March 2023 special warrants

Expected life

Risk free interest rate

Dividend yield

Share price (C$)

Fair value of March 2023 Unit

Change in derivative liability

prior financings, excluding the March 2023 Special Warrants, the Company has accounted for warrants in accordance with ASC 815

derivatives and hedging.

The warrants are considered derivative instruments as they were issued in a currency other than the

Company’s functional currency of the United States Dollars.

The estimated fair value of warrants accounted for as liabilities

was determined on the date of issue and marked 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 (loss) and comprehensive (loss) income as a

gain or loss and is estimated using the Binomial model.

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

the Binomial model to determine the fair value using the following assumptions as at September 30, 2023 and December 31, 2022:

Special Warrants issued on March 27, 2023 were converted to 51,633,727 shares of common stock and common stock purchase warrants on July

The Company determined that in accordance with ASC 815 derivatives and hedging, each Special Warrant will be valued and carried

as a single instrument, with the periodic changes to fair value accounted through earnings, profit and loss until the shares of common

stock and common stock purchase warrants are issued.

January 2024, the Company issued 7,392,859 shares of common stock in connection with its election to satisfy interest payments under

the outstanding convertible debentures for the three months ending December 31, 2023.

March 2024, the Company issued 2,546,436 shares of common stock in connection with settlement of RSUs.

In 2023 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 marked to market at each financial reporting period.

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

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

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

model to determine the fair value using the following assumptions as at March 31, 2024 and December 31, 2023:

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

March 2023 warrants

September 30,

Expected life

Risk free interest rate

Dividend yield

Share price (C$)

Change in derivative liability

$ ( 1,234,399 )

April 2022 special warrants issuance

September 30,

2023 warrants

Expected life

3 unchanged sentences

Change in derivative liability

$ ( 997,952 )

April 2022 non-brokered issuance

September 30,

special warrants issuance

Expected life

3 unchanged sentences

Change in derivative liability

June 2022 issuance

September 30,

non-brokered issuance

Expected life

3 unchanged sentences

Change in derivative liability

February 2021 issuance

September 30,

Expected life

3 unchanged sentences

Change in derivative liability

$ ( 463,467 )

August 2020 issuance

September 30,

2021 issuance

Expected life

3 unchanged sentences

Change in derivative liability

$ ( 903,697 )

June 2019 issuance

September 30,

2019 issuance

Expected life

3 unchanged sentences

Change in derivative liability

$ ( 281,588 )

August 2019 issuance

September 30,

Expected life

3 unchanged sentences

Change in derivative liability

$ ( 432,765 )

warrants at September 30, 2023 and September 30, 2022 were as follows:

warrants at March 31, 2024 and March 31, 2023 were as follows:

Schedule of Warrant Activity

1 unchanged sentence

Balance, December 31, 2022

Balance, September 30, 2022

Balance, December 31, 2022

( 10,416,667 )

Balance, September 30, 2023

September 30, 2023, the following warrants were outstanding:

Balance, March 31, 2023

Balance, December 31, 2023

Balance, March 31, 2024

the three months ended March 31, 2023, 10,416,667 May 2022 Teck warrants were exercised.

March 31, 2024, the following warrants were outstanding:

Schedule of Warrants Outstanding Exercise Price

4 unchanged sentences

March 27, 2026

September 30, 2023, the following broker options were outstanding:

March 31, 2024, the following broker options were outstanding:

of Compensation Options

1 unchanged sentence

Balance, December 31, 2022

Issued – April 2022 Compensation Options (i)

Issued – March 2023 Compensation Options (i)

Balance, March 31, 2023

Balance, December 31, 2023

Issued – March 2023 Compensation Options (ii)

Expired – August 2020 Compensation Options

( 3,239,907 )

Balance, September 30, 2023

The grant date fair value of the April 2022 Compensation Options were estimated at $ 264,435 using the Black-Scholes valuation model with

Expired – February 2024

Balance, March 31, 2024

grant date fair value of the March 2023 Compensation Options was estimated at $ 111,971 using the Black-Scholes valuation model with

the following underlying assumptions:

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

Risk free interest rate

Dividend yield

Weighted average life

grant date fair value of the March 2023 Compensation Options were estimated at $ 111,971 using the Black-Scholes valuation model with

the following underlying assumptions:

Risk free interest rate

interest rate

Dividend yield

2 unchanged sentences

broker options

February 16, 2024 (i)

April 1, 2024 (ii)

March 27, 2026 (iii)

into one February 2021 Unit

April 1, 2024 (i)

March 27, 2026 (ii)

into one April 2022 Unit

into one March 2023 Unit

following table summarizes the stock option activity during the nine months ended September 30, 2023:

following table summarizes the stock option activity during the three months ended March 31, 2024 and March 31 2023:

of Stock Options

2 unchanged sentences

Balance, December 31, 2022

Expired, May 1, 2022

Expired, December 31, 2022

Balance, March 31, 2023

Balance, December 31, 2023

Expired, September 30, 2023

Balance, September 30, 2023

August 22, 2022, the Company granted 300,000 Stock Options to certain employee of the Company

with half vesting immediately and a quarter vesting on the first and second anniversary of

the grant date.

On November 23, 2022, the Company granted 400,000 Stock Options to certain

employee of the Company with half vesting immediately and a quarter vesting on the first

and second anniversary of the grant date.

following table reflects the actual stock options issued and outstanding as of September 30, 2023:

Balance, March 31, 2024

following table reflects the actual stock options issued and outstanding as of March 31, 2024:

of Actual Stock Options Issued and Outstanding

(exercisable)

vesting of stock options during the three and nine months ending September 30, 2023, resulted in stock based compensation expenses of

$ 27,725 and $ 120,865 respectively ($ 72,066 and $ 241,060 for the three and nine months ending September 30, 2022, respectively).

fair value ($)

vesting of stock options during the three months ending March 31, 2024 and March 31, 2023, resulted in stock based compensation expenses

of $ 25,093 and $ 58,700 respectively.

Restricted Share Units

1 unchanged sentence

key employees and consultants.

following table summarizes the RSU activity during the nine months ended September 30, 2023:

following table summarizes the RSU activity during the three months ended March 31, 2024 and March 31, 2023:

Schedule of Restricted Share Units

Unvested as at December 31, 2022

( 2,373,900 )

Granted (i, ii)

Unvested as at March 31,

Unvested as at December 31, 2023

Granted (i, ii)

( 2,546,436 )

Unvested as at September 30, 2023

January 10, 2022, the Company granted 500,000 RSUs to a consultant of the Company, vested 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

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

April 29, 2022, the Company granted 76,750 RSUs to certain consultants of the Company, vested immediately.

The vesting of these RSUs

resulted in stock-based compensation of $ 16,800 for the year ended December, 2022, which is included in operation and administration

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

June 30, 2022, the Company granted 15,000 RSUs to a consultant of the Company, vested immediately.

The vesting of these RSUs resulted

in stock-based compensation of $ 2,328 for the year ended December 31, 2022, which is included in operation and administration expenses

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

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 unaudited condensed

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

June 1, 2023, the Company granted 4,067,637 RSUs to executives and employees of the Company, vested immediately.

Unvested as at March 31, 2024

January 29, 2024, the Company granted 672,450 RSUs to the CFO of the Company, which vest on January 29, 2025.

The vesting of these

RSUs resulted in stock-based compensation of $ 322,905 for the nine months ended September 30, 2023, which is included in operation

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

June 4, 2023, the Company granted 42,000 RSUs to a consultant of the Company, vested immediately.

The vesting of these RSUs resulted

in stock-based compensation of $ 7,825 for the nine months ended September 30, 2023, which is included in operation and administration

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

July 4, 2023, the Company granted 6,735,356 RSUs to executives and employees of the Company, which vest in one-third increments on

March 31 of 2024, 2025 and 2026.

The vesting of these RSUs resulted in stock-based compensation of $ 214,897 for the nine months ended

September 30, 2023, which is included in operation and administration expenses on the consolidated statements of (loss) income and

comprehensive (loss) income.

vesting of RSU’s during the three and nine months ending September 30, 2023, resulted in stock based compensation expense of $ 271,021

and $ 865,745 respectively ($ 14,585 and $ 53,444 for the three and nine months ending September 30, 2022, respectively).

RSUs resulted in stock-based compensation of $ 8,880 for the three months ended March 31, 2024, which is included in operating expenses

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

March 13, 2024, the Company granted 9,047,953 RSUs to certain executives and employees of the Company, which vest in one-third increments

on March 13 of 2025, 2026 and 2027.

The vesting of these RSUs resulted in stock-based compensation of $ 22,220 for the three months

ended March 31, 2024, which is included in operating expenses condensed interim consolidated statements of (loss) income and comprehensive

(loss) income.

vesting of RSU’s during the three months ending March 31, 2024, and March 31, 2023, resulted in stock based compensation expense

of $ 236,856 and $ 174,970 respectively.

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 nine months ended September 30, 2023 and 2022:

following table summarizes the DSU activity during the three months ended March 31, 2024 and 2023:

Schedule of Deferred Share Units

Unvested as at December 31, 2021

( 3,125,000 )

Unvested as at December 31, 2022

Granted (ii, iii)

Vested (iv, v)

( 3,071,826 )

Unvested as at September 30, 2023

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

During 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.

July 4, 2023, 1,611,826 DSUs were issued to the Company’s Directors which vested immediately.

July 6, 2023, 245,454 DSUs were issued to one of the Company’s Directors which vests on July 6, 2024.

April 21, 2023, 1,250,000 DSUs for one of the Company’s Directors vested.

July 1, 2023, 210,000 DSUs for one of the Company’s Directors vested.

vesting of DSU’s during the three and nine months ending September 30, 2023, resulted in stock based compensation recovery (expense)

of $ 141,969 and ($ 145,355 ), respectively (stock based recovery of $ 188,194 and $ 1,083,610 for the three and nine months ending September

30, 2022, respectively).

Unvested as at December 31 2022, and March 31, 2023

Unvested as at December 31 2023, and March 31, 2024

vesting of DSU’s during the three months ended March 31, 2024 resulted in stock based compensation expense of $ 74,978 and a recovery

of stock-based compensation of $ 199,278 for the three months ended March 31, 2023.

The fair value of each DSU is $ 0.09 as of March 31,

2024, and $ 0.08 as of March 31, 2023.

Commitments and Contingencies

stipulated in the agreement with the EPA and as described in Note 6, the Company is required to make two types of payments to the EPA

and IDEQ, one for historical water treatment cost-recovery to the EPA, and the other for ongoing water treatment.

Water treatment costs

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

(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”).

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

The lawsuit alleges that Placer Mining and Robert Hopper

intentionally flooded the Crescent Mine during the period from 1991 and 1994, and that the Company is jointly and severally liable

with the other defendants for unspecified past and future costs associated with the presence of Acid Mine Drainage in the Crescent Mine.

As stipulated in the agreement with the EPA and as described in note 8,

the Company is required to make two types of payments to the EPA and IDEQ, one for historical water treatment cost-recovery to the EPA,

and the other for ongoing water treatment.

Water treatment costs incurred through December 2021 are payable to the EPA, and water treatment

costs incurred thereafter are payable to the IDEQ.

The IDEQ (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.

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

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

The named defendants include Placer Mining, Robert Hopper

Jr., and the Company.

The lawsuit alleges that Placer Mining and Robert Hopper Jr.

intentionally flooded the Crescent Mine during the

period from 1991 and 1994, and that the Company is jointly and severally liable with the other defendants for unspecified past and future

costs associated with the presence of AMD in the Crescent Mine.

The plaintiff has requested unspecified damages.

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.

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.

On September 20, 2021,

the Company filed a motion to dismiss Crescent’s claims against it, contending that such claims are facially deficient.

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

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

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.

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

The court denied the motion

to dismiss filed by Placer Mining Corp.

for Crescent’s trespass, nuisance and negligence claims.

Crescent later filed an amended

complaint on April 1, 2022.

Placer Mining Corp.

Hill Mining Corp are named as co-defendants.

The Company 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

is 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 nine months ended September 30, 2023, the Company entered into a lease agreement with C & E Tree Farm LLC for the lease of a land parcel

overlaying a portion of the Company’s existing mineral claims package.

The Company is committed to making monthly payments of $ 10,000

through February 2026 (note 5).

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 lawsuit is without merit and is vigorously defending itself, as well as Placer Mining Corp.

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 lawsuit is currently in the discovery phase, in which information is gathered and exchanged.

Deferred tax liability

Company incurred income tax recovery (expense) of $ 0.90 million and ($ 2.61 ) million for the three and nine months ended September 30,

2023 respectively, and incurred no income tax expense for the three and nine months ended September 30, 2022.

The Company’s effective

income tax rate for the first nine months of 2023 was - 52.0 % compared to 0.0 % for the first nine months of 2022.

The effective tax rate

during the first nine months of 2023 rate differed from the statutory rate primarily due to the income tax treatment of the Stream proceeds

as deferred revenue compared to its treatment as debt under U.S.

GAAP thereby resulting in a decrease of the existing valuation allowance

against deferred tax assets related to the expected utilization of $ 35.8 million of net operating losses not previously benefitted.

Company maintains a valuation allowance against net operating losses subject to Section 382 and against other deferred tax assets.

effective tax rate during the first nine months of 2022 rate differed from the statutory rate primarily due to changes in the valuation

allowance established to offset net deferred tax assets.

Company incurred income tax recovery of $ 699,920

for the three months ended March 31, 2024 and incurred no income

tax recovery or expense for the three months ended March 31, 2023.

The Company’s effective income tax rate for the first three

months of 2024 was 12.6 %

compared to 0.0 %

for the first three months of 2023.

The effective tax rate during the first three months of 2024 rate differed from the statutory

rate primarily due to the recognition of deferred tax assets available to offset the deferred tax liability associated with the

Stream Obligation.

The Company maintains a valuation allowance against net operating losses subject to Section 382 and other

deferred tax assets.

The effective tax rate during the first three months of 2023 rate differed from the statutory rate primarily

due to changes in the valuation allowance established to offset net deferred tax assets.

valuation allowance is provided for deferred tax assets for which it is more likely than not that the related tax benefits will not be

4 unchanged sentences

of the related valuation allowance will be reduced.

Operating Expenses

Schedule of Operating Expenses

March 31, 2024

March 31, 2023

Salaries, wages, and consulting fees

General administration expenses

Related party transactions

2 unchanged sentences

Schedule of Related Party Transactions

September 30,

Consulting fees & wages

September 30, 2023 and September 30, 2022, $ nil and $ 15,000 , respectively is owed to key management personnel with all amounts included

in accounts payable and accrued liabilities.

March 31, 2024

March 31, 2023

Consulting Fees and Salaries

March 31, 2024 and March 31, 2023, $ 89,324 and $ 248,533 respectively is owed to key management personnel with all amounts included in

accounts payable and accrued liabilities.

Subsequent Events

In October 2023, the Company issued 5,175,000

common shares in connection with its election to satisfy interest payments under the outstanding convertible debentures for the three

months ended September 30, 2023.

April 1, 2024, the Company granted 2,527,888 DSUs to certain members of the board of directors of the Company.

The DSUs vested immediately.

April 4, 2024, the Company issued 6,398,439 shares of common stock in connection with its election to satisfy interest payments under

the outstanding convertible debentures for the three months ending March 31, 2024.

April 5, 2024, the $ 2,001,000 letter of credit, in place to secure the environment protection agency cost recovery payable was returned

to the Company and cancelled.

As a result of this transaction the restricted cash balance was decreased by $ 2,001,000 (from $ 6,476,000

to $ 4,475,000 ) and the cash and cash equivalents was increased by the corresponding amount.

April 16, 2024, the Company issued 100,000

shares to a member of the executive team for the vesting of RSUs.

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