What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-09 compared with 2023-11-13 · 100 added, 128 removed, 71 unchanged (76% of the section changed)

25 unchanged sentences

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

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

The Mine remains the largest single producing mine by tonnage in the Silver Valley region of northwest Idaho, producing over 165 million

ounces of silver and 5 million tons of base metals between 1885 and 1981.

The Mine is located within Operable Unit 2 of the Bunker Hill

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

Company purchased the Mine on January 7, 2022 for $5,400,000 in cash.

Prior to purchasing the Mine, the Company had entered into a series

of agreements with Placer Mining Corporation (“Placer Mining”), the prior owner, for the lease and option to purchase the

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 most recent of these agreements, the Company was required to make payments pursuant to an agreement with the U.S.

Environmental Protection

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

to the EPA on behalf of Placer Mining in satisfaction of the EPA’s claim for historical water treatment cost recovery in accordance

with the Settlement Agreement reached with the EPA in 2018.

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

to EPA in this regard totaled $11,000,000.

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

2018 Settlement Agreement & 2021 Amended Settlement Agreement” in the “Our Business” section above).

early 2020, a new management team comprised of former executives from Barrick Gold Corp.

assumed leadership of the Company.

time, the Company conducted multiple exploration campaigns, published multiple economic studies and Mineral Resource Estimates, and advanced

the rehabilitation and development of the Mine.

In December 2021, it announced a project finance package with Sprott Private Resource

Streaming & Royalty Corp.

(“SRSR”), an amended Settlement Agreement with the EPA, and the purchase of the Bunker Hill

Mine, setting the stage for a restart of the Mine.

milestones following the purchase of the mine have included the purchase and demobilization of a process plant to site, advancement of

engineering and a Prefeasibility Study envisaging the restart of the Mine, the completion of the primary portion of the ramp decline

connecting the 5 and 6 Levels and securing of $96,000,000 of financing commitments from SRSR.

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

Mine” or the “Mine”) in Idaho, USA.

The Mine remains the largest single producing mine by tonnage in the Silver Valley

region of northwest Idaho, producing over 165 million ounces of silver and 5 million tons of base metals between 1885 and 1981.

Hill Mine is located within Operable Unit 2 of the Bunker Hill Superfund site (EPA National Priorities Listing IDD048340921), where cleanup

activities have been completed.

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

The Company has moved into

the development stage concurrent with (i) purchasing the Mine and a process plant, (ii) completing successive technical and economic

studies, including a Prefeasibility Study, (iii) delineating mineral reserves, and (iv) conducting the program of activities outlined

of Operations

following discussion and analysis provide information that is believed to be relevant to an assessment and understanding of the results

of operation and financial condition of the Company for the three and nine months ended September 30, 2023, and September 30, 2022.

otherwise stated, all figures herein are expressed in United States Dollars, which is the Company’s functional currency.

of the three and nine months ended September 30, 2023, and 2022

the three and nine months ended September 30, 2023, and 2022, respectively, the Company generated no revenue.

the three and nine months ended September 30, 2023, the Company reported total operating expenses of $2,771,722 and $8,294,183, respectively

(total operating expenses of $3,824,948 and $13,291,484 for the three and nine months ending September 30, 2022, respectively).

decrease in total operating expenses was primarily due to (i) a decrease in mine preparation expenses of $2,533,101, and $6,861,403 (ii)

a decrease in consulting and wages expenses of $132,774 and $2,355,473 (iii) partially offset by an increase in operation and admin expenses of

$1,379,974 and $3,827,267 for the three and nine months ending, respectively.

Mine preparation

expenses were $nil in the nine months ended September 30, 2023, primarily as a result of the Company determining that costs directly

attributed to the mine after September 30, 2022 (upon the release of the prefeasibility study) constituted mine development costs (capitalized

to non-current assets) instead of mine preparation costs (expense) given the existence of probable mineral reserves and an economic study

incorporating them.

The decrease in consulting and wages expenses was impacted by a lower volume of transactions and a lower bonus accrual

in the three and nine months ended September 30, 2023, as compared to the three and nine months ended September 30, 2022.

Operation and admin expenses increased due to increased activities

(Loss) Income and Comprehensive (Loss) Income

Company had net income of $7,447,860 for the three months ended September 30, 2023 ($3,690,353 for the three months ended September 30,

Offsetting the decrease in operating expenses (as described above), net loss in the three months ended September 30, 2023 was

impacted by an increase in interest income of $476,397 ($nil for three months ending September 30, 2022) an increase in the gain recorded

due to change in derivative liability of $1,216,469 ($8,513,630 and $7,315,161 for the three months ended September 30, 2023 and 2022

respectively) and an increase in the gain recorded due to change in convertible debentures of $1,149,899 ($2,450,968 and $1,301,069

for the three months ended September 30, 2023 and 2023 respectively).

Both changes in fair value were driven by a proportionally greater

decline in the Company’s share price for the three months ending September 30, 2023, relative to the decline in share price in

the three months ending September 30, 2022.

Net loss for the three months ending September 30, 2023, includes a deferred tax recovery

of $903,000 compared to $nil for the three months ending September 30, 2022.

Partially offset by an increase in interest expense of

$1,267,410 ($2,293,643 and 1,026,233 for the three months ended September 2023 and 2022 respectively).

The Company had net loss of $7,618,775 for the nine months ended September 30, 2023 (net income of $12,864,248 for the nine months ended

September 30, 2022).

Offsetting the decrease in operating expenses (as described above), net loss in the nine months ended September 30,

2023 a decrease in the gain recorded due to change in derivative liability of $19,026,737 (loss of $488,357 and gain of $18,538,380 for

the nine months ended September 30, 2023 and 2022 respectively) and a decrease in the gain recorded due to change in convertible debentures

of $784,619 ($2,256,437 and $3,041,056 for the three months ended September 30, 2023 and 2023 respectively).

Both changes in fair value

were driven by a proportionally smaller decline in the Company’s share price for the nine months ending September 30, 2023, relative

to the decline in share price in the three months ending September 30, 2022.

The change in net loss was further impacted by a decrease

of $1,496,683 gain on extinguishment in debt in the nine months ending September 30, 2023, compared to the nine months ending September

A gain of $7,117,420 was recognized in the nine months ending September 30, 2023, relating to the sale of mineral properties,

compared with a $8,614,103 gain on EPA settlement in the nine months ending September 30, 2022.

The decrease in net income was further

increased by a higher interest expense in the nine months ending September 30, 2023 ($5,006,692) compared to the nine months ending September

30, 2022 (2,143,840).

Net loss for the nine months ending September 30, 2023, also included the initial recognition of a deferred tax

liability and corresponding deferred tax expense relating to the closing of the stream transaction ($2,605,741 for the nine months ending

September 30, 2023, compared to $nil for the nine months ending September 30, 2022).

The decrease in net income was partially offset by

an increase in interest income of $707,530 ($nil for three months ending September 30, 2022).

Company had comprehensive income (loss) of $7,516,598 and ($7,116,440) for the three and nine months ended September 30, 2023, respectively

(comprehensive income of $4,315,403 and $13,860,884 for the three and nine months ended September 30, 2022, respectively).

Comprehensive

(loss) income for the three and nine months ended September 30, 2023, is inclusive of a $68,738 and $502,335 gain on change in fair value

on own credit risk ($625,050 and $996,636 for the three and nine months ended September 30, 2022, respectively).

of operation and financial condition of the Company for the three months ended March 31, 2024 and March 31, 2023.

Unless otherwise stated,

all figures herein are expressed in U.S.

dollars, which is the Company’s functional currency.

of the three months ended March 31, 2024 and 2023

the three months ended March 31, 2024, and 2023, respectively, the Company generated no revenue.

the three months ended March 31, 2023, and 2022, the Company reported total operating expenses of $3,787,631 and $2,185,488, respectively.

increase in total operating expenses was primarily due to increase in the volume of transactions as the mine continues to develop.

Operation and administration expenses increased by $1,018,781 ($1,898,773 for the three months ended March 31, 2024, compared to

$879,992 for the three months ended March 31, 2023).

Legal and accounting fees increased by $411,55 3 ($946,464 for the three months

ended March 31, 2024, compared to $534,911 for the three months ended March 31, 2023) primarily because of the Company’s

uplisting from the Canadian Stock Exchange to the Toronto Stock Exchange Venture which occurred in September of 2023.

Consulting and wages increased by $171,809

($942,394 for the three months ended March 31, 2024, compared to $770,585 for the three months ended March 31, 2023) also increased

to increased head count as the Bunker Hill Mine moves towards production.

Income and Comprehensive Income

Company had net loss of $5,582,036 for the year three months ended March 31, 2024 (compared to net income of $1,791,147 for the three

months ended March 31, 2023).

In addition to the increase in operating expenses (as described above), net loss for the three months ended

March 31, 2024 was impacted by increase in interest expense of $759,106 ($2,083,735 and $1,324,629 for the three months ended March 2024

and 2023 respectively), a decrease in change in derivative liability of $4,490,517 (loss of $263,943 for the three months ended March

31, 2024 compared to a gain of $4,226,574 for the three months ended March 31, 2023), driven by a proportionally greater decline in the

Company’s share price in Q1 2023 relative to Q1 2024.

Additionally, a loss on fair value of the convertible debenture of $263,943

was recognized for the three months ended March 31, 2024, compared to a gain of $4,226,574 for the three months ended March 31, 2024.

The three months ended March 31, 2024, also includes $217,000 ($nil for the three months ended March 31, 2023) loss on revaluation of

the stream debenture due to updated key assumptions such as commodity prices.

Net loss for the three months ending March 31, 2024, includes

a deferred tax recovery of $699,920 and interest income of $291,330 compared to $nil and $nil respectively for three months ended March

Additionally, net loss for the three months ended March 31, 2024, includes $nil of financing costs compared to $576,751 for

the three months ended March 31, 2023.

Company had comprehensive loss of $5,293,664 for the three months ended March 31, 2024 (comprehensive income of $2,598,159 for the month

three ended March 31, 2023).

Comprehensive income for the three months ended March 31, 2024, is inclusive of a $288,372 gain on change

in fair value on own credit risk ($807,012 for the three months ended March 31, 2023).

and Capital Resources

Assets and Total Assets

of September 30, 2023, the Company had total current assets of $35,521,813, compared to total current assets of $7,741,052 at December

31, 2022 – an increase of $27,780,761;

of March 31, 2024, the Company had total current assets of $20,863,546, compared to total current assets of $27,176,997 at December 31,

2023 – a decrease of $6,313,451;

and total assets of $61,649,028, compared to total assets of $61,989,678 at December 31, 2023

2022 – an increase of $32,234,230.

The increase in current assets and total assets was primarily due to the closing of the $46,000,000

Stream, net of repayment of the $5,000,000 Bridge Loan and transaction related costs.

– an decrease of $340,650.

During the three months ended March 31, 2024, the Company’s current assets decreased due to cash

expenditures on the process plant, purchasing of equipment and additions to the Bunker Hill Mine.

Total assets remained constant as the

increase in property plant and equipment was offset by the decrease in cash.

Liabilities and Total Liabilities

of September 30, 2023, the Company had total current liabilities of $5,122,137 and total liabilities of $86,356,025, compared to

total current liabilities of $10,155,582 and total liabilities of $59,106,835 at December 31, 2022.

Current liabilities decreased

primarily as a result of the partial repayment of the promissory note, and settlement of accounts payable and accrued liabilities

from the proceeds of the Stream.

Total liabilities increased primarily as a result of closing of the $46,000,000 Stream and

recognition of deferred tax liability, partially offset by a decrease in the carrying values of CD1 and CD2 as well as the

settlement of the RCD and the bridge loan.

of March 31, 2024, the Company had total current liabilities of $12,201,846 and total liabilities of $92,467,400, compared to total current

liabilities of $7,472,326 and total liabilities of $88,356,840 at December 31, 2023.

Total liabilities increased because of accretion

on the stream debenture and environmental protection agency payable as well as an increase in accounts payable and accruals due to timing

of invoices and payments.

Capital and Shareholders’ Deficit

of September 30, 2023, the Company had a working capital balance of $30,399,676 and a shareholders’ deficiency of $21,191,903 compared

to a working capital deficit of $2,414,530 and a shareholders’ deficiency of $26,176,943 as of December 31, 2022.

The working capital

balance increased during the nine months ended September 30, 2023, primarily due to cash received from closing of the $46,000,000 Stream

(net of repayment of the $5,000,000 Bridge Loan and transaction related costs) and cash received from the closing of a brokered private

placement of special warrants of the Company, partially offset by operating expenses and capital expenditures incurred during the period.

The shareholders’ deficiency decreased due to net loss for the nine months ended September 30, 2023, partially offset by an increase

due to proceeds received from equity financing in the nine months ended September 30, 2023.

the nine months ended September 30, 2023, the Company had a net cash increase of $27,652,390, primarily due to the closing of a brokered

private placement of special warrants of the Company and proceeds received from the exercise of warrants and closing of the Stream agreement

Cash expenditures during the nine months ended September 30, 2023, were primarily related to working capital requirements.

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.

of March 31, 2024, the Company had working capital of $8,661,700 and a shareholders’ deficiency of $30,818,372 compared to a working

capital of $19,704,671 and a shareholders’ deficiency of $26,367,162 as of December 31, 2023.

The working capital balance decreased

during the three months ended March 31, 2024, primarily due to cash expenditures on the process plant, purchasing of equipment, and additions

to the Bunker Hill Mine.

The shareholders’ deficiency increased primarily due to the net loss in the 2024 quarter.

the three months ended March 31, 2024, the Company had a net cash decrease of $6,418,054, primarily due to cash expenditures on the process

plant, purchasing of equipment, and additions to the Bunker Hill Mine.

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.

On April 1, 2024, the Company appointed Brenda Dayton as its Vice President

Investor Relations.

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.

On April 30, 2024, the Company received approval to commence construction

from the Idaho Department of Environmental Quality (IDEQ, Air Quality Division) in accordance with IDAPA 58.01.01.213, Rules for the Control

of Air Pollution in Idaho.

The Company will continue to work with IDEQ regarding issuance of the full Air Permit.

accounting estimates

preparation of the interim unaudited condensed consolidated financial statements in conformity with U.S.

GAAP requires management to

make estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the

financial statements and reported amounts of expenses during the reporting period.

Estimates and judgments are continuously

evaluated and are based on management’s experience and other factors, including expectations of future events that are

believed to be reasonable under the circumstances.

Actual outcomes can differ from these estimates.

The key sources of estimation

uncertainty that have a significant risk of causing material adjustment to the amounts recognized in the financial statements

preparation of the interim condensed consolidated financial statements in conformity with U.S.

GAAP requires management to make estimates

and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the financial statements

and reported amounts of expenses during the reporting period.

Estimates and judgments are continuously evaluated and are based on management’s

experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

outcomes can differ from these estimates.

The key sources of estimation uncertainty that have a significant risk of causing material

adjustment to the amounts recognized in the financial statements are:

determines costs for share-based payments using market-based valuation techniques.

12 unchanged sentences

the expected life of the warrants derivative liability, volatility and dividend yield and making assumptions about them.

fair value estimates of the convertible loans use inputs to the valuation model that include risk-free rates, equity value per common

share, USD-CAD exchange rates, spot and futures prices of minerals, expected equity volatility, expected volatility in minerals prices,

discount for lack of marketability, credit spread, expected mineral production over the life of the mine, and project risk/estimation

fair value estimates of the convertible loans use inputs to the valuation model that include risk-free rates, equity value per share

of common stock, USD-CAD exchange rates, spot and futures prices of minerals, expected equity volatility, expected volatility in minerals

prices, discount for lack of marketability, credit spread, expected mineral production over the life of the mine, and project risk/estimation

risk factors.

18 unchanged sentences

the water treatment costs for future periods.

Borrowing rate

Company estimates the incremental borrowing rate to determine the present value of future lease payments.

Actual results may be different

from estimates.

Cost Capitalization rate

Company makes estimates to determine the percentage of borrowing costs that are capitalized into property plant and equipment.

results may be different.

Sheet Arrangements

2 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis