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Item 1. Financial Statements

2024-07-30 compared with 2024-05-09 · 454 added, 398 removed, 420 unchanged (67% of the section changed)

10 unchanged sentences

in United States Dollars)

Current assets

Restricted cash (note 8)

cash (note 8)

receivable and prepaid expenses (note 3)

Total current assets

Non-current assets

Spare parts inventory (note 5)

Long term deposit

Equipment (note 4)

Right-of-use asset (note

Bunker Hill Mine and mining

interests (note 6)

Total current

parts inventory (note 5)

asset (note 4)

Hill Mine and mining interests (note 6)

plant (note 5)

EQUITY AND LIABILITIES

Current liabilities

Accounts payable (note 16)

Accrued liabilities

Current portion of lease

liability (note 7)

Deferred share units liability

Environment protection

agency cost recovery payable (note 8)

Current portion of stream

AND LIABILITIES

payable (note 16)

Total current liabilities

Non-current 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

portion of lease liability (note 7)

share units liability (note 12)

protection agency cost recovery payable (note 8)

portion of stream debenture

payable (note 9)

Total current

liability (note 7)

1 convertible debenture (note 9)

2 convertible debenture (note 9)

debenture (note 9)

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

tax liability (note 14)

warrant liability (note 10)

Shareholders’ Deficiency

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

Shareholders’

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

paid-in-capital (note 10)

other comprehensive income

( 94,509,538 )

6 unchanged sentences

Hill Mining Corp.

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

Interim Consolidated Statements of Loss and Comprehensive Loss

in United States Dollars)

2 unchanged sentences

$ ( 3,336,973 )

Other income or gain (expense

Interest income

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

$ ( 7,937,745 )

$ ( 5,522,461 )

Financing costs (note 10)

Loss on stream debentures

Loss on debt settlement

(Loss) income for the period

or gain (expense or loss)

in derivative liabilities (note 10)

( 13,246,561 )

Deferred income tax

recovery (note 14)

income for the period

( 9,019,987 )

Other comprehensive income

(loss), net of tax

Gain on change in FV

on own credit risk (note 9)

comprehensive income

foreign exchange

FV of debentures (note 9)

( 1,884,232 )

debt settlement (note 6)

warrant settlement

expense (note 7,8,9)

( 2,176,868 )

( 1,388,420 )

( 4,260,603 )

( 2,713,049 )

costs (note 9)

( 1,100,881 )

stream debentures (note 9)

debt modification (note 9)

on debt settlement (note 9)

the period pre tax

$ ( 4,407,202 )

$ ( 13,349,041 )

$ ( 10,689,158 )

$ ( 11,557,894 )

tax recovery (expense) (note 14)

( 3,508,741 )

Loss for the period

$ ( 3,902,404 )

$ ( 16,857,782 )

$ ( 9,484,440 )

$ ( 15,066,635 )

Other comprehensive

(loss) income, net of tax:

(loss) on change in FV on own credit risk

comprehensive income (loss)

Comprehensive

(loss) income

$ ( 3,426,642 )

Net (loss)/income per common share

Net (loss)/income per

common share – fully diluted

$ ( 17,231,197 )

$ ( 8,720,306 )

$ ( 14,633,038 )

Net loss per common share

loss 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.

2 unchanged sentences

in United States Dollars)

Operating activities

Net (loss) income for the

Net loss for the

$ ( 9,484,440 )

Adjustments to reconcile net loss to net cash

used in operating activities:

Stock-based compensation

Depreciation expense

Change in fair value of

warrant liability

$ ( 15,066,635 )

Deferred tax expense

Gain on warrant extinguishment

Units issued for services

Interest expense on lease

liability (note 7)

Financing costs

Loss on debt settlement

Adjustments to reconcile net

loss to net cash used in operating activities:

compensation (note 10, 11, 12)

in fair value of derivative liabilities

tax (recovery) expense

( 1,204,718 )

loss on warrant extinguishment

issued for services

expense on lease liability (note 7)

debt settlement

Gain on stream debenture

( 2,531,000 )

Loss on debt modification

Accretion of liabilities

Loss (gain) on fair value

of derivatives

fair value of debentures

debt settlement

( 7,117,420 )

1 unchanged sentence

and liabilities:

Accounts receivable and

prepaid expenses

Accounts payable

Accrued liabilities

receivable and prepaid expenses

( 1,016,447 )

cash used in operating activities

1 unchanged sentence

( 6,656,263 )

Investing activities

Process plant

( 10,414,510 )

( 3,155,362 )

Mine improvements

( 1,465,994 )

of machinery and equipment

1 unchanged sentence

( 12,322,158 )

Financing activities

Proceeds from issuance

of special warrants

Proceeds from warrants

Proceeds from promissory

( 3,729,493 )

from stream obligation

costs stream obligation

from issuance of special warrants

from warrants exercise

from promissory note

of bridge loan

( 5,000,000 )

of promissory notes

cash (used) provided by financing activities

Net change in cash

( 18,564,172 )

Cash, beginning of

Cash, end of period

Supplemental disclosures

Non-cash activities

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

beginning of period

end of period

Cash interest paid

Non-cash activities

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

payable settled with common shares

Reconciliation from Cash Flow

Statement to Balance Sheet:

restricted cash end of period

restricted cash

8 unchanged sentences

$ ( 26,367,162 )

Stock-based compensation

Compensation options

Shares issued for interest

Shares issued for RSUs

Shares issued for warrant exercise

Special warrants

income (loss) for the period

issued for interest payable

issued for RSUs vested

Shares issued for warrant

Shares issued for interest payable, shares

(loss) for the period

( 9,484,440 )

Balance, March 31, 2024

Balance, June 30, 2024

$ ( 94,509,538 )

5 unchanged sentences

$ ( 26,176,943 )

Stock-based compensation

Compensation options

Shares issued for interest

Shares issued for warrant exercise

Special warrants

income (loss) for the period

Balance, March 31, 2023

issued for RSUs vested

issued for interest payable

Shares issued for warrant

(loss) for the period

( 15,066,635 )

Balance, June 30, 2023

$ ( 86,659,194 )

$ ( 36,432,624 )

$ ( 86,659,194 )

$ ( 36,432,624 )

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

1 unchanged sentence

to the Condensed Interim Consolidated Financial Statements (Unaudited)

Months Ended March 31, 2024

and Six Months Ended June 30, 2024

in United States Dollars)

8 unchanged sentences

is located at 1802 N.

Carson Street, Suite 212, Carson City, Nevada 89701, and its head office is located at 82 Richmond Street East,

Toronto, Ontario, Canada, M5C 1P1.

Carson Street, Suite 212, Carson City, Nevada 89701, and its head office is located at 300-1055 West Hastings Street, Vancouver, British Columbia, Canada,V6E 2E9.

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

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Management’s Discussion and Analysis, for the year ended December 31, 2023.

The interim results for the period ended March 31,

The interim results for the period ended June 30, 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.

The unaudited condensed interim 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

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Schedule of Accounts receivable and prepaid expenses

Prepaid expenses and deposits

HST Receivable

Environment protection

agency overpayment (note 8)

Prepaid expenses

HST and interest receivable

protection agency overpayment (note 8)

Equipment, Right-of-Use Asset

2 unchanged sentences

Equipment, gross

Less accumulated

Equipment, net

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.

accumulated depreciation

total depreciation expense relating to equipment during the three and six months ended June 30, 2024, was $ 50,492 and $ 96,957 , respectively.

Compared to the three and six months ended June 30, 2023, was $ 31,732 and $ 76,424 , respectively.

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

accumulated depreciation

total depreciation expense during the three and six months ended June 30, 2024, was $ 44,349 and $ 88,699 , respectively.

Compared to the

three and six months ended June 30, 2023, was $ 6,385 and $ 12,769 respectively.

Process Plant

On May 13, 2022, the

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

10 unchanged sentences

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.

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

Plant purchase price less inventory

Plant purchase

price less inventory

Demobilization

Site preparation costs

Capitalized interest

Process Plant

Detailed engineering and

construction costs

interest (note 9)

Bunker Hill Mine and Mining Interests

2 unchanged sentences

Schedule of Mining Interests

Bunker Hill Mine purchase

Mine purchase

Capitalized development

2 unchanged sentences

( 1,973,840 )

Bunker Hill mine

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

of $ 10,000 through February 2026.

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.

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 six months ended June 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.

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.

Lease Liability

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

of June 30, 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

Gross lease obligation

– minimum lease payments

interest expense on lease obligations

Total lease liability

Current lease liability

Non-current lease liability

lease liability

Total lease liability

Interest expense for the three and six months ended June 30, 2024, was

$ 13,997 and $ 41,005 , respectively.

Compared to the three and six months ended June 30, 2023, was $ 1,469 and $ 5,080 , respectively.

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

9 unchanged sentences

Schedule of Amended Settlement Environmental Protection Agency Agreement

Within 30 days of Settlement

November 1, 2024

November 1, 2025

November 1, 2026

November 1, 2027

November 1, 2028

November 1, 2029

30 days of Settlement Agreement

plus accrued interest

1 unchanged sentence

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.

of June 30, 2024, the Company had two payment bonds of $ 9,999,000

and $ 7,000,000

in place to secure this liability ( as of 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”).

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 $ 4,475,000

in aggregate are secured by cash deposits under an agreement with a commercial bank, which comprise the $ 4,475,000

of restricted cash shown within current assets as of June 30, 2024, compared to $ 6,476,000

as of December 31, 2023.

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 ).

Company recorded accretion expense on the liability of $ 479,854 and $ 932,661 for the three and six months ended June 30, 2024, respectively,

bringing the net liability to $ 10,506,801 (previously accrued interest of $ 154,743 ) as of June 30, 2024.

The Company recorded accretion

expense on the liability of $ 396,663 and $ 770,969 for the three and six months ended June 30, 2023, respectively.

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.

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

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

As of June 30, 2024, a prepaid expense of $ 30,000 (December 31, 2023:

$ 94,582 ) represented the difference between

2 unchanged sentences

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

Convertible Debentures

Promissory Notes Payable and Convertible Debentures

Promissory Notes

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.

Interest expense for the three and six months ended June 30, 2024, was $ nil

respectively.

Compared to $ 54,931 and

$ 110,411 for

the three and six months ended June 30, 2023, respectively.

The Company incurred a one-time penalty

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

is included in Loss on debt modification in the condensed interim consolidated statements

of loss and comprehensive loss.

A final principal payment of $ 1,599,569 was made during the year ended

December 31, 2023.

On 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.

Both promissory notes, including

interest, were settled on March 27, 2023.

In 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.

promissory note, including interest, was settled in June 2023.

Finance Package with Sprott Private Resource Streaming & Royalty Corp.

14 unchanged sentences

resulting in a lower cost of capital for the Company.

The Company also announced a new $ 21,000,000 new debt facility (the “Debt

The Company also announced a new $ 21,000,000 debt facility (the “Debt

Facility”), available for draw at the Company’s election for two years.

19 unchanged sentences

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

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

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

The 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 to

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

The Company determined

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

for as a modification.

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

as a modification.

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

2 unchanged sentences

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

Convertible Debenture (CD1)

Series 1 Convertible Debenture (CD1)

Company closed the $ 6,000,000 CD1 on January 28, 2022, which was increased from the previously-announced $ 5,000,000 .

14 unchanged sentences

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.

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

5 unchanged sentences

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

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 .

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.

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 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 Sprott elects

to exercise its share conversion option.

The Company determined that the amendments to the terms of the CD2 should not be treated as

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

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 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 Sprott elects to exercise its share conversion option.

CD2 is convertible into Common Shares at a price of C$ 0.29 per Common Share, subject to stock exchange approval.

determined that the amendments to the terms of the CD2 should not be treated as 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 recorded as a single instrument,

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

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

with the approach above, the following table summarizes the key valuation inputs as at applicable valuation dates using the binomial lattice methodology based on a Cox-Ross-Rubenstein (“CRR”) approach:

Schedule of Key Valuation Inputs

CD1 note (1)(2)(3)

CD2 note (1)(2)(3)

CD1 note (1)(2)(3)

CD2 note (1)(2)(3)

Interest rate

Convertible Debenture

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.

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

CD2 carried a DLOM of 10.0 % as of the issuance date.

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

conversion price of the CD1 is $ 0.219 and CD2 is $ 0.212 as of June 30, 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:

resulting fair values of the CD1 and CD2 at June 30, 2024, and as of December 31, 2023, were as follows:

Schedule of Fair Value Derivative Liability

(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 )

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

comprehensive loss during the three and six months ended June 30, 2024, was ($ 498,263 )

and ($ 655,495 ),

respectively, and ($ 1,884,232 )

and ($ 194,531 )

for the three and six month ended June 30, 2023, respectively.

The portion of changes in fair value that is attributable to changes

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

June 30, 2024, was $ 475,762

respectively.

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

for within other comprehensive income.

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

Compared to three and six months ended June 30, 2023, was ($ 373,415 )

and $ 433,597 ,

respectively, within other comprehensive income.

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

respectively.

Interest expense for the three and six months ended June 30, 2024, was $ 504,863

and $ 1,009,726 ,

respectively.

At March 31, 2024 interest of $ 504,863

Compared to the three and six months ended June 30, 2023, was $ 670,562

and $ 1,347,411 ,

respectively.

At June 30, 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

Interest is due on a quarterly basis.

For the three and six

months ended June 30, 2024, the Company recognized $ 133,232

and $ 203,325 ,

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

respectively, loss on debt settlement in the condensed interim consolidated statements of loss and comprehensive loss, as a result

of settling interest by issuance of shares.

Compared to the three and six months ended June 30, 2023, was $ 18,803

and $ 268,889 ,

respectively.

Company performs quarterly testing of the covenants in the CD1 and CD2 and was not in compliance with the working capital covenant

require as of June 30, 2024, however, each debenture holder agreed to waive the working capital covenant for the period of June 30,

It is probable that the violation will be cured by September 30, 2024.

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

23 unchanged sentences

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

$ 1,099,060 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.

statements of loss and comprehensive loss.

Company determined the effective interest rate of the Stream obligation to be 10.7 %

and recorded accretion expense on the liability of $ 1,178,156

and $ 2,277,216

for the three and six months ended June 30, 2024,

respectively ($ nil and

the three and six months ended June 30, 2023) recognized in the condensed interim consolidated statements of loss and comprehensive loss,

accretion expense on the liability of $ 226,840

and $ 485,784

for the three and six months ended June 30, 2024

for the three and six months ended June 30, 2023)

capitalized into the process plant (note 5) on the condensed interim consolidated balance sheets and gain on revaluation of the liability

of $ 2,748,000 and

$ 2,531,000 for

the three and six months ended June 30, 2024, respectively ($ nil

for the six months ended June 30, 2023), bringing

the liability to $ 51,370,000 as

of June 30, 2024.

The revaluation is because of a change in projections.

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 1.16 $/lb to 1.21 $/lb for zinc, 0.93 $/lb to 0.95 $/lb for lead, and 24.00 $/oz to $28.00 $/oz for

$5,000,000 Bridge Loan

On 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 of 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.

On 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 condensed

interim consolidated statements of loss and comprehensive loss.

Interest expense for three and six months ended June 30, 2024, was $ nil

and $ nil respectively.

Compared to the three and six months ended June 30, 2023, was $ 168,166 and $ 346,550 respectively.

Debt 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.

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

As of December 31, 2023 and June 30, 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.

maturity date of any drawings under the Debt Facility will be June

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 June 30, 2024, as no amount has been drawn

from the facility.

Capital Stock, Warrants and Stock Options

4 unchanged sentences

and outstanding

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.

January 2023, 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 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 plant.

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

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.

During the quarter ended March 31, 2023, 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 %

and dividend yield of 0 %.

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

2 unchanged sentences

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 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

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

Unit being comprised of 1.2 Unit Shares and 1.2 Warrants.

Notice of such effectiveness was received on July 11, 2023, eliminating the

potential for issuance of the Penalty Units.

In connection with the March 2023

Offering, each March 2023 Special Warrant is automatically exercisable (without payment of any further consideration and subject to

customary anti-dilution adjustments) into one unit of the Company (a “March 2023 Unit”).

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 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.

the event that the Registration Statement 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 Unit being comprised of 1.2 Unit Shares and 1.2 Warrants.

Notice of such

effectiveness was received on July 11, 2023, eliminating the potential for issuance of the Penalty Units.

connection with the March 2023 Offering, the Company incurred share issuance costs of $ 585,765 and issued 2,070,258 compensation options

6 unchanged sentences

stock and common stock purchase warrants are issued.

May 2023, the Company issued 1,318,183 shares of common stock in connection with settlement of RSUs.

June 2023, the Company issued 4,449,035 shares of common stock in connection with settlement of RSUs.

June 2023, the Company issued 3,944,364 shares of common stock in connection with its election to satisfy interest payments under the

outstanding convertible debentures for the three months ending June 30, 2023.

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

1 unchanged sentence

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.

April 2024, the Company issued 100,000 shares of common stock in connection with settlement of RSUs.

April 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.

2024, the Company has accounted for the warrants in accordance with ASC Topic 815.

The warrants are considered derivative instruments

2 unchanged sentences

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.

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

model to determine the fair value using the following assumptions as at June 30, 2024 and December 31, 2023:

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

11 unchanged sentences

Change in derivative liability

$ ( 275,588 )

2022 non-brokered issuance

4 unchanged sentences

Change in derivative liability

2022 issuance

Expected life

15 unchanged sentences

Change in derivative liability

August 2019 issuance

2019 issuance

Expected life

3 unchanged sentences

Change in derivative liability

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

warrants at June 30, 2024 and June 30, 2023 were as follows:

Schedule of Warrant Activity

exercise price

Balance, December

( 10,416,667 )

Balance, March 31, 2023

Balance, June 30, 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:

June 30, 2024

the six months ended June 30, 2023, 10,416,667 May 2022 Teck warrants were exercised.

June 30, 2024, the following warrants were outstanding:

Schedule of Warrants Outstanding Exercise Price

3 unchanged sentences

February 16, 2026

March 27, 2026

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

June 30, 2024, the following broker options were outstanding:

of Compensation Options

exercise price

Balance, December

Issued – March 2023 Compensation Options (i)

Balance, March 31, 2023

– March 2023 Compensation Options (i)

Balance, June 30, 2023

Balance, December 31, 2023

Expired – February

Balance, March 31, 2024

( 1,879,892 )

Balance, June 30, 2024

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

1 unchanged sentence

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

interest rate

Dividend yield

Weighted average life

Schedule of Broker Exercise Prices

broker options

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 three months ended March 31, 2024 and March 31 2023:

following table summarizes the stock option activity during the six months ended June 30, 2024, and June 30 2023:

of Stock Options

exercise price

stock options

Balance, December

Balance, March 31, 2023

Balance, June 30, 2023

Balance, December 31, 2023

Balance, March 31, 2024

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

June 30, 2024

following table reflects the actual stock options issued and outstanding as of June 30, 2024:

of Actual Stock Options Issued and Outstanding

(exercisable)

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.

vesting of stock options during the three and six months ending June 30, 2024, resulted in stock based compensation expense of $ 6,423

and $ 31,516 , respectively ($ 34,441 and $ 93,140 for the three and six months ending June 30, 2023, respectively).

Restricted Share Units

1 unchanged sentence

key employees and consultants.

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

following table summarizes the RSU activity during the six months ended June 30, 2024, and June 30, 2023:

Schedule of Restricted Share Units

Unvested as at December 31, 2022

Granted (i, ii)

Unvested as at March 31,

at December 31, 2022

( 5,767,218 )

Unvested as at June 30,

Unvested as at December

1 unchanged sentence

( 2,646,436 )

Unvested as at March 31, 2024

Unvested as at June 30,

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 $ 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.

RSUs resulted in stock-based compensation of $ 12,432 and $ 21,311 , respectively, for the three and six months ended June 30, 2024,

which is included in operating expenses condensed interim consolidated statements of loss and comprehensive loss.

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.

The vesting of these RSUs resulted in stock-based compensation of $ 112,334 and $ 134,554 , respectively,

for the three and six months ended June 30, 2024, which is included in operating expenses condensed interim consolidated statements

of loss and comprehensive loss.

vesting of RSU’s during the three and six months ending June 30, 2024, resulted in stock based compensation expense of $ 189,808

and $ 426,664 respectively ($ 419,754 and $ 594,724 for the three and six months ending June 30, 2023, 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 three months ended March 31, 2024 and 2023:

following table summarizes the DSU activity during the six months ended June 30, 2024, and 2023:

Schedule of Deferred Share Units

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.

at December 31 2022

( 1,250,000 )

Unvested as at June 30,

Unvested as at December 31 2023

( 3,157,840 )

as at June 30, 2024

vesting of DSU’s during the three and six months ended June 30, 2024, resulted in stock based compensation expense of $ 476,794

and $ 551,772 , respectively.

The vesting of DSU’s during the three and six months ending June 30, 2023, resulted in stock based

compensation expense of $ 486,602 and $ 287,324 , respectively.

The fair value of each DSU is $ 0.12 as of June 30, 2024, and $ 0.17 as of

June 30, 2023.

Commitments and Contingencies

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.

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.

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.

(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 (“AMD”) in the Crescent Mine.

The plaintiff

has requested unspecified damages.

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

that such claims are facially deficient.

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

Nye granted in part and denied

in part the Company’s motion to dismiss.

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

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

were dismissed without prejudice.

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.

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.

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.

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 lawsuit is currently in the

discovery phase, in which information is gathered and exchanged.

Deferred tax liability

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.

Company recorded income tax recovery (expense) of $ 504,798 and $ 1,204,718 for the three and six months ended June 30, 2024, and incurred

income tax expense of $ 3,508,741 and $ 3,508,741 for the three and six months ended June 30, 2023.

The Company’s effective income

tax rate for the first six months of 2024 was 10.3 % compared to - 30.29 % for the first six months of 2023.

The effective tax rate during

the first six months of 2024 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 of the Internal Revenue Code and other deferred tax assets.

The effective tax rate during the first six months

of 2023 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.

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

6 unchanged sentences

Schedule of Operating Expenses

March 31, 2024

March 31, 2023

Salaries, wages, and consulting fees

General administration expenses

administration expenses

wages, and consulting fees

Related party transactions

2 unchanged sentences

Schedule of Related Party Transactions

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

Consulting fees

June 30, 2024 and June 30, 2023, $ 88,796 and $ 52,148 , respectively, is owed to key management personnel with all amounts included in

accounts payable and accrued liabilities.

Subsequent Events

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.

July 8, 2024, the Company issued 4,653,409 shares of common stock in connection with its election to satisfy interest payments under

the outstanding convertible debentures for the three months ending June 30, 2024.

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