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Item 7. Management’s Discussion and Analysis

2025-03-28 compared with 2024-03-12 · 278 added, 126 removed, 66 unchanged (86% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS

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

which are basically statements about the future.

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

predict the future.

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

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

that a statement is a forward-looking statement.

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

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

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

Numerous factors and future events could cause the Company to

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

operations to fail to produce revenues, income or profits.

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

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

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

Company’s sole focus is the development and restart of its 100% owned flagship asset, the Bunker Hill Mine, in Idaho, USA.

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 Bunker 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.

Our focus is the development and restart of our 100% owned flagship asset, the Bunker Hill 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.

The Bunker 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.

Production is

expected to commence in 2024.

Since early 2020, the Company has conducted multiple

exploration campaigns, published multiple economic studies and mineral resource estimates, and advanced the rehabilitation and development

In December 2021, the Company announced a project finance package with Sprott Private Resource Streaming & Royalty Corp.,

an amended Settlement Agreement with the EPA, and the purchase of the Bunker Hill Mine.

In 2022, the Company completed the purchase of

a package of equipment and parts inventory from Teck Resources Limited’s (“Teck”) Pend Oreille operation.

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.

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 to restart the mine.

In June 2023, the Company closed an upsized and improved

early 2020, we have conducted multiple exploration campaigns, published multiple economic studies and mineral resource estimates,

and advanced the rehabilitation and development of the Mine.

In December 2021, we announced a project finance package with Sprott, an amended Settlement Agreement with the EPA, and the purchase of the Bunker Hill Mine.

In 2022, we 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.

We 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 to restart the mine.

In June 2023, we closed an upsized and improved $67,000,000

project finance package with Sprott, consisting of a $46,000,000 stream and a $21,000,000 new debt facility.

The Company believes

that this project finance package will be sufficient to complete the development and construction activities to restart the mine.

The Bunker Hill Mine restart is expected to take place in 2024, with first

concentrate production targeted for the fourth quarter of 2024.

However, the estimated timing of Bunker Hill Mine restart is subject to

change based on factors beyond the Company’s control, including but not limited to supply chain dynamics.

In August 2024, we entered

into definitive agreements with Monetary Metals Bond III LLC, an entity established by Monetary Metals & Co., for a silver loan in

an amount of U.S.

dollars equal to up to 1.2 million ounces of silver, to be advanced in one or more tranches, in support of the re-start

and ongoing development of the Bunker Hill Mine (the “Silver Loan”).

Throughout 2024 we closed several tranches of the Silver

Loan for an aggregate principle of 1,098,400 ounces of Silver.

In December 2024 we borrowed $10,000,000 on the new debt facility, leaving

the undrawn portion at $11,000,000 as of December 31, 2024.

Bunker Hill Mine restart is expected to take place in 2026.

However, the estimated timing of Bunker Hill Mine restart is subject to change

based on factors beyond the Company’s control, including but not limited to supply chain dynamics.

of Operations

5 unchanged sentences

of the year ended December 31, 2024, and the year ended December 31, 2023

the year ended December 31, 2023, the Company generated no revenue (year ended December 31, 2022 - $nil).

the year ended December 31, 2023, the Company reported total operating expenses of $11,600,574 as compared to total operating expenses

of $16,487,161 for the year ended December 31, 2022.

decrease in total operating expenses was primarily due to (i) a decrease in mine preparation expenses of $7,827,656 (ii) a decrease

in consulting and wages expenses of $1,872,392 (iii) partially offset by an increase in operation and administration expenses of $4,112,443

in the year ended December 31, 2023 compared to the year ended December 31, 2022.

Mine preparation expenses were $nil in the year

ended December 31, 2023, primarily as a result of the Company determining that all 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 year ended December 31, 2023, as compared to the year ended December 31, 2022.

Operation and administration expenses increased

due to increased activities at site, such as maintenance.

During the years ended December 31, 2024, and December 31, 2023, we generated no revenue.

the years ended December 31, 2024 and December 31, 2023, we reported total

operating expenses of $15,649,142 and $11,600,574, respectively.

The increase in total operating expenses was primarily due to an increase

in the volume of transactions and employee head count associated with construction of the process plant commencing in the year ended December

Income and Comprehensive Income

Company had net loss of $13,432,539 for the year ended December 31, 2023 (net income of $898,591 for the year ended December 31, 2022).

The decrease in net income was due to a decrease in the gain recorded due to change in derivative liability of $13,336,366 (gain of $2,360,025

and gain of $15,696,391 for the year ended December 31, 2023, and 2022 respectively).

The decrease in net income was further increased

by a higher interest expense in the year ended December 31, 2023 ($7,124,527) compared to the year ended December 31, 2022 (3,382,559),

due to the issuance of the Stream obligation in June 2023.

The change in net loss was also impacted by a decrease of $1,462,230 gain

on extinguishment in debt in the year ended December 31, 2023, compared to the year ended December 31, 2022.

A gain of $7,151,873 was

recognized in the year ended December 31, 2023, relating to the sale of mineral properties, compared with a $8,614,103 gain on EPA settlement

in the year ended December 31, 2022.

Net loss for the year ended December 31, 2023, included a loss on modification of debt of 3,228,525,

mostly relating to the Stream, compared to $nil for the year ended December 31, 2022.

Net loss for the year ended December 31, 2023,

also included the initial recognition of a deferred tax liability and corresponding deferred tax expense relating to the closing of the

stream transaction ($2,588,590 for the year ended December 31, 2023, compared to $nil for the year ended December 31, 2022).

decrease in net income was offset by the inclusion of $1,107,093 of interest income for the year ended December 31, 2023, compared to

$nil for the year ended December 31, 2022.

Additionally, items offsetting the decrease in net income was the decrease in operating expenses, as described above, and the decrease in debenture financing

costs of $1,230,540 ($nil for the year ended December 31, 2023, compared to $1,230,540 for the year ended December 31, 2022).

in net income was further offset by an increase in the gain recorded due to change in convertible debentures of $2,814,313 (gain of $1,673,776

and loss of $1,140,537 for the year ended December 31, 2023, and 2022 respectively).

The gain in fair value that occurred in 2023 was

driven by a decline in the Company’s share price.

The loss that occurred in 2022 was driven by the increase in likelihood of the

RCD being converted into a Royalty.

Company had comprehensive loss of $12,877,752 for the year ended December 31, 2023 (comprehensive income of $1,152,466 for the year ended

experienced a net loss of $25,341,623 for the year ended December 31, 2024

(compared to a net loss of $13,432,539 for the year ended December 31, 2023).

In addition to the increase in operating expenses (as described

above), net loss for the year ended December 31, 2024 was impacted by an increase in interest expense of $966,885 ($8,091,412 for the

year ended December 31, 2024 compared to $7,124,527 for the year ended December 31, 2023), and $nil of gain on debt settlement for the

year ended December 31, 2024 compared to $7,151,873 of gain on debt settlement relating to the conversion of the royalty convertible debentures

into a royalty during the year ended December 31, 2023.

A loss on fair value of the convertible debentures of $890,258 was recognized

for the year ended December 31, 2024, compared to a gain on fair value of the convertible debentures of $1,673,776 for the year ended

December 31, 2023.

Comprehensive loss for the year ended December 31, 2023, is inclusive of a $554,787 gain on change in fair value on

own credit risk ($253,875 for the year ended December 31, 2022) relating to the convertible debentures outstanding into during the year ended

December 31, 2023, due to the Company’s credit rating improving in the same period

primarily due to the closing of the $46,000,000 Stream.

Additionally, the year ended December 31, 2024 included $2,820,533 loss on revaluation of the Silver Loan due to updated

key assumptions such as commodity prices (compared to $nil for the year ended December 31, 2023).

During the year ended December 31, 2024,

the Company incurred a loss of $924,820 from the sale of equipment (compared to $nil for the year ended December 31, 2023) and a gain

on in derivative liabilities of $838,378 in the year ended December 31, 2024 compared to a gain of $2,360,025 in the year ended December

31, 2023 (driven by the decrease in remaining contractual life of the warrants issued and outstanding).

Net loss for the year ended December

31, 2024, included a current tax expense of $1,050,000 compared to $nil for the year ended December 31, 2023.

net loss for the year ended December 31, 2024 was partially offset by (i) a gain on debt modification of $1,308,062 for the year

ended December 31, 2024 compared to a loss on debt modification of $99,569 for the year ended December 2023 and (ii) a decrease in

the loss on modification of debt of $2,898,956 relating to the revaluation of the stream ($230,000 for the year ended December 31,

2024 compared to $3,128,956 for the year ended December 31, 2023).

Net loss for the year ended December 31, 2024 included a deferred

tax recovery of $2,588,590 compared to deferred tax expense of $2,588,590 for the year ended December 31, 2023.

Current income tax expense for the year ended December 31, 2024, $1,050,000 ($nil for the year ended December 31,

203) relates to the proceeds of the stream debenture which are classified as income under the internal revenue code.

We elected to defer

the income, one year, to 2024 in which most of the income was offset by losses incurred in the current year and previous years.

had a comprehensive loss of $29,152,646 and $12,877,752 for the year ended December 31, 2024, and December 31, 2023, respectively.

Comprehensive

(loss) income for the year ended December 31, 2024 and December 31, 2023 is inclusive of a ($3,811,023) and $554,787 change in fair

value on own credit risk, respectively.

and Capital Resources

consolidated financial statements have been prepared on a going concern basis.

The Company has incurred losses since inception resulting

in an accumulated deficit of $110,366,721 and further losses are anticipated in the development of its business.

The Company does not

have sufficient cash to fund normal operations and meet debt obligations for the next 12 months without deferring payment on certain

current liabilities and/or raising additional funds.

In order to continue to meet its fiscal obligations in the current fiscal year and

beyond, the Company must seek additional financing.

This raises substantial doubt about the Company’s ability to continue as a

going concern.

Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations

in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business

operations when they come due.

The accompanying consolidated financial statements do not include any adjustments that might result from

the outcome of this uncertainty.

consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets,

or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

Assets and Total Assets

of December 31, 2023, the Company had total current assets of $27,176,997, compared to total current assets of $7,741,052 at December

31, 2022 – an increase of $19,435,945;

and total assets of $61,989,678, compared to total assets of $32,929,892 at December 31,

2022 – an increase of $29,059,786.

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, Promissory note and transaction related costs, the exercise of 10,416,667 warrants at an exercise price of C$0.11, for

aggregate gross proceeds of $837,460 (C$1,145,834) and the closing of the March 2023 Offering for gross proceeds of $4,536,020 (C$6,196,047).

of December 31, 2024, the Company had (i) total current assets of $9,332,639,

compared to total current assets of $27,176,997 at December 31, 2023, a decrease of $17,844,358;

and (ii) total assets of $97,601,550,

compared to total assets of $61,989,678 at December 31, 2023, an increase of $35,611,872.

During the year ended December 31, 2024, our

current assets decreased due to cash expenditures on the process plant, purchasing of equipment and additions to the Bunker Hill Mine.

Total assets increased as the increase in property plant and equipment was offset largely by the decrease in cash.

Liabilities and Total Liabilities

of December 31, 2023, the Company had total current liabilities of $7,472,326 and total liabilities of $88,356,840, 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 repayment of the promissory note, and settlement of accounts payable and accrued liabilities from the proceeds of

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 convertible debenture 1, convertible debenture 2, warrants, and the settlement

of royalty convertible debenture and the bridge loan.

of December 31, 2024, our total current liabilities were $29,644,412 and total

liabilities were $149,736,915, compared to total current liabilities of $7,472,326 and total liabilities of $88,356,840 as of December

Total liabilities increased because of the issuance of the Silver Loan, drawings on our debt facility, accretion on the stream

debenture and the EPA payable, as well as an increase in accounts payable and accruals due to timing of invoices and payments.

Capital and Shareholders’ Deficit

of December 31, 2023, the Company had a working capital balance of $19,704,671 and a shareholders’ deficiency of $26,367,162 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 year ended December 31, 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 proceeds received from the equity financing in the year ended December 31, 2023, partially offset by the

net loss the same period.

the year ended December 31, 2023, the Company had a net cash increase of $19,394,491, 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 year ended December 31, 2023, were primarily related to process plant and general working capital requirements.

As of December 31, 2024, we had a working capital deficit of $20,311,773 and a shareholders’ deficiency of

$52,135,365, compared to positive working capital of $19,704,671 and a shareholders’ deficiency of $26,367,162 as of December 31,

The working capital deficit as of December 31, 2024, was 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 year

ended December 31, 2024.

have a $21,000,000 debt facility with Sprott which is available at our election for a period of 2 years, ending on June 30, 2030.

of December 31, 2024, we have drawn $10,000,000 on this facility.

Notwithstanding the debt facility with Sprott, based on our limited cash

resources and history of losses, there is substantial doubt as to whether our existing cash resources are sufficient to enable us to continue

operations for the next 12 months as a going concern.

We plan to pursue possible financing and strategic options, including, but not limited

to, obtaining additional equity financing.

also plan to secure additional financial resources through potential equity financings and other strategic initiatives, including but not limited to a possible debt funding package from

Ultimately, if the Company is unable to secure sufficient additional financial resources, the Company may

need to curtail or suspend its development or operations plans regarding the Bunker Hill Mine or other initiatives.

the year ended December 31, 2024, we had a net cash decrease of $18,317,319, primarily due to cash expenditures on the process plant,

purchasing of equipment, and additions to the Bunker Hill Mine, offset by $32,740,264 of cash provided by financing activities relating

to the issuance of the Silver Loan.

January 8, 2025, the Company issued 1,053,335 shares of common stock to satisfy $120,000 owed to a certain service provider of the Company

as of December 31, 2024.

January 14, 2025, 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.

January 29, 2024, the Company granted 672,450 RSUs to a certain member of management of the Company.

The RSUs vest on January 29, 2025.

the outstanding convertible debentures for the three months ended December 31, 2024.

On January 27, 2025, the Company issued 672,450 shares

of common stock in connection with settlement of RSUs.

On January 29, 2025, the Company issued 621,500 shares

of common stock to satisfy $60,000 owed to a certain service provider of the Company as of December 31, 2024.

March 13, 2025, the Company’s board of directors approved an amendment to the vesting schedule of certain RSUs previously granted

to certain directors and officers of the Company under the Company’s amended and restated restricted stock unit incentive plan

(the “RSU Plan”) on November 2, 2022, July 4, 2023 and March 13, 2024, such that an aggregate of 5,562,419 RSUs granted to

such directors, officers and employees will now vest on May 1, 2025 rather than on March 13, 2025 or March 31, 2025, as applicable.

other terms of such RSUs remain the same.

January 7, 2025, in connection with the Silver Loan, the Company issued 100,397 Bonus Warrants to Monetary Metals.

Each such warrant

will entitle the holder to acquire one share of common stock of the Company at an exercise price of C$0.15.

Each such warrant is exercisable

until August 8, 2027.

January 17, 2025, the Company drew $5,000,000 on the debt facility.

January 31, 2025, the Company drew the final $6,000,000 on the debt facility.

consideration for Sprott advancing $11,000,000 of the debt facility, the Company granted a royalty for 1.0% of life-of-mine gross revenue

from mining claims considered to be historically worked, contiguous to current accessible underground development, and covered by the

Company’s 2021 ground geophysical survey.

A 0.70% rate will apply to claims outside of these areas.

Unsecured Promissory Note

On March 21, 2025, the company closed a unsecured

promissory note for an aggregate principal amount of up to $3,400,000 (the “ Note ”) to ensure sufficient short-term

funding to keep the Project on track while the Private Placements close.

The Note will bear interest at 12% per annum, with such interest

being capitalized and added to the principal amount outstanding under the Note monthly.

The Note will be available in multiple advances,

at the discretion of Teck, and is payable on demand from Teck.

On March 21, 2025, the Company received $763,000 advance from Teck.

March 25, 2025, the Company received $2,325,000 advance from Teck.

As of March 28, 2025 the principal outstanding on the unsecured promissory

note is $3,088,000.

During the year end December 31, 2024, the Company made a $3,000,000 payment to the EPA bringing the principal of the cost recovery liability

to $14,000,000.

As a result of this payment the Company’s letter of credit requirement decreased by $1,500,000 and the restricted

cash balance (utilized as collateral for letters of credit) decreased by the same amount from $4,475,000 as of December 31, 2024, to $2,975,000

on January 20, 2025.

Restructuring of Outstanding Debt alongside up

to $45,000,000 Equity Financing and Provision of New Standby Facility

In March 2025, the Company announced a

restructuring of outstanding debt alongside an equity financing of up to $45,000,000 and a new standby facility agreement for

The planned brokered private placement equity offering for minimum aggregate gross

proceeds of $10,000,000 (C$14,370,000), and up to maximum aggregate gross proceeds of $15,000,000 (C$21,555,000) (the

“Brokered Offering”).

Teck has agreed to contribute, through a non-brokered private placement, $2 for every $1 raised

through the Brokered Offering in aggregate, with a minimum lead order of $6,600,000 and total gross proceeds of up to $30,000,000

(C$43,110,000)1 (collectively, the “Non-Brokered Offering” and together with the Brokered Offering, the “Private

Placements”), subject to shareholder approval, closing of the debt restructuring transactions and other customary closing

Proceeds will be used to support the construction, start-up, and ramp-up of the Project.

In connection with the

Non-Brokered Offering, the Company and Teck have amended the subscription agreement dated March 5, 2025, to, among other things,

amend the closing condition thereunder requiring the Company to raise aggregate gross proceeds of at least $20,000,000 under the

Brokered Offering to a minimum of at least $10,000,000.

In accordance with the TSX-V policies, the

approval of the Company’s stockholders will be required with respect to Teck becoming a Control Person (over 20% ownership in the Company).

In lieu of a special

meeting of its stockholders, the Company intends to obtain the written consent of disinterested stockholders holding more than 50%

of the current issued and outstanding Common Shares (the “Stockholder Consent”), which Stockholder Consent will exclude

any votes held by Teck and its Affiliates or Associates (each as defined in the TSX-V policies).

Also in connection with the Non-Brokered Offering,

the Company and its wholly-owned subsidiary Silver Valley Metals Corp.

(“Silver Valley”) announced its intention to enter

into a standby facility agreement with Teck (or an affiliate thereof) pursuant to which, among other things, Teck will provide an uncommitted

revolving standby prepayment facility of up to $10,000,000 to the Company (the “SP Facility”), which will be available to

the Company until the earlier of (i) June 30, 2028, and (ii) the date on which the Project hits 90% of name plate capacity or the date

on which the Company is cash positive for a quarter, unless terminated earlier by Teck.

The SP Facility will bear interest at a to-be-agreed-basis

per annum, calculated and capitalized quarterly.

1 Based on a USD/CAD exchange rate

of 1.4370 as published by the Bank of Canada on March 5, 2025.

The Company announced its intention to restructure, either directly

or indirectly, its existing debt financing package with Sprott Streaming and certain other creditors on the following principal terms:

amendment and restatement of the Series 1 secured convertible debentures in the aggregate

principal amount of $6,000,000 (collectively, the “Series 1 CDs”) previously

issued to Sprott Streaming and certain other creditors, maturing on March 31, 2028, pursuant

to which, among other things, (i) the rate of interest of the Series 1 CDs will be reduced

from 7.5% to 5.0% per annum, (ii) the current conversion price, being the U.S.

dollar equivalent

of C$0.30 per Common Share, will be reduced to equal the Offering Price, and (iii) certain

prepayment and conversion terms will be amended;

amendment and restatement of the Series 2 secured convertible debentures in the aggregate

principal amount of $15,000,000 (collectively, the “Series 2 CDs”) previously

issued to Sprott Streaming, maturing on March 31, 2029, pursuant to which, among other things,

(i) the rate of interest of the Series 2 CDs will be reduced from 10.5% to 5.0% per annum,

(ii) the current conversion price, being the U.S.

dollar equivalent of C$0.29 per Common

Share, will be reduced to equal the Offering Price, and (iii) certain prepayment and conversion

terms will be amended;

exchange of a $46,000,000 multi-metals stream previously entered into with Sprott Streaming,

which currently applies to up to 10% of payable metals sold from the Project and expires

on June 23, 2063 (the “Stream”), for the Series 3 CDs, the Sprott Tranche II

Shares and the Third Royalty referred to and defined below under paragraph (A) below;

cancellation of the royalty put option previously granted to Sprott Streaming, pursuant to

which, among other things, upon the occurrence of an event of default under any of the Series

1 CDs and the Series 2 CDs, Sprott Streaming may require the Company to purchase the First

Royalty (as defined below);

amendments of certain royalty interests granted to Sprott Streaming (collectively, the “First

Royalty”), currently applying to certain primary, residual and other claims comprising

the Project (with the royalty percentage being between 1.35% to 1.85% based on the type of

claim), pursuant to which, among other things, the First Royalty will be consolidated into

one 1.85% life-of-mine gross revenue royalty applying to both primary and secondary claims

comprising the Project, which will also include additional surface and mineral rights recently

acquired by the Company or Silver Valley, as applicable;

amendment and restatement of the loan agreement with respect to the existing senior secured

credit facility in the aggregate principal amount of $21,000,000 advanced by Sprott Streaming

(the “Debt Facility”), maturing on June 30, 2030 and secured by first-ranking

interests and charges on all of the property and assets of the Company and its wholly-owned

subsidiary Silver Valley Metals Corp., pursuant to which (i) the sliding scale royalty payable

in connection with advances thereunder (the “Second Royalty Amendments”) will

be fixed at 1.5% for both the primary and secondary claims comprising the Project and (ii)

the Company’s royalty buyback option thereunder will be cancelled;

the foregoing amendments

will also be reflected in an amendment to the additional royalty granted to Sprott in connection

with the Debt Facility,

Company and Monetary Metals Bond III LLC (together with its affiliates, “ Monetary

Metals”) enter into an amending agreement to the note purchase agreement dated August

8, 2024, as previously by amended by a first amending agreement dated November 11, 2024 (the

“MM NPA”), the parties intend to, among other things, (i) reduce the interest

rate payable on advances under the existing loan by Monetary Metals to Silver Valley Metals

Corp., a wholly-owned subsidiary of the Company, in the aggregate principal amount equal

dollar equivalent of up to 1,200,000 troy ounces of silver (the “Silver

Loan”) from 15% to 13.5%;

(ii) clarify the calculation of the cash flow sweep;

extend the availability date for advances of the Silver Loan from January 31, 2025 to June

and (v) in connection with any advances of the Silver Loan, to provide for the

issuance of bonus warrants (“Bonus Warrants”) in such number and on such terms

as to be agreed upon between the parties before issuance and subject to prior approval from

the TSX-V (however, in any event, the aggregate number of Bonus Warrants issued to Monetary

Metals under the Silver Loan will not exceed the maximum amount of 3,000,000 allowable under

In consideration for, and in connection with, the Debt Amendments, the

Company intends to, either directly or indirectly:

consideration for the exchange of the Stream pursuant to the terms of a recapitalization

agreement to be entered into among the Company, Teck, and Sprott Streaming, (i) issue to

Sprott Streaming, on a private placement basis, two senior secured Series 3 convertible debentures

in the aggregate principal amount of $4,000,000 (the “Series 3 CDs”) which, once

issued, will (a) mature on June 30, 2030, (b) bear interest at an accrued rate of 5.0%, which

interest shall be capitalized until the beginning of 2028 or an event of default, and (c)

otherwise have terms substantially similar to the terms of the Series 1 CDs, (ii) issue up

to 200,000,000 Common Shares at the Offering Price (“Sprott Tranche II Shares”)

and (iii) grant Sprott Streaming an additional 1.65% life-of-mine gross revenue royalty on

both the primary and secondary claims comprising the Project (the “Third Royalty”);

into a debt settlement agreement with Sprott Streaming, pursuant to which, among other things,

Sprott Streaming will convert $6,000,000 outstanding under the Debt Facility, together

with all accrued and unpaid interest thereon, in consideration of up to 58,142,857 Common

Shares at the Offering Price (“Sprott Tranche I Shares”) and the Second Royalty

Amendments (the “Sprott Loan Conversion”);

into an amended and restated intercreditor agreement with, among others, the Company, Teck,

Monetary Metals and Sprott Streaming pursuant to which certain payment terms under the First

Royalty, the Second Royalty Amendment, Third Royalty, the Series 1CDs, the Series 2 CDs,

the Series 3 CDs and the Debt Facility will be waived, restricted or otherwise revised during

the term in which the Company has any outstanding obligations owing under the SP Facility;

There can be no assurance that the debt restructure and financing plan will be timely finalized, or on what specific

final terms, or if at all.

accounting estimates

23 unchanged sentences

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.

of common stock, USD-CAD exchange rates, expected equity volatility, discount for lack of marketability, credit spread.

stream obligation inputs used to determine the future cash flows and effective interest for the amortized cost calculation include futures

prices of minerals and expected mineral production over the life of the mine.

The fair value estimates of the silver loan use inputs

to the valuation model that include risk-free rates, spot and futures prices of minerals, and expected volatility in minerals prices.

fair value estimates may differ from actual fair values and these differences may be significant and could have a material impact on

15 unchanged sentences

the water treatment costs for future periods.

Incremental Borrowing rate

The Company estimates the incremental borrowing rate

to determine the present value of future lease payments.

Actual results may be different from estimates.

Borrowing Cost Capitalization rate

The Company makes estimates to determine the percentage

of borrowing costs that are capitalized into property plant and equipment.

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-K

Item 7. Management’s Discussion and Analysis