What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-28 compared with 2024-03-12 · 985 added, 870 removed, 807 unchanged (70% of the section changed)

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the Board of Directors and Shareholders of Bunker Hill Mining Corp.

(formerly Liberty Silver Corp.)

on the Consolidated Financial Statements

have audited the accompanying consolidated balance sheets of Bunker Hill Mining Corp.

(the “Company”) as at December 31,

2023 and 2022, and the related consolidated statements of income (loss) and comprehensive income (loss), cash flows, and changes in shareholders’

deficiency for each of the years in the two-year period ended December 31, 2023, and the related notes (collectively referred to as the

“consolidated financial statements”).

(the “Company”) as of December 31, 2024

and 2023, and the related consolidated statements of loss and comprehensive loss, cash flows, and changes in stockholders’ deficiency

for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated

financial statements”).

our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the

Company as at December 31, 2023 and 2022, and the results of its consolidated operations and its consolidated cash flows for each of

Company as of December 31, 2024 and 2023, and the results of its consolidated operations and its consolidated cash flows for each of

the years in the two-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States

Uncertainty Related to Going Concern

accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

in Note 1 to the consolidated financial statements, the Company has incurred losses since inception resulting in an accumulated deficit

and does not have sufficient working capital which raises substantial doubt about its ability to continue as a going concern.

plans in regard to these matters are also described in Note 1.

The consolidated financial statements do not include any adjustments that

might result from the outcome of this uncertainty.

This matter is also described in the “Critical Audit Matters” section

of our report.

consolidated financial statements are the responsibility of the Company’s management.

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conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

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Audit Matter Description

described in Note 1 to the consolidated financial statements, the Company may not have sufficient cash to fund its operations and

meet debt obligations and therefore, will need to obtain additional equity or debt financing.

Management has prepared future cash

flow forecasts, which involves judgement and estimation of key variables that affect cash flows, such as planned expenditure.

identified the Company’s ability to continue as a going concern as a critical audit matter because auditing the Company’s

going concern assessment is complex and involves a high degree of auditor judgment to assess the reasonableness of cash flow forecasts,

planned refinancing actions and other assumptions used in the Company’s going concern analysis.

matter is also described in the “Material Uncertainty Related to Going Concern” section of our report.

responded to this matter by performing audit procedures in relation to management’s assessment of the Company’s ability

to continue as a going concern.

Our audit work in relation to this included, but was not restricted to, the following:

● Evaluated the cash flow forecasts prepared by management and evaluated the integrity and arithmetical accuracy of the model.

Evaluated the key assumptions used in management’s model to estimate future cash flows by comparing assumptions used by

management against historical performance and budgets.

Assessed the adequacy of the going concern disclosure included in Note 1 to the consolidated financial statements.

of Series 1 & 2 Convertible Debentures (CDs)

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resulted in an increased extent of audit effort, including the involvement of internal valuation specialists.

to the complexity of these CDs and the estimates and assumptions involved in the determination of fair value we considered this to

to the complexity of these CDs and the estimates and assumptions involved in the determination of fair value we consider this to

be a critical audit matter.

to Note 3 Significant Accounting Policies - Use of Estimates and Assumptions and Note 9 Promissory Notes Payable and Convertible

to Note 3 Significant Account Policies – Use of Estimates and Assumptions and Note 10 Promissory Notes Payable and Convertible

responded to this matter by performing audit procedures in relation to the valuation of the CDs.

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Obtained and assessed all amendments signed in the year in relation to the CDs.

Obtained management’s assessment of the fair value of the CDs.

With the assistance of internal valuation specialists, evaluated the reasonability of management’s model for valuing the CDs

and the appropriateness of the inputs used in the model, and recalculated fair values.

Recalculated the covenants involved to ensure compliance.

Performed a sensitivity analysis on the inputs.

Assessed the appropriateness of the related disclosures.

Treatment and Valuation of Stream Debenture

closing of the Metals Purchase Agreement, the Company was issued a $46,000,000 debenture (the “Stream Debenture”).

determination of the accounting treatment of the Stream Debenture is complex in nature.

The measurement of the Stream Debenture requires

management to incorporate significant estimates.

to the complexity involved in determining the correct accounting treatment and measurement of the Stream Debenture, we considered

this to be a critical audit matter.

to Note 3 Significant Accounting Policies - Use of Estimates and Assumptions and Note 9 Promissory Notes Payable and Convertible

responded to this matter by performing audit procedures in relation to the accounting treatment and valuation of the Stream Debenture.

Our audit work in relation to this included, but was not restricted to, the following:

Obtained the agreement for the Stream Debenture.

Evaluated the appropriateness of management’s analysis and assessment of the accounting treatment of the Stream Debenture in

accordance with relevant accounting standards.

Assessed the reasonability of the model used to value the Stream Debenture and the appropriateness of the inputs used and

recalculated the value.

With the assistance of internal valuation specialists, assessed certain key assumptions in the valuation of the Stream Debenture

which included the discount rate and future metal prices.

Evaluated management’s calculation of the initial and year-end measurement of the Stream Debenture.

management’s assessment of the fair value of the CDs.

the assistance of internal valuation specialists, evaluated the reasonability of management’s model for valuing the CDs and

the appropriateness of the inputs used in the model, and recalculated fair values.

● Recalculated

the covenants involved to ensure compliance.

Assessed the appropriateness of the related disclosures.

of Gain on Conversion of Royalty Convertible Debenture (“RCD”)

RCD was converted and the Company granted a royalty over the life of the Bunker Hill mine (the “Royalty”).

determination of the accounting treatment of the Royalty is complex in nature.

The measurement of the converted RCD into the Royalty

requires management to incorporate significant estimates.

to the complexity involved in determining the correct accounting treatment and measurement of the RCD and the Royalty on the conversion

date, we consider this to be a critical audit matter.

of Silver Loan

Company closed multiple tranches of advancements relating to a loan in an amount of U.S.

dollars equal up to 1.2 million ounces of

silver (“Silver Loan”).

loan is complex in nature and is required to be fair valued on issuance date and at each reporting period.

calculation of the fair value of the Silver Loan requires management to use an appropriate valuation model and incorporates estimates.

resulted in an increased extent of audit effort, including the involvement of internal valuation specialists.

to the complexity of the Silver Loan and the estimates and assumptions involved in the determination of fair value we consider this

to be a critical audit matter.

to Note 3 Significant Accounting Policies – Use of Estimates and Assumptions and Note 10 Promissory Notes Payable and Convertible

responded to this matter by performing audit procedures in relation to the measurement of gain on conversion of the RCD.

work in relation to this included, but was not restricted to, the following:

Obtained the agreement for the conversion of the RCD into the Royalty.

Evaluated management’s analysis and assessment of the accounting treatment of the conversion in accordance with the relevant

accounting standards.

Assessed the reasonability of the model used to value the RCD and Royalty on conversion date and the appropriateness of the inputs

used and recalculated the values.

With the assistance of internal valuation specialists, assessed certain key assumptions in the valuation of the RCD and Royalty on

conversion date which included the discount rate and future metal prices.

Tested mathematical accuracy of management’s calculation of the RCD and the Royalty.

Assessed the appropriateness of the related disclosures.

responded to this matter by performing audit procedures in relation to the valuation of the Silver Loan.

Our audit work in relation

to this included, but was not restricted to, the following:

and assessed all agreements signed in the year in relation to the Silver Loan.

management’s assessment of the fair value of the Silver Loan.

the assistance of internal valuation specialists, evaluated the reasonability of management’s model for valuing the Silver

Loan and the appropriateness of the inputs used in the model, and recalculated fair values.

the appropriateness of the related disclosures.

Professional Accountants

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Restricted cash (note 9, 20)

Asset held for sale (note 6)

Accounts receivable and prepaid expenses (note 4)

Spare parts inventory

Total current assets

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Current liabilities

Accounts payable

Accrued liabilities

Accounts payable (note 18)

Accrued liabilities (note 18)

Current portion of lease liability (note 8)

Derivative warrant liability (note 10)

Deferred share units liability (note 14)

Environment protection agency cost recovery payable (note 8)

Environmental Protection Agency cost recovery payable (note 9)

Stream debenture (note 10)

Interest payable (notes 9 and 10)

Promissory notes payable (note 9)

Current income tax payable (note 16)

Total current liabilities

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Lease liability (note 8)

Loan payable (note 9)

Series 1 convertible debenture (note 10)

1 unchanged sentence

Stream debenture (note 10)

Royalty convertible debenture (note 9)

Silver loan (note 10)

Debt facility (note 10)

Environment protection agency cost recovery liability net of discount (note 9)

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Additional paid-in-capital (note 11)

Accumulated other comprehensive income

Accumulated other comprehensive (income) loss

( 3,002,361 )

Accumulated deficit

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Hill Mining Corp.

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

Statements of Loss and Comprehensive Loss

in United States Dollars)

Operating expenses

Operation and administration

Mine preparation

Legal and accounting

Consulting and wages (note 16)

Loss from operations

Operating expenses (note 17)

( 15,649,142 )

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Gain (loss) on fair value of convertible debentures (note 10)

( 1,140,537 )

Gain on RCD settlement (note 6)

Gain on debt settlement

Gain on EPA debt extinguishment (note 8)

Gain on debt settlement (note 7)

Gain on warrant modification

Interest expense (notes 8 and 9)

Loss on fair value of silver loan (note 10)

( 2,820,533 )

Loss on revaluation of stream debenture (note 10)

( 3,128,956 )

Debenture finance costs (note 9)

Interest expense and accretion (notes 9 and 10)

( 8,091,412 )

Financing costs (note 10)

Other expense

Loss on revaluation of stream debenture (note 9)

( 7,124,527 )

Loss on debt modification (note 9)

Financing costs (note 10)

Gain (loss) on debt modification (note 10)

Loss on debt settlement (note 10)

(Loss) income for the year pre tax

Loss on sale of equipment (note 6)

(Loss) for the year pre tax

$ ( 26,880,213 )

Deferred tax expense (note 15)

$ ( 10,843,949 )

Net (loss) income for the year

Current income tax expense (note 16)

( 1,050,000 )

Deferred tax recovery (expense) (note 16)

( 2,588,590 )

Net (loss) for the year

( 25,341,623 )

( 13,432,539 )

Other comprehensive income (loss), net of tax

Gain on change in FV on own credit risk (note 9)

Other comprehensive income

Comprehensive (loss) income

(Loss) gain on change in FV on own credit risk (note 10)

( 3,811,023 )

Net (loss) Income per share of common stock

Net (loss) income per share of common stock – basic

Other comprehensive (loss) income

( 3,811,023 )

Comprehensive (loss)

( 29,152,646 )

( 12,877,752 )

Net (loss) Income per share of common stock

fully diluted (note 11)

Net (loss) per share of common stock – basic (note 12)

Net (loss) per share of common stock – fully diluted (note 12)

Weighted average number of shares of common stock

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Operating activities

Net (Loss) income for the year

Net loss for the year

$ ( 25,341,623 )

$ ( 13,432,539 )

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

Stock-based compensation

Depreciation expense

Change in derivative liability

Stock-based compensation (note 11,13,14)

Settlement of DSUs (note 14)

Depreciation expense (note 5)

Change in fair value of derivative liabilities

( 2,360,025 )

Change in fair value of silver loan

Current tax expense

Deferred tax (recovery) expense

( 2,588,590 )

Deferred tax expense

Financing costs

(Gain) on warrant extinguishment

Units issued for services

Imputed interest expense on lease liability

Interest expense on lease liability (note 8)

Interest expense

Financing costs

Foreign exchange loss (gain)

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

Accretion of liabilities

Loss on revaluation of stream debenture

Loss on modification of debt

Loss on sale of equipment (note 6)

Loss on debt settlement

(Gain) loss on fair value of convertible debt derivatives

Loss on modification of debt

Loss on revaluation of stream debenture

Gain on modification of debt

( 1,308,062 )

Gain on Warrant Extinguishment

Gain on RCD settlement

Accretion of liabilities

Loss (gain) on fair value of convertible debt derivatives

( 1,673,777 )

Gain on debt settlement

Gain on extinguishment EPA debt

( 7,151,873 )

Changes in operating assets and liabilities:

Accounts receivable

Prepaid finance costs

Prepaid expenses and deposits

( 1,133,124 )

Accounts receivable and prepaid deposits

Accounts payable

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Accrued liabilities

EPA water treatment payable

( 4,458,707 )

EPA cost recovery payable

( 2,000,000 )

Interest payable – EPA

Interest payable

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Investing activities

Additions to Bunker Hill Mine and mining interests

Process plant

( 35,433,926 )

( 9,398,032 )

Land purchase

Process plant

Mine development

( 3,913,472 )

( 1,458,506 )

Purchase of land

Purchase of machinery and equipment

Purchase of spare inventory

Net cash used in investing activities

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Financing activities

Proceeds from silver loan

Proceeds from debt facility

Proceeds from stream obligation

Transaction costs stream obligation

Proceeds from convertible debentures

Proceeds from bridge loan

Proceeds from issuance of shares, net of issue costs

1 unchanged sentence

Proceeds from promissory notes

Repayment of U.S.

Environmental Protection Agency cost recovery payable

( 3,000,000 )

Repayment of bridge loan

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( 1,599,568 )

( 1,000,000 )

Lease payments

1 unchanged sentence

Net change in cash and restricted cash

( 18,317,319 )

Cash, beginning of year

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Supplemental disclosures

Cash interest paid

Non-cash activities:

Units issued to settle accounts payable and accrued liabilities

Units issued to settle deferred shared units

Units issued to settle interest payable

Mill purchase for shares and warrants

Units issued to settle DSU/RSU/Bonuses

Reconciliation from Cash Flow Statement to Balance Sheet:

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Shares issued for interest payable

Shares issued for RSUs vested

Non brokered shares issued for C$0.30

Contractor shares issued for C$0.30

Shares issued for Process plant purchase

Shares issued for deferred share units

Shares issued for restricted share units vested

Shares issued for warrant exercise

Special warrant shares issued for C$ 0.15

Warrant valuation

Gain on fair value from change in credit risk

Net income for the period

Special warrant shares issued for $0.15 CAD

Other comprehensive (loss)

( 3,811,023 )

Net (loss) for the year

( 25,341,623 )

Balance, December 31, 2024

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$ ( 110,366,721 )

$ ( 52,135,365 )

Balance, December 31, 2022

1 unchanged sentence

$ ( 26,176,943 )

Beginning balance, value

$ ( 71,592,559 )

2 unchanged sentences

Compensation options

Shares issued for restricted share units vested

Shares issued for interest payable

Shares issued for RSUs vested

Non brokered shares issued for C$ 0.30

Special warrant shares issued for C$ 0.30

Contractor shares issued for C$ 0.30

Shares issued for Process plant purchase

Warrant valuation

Shares issued for warrant exercise

Special warrant shares issued for $ 0.15 CAD

Other comprehensive income

Net (loss) for the year

( 13,432,539 )

Gain on fair value from change in credit risk

Net income for the period

Balance, December 31, 2023

1 unchanged sentence

$ ( 26,367,162 )

Ending balance, value

$ ( 85,025,098 )

$ ( 26,367,162 )

issued at C$ 0.15 , converted to U.S.

dollars at $ 0.11 (note 11)

issued at C$ 0.30 , converted to U.S.

dollars at $ 0.24 (note 11)

issued at C$ 0.40 , converted to U.S.

dollars at $ 0.32 (note 11)

issued at C$ 0.57 , converted to U.S.

dollars at $ 0.45 (note 11)

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

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Hill Mining Corp.

(the “Company”) was incorporated under the laws of the state of Nevada , U.S.A.

on February 20, 2007, under

the name Lincoln Mining Corp.

Pursuant to a Certificate of Amendment dated February 11, 2010, the Company changed its name to Liberty

Silver Corp., and on September 29, 2017, the Company changed its name to Bunker Hill Mining Corp.

The Company’s registered office

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.

(“we”, “us”, “Bunker Hill”, or the “Company”) was incorporated

under the laws of the state of Nevada, U.S.A.

on February 20, 2007, under the name Lincoln Mining Corp.

Pursuant to a Certificate of

Amendment dated February 11, 2010, the Company changed its name to Liberty Silver Corp., and on September 29, 2017, the Company

changed its name to Bunker Hill Mining Corp.

The Company’s registered office is located at 1802 N.

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

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

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

Mine in Kellogg, Idaho.

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

It continues to work at developing

its project with a view towards putting it into production.

(“Silver Valley”,

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

Kellogg, Idaho (“Bunker Hill Mine”).

Company was incorporated for the purpose of engaging in mineral exploration, and exploitation activities, and is currently focused on

the development and planned operations of the Bunker Hill Mine.

Hill holds a 100 % interest in the historic Bunker Hill Mine located in the town of Kellogg, Idaho.

The Bunker Hill Mine, previously

operated between 1885 and 1981 producing over 165 million ounces of silver and 5 million tons of base metals during that time.

are currently focused on the construction of mill facilities and upgrades to the historic underground infrastructure as well as further

delineation of mineral 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.

The Company has announced a debt restructure and equity offering, however, there is no assurance these

transactions will be finalized, and if finalized the timing of such finalizations.

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.

Company’s operations could be adversely affected by the effects of the tariff war between the United States of America and other

countries around the world.

The Company cannot accurately predict the impact the crisis will have on its operations and the ability of

contractors to meet their obligations with the Company, including uncertainties relating the severity of its effects, the duration of

the conflict, and the length and magnitude of restrictions imposed by governments.

In addition, the crisis could adversely affect the

economies and financial markets of the United States in general, resulting in an economic downturn that could further affect the Company’s

operations and ability to finance its operations.

Additionally, the Company cannot predict changes in precious metals pricing or changes

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

Basis of presentation

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has not yet realized any revenues from its planned operations.

Company capitalizes acquisition and option costs of mineral rights as intangible assets when there is sufficient evidence to support

probability of generating positive economic returns in the future.

Upon commencement of commercial production, the mineral rights will

be amortized using the unit-of-production method over the life of the mineral rights.

If the Company does not continue with exploration

after the completion of the feasibility study, the mineral rights will be expensed at that time.

Company capitalizes acquisition costs of mineral rights as intangible assets when there is sufficient evidence to support probability

of generating positive economic returns in the future.

Upon commencement of commercial production, the mineral rights will be amortized

using the unit-of-production method over the life of the mineral rights.

costs of acquiring mining properties are capitalized upon acquisition.

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Costs of abandoned projects are charged to operations upon abandonment.

The Company evaluates the carrying value of capitalized

mining costs and related property and equipment costs, to determine if these costs are in excess of their recoverable amount whenever

events or changes in circumstances indicate that their carrying amounts may not be recoverable.

Evaluation of the carrying value of capitalized

costs and any related property and equipment costs are based upon expected future cash flows and/or estimated salvage value in accordance

with Accounting Standards Codification (FASB ASC) 360-10-35, Impairment or Disposal of Long-Lived Assets.

Borrowing costs that are directly attributable to the acquisition,

construction or production of an asset that takes a substantial period of time to prepare for its intended use are capitalized as part

of the cost of the asset.

Capitalization of borrowing costs begins when there are borrowings, and activities commence to prepare an asset

for its intended use.

Capitalization of borrowing costs ends when substantially all activity necessary to prepare a qualifying asset for

its intended use are complete.

When proceeds of project-specific borrowings are invested on a temporary basis, borrowing costs are capitalized

net of any investment income.

costs that are directly attributable to the acquisition, construction or production of an asset that takes a substantial period of time

to prepare for its intended use are capitalized as part of the cost of the asset.

Capitalization of borrowing costs begins when there

are borrowings, and activities commence to prepare an asset for its intended use.

Capitalization of borrowing costs ends when substantially

all activity necessary to prepare a qualifying asset for its intended use are complete.

When proceeds of project-specific borrowings

are invested on a temporary basis, borrowing costs are capitalized net of any investment income.

is stated at cost less accumulated depreciation.

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their recoverability.

lease right of use (“ROU”) assets represent the right to use the leased asset for the lease term and operating lease

liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date.

As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at

the adoption date in determining the present value of future payments.

Lease expense for minimum lease payments is amortized on a

straight-line basis over the lease term and is included in operation and administration expenses in the consolidated statements of

(loss) Income and comprehensive (loss) Income.

Rental income obtained through subleases is recorded as income

over the lease term and is offset against operation and administration expenses.

lease right of use (“ROU”) assets represent the right to use the leased asset for the lease term and operating lease liabilities

are recognized based on the present value of the future minimum lease payments over the lease term at commencement date.

As most leases

do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date

in determining the present value of future payments.

Lease expense for minimum lease payments is amortized on a straight-line basis over

the lease term and is included in operation and administration expenses in the consolidated statements of loss and comprehensive

income obtained through subleases is recorded as income over the lease term and is offset against operation and administration expenses.

of long-lived assets

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3 inputs to valuation methodology are unobservable and significant to the fair measurement.

carrying amounts reported in the consolidated balance sheets for cash, restricted cash, accounts receivable excluding HST, accounts

payable, accrued liabilities, interest payable, promissory notes payable, current portion of environmental protection agency cost

recovery payable, and current portion of lease liability, all of which qualify as financial instruments, are a reasonable estimate

of fair value because of the short period of time between the origination of such instruments and their expected realization and

current market rate of interest.

The carrying amounts of convertible loans are reported at estimated fair values as a result of the

application of fair value models at each quarter end.

The Company measured its DSU liability at fair value on recurring basis using

level 1 inputs.

Derivative warrant liabilities and convertible debentures are measured at fair value on recurring basis using level

The Company measured the non-current portion of the EPA liability and the stream debenture using a discount rate

that represents the market rate.

The Company measured its lease liabilities using a discount rate that represents market rate for the

underlying asset.

carrying amounts reported in the consolidated balance sheets for cash, restricted cash, accounts receivable excluding HST, accounts payable,

accrued liabilities, interest payable, promissory notes payable, current portion of environmental protection agency cost recovery payable,

and current portion of lease liability, all of which qualify as financial instruments, are a reasonable estimate of fair value because

of the short period of time between the origination of such instruments and their expected realization and current market rate of interest.

The carrying amounts of convertible loans are reported at estimated fair values as a result of the application of fair value models at

each period end.

The Company measures its DSU liability at fair value on recurring basis using level 1 inputs.

Derivative warrant liabilities,

silver loan, and convertible debentures are measured at fair value on recurring basis using level 3 inputs.

The Company measured the

non-current portion of the EPA liability and the stream debenture using a discount rate that represents the market rate.

measures its lease liabilities using the rate implicit in the lease or incremental borrowing rate if the rate

implicit in the lease is not available.

Environmental

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Company computes net (loss) income per share in accordance with FASB ASC 260, Earnings per Share (“FASB ASC 260”).

the provisions of FASB ASC 260, basic net (loss) income per share is computed using the weighted average number of shares of common

stock outstanding during the period.

Diluted net (loss) income per share is computed using the weighted average number of

shares of common stock and, if dilutive, potential shares of common stock outstanding during the period.

Potential shares of common

stock consist of the incremental shares of common stock issuable upon the exercise of stock options, RSUs, warrants and the

conversion of convertible loan payable.

As of December 31, 2023, a $ 6,000,000

convertible debenture (the “CD1”), a $ 15,000,000

convertible debenture (the “CD2”), 8,970,636

stock options, 145,061,976

warrants, and 4,301,150

broker options, and 7,044,527

RSUs were considered in the calculation but not included, as they were anti-dilutive (December 31, 2022 - 9,005,636

stock options, 162,129,064

warrants, and 5,470,799

broker options).

the provisions of FASB ASC 260, basic net (loss) income per share is computed using the weighted average number of shares of common stock

outstanding during the period.

Diluted net (loss) income per share is computed using the weighted average number of shares of common

stock and, if dilutive, potential shares of common stock outstanding during the period.

Potential shares of common stock consist of the

incremental shares of common stock issuable upon the exercise of stock options, restricted share units (“RSUs”), warrants and the conversion of convertible loan

As of December 31, 2024, a $ 6,000,000 convertible debenture (the “CD1”), a $ 15,000,000 convertible debenture (the

“CD2”), 6,445,152 stock options, 147,219,360 warrants, and 2,070,258 broker options, and 14,026,493 RSUs were considered

in the calculation but not included, as they were anti-dilutive (December 31, 2023 - 8,970,636 stock options, 145,061,976 warrants, 4,301,150

broker options and 7,044,527 RSUs were considered in the calculation but not included).

December 2004, FASB issued FASB ASC 718, Compensation – Stock Compensation (“FASB ASC 718”), which establishes standards

9 unchanged sentences

value of the equity or liability instruments issued.

Company accounts for stock-based compensation arrangements with non-employees in accordance with ASU 505-50, Equity-Based Payments to

Non-Employees, which requires that such equity instruments are recorded at the value on the grant date based on fair value of the equity

or goods and services whichever is more reliable.

Company estimates the grant date fair value of RSUs using the Company’s common stock at the grant date.

23 unchanged sentences

of the water treatment costs for future periods.

Loans, Promissory Notes, Stream Obligation and Warrants

Loans, Promissory Notes, Stream Obligation, Silver Loan and Warrants

the fair value of derivative warrant liability requires determining the most appropriate valuation model, which is dependent on the terms

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This estimate also requires determining the most appropriate inputs to the valuation model including

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

the expected life of the warrants derivative liability, volatility, USD-CAD exchange rates and dividend yield and making assumptions about them.

The assumptions

and models used for estimating fair value of warrants derivative liability are disclosed in Notes 9 and 10.

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.

See Note 9 for full disclosures related to the convertible loans and promissory notes.

and models used for estimating fair value of warrants derivative liability are disclosed in Notes 11.

The 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, expected

equity volatility, expected volatility in minerals prices, credit spread, and project risk/estimation risk factors.

See Note 10 for full

disclosures related to the convertible loans and promissory notes.

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, expected volatility in minerals prices, credit

spread, and project risk/estimation risk factors.

See Note 10 for full disclosures related to the silver loan.

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

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of mineral properties, plant and equipment

Assets are reviewed for an indication of impairment

at each reporting date.

are reviewed for an indication of impairment at each reporting date.

This determination requires significant judgment.

Factors that could trigger an impairment review include, but

are not limited to, significant negative industry or economic trends, interruptions in exploration activities or a significant drop in

precious metal prices.

Incremental borrowing rate

Estimating the present value of minimum future

lease payments requires determining the most appropriate incremental borrowing rate.

The assessment of the Company’s

incremental borrowing rate involves judgment regarding the cost of borrowings for the related asset.

Borrowing cost capitalization rate

The assessment of the Company’s incremental borrowing rate involves

judgment on what qualifies as a qualifying asset and on determining the capitalization rates.

Factors that could

trigger an impairment review include, but are not limited to, significant negative industry or economic trends, interruptions in exploration

activities or a significant drop in precious metal prices.

borrowing rate

the present value of minimum future lease payments requires determining the most appropriate incremental borrowing rate.

The assessment

of the Company’s incremental borrowing rate involves judgment regarding the cost of borrowings for the related asset.

cost capitalization rate

assessment of the Company’s incremental borrowing rate involves judgment on what qualifies as a qualifying asset and on determining

the capitalization rates.

Reclassifications

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are reported as gain or loss on foreign exchange.

loans and promissory notes payable

Company reviews the terms of its convertible loans, stream obligation and promissory notes payable to determine whether there are embedded

derivatives, including the embedded options, that are required to be bifurcated and accounted for as individual derivative financial

In circumstances where the convertible loans, the stream obligation, or the promissory note contains embedded derivatives

that are to be separated from the host contracts, the total proceeds received are first allocated to the fair value of the derivative

financial instruments determined using the binomial model.

The remaining proceeds, if any, are then allocated to the debenture cost contracts,

usually resulting in those instruments being recorded at a discount from their principal amount.

This discount is accreted over the expected

life of the instruments to profit (loss) using the effective interest method.

In circumstances where the convertible loans, the stream

obligation, or the promissory note contains embedded derivatives that are not separated from the host contracts, the fair values of the

host contract and the derivative are valued together, with the change in fair value accounted through earnings, profit and loss for each

period reported.

debenture host contracts are subsequently recorded at amortized cost at each reporting date, using the effective interest method.

embedded derivatives are subsequently recorded at fair value at each reporting date, with changes in fair value recognized in profit

Company applies ASC 480 distinguishing liabilities from equity and ASC 815 derivatives and hedging in determining the appropriate accounting

treatment for hybrid instruments.

The embedded options within the convertible loans are not bifurcated and measured at fair value at

each period end.

Debt instruments

Company reviews the terms of its agreements to identify any embedded derivatives.

If an embedded derivative is identified in a

contract the Company assesses if it is clearly and closely related to the host debt.

If the embedded derivative is determined to not

be clearly and closely related to the host debt the fair value election is made to account for the entire instrument at fair value with

the change in fair value accounted through earnings, profit and loss for each period reported.

Company applies ASC 480 distinguishing liabilities from equity and ASC 815 derivatives and hedging in determining the appropriate

accounting treatment for hybrid instruments.

The Company has measured the whole instrument at fair value per the fair value election

therefore, the embedded options within the convertible loans are not bifurcated and measured at fair value at each period

Accounting Pronouncements

Accounting Pronouncements – In August 2023, the Financial Accounting Standards Board issued Accounting Standards Update

(“ASU”) 2023-05, Business Combinations - Joint Venture Formations (Subtopic 805-60):

Recognition and Initial

Measurement, which clarifies the business combination accounting for joint venture formations.

The amendments in the ASU seek to

reduce diversity in practice that has resulted from a lack of authoritative guidance regarding the accounting for the formation of

joint ventures in separate financial statements.

The amendments also seek to clarify the initial measurement of joint venture net

assets, including businesses contributed to a joint venture.

The guidance is applicable to all entities involved in the formation of

a joint venture.

The amendments are effective for all joint venture formations with a formation date on or after January 1, 2025.

Early adoption and retrospective application of the amendments are permitted.

The Company does not expect adoption of the new

guidance to have a material impact on our consolidated financial statements and disclosures.

Accounting Pronouncements – In August 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”)

2023-05, Business Combinations - Joint Venture Formations (Subtopic 805-60):

Recognition and Initial Measurement, which clarifies the

business combination accounting for joint venture formations.

The amendments in the ASU seek to reduce diversity in practice that has

resulted from a lack of authoritative guidance regarding the accounting for the formation of joint ventures in separate financial statements.

The amendments also seek to clarify the initial measurement of joint venture net assets, including businesses contributed to a joint

The guidance is applicable to all entities involved in the formation of a joint venture.

The amendments are effective for all

joint venture formations with a formation date on or after January 1, 2025.

Early adoption and retrospective application of the amendments

are permitted.

The Company does not expect adoption of the new guidance to have a material impact on our consolidated financial statements

and disclosures.

November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-07 (“ASU 2023-07”),

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fiscal years beginning after December 15, 2024, and are applied retrospectively.

Early adoption is permitted.

The Company is currently evaluating

the impact of this update on our consolidated financial statements and disclosures.

The adoption of this new standard has not had a material impact on our

consolidated financial statements and note disclosures.

December 2023, the FASB issued Accounting Standards Update 2023-09 (“ASU 2023-09”), Income Taxes (Topic 740):

Improvement to Income Tax Disclosures, amending income tax disclosure requirements for the effective tax rate reconciliation and

income taxes paid.

The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, and are applied

prospectively.

Early adoption and retrospective application of the amendments are permitted.

The Company is currently evaluating the

impact of this update on our consolidated financial statements and disclosures .

to Income Tax Disclosures, amending income tax disclosure requirements for the effective tax rate reconciliation and income taxes paid.

The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, and are applied prospectively.

The adoption of this new standard has not had a material impact on our consolidated financial statements and note

accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have

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receivable and prepaid expenses consists of the following:

Schedule of Accounts receivable and prepaid expenses

Prepaid expenses

HST Receivable

of Accounts receivable and prepaid expenses

Prepaid expenses and deposits

HST and interest receivable

Environment Protection Agency overpayment (note 9)

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

Equipment and Right-of-Use asset

consists of the following:

Schedule of Equipment

Equipment, gross

Less accumulated depreciation

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total depreciation expense during the year ended December 31, 2024, was $ 212,645 (year ended December 31, 2023 - $ 144,347 ).

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

Pend Oreille operation.

The package comprises substantially all the mineral processing equipment including complete crushing, grinding

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

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

purchase of the mill has been valued at:

consideration given, comprised of $ 500,000 non-refundable deposit remitted on January 7, 2022 and $ 231,000 sales tax remitted on

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

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

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

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

process plant was purchased in an assembled state, and included major processing systems, significant components, and a large

inventory of spare parts.

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

integral part of the Company’s future operations.

The Company determined that the transaction should be accounted for as an

asset acquisition, with the process plant representing a single asset, with the exception of the inventory of spare parts, which has

been separated out and appears on the balance sheets as a non-current asset in accordance with the purchase price allocation.

associated with the completed demobilized and transportation were capitalized.

Reassemble, installation and other costs associated

with these activities will be capitalized as components of the asset as incurred.

plant consists of the following:

Schedule of Plant Asset Consists

Plant purchase price less inventory

Ball mill purchase

Demobilization

Site preparation costs

Capitalized interest (note 9)

Process Plant

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

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

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

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

asset consists of the following:

Schedule of Right-of-use Asset

of Right-of-use Asset

Right-of-use asset

Right-of-use asset accumulated depreciation

Less accumulated depreciation

Right-of-use asset, net

total depreciation expense during the year ended December 31, 2023 was $ 45,786 (year ended December 31, 2022 - $ 52,353 , relating to an

expired lease).

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

total depreciation expense during the year ended December 31, 2024, was $ 180,652

(year ended December 31, 2023 - $ 45,786 ,

relating to an expired lease).

The weighted average remaining lease term is 7 months as of December 31, 2024 ( 13 months as of

December 31, 2023).

The weighted average discount rate of the lease contracts is 15 %.

The Company is a party primarily to lease

contracts for mining related mobile equipment.

Process Plant

May 13, 2022, the Company purchased a comprehensive package of equipment and parts inventory from Teck Resources Limited (“Teck”).

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

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

10,000 components and parts for mill, assay lab, conveyer, field instruments, and electrical spares.

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

components, and a large inventory of spare parts.

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

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

The Company determined that the transaction would be

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

spare parts, which has been separated out on the consolidated balance sheets as a non-current asset.

As the plant is demobilized,

transported and reassembled, installation and other costs associated with these activities are being captured and capitalized as

components of the asset.

plant consists of the following:

of Plant Asset Consists

Mill purchase, detailed engineering, and construction costs

Capitalized interest (note 10)

Disposal of Grinding Circuits

Process Plant

August 2024, the Company sold a Grinding Circuit previously purchased from Teck as part of the Pend Oreille Mill purchase for $ 20,000

recognizing a loss on sale of equipment of $ 308,273 .

In September 2024, the Company reclassified two remaining Grinding Circuits as assets at $ 40,000 held for sale and recognized a loss

on sale of equipment of $ 616,547

on the consolidated statements of loss and comprehensive loss.

Bunker Hill Mine and Mining Interests

Hill Mine Purchase

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

to purchasing the Mine, the Company had entered into a series of agreements with Placer Mining Corporation (“Placer Mining”),

the prior owner, for the lease and option to purchase the Mine.

The first of these agreements was announced on August 28, 2017, with

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

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

with $ 5,700,000 payable in cash (with an aggregate of $ 300,000 to be credited toward the purchase price of the Mine as having been previously

paid by the Company) and $ 2,000,000 in common stock of the Company.

The Company agreed to make an advance payment of $ 2,000,000 , credited

towards the purchase price of the Mine, which had the effect of decreasing the remaining amount payable to purchase the Mine to an aggregate

of $ 3,400,000 payable in cash and $ 2,000,000 in common stock of the Company.

Amended Agreement also required payments pursuant to an agreement with the Environmental Protection Agency (the “EPA”) whereby

for so long as the Company leases, owns and/or occupies the Mine, the Company would make payments to the EPA on behalf of Placer Mining

in satisfaction of the EPA’s claim for historical water treatment cost recovery as per the Settlement Agreement reached with the

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

Company completed the purchase of the Mine on January 7, 2022.

The terms of the purchase price were modified to $ 5,400,000 in cash, from

$ 3,400,000 of cash and $ 2,000,000 of common stock of the Company.

Concurrent with the purchase of the Mine, the Company assumed incremental

liabilities of $ 8,000,000 to the EPA, consistent with the terms of the amended Settlement Agreement with the EPA that was executed in

December 2021 (see “EPA Settlement Agreement” section below).

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

prior years’ maintenance payments.

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

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

present value of water treatment cost recovery liability assumed of $ 6,402,425 (note 8).

legal and closing costs of $ 444,785 .

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

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

Through December 31, 2023, a total of $ 2,722,889 had been capitalized.

of Mineral Properties

June 23, 2023, as consideration for the extinguishment of the royalty convertible debenture (the “RCD”), as described in note 9, the Company granted a royalty for 1.85 % of

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

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

A 1.35% rate will apply to claims

outside of these areas.

transaction is treated as a sale of mineral interest to Sprott Private Resource Streaming & Royalty Corp.

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

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

costs, applied to the carrying value of the Bunker Hill Mine as of June 23, 2023 before consideration of the sale of mineral properties.

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

respectively, consistent with assumptions utilized in the valuation of the RCD at extinguishment.

The Company has recognized a gain of

$ 6,980,932 in the consolidated statements of (loss) income and comprehensive (loss) income.

carrying cost of the Mine is comprised of the following:

Schedule of Mining Interests

Company purchased the Bunker Hill Mine in January 2022.

carrying cost of the Bunker Hill Mine is comprised of the following:

of Mining Interests

Bunker Hill Mine purchase

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( 2,768,510 )

( 1,973,840 )

Definition drilling

Bunker Hill Mine

purchase and lease

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

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

purchase and leases

The 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 year ended December 31, 2023, the Company entered into a lease agreement with C & E Tree Farm LLC for the lease of a land parcel

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made through the date of purchase.

of Mineral Properties

On June 23, 2023, as consideration for the

extinguishment of the royalty convertible debenture (the “RCD”), as described in note 10, the Company granted a royalty

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

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

rate will apply to claims outside of these areas.

This 2023 transaction was treated as a sale of mineral interest to Sprott Private

Resource Streaming & Royalty Corp.

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

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

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

mineral properties.

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

respectively, consistent with assumptions utilized in the valuation of the RCD at extinguishment.

December 12, 2024, as consideration for Sprott advancing the debt facility, as described in note 10, the Company granted a royalty for

0.5 % 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 0.35 % rate will apply to claims outside of these areas.

December 19, 2024, as consideration for Sprott advancing the debt facility, as described in note 10, the Company granted a royalty for

0.5 % 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 0.35 % rate will apply to claims outside of these areas.

transactions were treated as a sale of mineral interest to Sprott.

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

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

costs, applied to the carrying value of the Bunker Hill Mine as of December 19, 2024, before consideration of the sale of mineral properties.

This analysis utilized a discount rate of 15% and long-term metal prices of $1.20/lb, $0.95/lb and $27.29/oz for zinc, lead and silver

respectively .

Lease Liability

As of December 31, 2023, The Company’s undiscounted

lease obligations consisted of the following:

of December 31, 2024, and December 31, 2023, The Company’s undiscounted lease obligations consisted of the following:

of Lease Liability

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Total lease liability

lease liability

Current lease liability

Non-current lease liability

Total lease liability

Environmental Protection Agency

expense for the year ended December 31, 2024, was $ 50,560

(year ended Decembre 31, 2023, $ 23,669 ) .

Environmental Protection Agency (“EPA”)

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

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

Upon the effectiveness of the Amended Settlement, the Company

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

The Amended Settlement modified the payment schedule and

payment terms for recovery of the historical environmental response costs.

Pursuant to the terms of the Amended Settlement,

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

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

Schedule of Amended Settlement Environmental Protection Agency Agreement

Within 30 days

of Settlement Agreement

Upon the effectiveness of the Amended Settlement, the

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

The Amended Settlement modified the payment schedule

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

Pursuant to the terms of the Amended Settlement, upon

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

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

of Amended Settlement Environmental Protection Agency Agreement

Within 30 days of Settlement Agreement

November 1, 2024

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$ 2,000,000 plus accrued interest

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

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

date of the Amended Settlement.

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

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

The amount of the bonds

will decrease over time as individual payments are made.

Company completed the purchase of the Mine (see note 6) and made the initial $ 2,000,000 cost recovery payment on January 7, 2022.

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

$ 9,000,000 .

This was capitalized as $ 6,402,425 to the carrying value of the Bunker Hill Mine at time of purchase, comprised of $ 3,000,000

of incremental current liabilities and $ 5,000,000 of non-current liabilities (discounted to $ 3,402,425 ).

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

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

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

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

collateral for the payment bonds is comprised of two letters of credit of $ 4,475,000 in aggregate, as well as land pledged by third parties

with whom the company has entered into a financing cooperation agreement that contemplates a monthly fee of $ 20,000 (payable in cash

or common stock of the Company, at the Company’s election).

The letters of credit of $ 6,476,000 in aggregate are secured by cash

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

December 31, 2023 and December 31, 2022.

Company recorded accretion expense on the liability of $ 1,632,674 for the year ended December 31, 2023, respectively, bringing the net

liability to $ 9,574,140 (previously accrued interest of $ 154,743 ) as of December 31, 2023.

Additionally, there is $ 24,587 of interest owed to the EPA recorded in

interest payable on the consolidated balance sheets.

During the year ended December 31, 2022, the Company recorded combined

discount amortization expense of $ 712,713 on the discounted pre-and post-extinguishment liability, and interest expense of $ 156,343 respectively,

bringing the net liability to $ 7,941,466 .

As at December 31, 2022 interest of $ 24,587 is included in interest payable on the consolidated

balance sheets.

Under ASC 470-50, Debt Modifications and Extinguishments, during the year ended December 31, 2022, the Company performed

a comparison of net present value of the pre-settlement Cost Recovery obligation to the post-settlement schedule of Cost Recovery obligation

to determine this was an extinguishment of debt.

For the year ended December 31, 2022 the Company recorded a gain on extinguishment of

debt totaling $ 8,614,103 .

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

assurance for the principle outstanding in the form of performance bonds or letters of credit deemed acceptable to the EPA.

The financial

assurance can be drawn on by the EPA in the event of non-performance by the Company of its payment obligations under the Amended Settlement

(the “Financial Assurance”).

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

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 of December 31, 2024 (compared to $ 17,000,000 as of December 31, 2023).

of December 31, 2024, the Company had two payment bonds of $ 9,999,000 and $ 4,001,000 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

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).

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 December 31, 2024, compared to $ 6,476,000 as of December 31, 2023.

Company recorded accretion expense on the liability of $ 1,975,089

for the year ended December 31, 2024, respectively, bringing the discounted, at 19.5 %, net liability to $ 8,549,229

(previously accrued interest of $ 154,743 )

as of Decembre 31, 2024.

The Company recorded accretion expense on the liability of $ 1,632,674

for the year ended December 31, 2023, respectively.

Treatment Charges – Idaho Department of Environmental Quality

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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

charges incurred through December 31, 2021, were payable to the EPA, and charges thereafter are payable to the 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

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This balance has been recognized

on the consolidated balance sheets as accounts receivable and accounts payable.

on the consolidated balance sheets as accounts receivable and prepaid expenses and accounts payable.

Promissory notes payable and convertible debentures

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

interest of 15 %

per annum and payable at maturity.

The promissory note was scheduled to mature on March 15, 2022;

however, the note holder agreed to

accept $ 500,000 payment,

which the Company paid, by April 15, 2022, and the remaining principal and interest was deferred to June 20, 2022.

revised maturity of June 20, 2022, the note holder agreed to accept a further $ 500,000 payment

by June 30, 2022, which the Company paid.

The remaining principal and interest has been deferred to June 15, 2023.

incurred a one-time penalty of 10 %

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

is included in loss on debt modification in the consolidated statements of (loss) income.

September 22, 2021, the Company issued a non-convertible promissory note of $ 2,500,000 bearing interest of 15 % per annum and payable

Interest expense for the years ended December 31, 2024, and 2023 was $ nil and $ 189,179 respectively.

The Company incurred

a one-time penalty of 10 % of the outstanding principal on June 30, 2023, of $ 99,569 which is included in loss on debt modification in

the consolidated statements of loss and comprehensive loss.

A final principal payment of $ 1,599,569

$ 1,599,569 was

made during the year ended December 31, 2023.

Interest expense for the years ended December 31, 2023, and 2022 was $ 189,179 and

$ 281,301 respectively.

On December 31, 2023 interest of $ nil ($ 384,041 at

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

On December 31, 2023, the Company owes $ nil ($ 1,500,000 at

December 31, 2022) in promissory notes payable, which was included in current liabilities on the consolidated balance

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 ,

payable at maturity, which was the earlier of one year or the receipt of an equity or debt financing.

Both promissory notes,

including interest of a total of $ 36,000 recognized during the year ended December 31, 2023 ($ nil for the year ended December 31, 2022), were settled on March 27, 2023 through participating in the March 2023 Offering (Note 10).

was made during the year ended December 31, 2023.

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 , payable at maturity.

Both promissory

notes, including interest were settled on March 27, 2023.

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

1 unchanged sentence

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

The promissory

note, including interest, was settled in June 2023.

The promissory note, including

interest, was settled in June 2023.

Finance Package with Sprott

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

non-binding term sheet with Sprott outlined a $ 50,000,000 project financing package that the Company expected to fulfill the majority of

its funding requirements to restart the Mine.

non-binding term sheet with Sprott outlined a $ 50,000,000 project financing package that the Company expected to fulfill the majority

of its funding requirements to restart the Mine.

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

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The Bridge Loan, as previously envisaged, was repaid from the proceeds of the Stream.

The parties also agreed

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

Company incurred $ 83,499 of financing costs on the consolidated statements of (loss) income and comprehensive (loss) income relating

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

The parties also agreed to extend

the maturities of the CD1 and CD2 to March 31, 2026, when the full $ 6,000,000 and $ 15,000,000 , respectively, will become due.

Royalty Convertible Debenture (RCD)

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

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

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

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

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

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

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

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

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

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

2 unchanged sentences

for as a modification.

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

of life-of-mine gross revenue (the “Royalty”) from mining claims historically worked as described above.

rate will apply to claims outside of these areas.

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

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

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

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

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

The Company has accounted for the Royalty as a

sale of mineral properties (refer to Note 6 for further detail).

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

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

A 1.35 % rate will apply to claims outside of these

The Company has accounted for the Royalty as a sale of mineral properties (refer to note 7 for further detail).

The Company has recognized a gain

of $ 6,980,932

in the consolidated statements of (loss) income and comprehensive (loss) income for the year ending December 31, 2023.

Series 1 Convertible Debenture (CD1)

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elect to repay the CD1 early;

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

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

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

that the maturity

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

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

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 as a result of the treatment the Company reported a gain of $ 179,046

in the gain (loss) on fair value of convertible debentures line of the statement of operations for the year ended December 31,

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

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

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

have therefore been accounted for as a modification.

As a result of the modification the company reported a gain of $ 58,657 in the gain (loss) on fair value of convertible

debentures line of the consolidated statement of (loss) income for year ended December 31, 2023.

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

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

Company determined that the amendments in the terms of the CD1 should not be treated as an extinguishment of the CD1 and have therefore

been accounted for as a modification.

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

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

early repayment.

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

CD1 and have therefore been accounted for as a modification.

August 2024, the Company and Sprott agreed to amend the

maturity date of CD1 from March 31, 2026, to March 31, 2028 , and that CD1 would remain outstanding until the new maturity

date unless the Company elects to exercise its option of early repayment.

The Company determined that the amendments to the terms of

the CD1 should not be treated as an extinguishment of the CD1 and have therefore been accounted for as a modification.

of the modification the company reported a gain of $ 366,201 in the gain (loss) on debt modification of the consolidated statement of

loss for year ended December 31, 2024 (gain of $ 58,657 for the year ended December 31, 2023).

CD1 is convertible into Common Shares at a price of C$ 0.30 per Common Share, subject to stock exchange approval.

Series 2 Convertible Debenture (CD2)

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and is convertible into Company common stock at a price of C$ 0.29 per share at Sprott’s election at any time through the maturity

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

The repayment terms included 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

4 unchanged sentences

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

As a result of the modification the company reported a loss of $ ( 3,833 ) in the gain (loss) on fair value of convertible

debentures line of the consolidated statement of (loss) income for year ended December 31, 2023.

As a result of the modification the company reported a gain of $ 941,861 in the gain (loss) on debt modification of

the consolidated statement of loss for year ended December 31, 2024 (loss of $ 3,833 for the year ended December 31, 2023).

August 2024, the Company and Sprott agreed to amend the maturity date of CD2 from March 31, 2026, to March 31, 2029 , and that CD2 would

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

The Company determined

that the amendments to the terms of the CD2 should not be treated as an extinguishment of the CD2 and have therefore been accounted for

as a modification.

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

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

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

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

Schedule of Key Valuation Inputs

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:

of Key Valuation Inputs

Reference (1)(2)

Interest rate

Stock price (US$)

Stock price ($)

Expected equity volatility

2 unchanged sentences

adjusted rate

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

CD1 note (1)(2)(3) (3)

CD2 note (1)(2)(3) (3)

CD1 note (1)(2)(3) (3)

CD2 note (1)(2)(3) (3)

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

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

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

The 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 $ 0.208 and CD2 is $ 0.202 as of December 31, 2024.

The conversion price of the CD1 is $ 0.219 and CD2 is $ 0.212 as of December

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

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

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

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

The valuation

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

value of the RCD.

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

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, RCD, and CD2 at December 31, 2024, and as of December 31, 2023, were as follows:

Schedule of Fair Value Derivative Liability

of Fair Value Derivative Liability

Instrument Description

December 31, 2023

total gain (loss) on fair value of debentures recognized during the year ended December 31, 2023 and December 31, 2022, was $ 1,673,776

total (loss) gain on fair value of debentures recognized during the year ended December 31, 2024 and December 31, 2023, was $ ( 890,258 )

and $ 1,673,776 , 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.

is accounted for within other comprehensive loss.

During the year ended December 31, 2024 and December 31, 2023, the Company recognized

$ 554,787 and $ 253,875 respectively, within other comprehensive income.

$ ( 1,107,109 ) and $ 554,787 respectively, within other comprehensive loss.

Interest expense for the year ended December 31, 2024 and 2023

2 unchanged sentences

interest payable on the consolidated balance sheets.

During the year ended December 31, 2023, the Company issued shares of common stock in connection with its election

to satisfy interest payments under the outstanding convertible debentures recognizing a loss on extinguishment of debt of $ 268,889 ($ nil

in the year ended December 31, 2022) in the consolidated statements of (loss) income and comprehensive (loss) income.

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

During the year ended December 31, 2024, the Company issued shares of common stock

in connection with its election to satisfy interest payments under the outstanding convertible debentures recognizing a loss on extinguishment

of debt of $ 397,016 ($ 268,889 in the year ended December 31, 2023) in the consolidated statements of loss and comprehensive loss.

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

as of December 31, 2024.

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

5 unchanged sentences

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

June 23, 2023 the Company used some of the proceeds from the Stream to repay the outstanding principal and interest on the Bridge

Loan recognizing a loss on extinguishment of debt of $ 222,754

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

At December 31, 2023 interest of $ nil

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

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 consolidated statements of loss and comprehensive loss.

Interest expense for year ended December

2023, was $ 346,550

compared to $ 70,404

for the year ended December 31, 2022.

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

was advanced to the Company.

The Stream is secured by the same security package that is in place with respect to the RCD, CD1, and

The Stream is repayable by applying 10% of all payable metals sold until a minimum quantity of metal is delivered consisting

of, individually, 63.5 million pounds of zinc, 40.4 million pounds of lead, and 1.2 million ounces of silver (subsequently amended,

as described below).

Thereafter, the Stream would be repayable by applying 2% of payable metals sold.

The delivery price of streamed

metals will be 20% of the applicable spot price.

At the Company’s option, the Company may buy back 50% of the Stream Amount at

a 1.40x multiple of the Stream Amount between the second and third anniversary of the date of funding, and at a 1.65x multiple of

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

Company incurred $ 740,956 of

transactions costs directly related to the Stream which were capitalized against the initial recognition of the Stream of $ 45,259,044 on

the consolidated balance sheets.

31, 2024, was $ nil compared to $ 346,550 for the year ended December 31, 2023.

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

The Stream is secured

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

The Stream is repayable by applying 10% of all payable

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

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

Thereafter, the Stream would be repayable by applying

2% of payable metals sold.

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

At the Company’s option,

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

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

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

of the Stream of $ 45,259,044 on the consolidated balance sheets.

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

8 unchanged sentences

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

the stream obligation using the same discount rate, with changes to the carrying value recognized in the consolidated statements of (loss) income and comprehensive (loss) income.

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

$ 2,516,593 for the year ended December 31, 2023 ($ nil for the year ended December 31, 2022) recognized in the consolidated statement of (loss) income and comprehensive (loss) income, accretion expense on the

liability of $ 233,407 for the year ended December 31, 2023 ($ nil for the year ended December 31, 2022) capitalized into the process

plant (note 5) on the consolidated balance sheets and loss on revaluation of the liability

of $ 3,128,956 for the year ended December 31, 2023 ($ nil for the year ended December 31, 2022), bringing the liability to $ 51,138,000

as of December 31, 2023.

$ 4,003,934 for the year ended December 31, 2024 ($ 2,516,593 for the year ended December 31, 2023) recognized in the consolidated statement

of loss and comprehensive loss, accretion expense on the liability of $ 1,615,066 for the year ended December 31, 2024

($ 233,407 for the year ended December 31, 2023) capitalized into the process plant (note 6) on the consolidated balance sheets and loss

on revaluation of the liability of $ 230,000 for the year ended December 31, 2024 ($ 3,128,956 for the year ended December 31, 2023), bringing

the liability to $ 56,987,000 as of December 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 1.15 $/lb to 1.25 $/lb for zinc, 0.90 $/lb to 0.95 $/lb for lead, and 22.50 $/oz to

$24.50 $/oz for silver.

The key assumptions used

in the revaluation are production of 676,000,000 lbs of zinc, 366,000,000 lbs of lead, 8,800,000 oz of silver over 14 years and commodity

prices of 1.20 $/lb to 1.27 $/lb for zinc, 0.94 $/lb to 0.97 $/lb for lead, and 27.61 $/oz to $31.7 $/oz for silver.

Debt 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 years.

As of December 31, 2023, the company has not drawn on the facility.

Any amounts drawn will bear interest

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

election, and thereafter payable in cash only.

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

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

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

The Company may buy back

50% of these royalties for $ 20 million.

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

31, 2023, as no amount has been drawn from the facility.

the year ended December 31, 2023, and December 31, 2022 the Company recognized $ 1,708 and $ 72,304 respectively of other interest expense.

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

Any amounts drawn will bear interest of 10 %

per annum, from the later of the Funding Date and June 30, 2027 to the date of repayment in full, at the rate of per cent 15.0 %

per annum, which is payable annually in cash or capitalized at the Company’s election.

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

For every $ 5,000,000

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 $ 20,000,000 .

December 12, 2024, the Company drew $ 5,000,000 on the debt facility.

The proceeds were bifurcated between host debt and the underlying

sale of mineral interest to Sprott (Note 7).

On December 19, 2024, the Company drew $ 5,000,000 on the debt facility.

The proceeds were

bifurcated between host debt and the underlying sale of mineral interest to Sprott (Note 7).

The Company recorded accretion expense on

the debt facility of $ 31,280 for the year ended December 31, 2024 ($ nil for the year ended December 31, 2023), bringing the net liability

to $ 9,236,610 as of December 31, 2024.

The Company performs quarterly testing of the covenants in the debt facility and was in compliance with all such

covenants as of December 31, 2024.

August 8, 2024, the Company 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”).

August 8, 2024, the Company closed the first tranche Silver Loan in the principal amount of $ 16,422,039 ,

number of U.S.

dollars equal to 609,805 ounces of silver .

After deduction of financing costs and the first year interest, the

Company received $ 13,225,005 .

The Silver Loan is for a term of three years, secured against the Company’s assets and repayable in cash or silver ounces.

Silver Loan bears interest at the rate of 15 %

per annum, payable in cash or silver ounces on the last day of each quarterly interest period.

On September 25, 2024, the Company

closed the second tranche Silver Loan in the principal amount of $ 6,369,000 ,

number of U.S.

dollars equal to 200,000 ounces of silver .

After deduction of financing costs and the first year interest the

Company received $ 5,352,438 .

On November 6, 2024, the Company closed the third tranche Silver Loan in the principal amount of $ 6,321,112 ,

number of U.S.

dollars equal to 198,777 ounces of silver .

After deduction of financing costs and the first year interest the

Company received $ 5,422,474 .

On November 8, 2024, the Company closed the fourth tranche Silver Loan in the principal amount of $ 1,250,000 ,

number of U.S.

dollars equal to 39,620 ounces of silver .

After deduction of financing costs and the first year interest the

Company received $ 1,076,563 .

On December 30, 2024, the Company closed the fifth tranche Silver Loan in the principal amount of $ 1,478,847 ,

number of U.S.

dollars equal to 50,198 ounces of silver .

After deduction of financing costs and the first year interest the

Company received $ 1,201,781 .

connection with closing of the First Tranche, the Company issued a total of 1,280,591

Warrants to Monetary Metals & Co.

(the “Tranche

1 Warrants”).

The Tranche 1 Warrants will be exercisable until August 8, 2027, and the Exercise Price of the Tranche 1 Warrants

will be C$ 0.16 .

connection with closing of the Second Tranche, the Company issued a total of 400,000

Warrants to Monetary Metals & Co.

(the “Tranche

2 Warrants”).

The Tranche 2 Warrants will be exercisable until August 8, 2027, and the Exercise Price of the Tranche 2 Warrants

will be C$ 0.16 .

connection with closing of the Third and Fourth Tranches, the Company issued a total of 476,793

Warrants to Monetary Metals & Co.

(the “Tranche

3 & 4 Warrants”).

The Tranche 3 & 4 Warrants will be exercisable until August 8, 2027, and the Exercise Price of the Tranche

3 & 4 Warrants will be C$ 0.12 .

Company determined that in accordance with ASC 815 Derivatives and Hedging, the Silver Loan is valued and recorded as a single instrument,

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

fair value of the Silver Loan was determined using the Black-Derman-Toy (“BDT”) model.

The BDT model models the evolution

of interest rates over time using a binomial tree structure by capturing level of interest rates and volatility and estimates the value

of the prepayment option by assessing how the borrower’s incentive to prepay changes with interest rate movements.

The key inputs

of Estimates Value of Prepayment Option by Assessing Interest Rate Movements

Valuation Date

Maturity Date

Contractual Interest Rate

Interest Rate Volatility

Risk-free rate

Credit Spread

Risk-adjusted rate

Tranche 1, 2, 3, 4, & 5

resulting fair values of the Silver Loan at December 31, 2024, and as of the issuance date, were as follows:

loss on changes in fair value of Silver Loan recognized on the consolidated statements of loss and comprehensive loss during the year

ended December 31, 2024, was $ 2,820,533 compared to $ nil for the year ended December 31, 2023.

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 (loss) during the year ended

December 31, 2024, was $ 2,703,914 , compared to $ nil for the year ended December 31, 2023.

Company performs quarterly testing of the covenant of the Silver Loan and was in compliance with all such covenants as of December 31,

the year ended December 31, 2024, and December 31, 2023 the Company recognized $ nil and $ 1,708 respectively of other interest expense.

Capital stock, warrants and stock options

4 unchanged sentences

and outstanding

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

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

Related parties, including management, directors,

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

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

special warrant.

Each unit consists of one share of Company common stock and one warrant.

Each warrant entitles the holder to

acquire one share of Company common stock for C$ 0.37 until

April 1, 2025.

The warrants were also be exercisable on a cashless basis in the event the Registration Statement has not been made

effective by the SEC prior to the date of exercise.

On May 31, 2022, each unexercised Special Warrant was automatically exercised

into one share of Company common stock and one Warrant without further action on the part of the holders.

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

Each unit consists of one share of Company common stock and one

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

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

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

Each compensation unit consists

of one share of Company common stock and one warrant.

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

April 1, 2024.

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

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

April 2022, the Company issued 768,750 shares of common stock in connection with the settlement of RSUs.

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

Plant at C$ 0.245 per unit.

Each unit consists of one share of Company common stock and one warrant.

Each warrant entitles the holder

to acquire one warrant share for C$ 0.37 until May 13, 2025.

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

Each unit consists

of one share of Company common stock and one warrant.

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

April 1, 2025.

June 2022, the Company issued 165,000 shares of common stock in connection with the settlement of RSUs.

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

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

September 2022, the Company issued 33,000 shares of common stock in connection with the settlement of RSUs.

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

the outstanding convertible debentures for the three months ended September 30, 2022.

November 2022, the Company issued 1,599,150 shares of common stock in connection with settlement of RSUs.

January 2023, the Company issued 6,377,271 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 amended the exercise price and expiry date of 10,416,667

warrants previously issued in a private placement

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

The warrant entitled the holder to purchase one share of common stock of the Company at an exercise price of C$ 0.37

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

The Company amended the exercise price from C$ 0.37

per Warrant and the expiry date from May 12,

2025, to March

31, 2023 , resulting in a gain on modification

of warrants of $ 214,714 .

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

warrants at an exercise price of C$ 0.11 ,

for aggregate gross proceeds of $ 837,460

(C$ 1,145,834 )

to the Company.

During the year ended December 31, 2023 the Company recognized a change (gain) in derivative liability of $ ( 400,152 ) ,

relating to the Teck warrants using the following

volatility of 120 %,

stock price of C$ 0.11 ,

interest rate of 3.42 %

and dividend yield of 0 %.

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

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

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

the outstanding convertible debentures for the three months ended 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 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 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 % to 4.06 %, and dividend yield of 0 %.

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

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

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

accrued liabilities and promissory notes.

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

13 unchanged sentences

Each March 2023 Compensation Option is exercisable at an exercise price of C$ 0.15

into one Unit Share and one Warrant Share and has an expiry of March 27, 2027.

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

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

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

stock and common stock purchase warrants are issued.

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

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

with inputs as shown in the table below.

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

Schedule of Estimated Fair Value of Special Warrant Liabilities

March 2023 special warrants

Expected life

Risk free interest rate

Dividend yield

Share price (C$)

Fair value of March 2023 Unit

Change in derivative liability

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.

into one Unit Share and one Warrant Share.

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

July 24, 2023.

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

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

of common 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.

2 unchanged sentences

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

November 2023, the Company issued 42,000 shares of common stock in connection with settlement of RSUs.

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

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

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

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.

July 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.

August 2024, in connection with closing of the First Tranche, the Company issued 1,280,591 Warrants to Monetary Metals & Co.

Tranche 1 Warrants will be exercisable until August 8, 2027, at an exercise price of C$ 0.16 .

October 2024, in connection with closing of the Second Tranche, the Company issued 400,000 Warrants to Monetary Metals & Co.

2 Warrants will be exercisable until August 8, 2027, at an exercise price of C$ 0.16 .

October 2024, the Company issued 5,175,000 shares of common stock in connection with its election to satisfy interest payments under

the outstanding convertible debentures for the three months ended September 30, 2023.

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

October 2024, the Company issued 5,175,000 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.

October 2024, the Company issued 750,000 shares of common stock in connection with settlement of DSUs.

November 2024, the Company issued 21,000 shares of common stock in connection with settlement of RSUs.

November 2024, in connection with closing of the Third & Fourth Tranche, the Company issued 476,793 Warrants to Monetary Metals & Co.

Tranche 3 & 4 Warrants will be exercisable until August 8, 2027, at an exercise price of C$ 0.12 .

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

6 unchanged sentences

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 on the day of issuance and as at December 31, 2023 and December 31,

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

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

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

November 2024 warrants

Expected life

Risk free interest rate

Dividend yield

Share price (C$)

Change in derivative liability

October 2024 warrants

Expected life

Risk free interest rate

Dividend yield

Share price (C$)

Change in derivative liability

August 2024 warrants

Expected life

Risk free interest rate

Dividend yield

Share price (C$)

Change in derivative liability

March 2023 warrants

4 unchanged sentences

Change in derivative liability

$ ( 2,102,852 )

April 2022 special warrants issuance

11 unchanged sentences

Change in derivative liability

2022 Teck issuance

free interest rate

June 2022 issuance

10 unchanged sentences

$ ( 322,884 )

August 2020 issuance

Expected life

Risk free interest rate

Dividend yield

Change in derivative liability

$ ( 903,697 )

June 2019 issuance

4 unchanged sentences

$ ( 216,846 )

August 2019 issuance (ii)

August 2019 issuance

Expected life

3 unchanged sentences

$ ( 333,266 )

Schedule of Warrant Activity

of Warrant Activity

exercise price

Balance, December 31, 2022

( 10,416,667 )

1 unchanged sentence

Balance, December 31, 2023

the year ended December 31, 2023, 58,284,148 August 2020 warrants expired.

the year ended December 31, 2022, 239,284 February 2020 broker warrants expired.

Balance, December 31, 2024

December 31, 2024, the following warrants were outstanding:

Schedule of Warrants Outstanding Exercise Price

of Warrants Outstanding Exercise Price

April 1, 2025

3 unchanged sentences

March 27, 2026

December 31, 2023, the following compensation options were outstanding:

August 8, 2027

the year ended December 31, 2024, 10,416,667 May 2022 Teck warrants were exercised

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

of Compensation Options

1 unchanged sentence

Balance, December 31, 2022

Issued – April 2022 Compensation Options (i)

Balance, December 31, 2022

Issued – March 2023 Compensation Options (ii)

Issued – March 2023 Compensation Options (i)

Expired – August 2020 Compensation Options

1 unchanged sentence

Balance, December 31, 2023

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

the following underlying assumptions:

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

Risk free interest rate

Dividend yield

Weighted average life

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

Balance, December 31, 2023

Expired – February 2024

Expired – April 2024

( 1,879,892 )

Balance, December 31, 2024

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

the following underlying assumptions:

Risk free interest rate

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

Schedule of Broker Exercise

broker options

February 16, 2024 (i)

April 1, 2024 (ii)

March 27, 2026 (iii)

into one February 2021 Unit

into one April 2022 Unit

Exercisable into one March 2023 Unit

into one March 2023 Unit.

following table summarizes the stock option activity during the years ended December 31, 2024 and 2023:

3 unchanged sentences

Balance, December 31, 2022

Expired, May 1, 2022

Forfeited, November 25, 2022

Expired, December 31, 2022

Balance, December 31, 2022

Expired September 30, 2023

1 unchanged sentence

Balance, December 31, 2023

August 24, 2022, 300,000

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

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

These options have a 5 -year

life and are exercisable at C$ 0.15

per share of common stock.

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

The vesting of these options resulted in stock-based compensation of $ 15,594

for the year ended December 31, 2022, which is included in the operation and administration expense of the consolidated statements

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

On November 23, 2022, 400,000

stock options were issued to an employee of the Company, of which 200,000

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

These options have a 5 -year

life and are exercisable at C$ 0.15

per share of common stock.

Granted August 1, 2024

Expired October 24, 2024

( 1,575,000 )

Expired October 31, 2024

( 1,037,977 )

Balance, December 31, 2024

August 1, 2024, 87,493 stock options were issued to an employee of the Company, which vest on August 1, 2025.

These options have

a 5 -year life and are exercisable at C$ 0.16 per share of common stock.

The grant fair value of the options was estimated at $ 7,242 .

The vesting of these options resulted in stock-based compensation of $ 20,191

for the year ended December 31, 2022, which is included in the operation and administration expense of the consolidated statements

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

The vesting of these options resulted in stock-based compensation of $ 3,016 for the year ended December 31, 2024, which is included

in the operation and administration expense of the consolidated statements of loss and comprehensive loss.

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

underlying assumptions:

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

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

interest rate

2 unchanged sentences

November 2022

following table reflects the actual stock options issued and outstanding as of December 31, 2023:

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

of Actual Stock Options Issued and Outstanding

5 unchanged sentences

dilutive securities include convertible debentures payable, warrants, broker options, stock options, and unvested RSU.

Diluted income per share reflects the assumed exercise or conversion of all dilutive securities using the treasury stock method.

Diluted income

per share reflects the assumed exercise or conversion of all dilutive securities using the treasury stock method.

of Income Per Share

1 unchanged sentence

Year ended December 31,

Net (loss) income for the year

Net loss for the year

( 25,341,623 )

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

Net (loss) income per share – basic

Net (loss) income for the period

( 13,432,539 )

Basic loss per share Weighted average number of shares of common stock - basic

Net loss per share – basic

Net loss for the period

( 25,341,623 )

( 13,432,539 )

Dilutive effect of convertible debentures

Dilutive effect of warrants on net income

Diluted net (loss) income for the year

Diluted net loss for the year

( 25,341,623 )

( 13,432,539 )

Weighted average number of shares of common stock - basic

2 unchanged sentences

Weighted average number of shares of common stock - fully diluted

Net (loss) income per share - fully diluted

Restricted share units

March 25, 2020, the Board of Directors approved a RSU Plan to grant RSUs to its officers, directors,

key employees and consultants.

Net loss per share - fully diluted

March 25, 2020, the board of directors approved a RSU Plan to grant RSUs to its officers, directors, key employees and consultants.

following table summarizes the RSU activity during the year ended December 31, 2023:

Schedule of Restricted Share Units

of Restricted Share Units

Unvested as at December 31, 2022

Granted (i, ii, iii)

( 5,809,217 )

Unvested as at December 31, 2022

( 2,813,990 )

Unvested as at December 31, 2023

Granted (iv, v)

( 2,667,436 )

Unvested as at December 31, 2024

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

The vesting of these RSUs resulted

in stock-based compensation of $ 122,249 for the year ended December 31, 2022, which is included in operation and administration expenses

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

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

The vesting of these RSUs

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

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

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

The vesting of these RSUs resulted

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

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

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

The vesting of these RSUs

resulted in stock-based compensation of $ 2,889 for the year ended December 31, 2022, which is included in operation and administration

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

On October 31, 2022 the Company granted 1,599,150 RSUs to two consultants of the Company, vested immediately.

The vesting of these RSUs

resulted in stock-based compensation of $ 111,304 for the year ended December 31, 2022, which is included in operation and administration

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

On November 17, 2022 the Company granted 4,396,741

RSUs to certain key management of the Company.

The RSUs vest in one third increments upon each anniversary of the grant date.

vesting of these RSUs resulted in stock-based compensation of $ 208,574 and $ 79,504

respectively for the year ended December 31, 2023 and December 31, 2022, which is included in operation and administration expenses on the consolidated

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

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

of these RSUs resulted in stock-based compensation of $ 355,420 for the year ended December 31, 2023, which is included in operation

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

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

The vesting of these RSUs resulted in stock-based compensation of $ 7,825 for the year ended

December 31, 2023, which is included in operation and administration expenses on the consolidated

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

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

on March 31 of 2024, 2025 and 2026.

The vesting of these RSUs resulted in stock-based compensation of $ 344,515 for the year ended

December 31, 2023, which is included in operation and administration expenses on the consolidated statements of (loss) income and

comprehensive (loss) income.

vesting of RSUs during the year ended December 31, 2023, resulted in stock-based compensation expense of $ 949,114

for the year ended December 31, 2022), which is included in operation and administration expenses on the consolidated

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

Deferred share units

April 21, 2020, the Board of Directors approved a Deferred Share Unit (“DSU”) Plan to grant DSUs to its directors.

(i) On June 1, 2023, the Company granted 4,067,637

RSUs to executives and employees of the Company, which vested immediately.

The vesting of these RSUs resulted in stock-based compensation

for the year ended December 31, 2023, which is included in operation and administration expenses on the consolidated statements

of loss and comprehensive loss.

(ii) On June 4, 2023, the Company granted 42,000

RSUs to a consultant of the Company, vested immediately.

The vesting of these RSUs resulted in stock-based compensation of $ 7,825

for the year ended December 31, 2023, which is included in operation and administration expenses on the consolidated statements

of loss and comprehensive loss.

(iii) On July 4, 2023, the Company granted 6,735,356

RSUs to executives and employees of the Company, which vest in one-third increments on March 31 of 2024, 2025 and 2026.

of these RSUs resulted in stock-based compensation of $ 344,515

for the year ended December 31, 2023, which is included in operation and administration expenses on the consolidated statements

of loss and comprehensive loss.

January 29, 2024, the Company granted 672,450 RSUs

to executives and employees of the Company, which vest on January 29, 2025.

The vesting of these RSUs resulted in stock-based

compensation of $ 50,000

for the year ended December 31, 2024, which is included in operation and administration expenses on the consolidated statements of

loss and comprehensive loss.

March 13, 2024, the Company granted 9,047,953

RSUs to executives and employees of the Company, which vest in one-third increments on March 31 of 2025, 2026 and 2027.

The vesting of these RSUs resulted in stock-based compensation of $ 361,690

for the year ended December 31, 2024, which is included in operation and administration expenses on the consolidated statements of loss and comprehensive loss.

vesting of RSUs during the year ended December 31, 2024, resulted in stock-based compensation expense of $ 836,691 ( 949,114 for the year

ended December 31, 2023), which is included in operation and administration expenses on the consolidated statements of loss

and comprehensive loss.

April 21, 2020, the board of directors approved a DSUs Plan to grant DSUs to its directors.

Plan permits the eligible directors to defer receipt of all or a portion of their retainer or compensation until termination of their

3 unchanged sentences

following table summarizes the DSU activity during the years ended December 31, 2024 and 2023:

Schedule of Deferred Share Units

of Deferred Share Units

Unvested as at December 31, 2022

Vested (ii)(iii)

Granted (i, ii)

Vested (i, iii, iv)

( 3,071,826 )

Unvested as at December 31, 2023

Vested (ii)(iii)

Granted (v, vi)

Vested (ii)(v)

( 4,023,342 )

Unvested as at December 31, 2024

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

During the three months

ended June 30, 2022, the director redeemed 2,500,000 DSUs for C$ 750,000 , and elected to use net proceeds to subscribe for 375,000

units in the Company’s April 2022 special warrant issuance at C$ 0.30 per unit, with the balance of the redeemed amount payable

in cash after applicable withholding tax deductions.

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

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

on July 6, 2024.

April 21, 2023, 1,250,000

DSUs for one of the Company’s

Directors vested.

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

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

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

vesting of DSU’s during the year ended December 31, 2023, resulted in a recovery of stock-based compensation of $ 4,416

(a stock-based recovery of $ 282,967

for the year ended December 31, 2022).

April 1, 2024, 1,907,840 DSUs were issued to the Company’s Directors which vested immediately.

October 1, 2024, 337,475 DSUs were issued to one of the Company’s Directors which vests on October 1, 2025.

In October 2024 the Company settled 1,051,787 DSUs by issuing 750,000 shares of common stock at C$ 0.16 a share and

cash payment $ 46,304 to a certain director of the Company.

vesting of DSU’s during the year ended December 31, 2024, resulted in stock-based compensation of $ 482,994 (a stock-based recovery

of $ 4,416 for the year ended December 31, 2023).

The fair value of each DSU is $ 0.11 as of December 31, 2024 and $ 0.08 as of December

15 unchanged sentences

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

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

with the other defendants for unspecified past and future costs associated with the presence of acid mine drainage in the Crescent

The plaintiff has requested unspecified damages.

19 unchanged sentences

indemnification of Placer Mining Corp in the sale and purchase agreement executed between the companies for the Mine on December 15,

at December 31, 2023, and December 31, 2022, the Company had no accrued interest and penalties related to uncertain tax positions.

income tax provision differs from the amount of income tax determined by applying the U.S.

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

December 31, 2024, and December 31, 2023, the Company had no accrued interest and penalties related to uncertain tax positions.

tax provision differs from the amount of income tax determined by applying the U.S.

federal tax rate of 21.0 % (December 31, 2023 –

– 21.0 %) to pretax loss from operations for the periods ended December 31, 2023 and December 31, 2022:

Schedule of Income Tax Provision

(Loss) income before income taxes

21.0 %) to pretax loss from operations for the periods ended December 31, 2024 and December 31, 2023 as follows:

of Income Tax Provision

(Loss) before income taxes

$ ( 26,880,213 )

Expected income tax (recovery) expense

$ ( 10,843,949 )

Expected income tax (recovery)

( 5,644,845 )

( 2,277,229 )

Change in estimates in respect of prior periods

1 unchanged sentence

Change in fair value of derivative liability

( 3,296,242 )

State and local taxes, net of federal benefit

Loss (gain) on debt settlement

Loss on debt settlement

Change in valuation allowance

$ ( 1,538,590 )

components of deferred tax assets and liabilities are as follows:

Schedule of Components of Deferred Tax Assets and Liabilities

of Components of Deferred Tax Assets and Liabilities

Deferred tax assets:

18 unchanged sentences

( 1,209,198 )

( 13,535,436 )

Net deferred tax liabilities

$ ( 2,588,590 )

potential income tax benefit of these losses has been offset by a full valuation allowance.

of December 31, 2023 and December 31, 2022, the Company has an unused net operating loss carryforward balance of $ 58,145,638

and $ 40,227,950 ,

potential income tax benefit of net deferred tax assets has been offset by a full valuation allowance.

December 31, 2024 and December 31, 2023, the Company has an unused net operating loss carryforward balance of $ 37,379,170 and $ 58,145,638 ,

respectively, that is available to offset future taxable income.

net operating loss carryforwards generated before 2018 expire between 2031 and 2037.

The losses generated in 2018 and later tax years

do not expire.

The net operating loss carryforwards generated before 2018 expire between

2031 and 2037.

The losses generated in 2018 and later tax years do not expire.

Company did not have any tax positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly

increase or decrease within the next 12 months.

Company incurred $ 2,588,590 of income tax expense for the year ended December 31, 2023 and incurred no income tax expense for the year

ended December 31, 2022.

Company incurred income tax benefit of $ ( 1,538,590 ) for the year ended December 31, 2024, and incurred $ 2,588,590 of income tax expense

for the year ended December 31, 2023.

The Company’s effective income tax rate for 2024 was 5.8 % compared to - 23.4 % for 2023.

The effective

tax rate during 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.

GAAP and due to changes in the valuation allowance established to offset net deferred tax

effective tax rate for 2024 differed from the statutory rate primarily due to the income tax treatment of the Stream proceeds as deferred

revenue on receipt, the recognition of the Stream proceeds in current year taxable income, and due to changes in the valuation allowance

established to offset net deferred tax assets.

tax years that remain subject to examination by major taxing jurisdictions are those for the years ended December 31, 2015 through 2024.

Operating Expenses

of Operating Expenses

Operating expenses

General administration expenses

Salaries, wages, and consulting fees

Related party transactions

1 unchanged sentence

of the Company and consists of the Company’s executive management team and management directors.

Schedule of Related Party Transactions

of Related Party Transactions

Consulting fees, wages and bonus

December 31, 2023 and December 31, 2022, $ 67,800

and $ 154,797 ,

respectively, is owed to key management personnel with all amounts included in accounts payable and accrued liabilities.

During the year ended December 31, 2023, Richard Williams (Director and Executive Chairman) billed $ 286,253 (year ended December 31,

2022 - $ 372,084 ) for consulting services and bonus payment to the Company.

At December 31, 2023, $ 67,800 is owed to Richard Williams (December

December 31, 2024 and December 31, 2023, $ 24,658 and $ 67,800 , respectively, is owed to key management personnel with all amounts included

in accounts payable and accrued liabilities.

During the year ended December 31, 2024, Richard Williams (Director and Executive Chairman) billed $ 412,152

(year ended December 31, 2023 - $ 286,253 )

for wages and bonus payment for services to the Company.

At December 31, 2024, $ nil

is owed to Richard Williams (December 31, 2023 - $ 67,800 )

for consulting services, with all amounts included in accounts payable and accrued liabilities.

the year ended December 31, 2023, 1,588,800 restricted share units (RSUs) were issued to Richard Williams which will vest in one third

the year ended December 31, 2024, 2,556,566 RSUs were issued to Richard Williams which will vest in one third

increments on March 31, 2025, March 31, 2026, and March 31, 2027.

1 unchanged sentence

for the year ended December 31, 2024.

the year ended December 31, 2023, 894,199 restricted share units (RSUs) were issued to Richard Williams which vested immediately.

the year ended December 31, 2023, 1,588,800 RSUs were issued to Richard Williams which will vest in one third

increments on March 31, 2024, March 31, 2025, and March 31, 2026.

The vesting of these RSUs resulted in stock-based compensation of $ 103,688

for the year ended December 31, 2023.

the year ended December 31, 2023, 894,199 RSUs were issued to Richard Williams which vested immediately.

vesting of these RSUs resulted in stock-based compensation of $ 157,765 for the year ended December 31, 2023.

the year ended December 31, 2022, 1,110,756

restricted share units (RSUs) were issued to Richard Williams which will vest in one third increments on March 31, 2023, March 31,

2024, and March 31, 2025.

The vesting of these RSUs resulted in stock-based compensation of $ 78,393 and $ 20,085

respectively for the year ended December 31, 2023 and December 31, 2022.

During the year ended December 31, 2023, the Company incurred $ 318,924 in payroll expense and bonus payment for Sam Ash (year ended December

During the year ended December 31, 2024, the Company incurred $ 454,296

in payroll expense and bonus payment for Sam Ash (CEO) (year ended December 31, 2023 - $ 318,924 )

for services to the Company.

At December 31, 2023, $ nil (December 31, 202 - $ nil ) is payable and included in accrued

the year ended December 31, 2023, 1,787,400 restricted share units (RSUs) were issued to Sam Ash which will vest in one third increments

At December 31, 2023, $ nil

(December 31, 202 - $ nil )

is payable and included in accrued liabilities.

the year ended December 31, 2024, 2,876,137 RSUs were issued to Sam Ash which will vest in one third increments

on March 31, 2025, March 31, 2026, and March 31, 2027.

1 unchanged sentence

the year ended December 31, 2024.

the year ended December 31, 2023, 945,841 restricted share units (RSUs) were issued to Sam Ash which vested immediately.

of these RSUs resulted in stock-based compensation of $ 166,876 for the year ended December 31, 2023.

the year ended December 31, 2023, 1,787,400 RSUs were issued to Sam Ash which will vest in one third increments

on March 31, 2024, March 31, 2025, and March 31, 2026.

The vesting of these RSUs resulted in stock-based compensation of $ 116,649 for

the year ended December 31, 2023.

restricted share units (RSUs) were issued to Sam Ash which will vest in one third increments on March 31, 2023, March 31, 2024, and

March 31, 2025.

The vesting of these RSUs resulted in stock-based compensation of $ 88,192 and $ 22,596

respectively for the year ended December 31, 2023 and December 31, 2022.

During the year ended December 31, 2023, the Company incurred $ 132,000 in payroll expense and bonus payment for Gerbrand van Heerden

(CFO) (year ended December 31, 2022, $ nil ) for services to the Company.

At December 31, 2023, $ nil (year ended December 31, 2022 - $ nil )

the year ended December 31, 2023, 945,841 RSUs were issued to Sam Ash which vested immediately.

of these RSUs resulted in stock-based compensation of $ 166,876 for the year ended December 31, 2023.

During the year ended December 31, 2024, Gerbrand van Heerden billed $ 362,000

(year ended December 31, 2023, $ 132,000 ) for

wages and bonus payment for services to the Company.

At December 31, 2024, $ nil

(year ended December 31, 2023, $ nil )

is payable, including reimbursable expenses, and included in accrued liabilities.

During the year ended December 31, 2023, the Company incurred $ 246,673 in payroll expense and bonus payment for David Wiens (Former CFO)

the year ended December 31, 2024, 672,450 RSUs were issued to Gerbrand van Heerden which vested on January 26,

The vesting of these RSUs resulted in stock-based compensation of $ 46,448 for the year ended December 31, 2024.

the year ended December 31, 2024, 504,034 RSUs were issued to Gerbrand van Heerden which will vest in one third

increments on March 31, 2025, March 31, 2026, and March 31, 2027.

The vesting of these RSUs resulted in stock-based compensation of $ 20,149

for the year ended December 31, 2024.

During the year ended December 31, 2024, the Company incurred $ nil in payroll expense and bonus payment for David Wiens (Former CFO)

(year ended December 31, 2023, $ 246,673 ) for services to the Company.

At December 31, 2023, $ nil (year ended December 31, 2022 - $ 19,197 )

is payable, including reimbursable expenses, and included in accrued liabilities.

the year ended December 31, 2023, 1,456,400 restricted share units (RSUs) were issued to David Wiens which will vest in one third increments

the year ended December 31, 2023, 1,456,400 RSUs were issued to David Wiens which will vest in one third increments

on March 31, 2024, March 31, 2025, and March 31, 2026.

The vesting of these RSUs resulted in stock-based compensation of $ nil for

the year ended December 31, 2023.

the year ended December 31, 2023, 902,365 restricted share units (RSUs) were issued to David Wiens which vested immediately.

The vesting of these RSUs resulted in stock-based compensation of $ nil for the

year ended December 31, 2023.

the year ended December 31, 2023, 902,365 RSUs were issued to David Wiens which vested immediately.

of these RSUs resulted in stock-based compensation of $ 159,206 for the year ended December 31, 2023.

the year ended December 31, 2022, 1,018,193 restricted

share units (RSUs) were issued to David Wiens which will vest in one third increments on March 31, 2023, March 31, 2024, and March

The vesting of these RSUs resulted in stock-based compensation of $ 26,467 for

the year ended December 31, 2023 and $ 12,939 December 31, 2022.

During the year ended December 31, 2024, Pam Saxton (Director) billed $ 41,299 (year ended December 31, 2023 - $ 34,832 ) for consulting

services to the Company.

On July 4, 2023, the Company issued 431,739 DSU’s to Pam Saxton.

During the year ended December 31, 2023, Cassandra Joseph (Director) billed $ 34,832 (year ended December 31, 2022 - $ 36,133 ) for consulting

services to the Company.

On July 4, 2023, the Company issued 431,739 DSU’s to Cassandra Joseph.

On April 1, 2024, the Company issued 476,960 DSU’s to Pam Saxton which vested immediately.

2023, the Company issued 431,739 DSU’s to Pam Saxton which vested immediately.

During the year ended December 31, 2024, Cassandra Joseph (Director) billed $ 21,178

(year ended December 31, 2022 - $ 34,832 )

for consulting services to the Company.

On April 1, 2024, the Company issued 620,048

DSU’s to Cassandra Joseph which vested immediately.

On July 4, 2023, the Company issued 431,739

DSU’s to Cassandra Joseph which vested immediately.

In October 2024 the Company settled 1,051,787 DSUs by issuing 750,000 shares of common stock at C$ 0.16 a share and

cash payment $ 46,304 to Cassandra Joseph.

During the year ended December 31, 2024, the Company incurred $ 34,185 in director fees for Mark Cruise (year ended December 31, 2023

- $ 31,240 ).

At December 31, 2024, $ 2,933 is owed to Mark Cruise (December 31, 2023 - $ nil ) for consulting services.

On April 1, 2024,

the Company issued 476,960 DSU’s to Mark Cruise which vested immediately.

On July 4, 2023, the Company issued 374,174 DSU’s

to Mark Cruise which vested immediately.

During the year ended December 31, 2024, Paul Smith (Director) billed $ 43,009 (year ended December 31, 2023 - $ 19,322 ) for consulting

services to the Company.

On April 1, 2024, the Company issued 476,960 DSU’s to Paul Smith which vested immediately.

2023, the Company issued 245,454 DSU’s to Paul Smith which vest on July 5, 2024.

During the year ended December 31, 2024, Dickson Hall (Director) billed $ 43,448 (year ended December 31, 2023 - $ nil ) for consulting

services to the Company.

At December 31, 2024, $ 21,725 is owed to Dickson Hall (December 31, 2023 - $ nil ) for consulting services.

April 1, 2024, the Company issued 476,960 DSU’s to Dickson Hall which vested immediately.

On July 4, 2023, the Company issued 374,174

DSU’s to Mark Cruise.

On July 1, 2022,

the Company issued 210,000

DSU’s to Mark Cruise.

During the year ended December 31, 2023, Paul Smith (Director) billed $ 19,322 (year ended December 31, 2022 - $ nil ) for consulting services

to the Company.

On July 5, 2023, the Company issued 245,454 DSU’s to Paul Smith.

During the year ended December 31, 2023, Dickson Hall (Director) billed $ nil (year ended December 31, 2022 - $ nil ) for consulting services

to the Company.

On July 4, 2023, the Company issued 374,174 DSU’s to Dickson Hall.

DSU’s to Dickson Hall which vested immediately.

the year ended December 31, 2024, Kelli Kast (Director) billed $ 9,875

(year ended December 31, 2023 - $ nil )

for consulting services to the Company.

On October 1, 2024, the Company issued 337,475

DSU’s to Kelli Kast which vested on October 1, 2 025.

August 2024, the Company and Sprott agreed to amend the maturity date of CD1 from March 31, 2026, to March 31, 2028 , and CD2 from March

31, 2026, to March 31, 2029 , and that CD1 and CD2 would remain outstanding until the new maturity dates unless the Company elects to

exercise its option of early repayment.

December 2024, the Company drew $ 10,000,000 on the debt facility.

As consideration for Sprott advancing 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 and a 0.70 % rate will apply to

claims outside of these areas.

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

with the funding of the stream in June 2023, the Company repaid the outstanding principal and interest on the Bridge Loan.

with the funding of the stream in June 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.

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

March 31, 2026 , and 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.

Segment Reporting

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

As of December 31, 2024,

and December 31, 2023, the Company had one single reportable segment, which is the Bunker Hill Mine.

The executive team, consisting of the CEO, CFO and Executive Chairman, uses the following

measurements to manage the business.

The chief operating decision maker of the Bunker Hill Mine is the CEO.

of Segment Reporting Information

Interest income

Interest expense & accretion

$ ( 7,124,527 )

Net (loss) for the year

$ ( 25,341,623 )

$ ( 13,432,539 )

Subsequent events

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 ended December 31, 2024.

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.

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.

On 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.

All 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.

Promissory Note

March 21, 2025, the company closed an 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.

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.

On 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 .

Restricted Cash

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 $ 10,000,000 .

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”).

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.

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:

the 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;

the 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;

1 Based on a USD/CAD exchange rate of 1.4370

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

the 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;

the 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);

the 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;

the 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,

the 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 to the U.S.

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;

(iii) extend the availability date for advances of the Silver Loan from January 31, 2025 to June 30, 2025;

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 the MM NPA).

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

Company intends to, either directly or indirectly:

in 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”);

enter 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”);

enter 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;

The Company is unable to predict the outcome of these

financing transactions or any future financing or strategic transactions that we may pursue or whether any such efforts will be successful.

There can be no assurance that these financing transactions will close as anticipated.

In addition, our ability to complete these financing

transactions and any future financing or strategic transactions depends on a number of factors, including the state of the global commodity,

credit and equity markets.

If we are unable to complete these financings transactions, complete new capital transactions or obtain additional

financings on acceptable terms or at all, we will face significant liquidity challenges.

Refer to Part I, Item 1.A “Risk Factors”

for a discussion of additional risks relating to our liquidity.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

4 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 8. Financial Statements and Supplementary Data