Bunker Hill Mining Corp. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS Page Report of Independent Registered Public Accounting Firm – MNP LLP , PCAOB ID: 1930 44 Consolidated Balance Sheets, December 31, 2023 and 2022 46 Consolidated Statements of Operations for the years ended December 31, 2023 and 2022 47 Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022 48 Consolidated Statements of Changes in Stockholders’ Deficit for the years ended December 31, 2023 and 2022 49 Notes to the Consolidated Financial Statements 50-79 43 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Bunker Hill Mining Corp. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Bunker Hill Mining Corp. (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”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the 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 of America. Material Uncertainty Related to Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed 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. Management’s 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. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. 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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. 44 Critical Audit Matter Description Audit Response Going Concern As 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. We 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. This matter is also described in the “Material Uncertainty Related to Going Concern” section of our report. We 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. Valuation of Series 1 & 2 Convertible Debentures (CDs) The Company had previously issued CDs which are complex in nature and are required to be fair valued at the end of each reporting period. The calculation of the fair value of the CDs requires management to use an appropriate valuation model and incorporates estimates. This resulted in an increased extent of audit effort, including the involvement of internal valuation specialists. Due 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. Refer to Note 3 Significant Account Policies – Use of Estimates and Assumptions and Note 10 Promissory Notes Payable and Convertible Debentures. We responded to this matter by performing audit procedures in relation to the valuation of the CDs. Our audit work in relation to this included, but was not restricted to, the following: ● 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. ● Assessed the appropriateness of the related disclosures. Valuation of Silver Loan The 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”). The loan is complex in nature and is required to be fair valued on issuance date and at each reporting period. The calculation of the fair value of the Silver Loan requires management to use an appropriate valuation model and incorporates estimates. This resulted in an increased extent of audit effort, including the involvement of internal valuation specialists. Due 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. Refer to Note 3 Significant Accounting Policies – Use of Estimates and Assumptions and Note 10 Promissory Notes Payable and Convertible Debentures. We 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: ● Obtained and assessed all agreements signed in the year in relation to the Silver Loan. ● Obtained management’s assessment of the fair value of the Silver Loan. ● With 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. ● Assessed the appropriateness of the related disclosures. Chartered Professional Accountants Licensed Public Accountants We have served as the Company’s auditor since 2014. Mississauga, Canada March 28, 2025 45 Bunker Hill Mining Corp. Consolidated Balance Sheets (Expressed in United States Dollars) December 31, December 31, 2024 2023 ASSETS Current assets Cash $ 3,786,277 $ 20,102,596 Restricted cash (note 9, 20) 4,475,000 6,476,000 Asset held for sale (note 6) 40,000 - Accounts receivable and prepaid expenses (note 4) 690,358 598,401 Spare parts inventory 341,004 - Total current assets 9,332,639 27,176,997 Non-current assets Spare parts inventory - 341,004 Long-term deposit 254,106 249,265 Equipment (note 5) 1,741,981 946,661 Right-of-use assets (note 5) 758,125 625,022 Land 309,861 - Bunker Hill Mine and Mining interests (note 7) 18,795,591 15,198,259 Process plant (note 6) 66,409,247 17,452,470 Total assets $ 97,601,550 $ 61,989,678 EQUITY AND LIABILITIES Current liabilities Accounts payable (note 18) $ 14,678,901 $ 1,788,950 Accrued liabilities (note 18) 5,210,939 1,225,525 Current portion of lease liability (note 8) 189,368 353,526 Deferred share units liability (note 14) 929,466 569,327 U.S. Environmental Protection Agency cost recovery payable (note 9) 3,000,000 3,000,000 Stream debenture (note 10) 4,063,253 - Interest payable (notes 9 and 10) 522,485 534,998 Current income tax payable (note 16) 1,050,000 - Total current liabilities 29,644,412 7,472,326 Non-current liabilities Lease liability (note 8) 62,282 71,808 Series 1 convertible debenture (note 10) 5,494,151 5,244,757 Series 2 convertible debenture (note 10) 13,898,481 13,458,570 Stream debenture (note 10) 52,923,747 51,138,000 Silver loan (note 10) 31,802,708 - Debt facility (note 10) 9,236,610 - Environment protection agency cost recovery liability net of discount (note 9) 5,549,229 6,574,140 Deferred tax liability (note 16) - 2,588,590 Derivative warrant liability (note 11) 1,125,295 1,808,649 Total liabilities 149,736,915 88,356,840 Shareholders’ Deficiency Preferred shares, $ 0.000001 par value, 10,000,000 preferred shares authorized; Nil preferred shares issued and outstanding (note 11) - - Common stock, $ 0.000001 par value, 1,500,000,000 shares of common stock authorized; 349,698,625 and 322,661,482 shares of common stock issued and outstanding, respectively (note 11) 348 321 Additional paid-in-capital (note 11) 61,233,369 57,848,953 Accumulated other comprehensive (income) loss ( 3,002,361 ) 808,662 Accumulated deficit ( 110,366,721 ) ( 85,025,098 ) Total shareholders’ deficiency ( 52,135,365 ) ( 26,367,162 ) Total shareholders’ deficiency and liabilities $ 97,601,550 $ 61,989,678 The accompanying notes are an integral part of these consolidated financial statements. 46 Bunker Hill Mining Corp. Consolidated Statements of Loss and Comprehensive Loss (Expressed in United States Dollars) 2024 2023 Year Ended Year Ended December 31, December 31, 2024 2023 Operating expenses (note 17) ( 15,649,142 ) ( 11,600,574 ) Other income or gain (expense or loss) Interest income 655,125 1,107,093 Change in derivative liability (note 11) 838,378 2,360,025 Gain (loss) on foreign exchange ( 7,004 ) 4,821 Gain (loss) on fair value of convertible debentures (note 10) ( 890,258 ) 1,673,776 Gain on debt settlement (note 7) - 7,151,873 Gain on warrant modification - 214,714 Loss on fair value of silver loan (note 10) ( 2,820,533 ) - Loss on revaluation of stream debenture (note 10) ( 230,000 ) ( 3,128,956 ) Interest expense and accretion (notes 9 and 10) ( 8,091,412 ) ( 7,124,527 ) Financing costs (note 10) ( 676,784 ) ( 934,502 ) Other income 2,631 23,520 Gain (loss) on debt modification (note 10) 1,308,062 ( 99,569 ) Loss on debt settlement (note 10) ( 394,456 ) ( 491,643 ) Loss on sale of equipment (note 6) ( 924,820 ) - (Loss) for the year pre tax $ ( 26,880,213 ) $ ( 10,843,949 ) Current income tax expense (note 16) ( 1,050,000 ) - Deferred tax recovery (expense) (note 16) 2,588,590 ( 2,588,590 ) Net (loss) for the year ( 25,341,623 ) ( 13,432,539 ) Other comprehensive income (loss), net of tax (Loss) gain on change in FV on own credit risk (note 10) ( 3,811,023 ) 554,787 Other comprehensive (loss) income ( 3,811,023 ) 554,787 Comprehensive (loss) ( 29,152,646 ) ( 12,877,752 ) Net (loss) Income per share of common stock Net (loss) per share of common stock – basic (note 12) $ ( 0.07 ) $ ( 0.05 ) Net (loss) per share of common stock – fully diluted (note 12) $ ( 0.07 ) $ ( 0.05 ) Weighted average number of shares of common stock Weighted average shares of common stock – basic (note 12) 340,244,856 280,354,631 Weighted average shares of common stock – fully diluted (note 12) 340,244,856 280,354,631 The accompanying notes are an integral part of these consolidated financial statements. 47 Bunker Hill Mining Corp. Consolidated Statements of Cash Flows (Expressed in United States Dollars) 2024 2023 Year Ended Year Ended December 31, December 31, 2024 2023 Operating activities 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 (note 11,13,14) 1,356,071 1,092,290 Settlement of DSUs (note 14) ( 36,495 ) - Depreciation expense (note 5) 393,297 190,133 Change in fair value of derivative liabilities ( 838,378 ) ( 2,360,025 ) Change in fair value of silver loan 2,820,533 - Current tax expense 1,050,000 - Deferred tax (recovery) expense ( 2,588,590 ) 2,588,590 Financing costs 155,024 - (Gain) on warrant extinguishment - ( 214,714 ) Units issued for services - 111,971 Interest expense on lease liability (note 8) 50,560 29,699 Interest expense - 92,799 Loss on sale of equipment (note 6) 924,820 - Loss on debt settlement 394,456 491,643 Loss on modification of debt - 99,569 Loss on revaluation of stream debenture 230,000 3,128,956 Gain on modification of debt ( 1,308,062 ) - Accretion of liabilities 6,010,303 4,149,267 Loss (gain) on fair value of convertible debt derivatives 890,258 ( 1,673,777 ) Gain on debt settlement - ( 7,151,873 ) Changes in operating assets and liabilities: Accounts receivable and prepaid deposits ( 96,798 ) ( 26,267 ) Accounts payable 2,456,577 ( 1,840,426 ) Accrued liabilities 1,043,405 425,719 Interest payable 2,018,037 1,966,233 Net cash used in operating activities ( 10,416,605 ) ( 12,332,752 ) Investing activities Process plant ( 35,433,926 ) ( 9,398,032 ) Mine development ( 3,913,472 ) ( 1,458,506 ) Purchase of land ( 309,861 ) - Purchase of machinery and equipment ( 983,719 ) ( 539,803 ) Net cash used in investing activities ( 40,640,978 ) ( 11,396,341 ) Financing activities Proceeds from silver loan 26,278,261 - Proceeds from debt facility 10,000,000 - Proceeds from stream obligation - 46,000,000 Transaction costs stream obligation - ( 740,956 ) Proceeds from issuance of shares, net of issue costs - 3,661,822 Proceeds from warrants exercise - 837,459 Proceeds from promissory notes - 390,000 Repayment of U.S. Environmental Protection Agency cost recovery payable ( 3,000,000 ) - Repayment of bridge loan - ( 5,000,000 ) Repayment of promissory notes - ( 150,000 ) Repayment of promissory note - ( 1,599,568 ) Lease payments ( 537,997 ) ( 275,173 ) Net cash provided by financing activities 32,740,264 43,123,584 Net change in cash and restricted cash ( 18,317,319 ) 19,394,491 Cash, beginning of year 26,578,596 7,184,105 Cash and restricted cash, end of year $ 8,261,277 $ 26,578,596 Supplemental disclosures Cash interest paid $ - $ 322,708 Non-cash activities: Units issued to settle accounts payable and accrued liabilities $ - $ 874,198 Units issued to settle deferred shared units 83,802 - Units issued to settle interest payable 2,030,526 2,515,235 Reconciliation from Cash Flow Statement to Balance Sheet: Cash and restricted cash, end of year $ 8,261,277 $ 26,578,596 Less restricted cash 4,475,000 6,476,000 Cash $ 3,786,277 $ 20,102,596 The accompanying notes are an integral part of these consolidated financial statements. 48 Bunker Hill Mining Corp. Consolidated Statements of Changes in Shareholders’ Deficiency (Expressed in United States Dollars) Shares Amount capital income deficit Total Accumulated Additional other Common stock paid-in- comprehensive Accumulated Shares Amount capital income deficit Total Balance, December 31, 2023 322,661,482 $ 321 $ 57,848,953 $ 808,662 $ ( 85,025,098 ) $ ( 26,367,162 ) Stock-based compensation - - 873,076 - - 873,076 Compensation options - - - - Shares issued for interest payable 23,619,707 24 2,427,541 - - 2,427,565 Shares issued for deferred share units 750,000 1 83,801 - - 83,802 Shares issued for restricted share units vested 2,667,436 2 ( 2 ) - - - Shares issued for warrant exercise 10,416,667 - - - - - Special warrant shares issued for $0.15 CAD 51,633,727 - - - - - Other comprehensive (loss) - - - ( 3,811,023 ) - ( 3,811,023 ) Net (loss) for the year - - - - ( 25,341,623 ) ( 25,341,623 ) Balance, December 31, 2024 349,698,625 $ 348 $ 61,233,369 $ ( 3,002,361 ) $ ( 110,366,721 ) $ ( 52,135,365 ) Balance, December 31, 2022 229,501,661 $ 228 $ 45,161,513 $ 253,875 $ ( 71,592,559 ) $ ( 26,176,943 ) Balance 229,501,661 $ 228 $ 45,161,513 $ 253,875 $ ( 71,592,559 ) $ ( 26,176,943 ) Stock-based compensation 1,458,946 - - 1,458,946 Compensation options 111,971 - - 111,971 Shares issued for restricted share units vested 5,809,218 6 ( 6 ) - - - Shares issued for interest payable 25,300,209 25 2,784,124 - - 2,784,149 Shares issued for warrant exercise 10,416,667 10 907,080 - - 907,090 Special warrant shares issued for $ 0.15 CAD 51,633,727 52 7,425,325 - - 7,425,377 Other comprehensive income - - - 554,787 - 554,787 Net (loss) for the year - - - - ( 13,432,539 ) ( 13,432,539 ) Balance, December 31, 2023 322,661,482 $ 321 $ 57,848,953 $ 808,662 $ ( 85,025,098 ) $ ( 26,367,162 ) Balance 322,661,482 $ 321 $ 57,848,953 $ 808,662 $ ( 85,025,098 ) $ ( 26,367,162 ) The accompanying notes are an integral part of these consolidated financial statements. 49 1. Nature and continuance of operations Bunker Hill Mining Corp. (“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 2E9. As of the date of this Form 10-K, the Company had one subsidiary, Silver Valley Metals Corp. (“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”). The 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. Bunker 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. We are currently focused on the construction of mill facilities and upgrades to the historic underground infrastructure as well as further delineation of mineral resources. Going Concern These 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. These 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. Tariff War The 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. 2. Basis of presentation The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America applicable to exploration stage enterprises. The consolidated financial statements are expressed in U.S. dollars, the Company’s functional currency. 3. Significant accounting policies The following is a summary of significant accounting policies used in the preparation of these consolidated financial statements. Basis of consolidation These consolidated financial statements include the assets, liabilities and expenses of the Company and its wholly owned subsidiary, Silver Valley Metals Corp. (formerly American Zinc Corp.). All intercompany transactions and balances have been eliminated on consolidation. Cash and cash equivalents Cash and cash equivalents may include highly liquid investments with original maturities of three months or less. Mineral rights, property and acquisition costs The Company transitioned from the exploration stage to the development stage at the beginning of the fourth quarter of 2022. The Company has not yet realized any revenues from its planned operations. 50 The 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. The costs of acquiring mining properties are capitalized upon acquisition. Mine development costs incurred to develop and expand the capacity of mines, or to develop mine areas in advance of production, are also capitalized once proven and probable reserves exist and the property is a commercially mineable property. Costs incurred to maintain current exploration or to maintain assets on a standby basis are charged to operations. Costs of abandoned projects are charged to operations upon abandonment. 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. Equipment Equipment is stated at cost less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which range from 3 to 10 years. The cost of repairs and maintenance is charged to expense as incurred. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income or gain (expense or loss). The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful lives of equipment or whether the remaining balance of the equipment should be evaluated for possible impairment. If events and circumstances warrant evaluation, the Company uses an estimate of the related undiscounted cash flows over the remaining life of the equipment in measuring their recoverability. Leases Operating 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 loss. Rental income obtained through subleases is recorded as income over the lease term and is offset against operation and administration expenses. Impairment of long-lived assets The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate the related carrying amounts may not be recoverable. The assets are subject to impairment consideration under FASB ASC 360, Property, Plant and Equipment, if events or circumstances indicate that their carrying amount might not be recoverable. When the Company determines that an impairment analysis should be done, the analysis is performed using the rules of FASB ASC 930-360-35, Extractive Activities – Mining, and 360-10-15-3 through 15-5, Impairment or Disposal of Long-Lived Assets. Various factors could impact the Company’s ability to achieve forecasted production schedules. Additionally, commodity prices, capital expenditure requirements and reclamation costs could differ from the assumptions the Company may use in future production cash flow models when compared to factors used to assess impairment. The ability to achieve the estimated quantities of recoverable minerals from development stage mineral interests involves further risks in addition to those factors applicable to mineral interests where proven and probable reserves have been identified, due to the lower level of confidence that the identified mineralized material can ultimately be mined economically. Fair value of financial instruments The Company adopted FASB ASC 820-10, Fair Value Measurement. This guidance defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows: ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. 51 ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement. The 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. The Company 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 expenditures The operations of the Company have been, and may in the future be, affected from time to time, in varying degrees, by changes in environmental regulations, including those for future reclamation and site restoration costs. Both the likelihood of new regulations and their overall effect upon the Company vary greatly and are not predictable. The Company’s policy is to meet, or if possible, surpass standards set by relevant legislation, by application of technically proven and economically feasible measures. Environmental expenditures that relate to ongoing environmental and reclamation programs are expensed as incurred or capitalized and amortized depending on their future economic benefits. Estimated future reclamation and site restoration costs, when the ultimate liability is reasonably determinable, are charged against earnings over the estimated remaining life of the related business operation, net of expected recoveries. Income taxes The Company accounts for income taxes in accordance with Accounting Standard Codification 740, Income Taxes (“FASB ASC 740”), on a tax jurisdictional basis. The Company files income tax returns in the United States. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the tax bases of assets and liabilities and the consolidated financial statements reported amounts using enacted tax rates and laws in effect in the year in which the differences are expected to reverse. A valuation allowance is provided against deferred tax assets when it is determined to be more likely than not that the deferred tax asset will not be realized. The Company assesses the likelihood of the consolidated financial statements effect of a tax position that should be recognized when it is more likely than not that the position will be sustained upon examination by a taxing authority based on the technical merits of the tax position, circumstances, and information available as of the reporting date. The Company is subject to examination by taxing authorities in jurisdictions such as the United States. Management does not believe that there are any uncertain tax positions that would result in an asset or liability for taxes being recognized in the accompanying consolidated financial statements. The Company recognizes tax-related interest and penalties, if any, as a component of income tax expense. FSAB ASC 740 prescribes recognition threshold and measurement attributes for the consolidated financial statements recognition and measurement of a tax position taken, or expected to be taken, in a tax return. FASB ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in periods, disclosure and transition. At December 31, 2024, December 31, 2023, the Company has not taken any tax positions that would require disclosure under FASB ASC 740. 52 Basic and diluted net (loss) income per share The Company computes net (loss) income per share in accordance with FASB ASC 260, Earnings per Share (“FASB ASC 260”). Under 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 payable. 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). Stock-based compensation In December 2004, FASB issued FASB ASC 718, Compensation – Stock Compensation (“FASB ASC 718”), which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. FASB ASC 718 focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. FASB ASC 718 requires that the compensation cost relating to share-based payment transactions be recognized in the consolidated financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. Restricted share units The Company estimates the grant date fair value of RSUs using the Company’s common stock at the grant date. The Company records the value of the RSUs in paid-in capital. Deferred share units (“DSUs”) The Company estimates the grant date fair value of the DSUs using the trading price of the Company’s common stock on the day of grant. The Company records the value of the DSUs owing to its directors as DSU liability and measures the DSU liability at fair value at each reporting date, with changes in fair value recognized as stock-based compensation in profit (loss). Use of estimates and assumptions Many of the amounts included in the consolidated financial statements require management to make judgments and/or estimates. These judgments and estimates are continuously evaluated and are based on management’s experience and knowledge of the relevant facts and circumstances. Actual results may differ from the amounts included in the consolidated financial statements. Areas of significant judgment and estimates affecting the amounts recognized in the consolidated financial statements include: Going concern The assessment of the Company’s ability to continue as a going concern involves judgment regarding future funding available for its operations and working capital requirements. 53 Accrued liabilities The Company has to make estimates to accrue for certain expenditures due to delay in receipt of third-party vendor invoices. These accruals are made based on trends, history and knowledge of activities. Actual results may be different. The Company makes monthly estimates of its water treatment costs, with a true-up to the annual invoice received from the Idaho Department of Environmental Quality (“IDEQ”). Using the actual costs in the annual invoice, the Company then reassesses its estimate for future periods. Given the nature, complexity and variability of the various actual cost items included in the invoice, the Company has used the most recent invoice as its estimate of the water treatment costs for future periods. Convertible Loans, Promissory Notes, Stream Obligation, Silver Loan and Warrants Estimating the fair value of derivative warrant liability requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the issuance. This estimate also requires determining the most appropriate inputs to the valuation model including 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 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. The stream obligation inputs used to determine the future cash flows and effective interest for the amortized cost calculation include futures prices of minerals and expected mineral production over the life of the mine. See Note 10 for full disclosures related to the stream obligation. The fair value estimates may differ from actual fair values and these differences may be significant and could have a material impact on the Company’s balance sheets and the consolidated statements of operations. Impairment of mineral properties, plant and equipment Assets 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. Reclassifications Certain reclassifications have been made to conform prior year’s data to the current presentation. The reclassifications have no effect on the results of reported operations or stockholders’ deficit or cash flows. 54 Concentrations of credit risk The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and restricted cash. The Company places its cash with financial institutions of high credit worthiness. At times, its cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company’s management also routinely assesses the financial strength and credit worthiness of any parties to which it extends funds and as such, it believes that any associated credit risk exposures are limited. Risks and uncertainties The Company operates in the mineral resource exploration and mine development industry that is subject to significant risks and uncertainties, including financial, operational, and other risks associated with operating a mineral resource exploration business, including the potential risk of business failure. Foreign currency transactions The Company from time to time will receive invoices from service providers that are presenting their invoices using the Canadian dollar. The Company will use its U.S. dollars to settle the Canadian dollar liabilities and any differences resulting from the exchange transaction are reported as gain or loss on foreign exchange. Debt instruments The 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. The 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 end. Recent Accounting Pronouncements New 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. 55 In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-07 (“ASU 2023-07”), Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, amending reportable segment disclosure requirements to include disclosure of incremental segment information on an annual and interim basis. Among the disclosure enhancements are new disclosures regarding significant segment expenses that are regularly provided to the chief operating decision-maker and included within each reported measure of segment profit or loss, as well as other segment items bridging segment revenue to each reported measure of segment profit or loss. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, and are applied retrospectively. The adoption of this new standard has not had a material impact on our consolidated financial statements and note disclosures. In 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. The adoption of this new standard has not had a material impact on our consolidated financial statements and note disclosures. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. 4. Accounts receivable and prepaid expenses Accounts receivable and prepaid expenses consists of the following: Schedule of Accounts receivable and prepaid expenses December 31, December 31, 2024 2023 Prepaid expenses and deposits $ 464,380 $ 382,198 HST and interest receivable 125,978 121,621 U.S. Environment Protection Agency overpayment (note 9) 100,000 94,582 Total $ 690,358 $ 598,401 5. Equipment and Right-of-Use asset Equipment consists of the following: Schedule of Equipment December 31, December 31, 2024 2023 Equipment $ 2,468,339 $ 1,460,375 Less accumulated depreciation ( 726,358 ) ( 513,714 ) Equipment, net $ 1,741,981 $ 946,661 The total depreciation expense during the year ended December 31, 2024, was $ 212,645 (year ended December 31, 2023 - $ 144,347 ). Right-of-use asset consists of the following: Schedule of Right-of-use Asset December 31, December 31, 2024 2023 Right-of-use asset $ 984,562 $ 670,808 Less accumulated depreciation ( 226,437 ) ( 45,786 ) Right-of-use asset, net $ 758,125 $ 625,022 56 The 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. 6. Process Plant On 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. The 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. Process plant consists of the following: Schedule of Plant Asset Consists December 31, December 31, 2024 2023 Mill purchase, detailed engineering, and construction costs $ 65,545,594 $ 17,219,063 Capitalized interest (note 10) 1,848,473 233,407 Disposal of Grinding Circuits ( 984,820 ) - Process Plant $ 66,409,247 $ 17,452,470 In 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. 7. Bunker Hill Mine and Mining Interests The Company purchased the Bunker Hill Mine in January 2022. The carrying cost of the Bunker Hill Mine is comprised of the following: Schedule of Mining Interests December 31, December 31, 2024 2023 Bunker Hill Mine purchase $ 14,247,210 $ 14,247,210 Capitalized development 6,626,865 2,722,889 Sale of mineral properties (note 10) ( 2,768,510 ) ( 1,973,840 ) Land 202,000 202,000 Definition drilling 488,026 - Bunker Hill Mine $ 18,795,591 $ 15,198,259 57 Land 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. During 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 overlaying a portion of the Company’s existing mineral claims package. The Company is committed to making monthly payments of $ 10,000 through February 2026. The Company has the option to purchase the land parcel through March 1, 2026, for $ 3,129,500 less 50% of the payments made through the date of purchase. Sale 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 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. This 2023 transaction was treated as a sale of mineral interest to Sprott Private Resource Streaming & Royalty Corp. (“Sprott”). The portion of the mineral interest sold was determined based on an analysis of discounted life-of-mine royalty payments relative to discounted future cash flows generated from the mine net of capital and operating costs, applied to the carrying value of the Bunker Hill Mine as of June 23, 2023 before consideration of the sale of mineral properties. This analysis utilized a discount rate of 13% and long-term metal prices of $1.09/lb, $0.98/lb and $25.51/oz for zinc, lead and silver respectively, consistent with assumptions utilized in the valuation of the RCD at extinguishment. On 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. On 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. The 2024 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 . 8. Lease Liability As of December 31, 2024, and December 31, 2023, The Company’s undiscounted lease obligations consisted of the following: Schedule of Lease Liability December 31, December 31, 2024 2023 Gross lease obligation – minimum lease payments 1 year $ 200,755 $ 393,673 2- 3 years 64,375 73,588 4-5 years - - Future interest expense on lease obligations ( 13,480 ) ( 41,927 ) Total lease liability 251,650 425,334 Current lease liability 189,368 353,526 Non-current lease liability 62,282 71,808 Total lease liability $ 251,650 $ 425,334 Interest expense for the year ended December 31, 2024, was $ 50,560 (year ended Decembre 31, 2023, $ 23,669 ) . 58 9. U.S. Environmental Protection Agency (“EPA”) Effective December 19, 2021, the Company entered into an amended Settlement Agreement between the Company, Idaho Department of Environmental Quality, U.S. 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 were to be paid by the Company to the EPA on the following dates: Schedule of Amended Settlement Environmental Protection Agency Agreement Date Amount Within 30 days of Settlement Agreement $ 2,000,000 November 1, 2024 $ 3,000,000 November 1, 2025 $ 3,000,000 November 1, 2026 $ 3,000,000 November 1, 2027 $ 3,000,000 November 1, 2028 $ 3,000,000 November 1, 2029 $ 2,000,000 plus accrued interest In 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. 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 of December 31, 2024 (compared to $ 17,000,000 as of December 31, 2023). As 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 liability). The collateral for the payment bonds is comprised of two letters of credit of $ 4,475,000 in aggregate, as well as land pledged by third parties with whom the Company has entered into a financing cooperation agreement that contemplates a monthly fee of $ 20,000 (payable in cash or common shares of the Company, at the Company’s election). 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. The 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. Water Treatment Charges – Idaho Department of Environmental Quality Separate to the cost recovery liability outlined above, the Company is responsible for the payment of ongoing water treatment charges. Water treatment charges incurred through December 31, 2021, were payable to the EPA, and charges thereafter are payable to the IDEQ following a handover of responsibilities for the Central Treatment Plant from the EPA to the IDEQ as of that date. The Company currently makes monthly payments of $ 100,000 to the IDEQ as instalments toward the cost of treating water at the Central Treatment Plant. Upon receipt of an invoice from the IDEQ for actual costs incurred, a reconciliation is performed relative to payments made, with an additional payment made or refund received as applicable. The Company accrues $ 100,000 per month based on its estimate of the monthly cost of water treatment. As of December 31, 2024, a prepaid expense of $ 100,000 (December 31, 2023: $ 94,582 ) represents the difference between the estimated cost of water treatment and net payments made by the Company to the IDEQ to date. This balance has been recognized on the consolidated balance sheets as accounts receivable and prepaid expenses and accounts payable. 59 10. Promissory notes payable and convertible debentures On September 22, 2021, the Company issued a non-convertible promissory note of $ 2,500,000 bearing interest of 15 % per annum and payable at maturity. Interest expense for the 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 was made during the year ended December 31, 2023. On February 21, 2023, the Company issued a non-convertible promissory note to a related party of $ 120,000 , and a separate non-convertible promissory note of $ 120,000 to another party. Each promissory note bore fixed interest of $ 18,000 , payable at maturity. Both promissory notes, including interest were settled on March 27, 2023. In June 2023, the Company issued a non-convertible promissory note in the amount of $ 150,000 . The promissory note bore fixed interest of $ 15,000 , 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. Project Finance Package with Sprott On December 20, 2021, the Company executed a non-binding term sheet outlining a $ 50,000,000 project finance package with Sprott. The 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”), a $ 5,000,000 convertible debenture (the “CD1”), and a multi-metals Stream of up to $ 37,000,000 . The CD1 was subsequently increased to $ 6,000,000 , increasing the project financing package to $ 51,000,000 . On June 17, 2022, the Company consummated a new $ 15,000,000 convertible debenture (the “CD2”). As a result, total potential funding from Sprott was further increased to $ 66,000,000 including the RCD, CD1, CD2 and the Stream (together, the “Project Financing Package”). On June 23, 2023, the Company closed the upsized and improved $ 67,000,000 project finance package with Sprott, consisting of a $ 46,000,000 stream and a $ 21,000,000 new debt facility. The newly proposed $ 46,000,000 stream (the “Stream”) was envisaged to have the same economic terms as the previously proposed $ 37,000,000 stream, with a $ 9,000,000 increase in gross proceeds received by the Company, resulting in a lower cost of capital for the Company. The Company also announced a new $ 21,000,000 new debt facility (the “Debt Facility”), available for draw at the Company’s election for two years. As a result, total funding commitments from Sprott was envisaged to increase to $ 96,000,000 including the RCD, CD1, CD2, Stream and debt facility (together, the “Project Financing Package”). 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 $ 6,000,000 and $ 15,000,000 , respectively, will become due. $8,000,000 Royalty Convertible Debenture (RCD) The Company closed the $ 8,000,000 RCD on January 7, 2022. The RCD bears interest at an annual rate of 9.0 %, payable in cash or common stock at the Company’s option, until such time that Sprott elects to convert a royalty, with such conversion option expiring at the earlier of advancement of the Stream or July 7, 2023 (subsequently amended as described below). In the event of conversion, the RCD will cease to exist and the Company will grant a royalty for 1.85 % 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 (the “Sprott Royalty”). A 1.35 % rate will apply to claims outside of these areas. The RCD was initially secured by a share pledge of the Company’s operating subsidiary, Silver Valley, until a full security package was put in place concurrent with the consummation of the CD1. In the event of non-conversion, the principal of the RCD will be repayable in cash. Concurrent 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. The Company determined that the amendments in the terms of the RCD should not be treated as an extinguishment of the RCD, and have therefore been accounted for as a modification. 60 On June 23, 2023, the funding date of the Stream, the RCD was repaid by the Company granting a royalty for 1.85 % of life-of-mine gross revenue (the “Royalty”) from mining claims historically worked as described above. A 1.35 % rate will apply to claims outside of these areas. The Company 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. $6,000,000 Series 1 Convertible Debenture (CD1) The Company closed the $ 6,000,000 CD1 on January 28, 2022, which was increased from the previously-announced $ 5,000,000 . The CD1 bears interest at an annual rate of 7.5 %, payable in cash or common stock at the Company’s option, and matures on July 7, 2023 (subsequently amended, as described below). The CD1 is secured by a pledge of the Company’s properties and assets. Until the closing of the Stream, the CD1 was to be convertible into shares of Company common stock at a price of C$ 0.30 per share, subject to stock exchange approval (subsequently amended, as described below). Alternatively, Sprott may elect to retire the CD1 with the cash proceeds from the Stream. The Company may 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 apply. Concurrent 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. The Company determined that the amendments in the terms of the CD1 should not be treated as an extinguishment of the CD1 and have therefore been accounted for as a modification. Concurrent 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. In 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. As a result 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). The CD1 is convertible into Common Shares at a price of C$ 0.30 per Common Share, subject to stock exchange approval. $15,000,000 Series 2 Convertible Debenture (CD2) The Company closed the $ 15,000,000 CD2 on June 17, 2022. The CD2 bears interest at an annual rate of 10.5 %, payable in cash or common stock at the Company’s option, and matured on March 31, 2025 . The CD2 is secured by a pledge of the Company’s properties and assets, 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 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. Concurrent with the funding of the Stream in June 2023, the Company and Sprott agreed to amend the maturity date of the CD2 from 3 quarterly payments of $ 2,000,000 each beginning June 30, 2024, and $ 9,000,000 on March 31, 2025, to payment in full on March 31, 2026, and that the CD2 would remain outstanding until the new maturity date unless the Company elects to exercise its option of early repayment or Sprott elects to exercise its share conversion option. The Company determined that the amendments to the terms of the CD2 should not be treated as an extinguishment of the CD2 and have therefore been accounted for as a modification. 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). 61 In 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. The CD2 is convertible into Common Shares at a price of C$ 0.29 per Common Share, subject to stock exchange approval. The 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. Consistent with the approach above, the following table summarizes the key valuation inputs as at applicable valuation dates using the binomial lattice methodology based on a Cox-Ross-Rubenstein (“CRR”) approach: Schedule of Key Valuation Inputs Reference (1)(2) Valuation date Maturity date Contractual Interest rate Stock price ($) Expected equity volatility Credit spread Risk-free rate Risk- adjusted rate CD1 note (1)(2)(3) (3) 12-31-23 03-31-26 7.50 % 0.098 115 % 8.41 % 4.18 % 18.89 % CD2 note (1)(2)(3) (3) 12-31-23 03-31-26 10.50 % 0.098 115 % 8.41 % 4.18 % 20.79 % CD1 note (1)(2)(3) (3) 12-31-24 03-31-28 7.50 % 0.113 105 % 4.72 % 4.28 % 15.45 % CD2 note (1)(2)(3) (3) 12-31-24 03-31-29 10.50 % 0.113 105 % 5.03 % 4.34 % 17.89 % Convertible Debenture 12-31-24 03-31-29 10.50 % 0.113 105 % 5.03 % 4.34 % 17.89 % (1) The 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. (2) CD1 carries an instrument-specific spread of 7.23 %, CD2 carries an instrument-specific spread of 9.32 % (3) The 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 $ 0.227 and CD2 is $ 0.219 as of December 31, 2023. The 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 Instrument Description December 31, 2024 December 31, 2023 CD1 $ 5,494,151 $ 5,244,757 CD2 13,898,481 13,458,570 Total $ 19,392,632 $ 18,703,327 The 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 loss. During the year ended December 31, 2024 and December 31, 2023, the Company recognized $ ( 1,107,109 ) and $ 554,787 respectively, within other comprehensive loss. Interest expense for the year ended December 31, 2024 and 2023 was $ 2,030,548 and $ 2,368,233 respectively. At December 31, 2024 interest of $ 510,411 ($ 510,411 at December 31, 2023) is included in interest payable on the consolidated balance sheets. 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. 62 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. $5,000,000 Bridge Loan On December 6, 2022, the Company closed a $ 5,000,000 loan facility with Sprott (the “Bridge Loan”). The Bridge Loan is secured by the same security package in place for the RCD, CD1, and CD2. The Bridge Loan bears interest at 10.5% per annum and matures at the earlier of (i) the advance of the Stream, or (ii) June 30, 2024. In addition, the minimum quantity of metal delivered under the Stream, if advanced, would increase by 5 % relative to amounts previously announced. On June 23, 2023, the Company repaid the outstanding principal and interest on the Bridge Loan recognizing a loss on extinguishment of debt of $ 222,754 in the consolidated statements of loss and comprehensive loss. Interest expense for year ended December 31, 2024, was $ nil compared to $ 346,550 for the year ended December 31, 2023. The Stream On 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. The 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. The Company determined that in accordance with ASC 815 derivatives and hedging, the Stream does not meet the criteria for treatment as a derivate instrument as the quantities of metal to be sold thereunder are not subject to a minimum quantity, and therefore a notional amount is not determinable. The Company has therefore determined that in accordance with ASC 470, the stream obligation should be treated as a liability based on the indexed debt rules thereunder. The initial recognition has been made at fair value based on cash received, net of transaction costs, and the discount rate calibrated so that the future cash flows associated with the Stream, using forward commodity prices, equal the cash received. The measurement of the stream obligation is accounted for at amortized cost with accretion at the discount rate. Subsequent changes to the expected cash flows associated with the Stream will result in the adjustment of the carrying value of the stream obligation using the same discount rate, with changes to the carrying value recognized in the consolidated statements of loss and comprehensive loss. The Company determined the effective interest rate of the Stream obligation to be 10.7 % and recorded accretion expense on the liability of $ 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 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. 63 $21,000,000 Debt Facility On June 23, 2023, the Company closed a $ 21,000,000 debt facility with Sprott which is available for draw at the Company’s election for a period of 2 years. 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. The maturity date of any drawings under the Debt Facility will be June 30, 2030 . 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 . On 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. Silver Loan On 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”). On August 8, 2024, the Company closed the first tranche Silver Loan in the principal amount of $ 16,422,039 , being the 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. The 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 , being the 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 , being the 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 , being the 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 , being the 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 . In 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 . In 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 . In 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 . The 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. 64 The 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 include: Schedule of Estimates Value of Prepayment Option by Assessing Interest Rate Movements Reference Valuation Date Maturity Date Contractual Interest Rate Interest Rate Volatility Risk-free rate Credit Spread Risk-adjusted rate Tranche 1 Aug 8, 2024 Aug 8, 2027 15 % 31.5 % 3.86 % 12.92 % 16.78 % Tranche 2 Sep 25, 2024 Aug 8, 2027 15 % 31.0 % 3.49 % 11.02 % 14.51 % Tranche 3 Nov 6, 2024 Aug 8, 2027 15 % 28.0 % 4.21 % 4.46 % 15.78 % Tranche 4 Nov 8, 2024 Aug 8, 2027 15 % 28.5 % 4.21 % 4.76 % 16.30 % Tranche 5 Dec 30, 2024 Aug 8, 2027 15 % 26.5 % 4.23 % 4.23 % 16.54 % Tranche 1, 2, 3, 4, & 5 Dec 31, 2024 Aug 8, 2027 15 % 26.5 % 4.23 % 4.53 % 16.54 % The resulting fair values of the Silver Loan at December 31, 2024, and as of the issuance date, were as follows: Reference Dec 31, 2024 Aug 8, 2024 Silver Loan $ 31,802,708 $ 13,225,005 The 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. The Company performs quarterly testing of the covenant of the Silver Loan and was in compliance with all such covenants as of December 31, 2024. Other Interest During the year ended December 31, 2024, and December 31, 2023 the Company recognized $ nil and $ 1,708 respectively of other interest expense. 11. Capital stock, warrants and stock options Authorized The total authorized capital is as follows: ● 1,500,000,000 shares of common stock, with a par value of $ 0.000001 per share; and ● 10,000,000 preferred shares with a par value of $ 0.000001 per preferred share Issued and outstanding In 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 ended December 31, 2022. In 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. In 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 plant. The warrant entitled the holder thereof to purchase one share of Common Share of the Company at an exercise price of C$ 0.37 per Warrant at any time on or prior to May 12, 2025. The Company amended the exercise price of the warrants from C$ 0.37 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. During the quarter ended March 31, 2023, the Company recognized a change in derivative liability of $ 400,152 relating to the Teck warrants using the following assumptions: volatility of 120 %, stock price of C$ 0.11 , interest rate of 3.42 % to 4.06 %, and dividend yield of 0 %. 65 In 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. In connection with the March 2023 Offering, each March 2023 Special Warrant is automatically exercisable (without payment of any further consideration and subject to customary anti-dilution adjustments) into one unit of the Company (a “March 2023 Unit”). Each March 2023 Unit consists of one share of common stock of the Company (each, a “Unit Share”) and one common stock purchase warrant of the Company (each, a “Warrant”). Each whole Warrant entitles the holder thereof to acquire one share of common stock of the Company (a “Warrant Share”, and together with the Unit Shares, the “Underlying Shares”) at an exercise price of C$0.15 per Warrant Share until March 27, 2026, subject to adjustment in certain events. In the event that the Registration Statement had not been declared effective by the SEC on or before 5:00 p.m. (EST) on July 27, 2023, each unexercised Special Warrant would be deemed to be exercised on the Automatic Exercise Date into one penalty unit of the Company (each, a “Penalty Unit”), with each Penalty Unit being comprised of 1.2 Unit Shares and 1.2 Warrants. Notice of such effectiveness was received on July 11, 2023, eliminating the potential for issuance of the Penalty Units. In connection with the March 2023 Offering, the Company incurred share issuance costs of $ 846,661 and issued 2,070,258 compensation options (the “March 2023 Compensation Options”). Each March 2023 Compensation Option is exercisable at an exercise price of C$ 0.15 into one Unit Share and one Warrant Share. The 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. In May 2023, the Company issued 1,318,183 shares of common stock in connection with settlement of RSUs. In June 2023, the Company issued 4,449,035 shares of common stock in connection with settlement of RSUs. In June 2023, the Company issued 3,944,364 shares of common stock in connection with its election to satisfy interest payments under the outstanding convertible debentures for the three months ended June 30, 2023. In November 2023, the Company issued 42,000 shares of common stock in connection with settlement of RSUs. In 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. In March 2024, the Company issued 2,546,436 shares of common stock in connection with settlement of RSUs. In April 2024, the Company issued 100,000 shares of common stock in connection with settlement of RSUs. In 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. In 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. In August 2024, in connection with closing of the First Tranche, the Company issued 1,280,591 Warrants to Monetary Metals & Co. The Tranche 1 Warrants will be exercisable until August 8, 2027, at an exercise price of C$ 0.16 . 66 In October 2024, in connection with closing of the Second Tranche, the Company issued 400,000 Warrants to Monetary Metals & Co. The Tranche 2 Warrants will be exercisable until August 8, 2027, at an exercise price of C$ 0.16 . In 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 September 30, 2024. In 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. In October 2024, the Company issued 750,000 shares of common stock in connection with settlement of DSUs. In November 2024, the Company issued 21,000 shares of common stock in connection with settlement of RSUs. In November 2024, in connection with closing of the Third & Fourth Tranche, the Company issued 476,793 Warrants to Monetary Metals & Co. The Tranche 3 & 4 Warrants will be exercisable until August 8, 2027, at an exercise price of C$ 0.12 . For each financing, the Company has accounted for the warrants in accordance with ASC Topic 815 Derivatives and Hedging. The warrants are considered derivative instruments as they were issued in a currency other than the Company’s functional currency of the U.S. dollar. The estimated fair value of warrants accounted for as liabilities was determined on the date of issue and marked to market at each financial reporting period. The change in fair value of the warrant is recorded in the consolidated statement of operations and comprehensive loss as a gain or loss in the change in derivative liability line item and is estimated using the Binomial model. The fair value of the warrant liabilities related to the various tranches of warrants issued during the period were estimated using the Binomial model to determine the fair value using the following assumptions as at December 31, 2024 and December 31, 2023: Schedule of Estimated Using the Binomial Model to Determine the Fair Value of Warrant Liabilities November 2024 warrants December 31, 2024 Grant Date Expected life 950 days 996 days Volatility 95 % 105 % Risk free interest rate 2.96 % 3.14 % Dividend yield 0 % 0 % Share price (C$) $ 0.155 $ 0.125 Fair value $ 32,374 $ 26,752 Change in derivative liability $ 5,622 October 2024 warrants December 31, 2024 Grant Date Expected life 950 days 1,041 days Volatility 95 % 105 % Risk free interest rate 2.96 % 2.84 % Dividend yield 0 % 0 % Share price (C$) $ 0.155 $ 0.16 Fair value $ 25,881 $ 29,780 Change in derivative liability $ ( 3,899 ) 67 August 2024 warrants December 31, 2024 Grant Date Expected life 950 days 1,095 days Volatility 95 % 105 % Risk free interest rate 2.96 % 3.25 % Dividend yield 0 % 0 % Share price (C$) $ 0.155 $ 0.16 Fair value $ 82,857 $ 98,493 Change in derivative liability $ ( 15,636 ) March 2023 warrants December 31, 2024 December 31, 2023 Expected life 451 days 817 days Volatility 24 % 24 % Risk free interest rate 2.96 % 3.88 % Dividend yield 0 % 0 % Share price (C$) $ 0.155 $ 0.11 Fair value $ 915,046 $ 281,085 Change in derivative liability $ 633,961 April 2022 special warrants issuance December 31, 2024 December 31, 2023 Expected life 91 days 457 days Volatility 70 % 110 % Risk free interest rate 2.96 % 3.88 % Dividend yield 0 % 0 % Share price (C$) $ 0.155 $ 0.11 Fair value $ 1 $ 546,592 Change in derivative liability $ ( 546,591 ) $ April 2022 non-brokered issuance December 31, 2024 December 31, 2023 Expected life 91 days 457 days Volatility 70 % 110 % Risk free interest rate 2.96 % 3.88 % Dividend yield 0 % 0 % Share price (C$) $ 0.155 $ 0.11 Fair value $ 1 $ 21,252 Change in derivative liability $ ( 21,251 ) $ June 2022 issuance December 31, 2024 December 31, 2023 Expected life 91 days 457 days Volatility 70 % 110 % Risk free interest rate 2.96 % 3.88 % Dividend yield 0 % 0 % Share price (C$) $ 0.155 $ 0.11 Fair value $ 1 $ 17,589 Change in derivative liability $ ( 17,588 ) 68 February 2021 issuance December 31, 2024 December 31, 2023 Expected life 405 days 771 days Volatility 70 % 110 % Risk free interest rate 2.96 % 3.88 % Dividend yield 0 % 0 % Share price $ 0.155 $ 0.11 Fair value $ 44,465 $ 367,349 Change in derivative liability $ ( 322,884 ) June 2019 issuance December 31, 2024 December 31, 2023 Expected life 365 days 731 days Volatility 70 % 110 % Risk free interest rate 2.96 % 3.88 % Dividend yield 0 % 0 % Share price $ 0.155 $ 0.11 Fair value $ 9,724 $ 226,570 Change in derivative liability $ ( 216,846 ) August 2019 issuance December 31, 2024 December 31, 2023 Expected life 365 days 731 days Volatility 70 % 110 % Risk free interest rate 2.96 % 3.88 % Dividend yield 0 % 0 % Share price $ 0.155 $ 0.11 Fair value $ 14,945 $ 348,211 Change in derivative liability $ ( 333,266 ) Warrants Schedule of Warrant Activity Weighted Weighted Average average Number of exercise price grant date warrants (C$) value ($) Balance, December 31, 2022 162,129,064 $ 0.49 $ 0.17 Issued 51,633,727 0.15 0.05 Exercised ( 10,416,667 ) 0.11 0.12 Expired ( 58,284,148 ) 0.50 0.27 Balance, December 31, 2023 145,061,976 $ 0.37 $ 0.09 Issued 2,157,384 0.15 0.07 Balance, December 31, 2024 147,219,360 $ 0.37 $ 0.09 At December 31, 2024, the following warrants were outstanding: Schedule of Warrants Outstanding Exercise Price Exercise Number of Number of warrants Expiry date price (C$) warrants exercisable April 1, 2025 0.37 40,538,969 40,538,969 December 31, 2025 0.59 32,895,200 32,895,200 February 9, 2026 0.60 17,112,500 17,112,500 February 16, 2026 0.60 2,881,580 2,881,580 March 27, 2026 0.15 51,633,727 51,633,727 August 8, 2027 0.16 1,680,591 1,680,591 August 8, 2027 0.12 476,793 476,793 147,219,360 147,219,360 During the year ended December 31, 2024, 10,416,667 May 2022 Teck warrants were exercised 69 Compensation options At December 31, 2024, the following broker options were outstanding: Schedule of Compensation Options Weighted Number of average broker exercise price options (C$) Balance, December 31, 2022 5,470,799 $ 0.34 Issued – March 2023 Compensation Options (i) 2,070,258 0.15 Expired – August 2020 Compensation Options ( 3,239,907 ) 0.35 Balance, December 31, 2023 4,301,150 0.24 Balance, December 31, 2023 4,301,150 0.24 Expired – February 2024 ( 351,000 ) 0.50 Expired – April 2024 ( 1,879,892 ) 0.30 Balance, December 31, 2024 2,070,258 $ 0.15 (i) The grant date fair value of the March 2023 Compensation Options was estimated at $ 111,971 using the Black-Scholes valuation model with the following underlying assumptions: Schedule of Estimated Using Black-Scholes Valuation Model for Fair Value of Broker Options Grant Date Risk free interest rate Dividend yield Volatility Stock price Weighted average life March 2023 3.4 % 0 % 120 % C$ 0.11 3 years Schedule of Broker Exercise Prices Exercise Number of Grant date Fair value Expiry date price (C$) broker options ($) March 27, 2026 (i) $ 0.15 2,070,258 $ 111,971 2,070,258 $ 111,971 (i) Exercisable into one March 2023 Unit. 70 Stock options The following table summarizes the stock option activity during the years ended December 31, 2024 and 2023: Schedule of Stock Options Weighted average Number of exercise price stock options (C$) Balance, December 31, 2022 9,320,636 $ 0.51 Expired September 30, 2023 ( 200,000 ) 0.60 Expired November 25, 2023 ( 150,000 ) 0.15 Balance, December 31, 2023 8,970,636 $ 0.52 Granted August 1, 2024 87,493 0.16 Expired October 24, 2024 ( 1,575,000 ) 0.60 Expired October 31, 2024 ( 1,037,977 ) 0.34 Balance, December 31, 2024 6,445,152 $ 0.52 (i) On 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 $ 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. The 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 Risk free interest rate Dividend yield Volatility Stock price Weighted average life October 2019 1.54 % 0 % 100 % C$ 0.50 5 years April 2020 0.44 % 0 % 100 % C$ 0.50 5 years February 2021 0.64 % 0 % 100 % C$ 0.34 5 years November 2022 3.22 % 0 % 120 % C$ 0.15 5 years August 2024 3.09 % 0 % 91 % C$ 0.16 5 years The following table reflects the stock options issued and outstanding as of December 31, 2024: Schedule of Actual Stock Options Issued and Outstanding Number of Remaining Number of options Exercise contractual options vested Grant date price (C$) life (years) outstanding (exercisable) fair value ($) 0.55 0.30 5,957,659 5,957,659 1,536,764 0.15 2.90 400,000 400,000 37,387 0.16 4.59 87,493 - 7,242 6,445,152 6,357,659 $ 1,581,393 The vesting of stock options during the year ended December 31, 2024, resulted in stock-based compensation expenses of $ 36,386 ($ 147,592 for the year ended December 31, 2023). 71 12. Income per Share Potentially 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. Schedule of Income Per Share Year ended December 31, 2024 Year ended December 31, 2023 Net loss for the year ( 25,341,623 ) ( 13,432,539 ) Basic loss per share Weighted average number of shares of common stock - basic 340,244,856 280,354,631 Net loss per share – basic ( 0.07 ) ( 0.05 ) 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 for the year ( 25,341,623 ) ( 13,432,539 ) Weighted average number of shares of common stock - basic 340,244,856 280,354,631 Diluted effect: Stock options and RSUs - - Weighted average number of shares of common stock - fully diluted 340,244,856 280,354,631 Net loss per share - fully diluted ( 0.07 ) ( 0.05 ) 13. RSU’s Effective March 25, 2020, the board of directors approved a RSU Plan to grant RSUs to its officers, directors, key employees and consultants. The following table summarizes the RSU activity during the year ended December 31, 2023: Schedule of Restricted Share Units Weighted average grant date fair value Number of per share shares (C$) Unvested as at December 31, 2022 4,822,741 $ 0.22 Granted (i, ii, iii) 10,844,993 0.23 Vested ( 5,809,217 ) 0.24 Forfeited ( 2,813,990 ) 0.20 Unvested as at December 31, 2023 7,044,527 $ 0.24 Granted (iv, v) 9,720,403 0.11 Vested ( 2,667,436 ) 0.23 Forfeited ( 71,000 ) 0.50 Unvested as at December 31, 2024 14,026,494 $ 0.15 (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 of $ 355,420 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. 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 and comprehensive loss. 72 (iv) On 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. (v) On 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. The 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. 14. DSU’s Effective April 21, 2020, the board of directors approved a DSUs Plan to grant DSUs to its directors. The DSU Plan permits the eligible directors to defer receipt of all or a portion of their retainer or compensation until termination of their services and to receive such fees in the form of cash at that time. Upon vesting of the DSUs or termination of service as a director, the director will be able to redeem DSUs based upon the then market price of the Company’s common stock on the date of redemption in exchange for cash. The following table summarizes the DSU activity during the years ended December 31, 2024 and 2023: Schedule of Deferred Share Units Weighted average grant date fair value Number of per share shares (C$) Unvested as at December 31, 2022 2,710,000 $ 0.97 Granted (i, ii) 1,857,280 0.22 Vested (i, iii, iv) ( 3,071,826 ) 0.55 Unvested as at December 31, 2023 1,495,454 $ 0.90 Granted (v, vi) 2,865,363 0.13 Vested (ii)(v) ( 4,023,342 ) 0.41 Unvested as at December 31, 2024 337,475 $ 0.16 (i) On July 4, 2023, 1,611,826 DSUs were issued to the Company’s Directors which vested immediately. (ii) On July 6, 2023, 245,454 DSUs were issued to one of the Company’s Directors which vests on July 6, 2024. (iii) On April 21, 2023, 1,250,000 DSUs for one of the Company’s Directors vested. (iv) On July 1, 2023, 210,000 DSUs for one of the Company’s Directors vested. (v) On April 1, 2024, 1,907,840 DSUs were issued to the Company’s Directors which vested immediately. 73 (vi) On 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. The 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 31, 2023. 15. Commitments and contingencies As stipulated in the agreement with the EPA and as described in Note 9, the Company is required to make two types of payments to the EPA and IDEQ, one for historical water treatment cost-recovery to the EPA, and the other for ongoing water treatment. Water treatment costs incurred through December 2021 are payable to the EPA, and water treatment costs incurred thereafter are payable to the IDEQ. The IDEQ (as done formerly by the EPA) invoices the Company on an annual basis for the actual water treatment costs, which may exceed the recognized estimated costs significantly. When the Company receives the water treatment invoices, it records any liability for actual costs over and above any estimates made and adjusts future estimates as required based on these actual invoices received. The Company is required to pay for the actual costs regardless of the periodic required estimated accruals and payments made each year. On July 28, 2021, a lawsuit was filed in the U.S. District Court for the District of Idaho brought by Crescent Mining, LLC (“Crescent”). The named defendants include Placer Mining, Robert Hopper Jr., and the Company. The lawsuit alleges that Placer Mining and Robert Hopper Jr. intentionally flooded the Crescent Mine during the period from 1991 and 1994, and that the Company is jointly and severally liable with the other defendants for unspecified past and future costs associated with the presence of acid mine drainage in the Crescent Mine. The plaintiff has requested unspecified damages. On September 20, 2021, the Company filed a motion to dismiss Crescent’s claims against it, contending that such claims are facially deficient.  On March 2, 2022, Chief U.S. District Court Judge, David C. Nye granted in part and denied in part the Company’s motion to dismiss. The court granted the Company’s motion to dismiss in respect of Crescent’s cost recovery claim under CERCLA Section 107(a), and declaratory judgment, tortious interference, trespass, nuisance and negligence claims. These claims were dismissed without prejudice. The court denied the motion to dismiss filed by Placer Mining Corp. for Crescent’s trespass, nuisance and negligence claims. Crescent later filed an amended complaint on April 1, 2022. Placer Mining Corp. and Bunker Hill Mining Corp are named as co-defendants. Bunker Hill responded to the amended filing, refuting and denying all allegations made in the complaint except those that are assertions of fact as a matter of public record. The Company believes Crescent’s lawsuit is without merit and intends to vigorously defend itself, as well as Placer Mining Corp. pursuant to the Company’s indemnification of Placer Mining Corp in the sale and purchase agreement executed between the companies for the Mine on December 15, 2021. The lawsuit is currently in the discovery phase, in which information is gathered and exchanged. 16. Income taxes At December 31, 2024, and December 31, 2023, the Company had no accrued interest and penalties related to uncertain tax positions. The income 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, 2024 and December 31, 2023 as follows: Schedule of Income Tax Provision Year Year Ended Ended December 31, December 31, 2024 2023 (Loss) before income taxes $ ( 26,880,213 ) $ ( 10,843,949 ) Expected income tax (recovery) ( 5,644,845 ) ( 2,277,229 ) Change in estimates in respect of prior periods 104,648 ( 340,768 ) Change in tax rate 135,998 - Change in fair value of derivative liability ( 176,059 ) ( 495,605 ) State and local taxes, net of federal benefit ( 463,643 ) 463,643 Loss on debt settlement 37,723 124,154 Other 39,876 ( 75,605 ) Change in valuation allowance 4,427,712 5,190,000 Total $ ( 1,538,590 ) $ 2,588,590 74 The components of deferred tax assets and liabilities are as follows: Schedule of Components of Deferred Tax Assets and Liabilities December 31, December 31, 2024 2023 Deferred tax assets: Net operating loss carryforwards $ 9,692,247 $ 15,583,299 Mining interests 7,097,179 7,000,260 EPA liabilities 2,282,217 2,565,870 Stream debenture 15,212,680 13,903,560 Lease liabilities 67,178 113,990 Other deferred tax assets 2,489,658 993,979 Total deferred tax assets 36,841,159 40,160,958 Valuation allowance ( 35,631,961 ) ( 29,214,112 ) Total deferred tax assets 1,209,198 10,946,846 Deferred tax liabilities: Deferred revenue - ( 12,526,577 ) Convertible debentures ( 429,087 ) ( 615,508 ) Right of use assets and lease obligations ( 202,381 ) ( 167,506 ) Equipment ( 577,730 ) ( 224,553 ) Unrealized foreign exchange gain - ( 1,292 ) Total deferred tax liabilities ( 1,209,198 ) ( 13,535,436 ) Net deferred tax liabilities $ - $ ( 2,588,590 ) The potential income tax benefit of net deferred tax assets has been offset by a full valuation allowance. At 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. 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. The 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. The 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 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. The tax years that remain subject to examination by major taxing jurisdictions are those for the years ended December 31, 2015 through 2024. 75 17. Operating Expenses Schedule of Operating Expenses 2024 2023 Year Ended December 31 2024 2023 Operating expenses General administration expenses $ 11,709,118 $ 7,995,201 Salaries, wages, and consulting fees 3,940,024 3,605,373 Total $ 15,649,142 $ 11,600,574 18. Related party transactions The Company’s key management personnel have the authority and responsibility for planning, directing and controlling the activities of the Company and consists of the Company’s executive management team and management directors. Schedule of Related Party Transactions Year Ended Year Ended December 31, December 31, 2024 2023 Consulting fees, wages and bonus $ 1,400,278 $ 1,104,075 At 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. (i) 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. During 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. The vesting of these RSUs resulted in stock-based compensation of $ 102,198 for the year ended December 31, 2024. During 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. During the year ended December 31, 2023, 894,199 RSUs were issued to Richard Williams which vested immediately. The vesting of these RSUs resulted in stock-based compensation of $ 157,765 for the year ended December 31, 2023. (ii) 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 liabilities. During 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. The vesting of these RSUs resulted in stock-based compensation of $ 114,973 for the year ended December 31, 2024. During 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. 76 During the year ended December 31, 2023, 945,841 RSUs were issued to Sam Ash which vested immediately. The vesting of these RSUs resulted in stock-based compensation of $ 166,876 for the year ended December 31, 2023. (iii) 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, 2024, 672,450 RSUs were issued to Gerbrand van Heerden which vested on January 26, 2025. The vesting of these RSUs resulted in stock-based compensation of $ 46,448 for the year ended December 31, 2024. During 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. (iv) 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. During 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. During the year ended December 31, 2023, 902,365 RSUs were issued to David Wiens which vested immediately. The vesting of these RSUs resulted in stock-based compensation of $ 159,206 for the year ended December 31, 2023. (v) 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 April 1, 2024, the Company issued 476,960 DSU’s to Pam Saxton which vested immediately. On July 4, 2023, the Company issued 431,739 DSU’s to Pam Saxton which vested immediately. (vi) 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. (vii) 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. (viii) 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. On July 5, 2023, the Company issued 245,454 DSU’s to Paul Smith which vest on July 5, 2024. (ix) 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. On 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 Dickson Hall which vested immediately. x) During 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. Sprott Transactions In 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. In 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. In June 2023, all conditions were met for the closing of the Stream, and $ 46,000,000 was advanced to the Company. Concurrent with the funding of the stream in June 2023, the Company repaid the outstanding principal and interest on the Bridge Loan. Concurrent 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. Concurrent 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. 19. Segment Reporting The 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. Schedule of Segment Reporting Information December 31 2024 2023 Total assets $ 97,601,550 $ 61,989,678 Interest income $ 655,125 $ 1,107,093 Interest expense & accretion $ ( 8,091,412 ) $ ( 7,124,527 ) Net (loss) for the year $ ( 25,341,623 ) $ ( 13,432,539 ) 20. Subsequent events Share Issuance On 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. On 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. 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. Warrant Issuance On 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 . Debt Facility On January 17, 2025, the Company drew $ 5,000,000 on the debt facility. On January 31, 2025, the Company drew the final $ 6,000,000 on the debt facility. As consideration for Sprott advancing $ 11,000,000 of the debt facility, the Company granted a royalty for 1.0 % of life-of-mine gross revenue from mining claims considered to be historically worked, contiguous to current accessible underground development, and covered by the Company’s 2021 ground geophysical survey. A 0.70 % rate will apply to claims outside of these areas. Unsecured Promissory Note On March 21, 2025, the company closed 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. The Note will be available in multiple advances, at the discretion of Teck, and is payable on demand from Teck. On March 21, 2025, the Company received $ 763,000 advance from Teck. 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. 77 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”). Teck has agreed to contribute, through a non-brokered private placement, $2 for every $1 raised through the Brokered Offering in aggregate, with a minimum lead order of $ 6,600,000 and total gross proceeds of up to $ 30,000,000 (C$ 43,110,000 )1 (collectively, the “Non-Brokered Offering” and together with the Brokered Offering, the “Private Placements”), subject to shareholder approval, closing of the debt restructuring transactions and other customary closing conditions. 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: a. 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; b. 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. 78 c. 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; d. 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); e. 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; and f. 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, g. 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: a. 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”); b. 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”); c. 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. 79 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Effective September 2, 2014, the Company appointed the firm of MNP LLP, Chartered Professional Accountants, as the Company’s principal independent accountant to audit the Company’s financial statements. The Company has had no disagreements with its accountants that would require disclosure pursuant to Item 304 of Regulation S-K.