Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ☐☒ No ☒☐

Indicate by check mark whether the Registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 (“Exchange Act”) during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐☐

to this Form 10-Q. ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the Registrant is a shell company, as defined in Rule 12b-2 of the Exchange Act. Yes ☐ No ☒

Number of shares of Common Stock outstanding as of August ~~12, 2022:~~14, 2023: ~~219,616,571~~317,444,482

The condensed interim consolidated financial statements of Bunker Hill Mining Corp., (“Bunker Hill”, the “Company”, or the “Registrant”) aa. Nevada corporation, included herein were prepared, without audit, pursuant to rules and regulations of the Securities and Exchange Commission. Because certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.”) were condensed or omitted pursuant to such rules and regulations, these financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, ~~2021, and all amendments thereto.~~2022.


	June 30,			December 31,			June 30,			December 31,
	2022			2021			2023			2022
ASSETS

Current assets
Cash	$	5,601,673		$	486,063		$	35,133,159		$	708,105
Restricted Cash (note 6)		9,476,000			-
Accounts receivable		213,477			112,630
Prepaid expenses (note 6)		567,084			300,813
Short-term deposit (note 3)		1,000,000			68,939
Prepaid mine deposit and acquisition costs (note 5)		-			2,260,463
Prepaid finance costs		-			393,640
Restricted cash								6,476,000			6,476,000
Accounts receivable and prepaid expenses (note 3)								1,222,565			556,947
Total current assets		16,858,234			3,622,548			42,831,724			7,741,052

Non-current assets
Spare parts inventory		341,004			-			341,004			341,004
Equipment (note 3)		481,360			396,894
Right-of-use assets (note 4)		-			52,353
Equipment (note 4)								534,784			551,204
Right-of-use asset (note 4)								102,151			-
Long term deposit								69,015			269,015
Bunker Hill Mine and mining interests (note 5)		14,449,211			1			13,992,896			15,896,645
Process plant (note 3)		4,532,773			-
Process plant (note 4)								9,992,390			8,130,972
Total assets	$	36,662,582		$	4,071,796		$	67,863,964		$	32,929,892

EQUITY AND LIABILITIES

Current liabilities
Accounts payable	$	2,193,493		$	1,312,062		$	2,878,719		$	4,523,502
Accrued liabilities		1,334,849			869,581			644,930			1,500,164
EPA water treatment payable (note 6)		3,847,141			5,110,706
Interest payable (notes 6 and 7)		906,447			409,242
DSU liability (note 12)		551,842			1,531,409
Interest payable (note 7)								27,738			1,154,477
Derivative warrant liability (note 8)								1			903,697
Deferred share units liability (note 10)								861,066			573,742
Derivative special warrant liability (note 8)								12,845,643			-
Promissory notes payable (note 7)		1,500,000			2,500,000			1,095,253			1,500,000
EPA cost recovery payable - short-term (note 6)		-			11,000,000
Current portion of lease liability (note 8)		-			62,277
Total current liabilities		10,333,772			22,795,277			18,353,350			10,155,582

Non-current liabilities
Bridge loan (note 7)								-			4,684,446
Series 1 convertible debenture (note 7)		5,633,253			-			5,812,092			5,537,360
Series 2 convertible debenture (note 7)		14,176,578			-			14,644,406			14,063,525
Stream obligation (note 7)								45,260,844			-
Royalty convertible debenture (note 7)		7,078,596			-			-			10,285,777
EPA cost recovery liability - long-term, net of discount (note 6)		7,072,410			-
Derivative warrant liability (note 9)		11,815,548			15,518,887
Environmental protection agency cost recovery liability, net of discount (note 6)								8,712,435			7,941,466
Deferred tax liability (note 12)								3,745,067			-
Derivative warrant liabilities (note 8)								7,768,394			6,438,679
Total liabilities		56,110,157			38,314,164			104,296,588			59,106,835

Shareholders’ Deficiency
Preferred shares, $0.000001 par value, 10,000,000 preferred shares authorized; Nil preferred shares issued and outstanding (note 9)		-			-
Common shares, $0.000001 par value, 1,500,000,000 common shares authorized; 217,640,683 and 164,435,442 common shares issued and outstanding, respectively (note 9)		216			164
Additional paid-in-capital (note 9)		43,497,878			38,248,618
Accumulated other comprehensive income (note 7)		371,586			-
Deficit accumulated during the exploration stage		(63,317,255	)		(72,491,150	)
Preferred shares, $0.000001 par value, 10,000,000 preferred shares authorized; Nil preferred shares issued and outstanding (note 8)								-			-
Common shares, $0.000001 par value, 1,500,000,000 common shares authorized; 265,810,755 and 229,501,661 common shares issued and outstanding, respectively (note 8)								264			228
Additional paid-in-capital (note 8)								49,538,834			45,161,513
Accumulated other comprehensive income								687,472			253,875
Accumulated deficit								(86,659,194	)		(71,592,559	)
Total shareholders’ deficiency		(19,447,575	)		(34,242,368	)		(36,432,624	)		(26,176,943	)
Total shareholders’ deficiency and liabilities	$	36,662,582		$	4,071,796		$	67,863,964		$	32,929,892

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

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

													2023			2022			2023			2022
	Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
	June 30,						June 30						June 30,						June 30
	2022			2021			2022			2021			2023			2022			2023			2022
Operating expenses
Operation and administration	$	176,892		$	447,463		$	436,604		$	1,285,408		$	2,003,905		$	176,892		$	2,883,897		$	436,604
Exploration		-			4,123,735			-			7,212,037
Mine preparation		1,821,223			-			4,328,302			-			-			1,821,223			-			4,328,302
Legal and accounting		401,318			318,110			764,054			537,218			388,776			401,318			923,687			764,054
Consulting		1,580,429			406,249			3,937,576			884,868			944,292			1,580,429			1,714,877			3,937,576
Loss from operations		(3,979,862	)		(5,295,557	)		(9,466,536	)		(9,919,531	)		(3,336,973	)		(3,979,862	)		(5,522,461	)		(9,466,536	)

Other income or gain (expense or loss)
Change in derivative liability		7,769,211			5,236,792			11,223,219			15,712,168
Interest income														231,133			-			231,133			-
Change in derivative liabilities (note 8)														(13,246,561	)		7,769,211			(9,019,987	)		11,223,219
Gain (loss) on foreign exchange		(249,244	)		103,821			(221,324	)		146,374			(591	)		(249,244	)		(3,479	)		(221,324	)
Gain on FV of debentures		1,813,456			-			1,739,987			-
(Loss) gain on FV of debentures (note 7)														(1,884,232	)		1,813,456			(194,531	)		1,739,987
Gain on EPA settlement		8,614,103			-			8,614,103			-			-			8,614,103			-			8,614,103
Interest expense		(382,370	)		-			(1,117,607	)		-
Gain on debt settlement (note 5)														7,117,420			-			7,117,420			-
Gain on warrant settlement														-			-			214,714			-
Interest expense (note 7)														(1,388,420	)		(382,370	)		(2,713,049	)		(1,117,607	)
Debenture finance costs		(1,099,051	)		-			(1,166,485	)		-			-			(1,099,051	)		-			(1,166,485	)
Finance costs		(455,653	)		-			(455,653	)		-
Finance costs (note 7, 8)														(524,130	)		(455,653	)		(1,100,881	)		(455,653	)
Other income		24,191			-			24,191			-			24,439			24,191			24,439			24,191
Loss on debt settlement		-			-			-			(56,146	)
Net income for the period	$	12,054,781		$	45,056		$	9,173,895		$	5,882,865
Loss on debt modification (note 7)														(99,569	)		-			(99,569	)		-
Loss on debt settlement (note 7)														(241,557	)		-			(491,643	)		-
(Loss) income for the period pre tax													$	(13,349,041	)	$	12,054,781		$	(11,557,894	)	$	9,173,895
Deferred tax expense (note 12)														(3,508,741	)		-			(3,508,741	)		-
Net (loss) income for the period													$	(16,857,782	)	$	12,054,781		$	(15,066,635	)	$	9,173,895

Other comprehensive income, net of tax:
Gain on change in FV on own credit risk		371,586			-			371,586			-
Other comprehensive (loss) income, net of tax:
(loss) gain on change in FV on own credit risk														(373,415	)		371,586			433,597			371,586
Other comprehensive income		371,586			-			371,586			-			(373,415	)		371,586			433,597			371,586
Comprehensive income	$	12,426,367		$	45,056		$	9,545,481		$	5,882,865
Comprehensive (loss) income													$	(17,231,197	)	$	12,426,367		$	(14,633,038	)	$	9,545,481

Dilutive effect of convertible debentures		(836,204	)		-			(865,015	)		-			-			(836,204	)		-			(865,015	)
Dilutive effect of warrant	$	-		$	(175,816	)	$	-		$	(520,066	)
Diluted net income (loss) and comprehensive income (loss) for the period	$	11,590,163		$	(130,760	)	$	8,680,466		$	5,362,799
Dilutive effect of derivative warrant liabilities													$	-		$	-		$	-		$	-
Diluted net (loss) income and comprehensive (loss) income for the period													$	(17,231,197	)	$	11,590,163		$	(14,633,038	)	$	8,680,466

Net income per common share – basic	$	0.06		$	0.00		$	0.05		$	0.04
Net income per common share – fully diluted	$	0.05		$	0.00		$	0.04		$	0.03
Net income (loss) per common share – basic													$	(0.07	)	$	0.06		$	(0.06	)	$	0.05
Net income (loss) per common share – fully diluted													$	(0.07	)	$	0.05		$	(0.06	)	$	0.04

Weighted average common shares – basic		210,586,156			163,677,564			187,638,287			158,916,637			258,236,840			210,586,156			247,170,167			187,638,287
Weighted average common shares – fully diluted		245,879,831			164,381,133			214,210,598			159,944,037			258,236,840			245,879,831			247,170,167			214,210,598

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


	Six Months			Six Months			Six Months			Six Months
	Ended			Ended			Ended			Ended
	June 30,			June 30,			June 30,			June 30,
	2022			2021			2023			2022
Operating activities
Net income (loss) for the period	$	9,173,895		$	5,882,865
Net (loss) income for the period							$	(15,066,635	)	$	9,173,895
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		(135,128	)		761,062
Stock-based compensation (note 9)								975,188			(135,128	)
Depreciation expense		129,445			117,585			89,193			129,445
Change in fair value of warrant liability		(11,223,219	)		(15,712,168	)		9,019,987			(11,223,219	)
Deferred tax expense (note 12)								3,508,741			-
Gain on warrant settlement								(214,714	)		-
Units issued for services		1,060,858			-			111,971			1,060,858
Imputed interest expense on lease liability		1,834			7,827
Finance costs		264,435			-
Interest expense on lease liability (note 7)								5,080			1,834
Financing costs								-			264,435
Foreign exchange loss (gain)		221,324			-			-			221,324
Foreign exchange loss (gain) on re-translation of lease (Note 8)		718			4,485
Foreign exchange loss (gain) on re-translation of lease								-			718
Loss on debt modification								99,569			-
Loss on debt settlement		-			56,146			491,643			-
Amortization of EPA discount		284,087			-
Gain on fair value of convertible debt derivatives		(1,739,987	)		-
Gain on EPA debt extinguishment		(8,614,103	)		-
loss (gain) on fair value of debentures								194,531			(1,739,987	)
Amortization of non-current liabilities								855,969			284,087
Gain on debt settlement								(7,117,420	)		-
Gain on EPA debt settlement								-			(8,614,103	)
Changes in operating assets and liabilities:
Restricted cash		(9,476,000	)		-
Accounts receivable		(100,847	)		-
Deposit on plant demobilization		(1,000,000	)		-
Prepaid finance costs		393,640			-
Prepaid expenses		(617,332	)		79,203
Accounts receivable and prepaid expenses								(470,181	)		(718,179	)
Accounts payable		(23,224	)		565,340			(61,969	)		(23,224	)
Accrued liabilities		465,268			1,210,754			(118,577	)		465,268
Accrued EPA water treatment		(903,565	)		-
Accrued EPA/IDEQ water treatment								-			(903,565	)
Prepaid finance costs								-			393,640
Deposit on plant demobilization								-			(1,000,000	)
EPA cost recovery payable		(2,000,000	)		-			-			(2,000,000	)
Interest payable – EPA		10,341			-
Interest payable		756,614			-			1,041,361			766,955
Net cash used in operating activities		(23,070,946	)		(7,040,266	)		(6,656,263	)		(13,594,946	)

Investing activities
Purchase of spare inventory		(341,004	)		-
Additions to Bunker Hill Mine and mining interests								(514,127	)		(5,524,322	)
Land purchase		(202,000	)		-			-			(202,000	)
Bunker Hill mine purchase		(5,524,322	)		-
Purchase of Process plant		(1,289,477	)		-
Purchase of machinery and equipment		(161,558	)		(94,693	)
Process plant								(3,155,362	)		(1,289,477	)
Purchase of equipment								(60,004	)		(161,558	)
Purchase of spare parts inventory								-			(341,004	)
Net cash used in investing activities		(7,518,361	)		(94,693	)		(3,729,493	)		(7,518,361	)

Financing activities
Proceeds from stream obligation								46,000,000			-
Transaction costs stream obligation								(304,156	)		-
Proceeds from convertible debentures		29,000,000			-			-			29,000,000
Proceeds from issuance of shares, net of issue costs		7,769,745			6,008,672			-			7,769,745
Repayment of promissory note		(1,000,000	)		-
Proceeds from issuance of special warrants								3,661,822			-
Proceeds from warrants exercise								837,459			-
Proceeds from promissory note								390,000			-
Repayment of bridge loan								(5,000,000	)		-
Repayment of promissory notes								(654,315	)		(1,000,000	)
Lease payments		(64,828	)		(64,985	)		(120,000	)		(64,828	)
Net cash provided by financing activities		35,704,917			5,943,687			44,810,810			35,704,917
Net change in cash		5,115,610			(1,191,272	)		34,425,054			14,591,610
Cash, beginning of period		486,063			3,568,661
Cash, end of period	$	5,601,673		$	2,377,389
Cash and restricted cash, beginning of period								7,184,105			486,063
Cash and restricted cash, end of period							$	41,609,159		$	15,077,673

Supplemental disclosures
Cash interest paid							$	322,708		$	-

Non-cash activities
Units issued to settle accounts payable and accrued liabilities	$	228,421		$	188,607
Shares issued to settle interest payable		269,750			-
Accounts payable, accrued liabilities, and promissory notes settled with special warrants issuance							$	874,198		$	228,421
Mill purchase for shares and warrants		3,243,296			-		$	-		$	3,243,296
Units issued to settle DSU/RSU/Bonuses		872,399			-		$	-		$	872,399
Interest payable settled with common shares							$	2,039,282		$	269,750

Reconciliation from Cash Flow Statement to Balance Sheet:
Cash and restricted cash end of period							$	41,609,159		$	15,077,673
Less restricted cash								6,476,000			9,476,000
Cash end of period							$	35,133,159		$	5,601,673

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

Condensed Interim Consolidated Statements of Changes in Shareholders’ Deficiency

																													Accumulated
					Additional			Stock subscriptions received for			Accumulated other												Additional			Stock			other
	Common stock				paid-in-			units to be			comprehensive		Retained						Common stock				paid-in-			subscriptions			comprehensive		Accumulated
	Shares		Amount		capital			issued			income		earnings			Total			Shares		Amount		capital			payable			income		deficit			Total

Balance, December 31, 2022																				229,501,661	$	228	$	45,161,513			-		$	253,875	$	(71,592,559	)	$	(26,176,943	)
Stock-based compensation																				-		-		1,050,105			-			-		-			1,050,105
Compensation options																				-		-		111,971			-			-		-			111,971
Shares issued for RSUs vested																				5,767,218		6		(6	)		-			-		-			-
Shares issued for warrant exercise																				10,416,667		10		907,080			-			-		-			907,091
Shares issued for interest payable																				20,125,209		20		2,308,171			-			-		-			2,308,191
OCI																				-		-		-			-			433,597		-			433,597
Net income (loss) for the period																				-		-		-			-			-		(15,066,635	)		(15,066,635	)
Balance, June 30, 2023																				265,810,755	$	264	$	49,538,834		$	-		$	687,472	$	(86,659,194	)	$	(36,432,624	)

Balance, December 31, 2021		164,435,442	$	164	$	38,248,618		$	-		$	-	$	(72,491,150	)	$	(34,242,368	)		164,435,829	$	164	$	38,248,618		$	-		$	-	$	(72,491,150	)	$	(34,242,368	)
Stock-based compensation		-		-		145,186			-			-		-			145,186
Stock subscription received for units		-		-		-			1,775,790			-		-			1,775,790
Net loss for the period		-		-		-			-			-		(2,880,886	)		(2,880,886	)
Balance, March 31, 2022		164,435,442	$	164	$	38,393,804		$	1,775,790		$	-	$	(75,372,036	)	$	(35,202,278	)
Stock-based compensation		-		-		15,922			-			-		-			15,922			-		-		161,107			-			-		-			161,107
Compensation options		-		-		264,435			-			-		-			264,435			-		-		264,435			-			-		-			264,435
Shares issued for interest payable		1,315,857		1		269,749			-			-		-			269,750			1,315,856		1		269,749			-			-		-			269,750
Shares issued for RSUs vested		933,750		1		(1	)		-			-		-			-			933,750		1		(1	)		-			-		-			-
Non brokered shares issued for $0.30 CAD		1,471,664		1		352,854			-			-		-			352,855
Non brokered shares issued for $0.30 CAD																				1,471,664		1		352,854			-			-		-			352,855
Stock subscription received for units																				-		-		-			1,775,790			-					1,775,790
Special warrant shares issued for $0.30 CAD		37,849,325		38		9,083,719			(1,775,790	)		-		-			7,307,967			37,849,325		38		9,083,719			(1,775,790	)		-		-			7,307,967
Contractor shares issued for $0.30 CAD		1,218,000		1		289,999			-			-		-			290,000
Contractor shares issued for $0.30 CAD																				1,218,000		1		289,999			-			-		-			290,000
Shares issued for Mill purchase		10,416,667		10		1,970,254			-			-		-			1,970,264			10,416,667		10		1,970,254			-			-		-			1,970,264
Issue costs		-		-		(896,009	)		-			-		-			(896,009	)		-		-		(896,009	)		-			-		-			(896,009	)
Warrant valuation		-		-		(6,246,848	)		-			-		-			(6,246,848	)		-		-		(6,246,848	)		-			-		-			(6,246,848	)
Gain on fair value from change in credit risk		-		-		-			-			371,586		-			371,586
Net income for the period		-		-		-			-			-		12,054,781			12,054,781
OCI																				-		-		-			-			371,586		-			371,586
Net income (loss) for the period																				-		-		-			-			-		9,173,895			9,173,895
Net income (loss)																				-		-		-			-			-		9,173,895			9,173,895
Balance, June 30, 2022		217,640,704	$	216	$	43,497,878		$	-		$	371,586	$	(63,317,255	)	$	(19,447,575	)		217,641,091	$	216	$	43,497,877		$	-		$	371,586	$	(63,317,255	)	$	(19,447,576	)

Balance, December 31, 2020		143,117,068	$	143	$	34,551,133		$	-		$	-	$	(66,088,873	)	$	(31,537,597	)
Stock-based compensation		-		-		620,063			-			-		-			620,063
Shares issued at $0.32 per share		19,576,360		20		6,168,049			-			-		-			6,168,069
Shares issued for debt settlement at $0.45 per share		417,720		-		188,145			-			-		-			188,145
Shares issued for RSUs vested		437,332		-		-			-			-		-			-
Issue costs		-		-		(159,397	)		-			-		-			(159,397	)
Warrant valuation		-		-		(3,813,103	)		-			-		-			(3,813,103	)
Net income for the period		-		-		-			-			-		5,837,809			5,837,809
Balance, March 31, 2021		163,548,480	$	163	$	37,554,890		$	34,551,133		$	-	$	(60,251,064	)	$	(22,696,011	)
Beginning balance, value		163,548,480	$	163	$	37,554,890		$	34,551,133		$	-	$	(60,251,064	)	$	(22,696,011	)
Stock-based compensation		-		-		280,720			-			-		-			280,720
Shares issued for RSUs vested		233,057		-		-			-			-		-			-
Net income for the period		-		-		-			-			-		45,056			45,056
Balance, June 30, 2021		163,781,537	$	163	$	37,835,610		$	34,551,133		$	-	$	(60,206,008	)	$	(22,370,235	)
Ending balance, value		163,781,537	$	163	$	37,835,610		$	34,551,133		$	-	$	(60,206,008	)	$	(22,370,235	)
Balance																				217,641,091	$	216	$	43,497,877		$	-		$	371,586	$	(63,317,255	)	$	(19,447,576	)

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

Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)

Bunker Hill Mining Corp. (the “Company”) was incorporated under the laws of the state of Nevada, U.S.A. on February 20, 2007, under the name Lincoln Mining Corp. Pursuant to a Certificate of Amendment dated February 11, 2010, the Company changed its name to Liberty Silver Corp., and on September 29, 2017, the Company changed its name to Bunker Hill Mining Corp. The Company’s registered office is located at 1802 N. Carson Street, Suite 212, Carson City, Nevada 89701, and its head office is located at 82 Richmond Street East, Toronto, Ontario, Canada, M5C 1P1. As of the date of this Form 10-Q, the Company had one subsidiary, Silver Valley Metals Corp. (formerly American Zinc Corp.), an Idaho corporation created to facilitate the work being conducted at the Bunker Hill Mine in Kellogg, Idaho.

The Company was incorporated for the purpose of engaging in mineral exploration, and exploitation activities. It continues to work at developing its project with a view towards putting it into production.

These unaudited condensed interim consolidated financial statements have been prepared on a going concern basis. The Company has incurred losses since inception resulting in an accumulated deficit of $~~63,317,255~~ ~~and further losses are anticipated in the development of its business. Additionally, the Company owes a total of $3,847,141~~ ~~to the Environmental Protection Agency (“EPA”) (see Note 6) for water treatment that is classified as current. The Company also owes a total of $7,072,410~~, net of discount, to the EPA that is classified as long-term debt. The Company does not have sufficient cash to fund normal operations and meet debt obligations for the next 12 months without deferring payment on certain current liabilities and/or raising additional funds. In order to continue to meet its fiscal obligations in the current fiscal year and beyond, the Company must seek additional financing. This raises substantial doubt about the Company’s ability to continue as a going concern. Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The accompanying condensed interim consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Management is considering various financing alternatives including, but not limited to, raising capital through the capital markets, debt, and multi-metals stream financings. These unaudited condensed interim 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.

The ability of the Company to emerge from the exploration stage is dependent upon, among other things, closing on the multi-metals stream transaction (see note 7), obtaining additional financing to continue operations, exploring and developing the mineral properties and the discovery, development, and sale of reserves.

The Company’s operations could be significantly adversely affected by the effects of a widespread global outbreak of epidemics, pandemics, or other health crises, including the recent outbreak of respiratory illness caused by the novel coronavirus (“COVID-19”). The Company cannot accurately predict the impact COVID-19 will have on its operations and the ability of others to meet their obligations with the Company, including uncertainties relating to the ultimate geographic spread of the virus, the severity of the disease, the duration of the outbreak, and the length of travel and quarantine restrictions imposed by governments of affected countries. In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could further affect the Company’s operations and ability to finance its operations.

The Company’s operations could be adversely affected by the effects of the Russia/Ukraine crisis and the effects of sanctions imposed against Russia or that country’s retributions against those sanctions, embargos or further-reaching impacts upon energy prices, food prices and market disruptions. 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 energy bans, embargos and 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.

~~Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)~~

The accompanying unaudited condensed interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, shareholders’ deficiency, or cash flows. It is management’s opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The unaudited condensed interim consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, which contains the annual audited consolidated financial statements and notes thereto, together with the Management’s Discussion and Analysis, for the year ended December 31, ~~2021.~~2022. The ~~financial~~interim results for the ~~three and six months~~period ended June 30, ~~2022~~2023, are not necessarily indicative of the results for the full fiscal year. The unaudited interim condensed consolidated financial statements are presented in United States dollars, which is the Company’s functional currency.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes for items such as mineral reserves, useful lives and depreciation methods, potential impairment of long-lived assets, sale of mineral properties for the accounting of the conversion of the royalty convertible debenture (the “RCD”), deferred income taxes, settlement pricing of commodity sales, fair value of stock based compensation, accrued liabilities, estimation of asset retirement obligations and reclamation liabilities, convertible debentures, stream obligation, and warrants. Estimates are based on historical experience and various other assumptions that the Company believes to be reasonable. Actual results could differ from those estimates.


	June 30,			December 31,			June 30,			December 31,
	2022			2021			2023			2022

Equipment	$	765,529		$	603,972		$	980,575		$	920,571
Equipment, gross		765,529			603,972			980,575			920,571
Less accumulated depreciation		(284,169	)		(207,078	)		(445,791	)		(369,367	)
Equipment, net	$	481,360		$	396,894		$	534,784		$	551,204

The total depreciation expense relating to equipment during the three and six months ended June 30, 2023, was $31,732 and $76,424, respectively. Compared to the three and six months ended June 30, 2022, was $38,692 and $77,091, respectively. ~~Compared to the three and six months ended June 30, 2021 was $34,566~~ ~~and $64,396, respectively.~~

On ~~January 25,~~May 13, 2022, the Company ~~entered into a non-binding Memorandum of Understanding (“MOU”) with a subsidiary of Teck Resources Limited (“Teck”) for~~completed the purchase of a ~~comprehensive~~ package of equipment and parts inventory from ~~its~~Teck Resources Limited’s (“Teck”) Pend Oreille ~~site (the “Pend Oreille Mill”).~~ operation. The package comprises substantially all the mineral processing equipment ~~of value located at the 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 the mill, assay lab, conveyer, field instruments, and electrical spares. ~~The Company paid a $500,000 non-refundable deposit~~ ~~in January 2022.~~

~~On March 31, 2022, the Company reached an agreement to satisfy the remaining purchase price by way of an equity issuance of the Company. Teck received~~ ~~10,416,667~~ ~~units of the Company (the “Teck Units”) at a deemed issue price of C$0.30~~ per unit. Each Teck Unit consists of one common share of the Company and one common share purchase warrant (the “Teck Warrants”). Each whole Teck Warrant entitles the holder to acquire one common share at a price of C$~~0.37~~ ~~per common share for a period of three years. The equity issuance and purchase of the mill occurred on May 13, 2022.~~

~~Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)~~

The process plant was purchased in an assembled state, ~~in its current location, including~~and included major processing systems, significant components, and a large inventory of spare parts. The Company ~~intends to disassemble~~has disassembled and ~~transport~~transported it to the Bunker Hill site, and will be reassembling it as an integral part of the Company’s future operations. The Company determined that the transaction should be accounted for as an asset acquisition, with the process plant representing a single asset, with the exception of the inventory of spare parts, which has been separated out and appears on the balance ~~sheet~~sheets as a ~~current~~non-current asset in accordance with ~~a preliminary~~the purchase price allocation. As the plant is demobilized, transported and reassembled, installation and other costs associated with these activities will be captured and capitalized as components of the asset.

~~Additionally, at June 30, 2022, the Company has paid a refundable deposit of $1,000,000~~ ~~to Teck as security while demobilization activities are ongoing. This is classified as a short-term deposit on the balance sheet.~~

On June 30, 2023, the Company made the final payment of $4. 545,626 to D’Angelo International LLC to complete the purchase of a ball mill for a total $~~Right-of-Use Asset~~745,626 (inclusive of two previously paid deposits of $100,000 from the Company to D’Angelo International LLC). The ball mill is capable of delivering the 1,800 ton per day mine plan envisaged in the Company’s Prefeasibility Study, and subject to future detailed engineering and mine planning, the mill could also potentially support a throughput increase.

The total depreciation expense during the three and six months ended June 30, ~~2022~~2023, was $~~24,442~~6,385 and $~~52,353~~12,769, respectively. Compared to the three and six months ended June 30, ~~2021~~2022, was $~~26,594~~24,442 and $~~53,189~~52,353, (relating to an expired lease) respectively.

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

Prior to purchasing the Mine, the Company had entered into a series of agreements with Placer Mining Corporation (“Placer Mining”), the prior owner, for the lease and option to purchase the Mine. The first of these agreements was announced on August 28, 2017, with subsequent amendments and/or extensions announced on November 1, 2019, July 7, 2020, and November 20, 2020.

~~Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)~~

Under the terms of the November 20, 2020, amended agreement (the “Amended Agreement”), a purchase price of $7,700,000 was agreed, with $5,700,000 payable in cash (with an aggregate of $300,000 to be credited toward the purchase price of the Mine as having been previously paid by the Company) and $2,000,000 in Common Shares of the Company. The Company agreed to make an advance payment of $2,000,000, credited towards the purchase price of the Mine, which had the effect of decreasing the remaining amount payable to purchase the Mine to an aggregate of $3,400,000 payable in cash and $2,000,000 in Common Shares of the Company.

The ~~amended~~Amended Agreement also required payments pursuant to an agreement with the ~~EPA~~Environmental Protection Agency (“EPA”) whereby for so long as the Company leases, owns and/or occupies the Mine, the Company would make payments to the EPA on behalf of Placer Mining in satisfaction of the EPA’s claim for historical water treatment cost recovery ~~in accordance with~~as per the Settlement Agreement reached with the EPA in 2018. Immediately prior to the purchase of the Mine, the Company’s liability to EPA in this regard totaled $~~11,000,000~~.$11,000,000.

The Company completed the purchase of the Mine on January 7, 2022. The terms of the purchase price were modified to $5,400,000 in cash, ~~(previously~~from $3,400,000 of cash and $2,000,000 of Common ~~Shares).~~Shares. Concurrent with the purchase of the Mine, the Company assumed incremental liabilities of $8,000,000 to the EPA, consistent with the terms of the amended Settlement Agreement with the EPA that was executed in December 2021 (see “EPA Settlement Agreement” section below).

The $5,400,000 contract cash paid at purchase was the $7,700,000 less the $2,000,000 deposit and $300,000 credit given by the seller for prior years’ maintenance payments.

Commencing on October 1, 2022, the Company capitalizes mine development. Through June 30, 2023, a total of $1,517,526 had been capitalized.

On June 23, 2023, as consideration for the extinguishment of the RCD, as described in note 7, 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 transaction is 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 June 23, 2023 before consideration of the sale of mineral properties. This analysis utilized a discount rate of 13% and long-term metal prices of $1.09/lb, $0.98/lb and $25.51/oz for zinc, lead and silver respectively, consistent with assumptions utilized in the valuation of the RCD at extinguishment. The Company has recognized a gain of $6,980,932in the condensed interim consolidated condensed interim consolidated statements of (loss) income and comprehensive income.

~~Management has determined the purchase to be an acquisition of a single asset as guided by ASU 805-10.~~

On March 3, 2022, the Company purchased a 225-acre surface land parcel for $202,000 which includes the surface rights to portions of 24 patented mining claims, for which the Company already owns the mineral rights.

During the six months ended June 30, 2023, the Company entered into a lease agreement with C & E Tree Farm LLC for the lease of a land parcel overlaying a portion of the Company’s existing mineral claims package. The Company is committed to making monthly payments of $10,000 through February 2026. The Company has the option to purchase the land parcel through March 1, 2026, for $3,129,500 less 50% of the payments made through the date of purchase.

6. Environmental Protection Agency ~~Agreement~~ and Water Treatment Liabilities (“EPA”)

As a part of the lease of the Mine with Placer Mining the Company was required to make payments pursuant to an agreement with the ~~Environmental Protection Agency (the “EPA”)~~EPA whereby for so long as the Company leases, owns and/or occupies the Mine, ~~the Company~~it was required to make payments to the EPA on behalf of Placer Mining in satisfaction of the EPA’s claim for cost recovery related to historical treatment costs paid by the EPA from 1995 to 2017. These payments, if all are made, will total $20,000,000. The agreement called for payments starting with $1,000,000 30 days after ~~a fully ratified~~an agreement was signed (which payment was made) followed by $2,000,000 on November 1, 2018, and $3,000,000 on each of the next five anniversaries with a final $2,000,000 payment on November 1, 2024. The November 1, 2018, November 1, 2019, November 1, 2020, and November 1, 2021, payments were not made. As a result, a total of $11,000,000 was outstanding as of December 31, 2021, accounted for within current liabilities. As the purchase of the Bunker Hill Mine (which would trigger the immediate recognition of the remaining liabilities due through November 1, 2024) had not yet taken place, the remaining $8,000,000 cost recovery liabilities were not recognized on the Company’s consolidated balance ~~sheet~~sheets as of December 31, 2021.

~~Notes~~Prior to the ~~Condensed Interim Consolidated Financial Statements (Unaudited)~~

~~Through 2021,~~purchase of the Mine, the Company engaged in discussions with the EPA ~~in an effort~~ to reschedule these payments in ways that enable the sustainable operation of the Mine as a viable long-term business.

Effective December 19, 2021, the Company entered into an amended Settlement Agreement between the Company, Idaho Department of Environmental Quality, US Department of Justice, and the EPA (the “Amended Settlement”). Upon the effectivity 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 ~~aforementioned~~ historical environmental ~~response~~ costs. Pursuant to the terms of the Amended Settlement, upon purchase of the Bunker Hill Mine and the satisfaction of financial assurance commitments (as described below), the $19,000,000 of cost recovery liabilities will be paid by the Company to the EPA on the following dates:

In addition to the changes in payment terms and schedule, the Amended Settlement included a commitment by the Company to secure $17,000,000 of financial assurance in the form of performance bonds or letters of credit deemed acceptable to the EPA within 180 days from the effective date of the Amended ~~Settlement Agreement.~~Settlement. Once ~~put~~ in place, the financial assurance can be drawn on by the EPA in the event of non-performance by the Company of its payment obligations under the Amended Settlement (the “Financial Assurance”). The amount of the bonds will decrease over time as individual payments are made.

The Company completed the purchase of the Mine (see note 5) and made the initial $2,000,000 cost recovery payment on January 7, 2022. Concurrent with the purchase of the Mine, the Company assumed the balance of the EPA liability totaling $17,000,000, an increase of $8,000,000.

~~As of March 31, 2022, the financial assurance had not yet been secured, and~~ This was capitalized as ~~such~~ $~~the Company accounted for the $17,000,000 liabilities according~~6,402,425 to the previous payment schedule, resulting in $12,000,000 classified as a current liability and $5,000,000 as a long-term liability. The long-term portion was discounted at an interest rate of 16.5% to arrive at a net presentcarrying value of ~~$3,402,425 after discount.~~the Bunker Hill Mine at time of purchase, comprised of $3,000,000 of incremental current liabilities and $5,000,000 of non-current liabilities (discounted to $3,402,425). See note 5.

During the ~~quarter~~year ended ~~June 30,~~ 2022, ~~the Company was successful in obtaining the final financial assurance. Specifically, a $9,999,000~~ ~~payment bond and a $7,001,000~~ letter of credit were secured and provided to the EPA. This milestone provides for the Company to recognize the effects of the change in terms of the EPA liability as outlined in the December 19, 2021 agreement. ~~Once~~ the financial assurance was put into place, enabling the restructuring of the payment ~~stream~~ under the Amendment ~~occurred~~Settlement with the entire $17,000,000 liability being recognized as ~~long-term in nature. The aforementioned~~long-term. As of June 30, 2023 (unchanged from December 31, 2022), the Company had two payment ~~bond is secured by a $2,475,000 letter~~bonds of ~~credit. The~~ $~~2,475,000~~9,999,000 and $~~7,001,000~~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 $6,476,000 in aggregate are secured by ~~$9,476,000 of~~ cash deposits under an agreement with a commercial ~~bank. These cash deposits~~bank, which comprise the $~~9,476,000~~6,476,000 of restricted cash shown within current assets as of June 30, ~~2022.~~2023.

Under ASC 470-50, Debt Modifications and Extinguishments, the Company performed a comparison of NPV’s of the pre-settlement Cost Recovery obligation to the post-settlement schedule of Cost Recovery obligation to determine this was an extinguishment of debt. The Company recorded ~~a gain~~accretion expense on ~~extinguishment of debt totaling $8,614,103. The old debt, including any discount, was written off and~~ the ~~new payment stream of the amended $17,000,000~~ ~~table, including the new discount of $9,927,590~~ ~~using the effective interest rate of 19.95% was recorded to result in a net~~ liability of $~~7,072,410~~396,663~~, which is due long-term.~~ and $770,969 for the three and six months ended June 30, 2023, respectively, bringing the net liability to $8,712,435 (previously accrued interest of $154,743) as of June 30, 2023.

~~Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)~~

Separate to the cost recovery ~~liabilities~~liability outlined above, the Company is responsible for the payment of ongoing water treatment charges. Water treatment charges incurred through December 31, 2021, ~~are~~were payable to the EPA, and charges thereafter are payable to the Idaho Department of Environmental Quality (“IDEQ”) ~~given~~following a handover of responsibilities for the Central Treatment Plant from the EPA to the IDEQ as of that date.

The Company ~~previously estimated a balance due~~currently makes monthly payments of $100,000 to the ~~EPA~~IDEQ as instalments toward the cost of $~~5,110,706~~ ~~for ongoing~~treating water ~~treatment through December 31, 2021. During~~at the ~~six months ended June 30, 2022, the Company received~~Central Treatment Plant. Upon receipt of an invoice from the ~~EPA~~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 June 30, 2023, a prepaid expense of $60,000 (December 31, 2022: $170,729) represents the difference between the estimated cost of water treatment ~~through October 2021. As a result,~~and net payments made by the Company ~~reversed its previous accruals for this period and adjusted its estimated charges for November and December 2021. Through recent discussions with the EPA, the Company has confirmed that payments~~ to the IDEQ ~~for water treatment charges cannot be netted against invoices payable~~ to date. This balance has been recognized on the ~~EPA. After taking this into account, the additional invoice received from the EPA,~~condensed interim balance sheets as accounts receivable and ~~a $~~prepaid expenses.

~~1,000,000~~ ~~payment made in April 2022, the Company has estimated water treatment payables to the EPA of $~~

~~3,847,141~~ ~~as of June 30, 2022 which is reflected in current liabilities.~~

~~For water treatment charges beginning January 2022, the Company makes a monthly accrual of $80,000~~ ~~to cover the IDEQ’s estimated costs of treating water at the water treatment facility. The Company also pays an agreed-upon monthly amount of $140,000, with a true-up to be recorded and paid by the Company once the actual annual costs are determined each year. At June 30, 2022, the Company has accrued $480,000~~ ~~for water treatment costs to IDEQ and has prepaid $840,000~~ ~~leaving a net prepaid of $360,000~~ ~~which is included in prepaids on the unaudited condensed interim consolidated balance sheet.~~

On September 22, 2021, the Company issued a non-convertible promissory note ~~in the amount~~ of $2,500,000 bearing interest of 15% per annum and payable at maturity. ~~The promissory note was scheduled to mature on~~ ~~March 15, 2022; however, the note holder agreed to accept $500,000~~ payment, which the Company paid, by April 15, 2022, and the remaining principal and interest was deferred to June 20, 2022. Prior to the revised maturity of June 20, 2022, the note holder agreed to accept a further $~~500,000~~ ~~payment by June 30, 2022, which the Company paid, and the remaining principal and interest was deferred to November 30, 2022.~~ The Company purchased a land parcel for approximately $202,000 on March 3, 2022, which may be used as security for the promissory note. The promissory note was originally scheduled to mature on March 15, 2022, however, was extended multiple times and is currently due on December 31, 2023. Principal payments of $1,000,000 in aggregate were made in the year ended December 31, 2022. Principal payment of $504,315 was made during the 6 months ended June 30, 2023. 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 modification of debt in the condensed interim consolidated statements of income.

On February 21, 2023, the Company issued a non-convertible promissory note to a related party of $120,000, and a separate non-convertible promissory note of $120,000 to another party. Each promissory note bore fixed interest of $18,000 per annum, payable at maturity, which was the earlier of one year or the receipt of an equity or debt financing. Both promissory notes, including interest, were settled on March 27, 2023.

In June 2023, the Company issued a non-convertible promissory note in the amount of $150,000. The promissory note bore fixed interest of $15,000 per annum, payable at maturity, 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.

At June 30, ~~2022,~~2023, the Company owes $~~1,500,000~~1,095,253 in promissory notes payable, ~~and~~which is included in current liabilities on the condensed interim consolidated balance ~~sheet.~~sheets. Interest expense for the three and six months ended June 30, 2023, was $54,931 and $110,411 respectively. Compared to the three and six months ended June 30, 2022, ~~and 2021~~ was $~~167,877~~92,466 and $~~nil~~167,877, respectively. At June 30, ~~2022 interest~~2023 financing costs of $~~270,616~~3,151 ($384,041 at December 31, 2022) is included in interest payable on the condensed ~~consolidated~~interim balance sheet. The effective interest rate of the promissory note is 15%.

Project Finance Package with Sprott Private Resource Streaming & Royalty Corp. (“SRSR”)

On December 20, 2021, the Company executed a non-binding term sheet outlining a $50,000,000 project finance package with ~~Sprott Private Resource Streaming and Royalty Corp. (“SRSR”).~~SRSR.

The non-binding term sheet with SRSR outlined a $50,000,000 project financing package that the Company ~~expects~~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~~Stream of up to $37,000,000 ~~(the “Stream”)~~. The CD1 was subsequently increased to $6,000,000, increasing the project financing package to ~~$51,000,000~~$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 SRSR was further increased to $66,000,000 including the RCD, CD1, CD2 and the Stream (together, the “Project Financing Package”).

On May 23, 2023, the Company announced an upsized and improved $67,000,000 project finance package with SRSR, 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 SRSR 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 to be repaid from the proceeds of the Stream. The parties also agreed to extend the maturities of the CD1 and CD2 to March 31, 2026, when the full $6 million and $15 million, respectively, will become due.

On June 23, 2023, the Project Financing Package and related transactions closed, consistent with the Company’s announcement of May 23, 2023. The Company incurred $254,220 of financing costs on the condensed interim consolidated statements of (loss) income and comprehensive income relating to the modification of CD1, CD2, the extinguishment of RCD and the closing of the $21,000,000 debt facility.

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 Shares at the Company’s option, until such time that SRSR 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 “SRSR 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.

~~Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)~~

Concurrent with the funding of the CD2 in June 2022, the Company and SRSR 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 ~~modifications.~~a modification.

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 recorded a gain on sale of mineral properties of $6,980,932 in the condensed interim consolidated statements of income (loss). Additionally, on settlement of the RCD, $347,499 of previously deferred to other comprehensive income was recognized in the net income (loss on FV of convertible debentures) on the condensed interim consolidated statement of income (loss). The Royalty Put Option permits SRSR Streaming to resell the royalty to the Company for $8 million upon default under the Series 1 Convertible Debentures or Series 2 Convertible Debentures until such time that they are repaid in full. The Company has accounted for the Royalty as a sale of mineral properties (refer to Note 5 for further detail).

The Company closed the $6,000,000 CD1 on January 28, 2022, which was increased from the ~~previously-announced~~previously announced $5,000,000. The CD1 bears interest at an annual rate of 7.5%, payable in cash or shares at the Company’s option, and ~~matures on~~ initially had a maturity date of the earlier of July 7, 2023 (subsequently amended, as described below). or the closing of the $37,000,000 stream that was announced on December 20, 2021. 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~~assets, and is convertible into Common Shares at a price of C$0.30 per Common Share ~~subject to stock exchange approval (subsequently amended, as described below). Alternatively, SRSR may elect to retire~~at SRSR’s election at any time through the ~~CD1 with the cash proceeds from the Stream.~~maturity date. The Company may elect to repay the CD1 early; if SRSR 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 SRSR 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~~stream is advanced, unless the Company elects to exercise its option of early ~~repayment.~~ repayment or SRSR elects to exercise its share conversion option. The Company determined that the amendments in the terms of the ~~RCD~~CD1 should not be treated as an extinguishment of the CD1, and have therefore been accounted for as ~~modifications.~~a modification.

Concurrent with the funding of the Stream in June 2023, the Company and SRSR 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.

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 shares at the Company’s option, and ~~matures~~matured on March 31, ~~2025~~.2025. The CD2 is secured by a pledge of the Company’s properties and ~~assets.~~assets, and is convertible into Common Shares at a price of C$0.29 per Common Share at SRSR’s election at any time through the maturity date. The repayment terms include 3 quarterly payments of $2,000,000 each beginning June 30, 2024, and $9,000,000 on the maturity date.

~~In light~~Concurrent with the funding of the ~~Series 2 Convertible Debenture financing,~~Stream in June 2023, the ~~previously permitted additional senior secured indebtedness~~Company and SRSR agreed to amend the maturity date of upthe CD2 from 3 quarterly payments of $2,000,000 each beginning June 30, 2024, and $9,000,000 on March 31, 2025, to $15 ~~million~~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 SRSR 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 ~~project finance has been removed.~~as a modification.

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:~~inputs as at applicable valuation dates:

~~Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)~~

The resulting fair values of the CD1, RCD, and CD2 at ~~the issuance dates, March 31, 2022,~~June 30, 2023, and as of ~~June 30,~~December 31, 2022, were as follows:

Instrument Description	Issuance date CD1 and RCD		Issuance date CD2		March 31, 2022		June 30, 2022		June 30, 2023		December 31, 2022
CD1	$	6,320,807	$	-	$	6,303,567	$	5,633,253	$	5,812,092	$	5,537,360
RCD		7,679,193		-		7,886,473		7,078,596		-		10,285,777
CD2		-		15,000,000		-		14,176,578		14,644,406		14,063,525
Total	$	14,000,000	$	15,000,000	$	14,190,040	$	26,888,427	$	20,456,498	$	29,886,662

The total (loss) gain on fair value of debentures recognized during the three and six months ended June 30, ~~2022~~2023 was ($1,884,232) and ($194,531), respectively, and $1,813,456and $1,739,987~~, respectively.~~ for the three and six months ended June 30, 2022, respectively. The portion of changes in fair value ~~that is~~ attributable to changes in the Company’s credit risk is accounted for within other comprehensive ~~income. During~~(loss) income during the three and six months ended June 30, 2023 was ($373,415) and $433,597, respectively. Compared to the three and six months ended June 30, 2022 was $371,255 and $371,255, respectively. Interest expense for the three and six months ended June 30, 2023 was $670,562 and $1,347,411, respectively. Compared to the three and six months ended June 30, 2022 was $348,574 and $588,738, respectively. At June 30, 2023 interest of $nil ($691,890 at December 31, 2022) is included in interest payable on the consolidated balance sheets. For the three and six months ended June 30, 2023 the Company recognized $18,803~~371,255~~and $268,889, respectively, loss on debt settlement in the condensed interim consolidated statements of income (loss) and comprehensive income (loss) as a result of settling interest by issuance of shares. Compared to the three and six months ended June 30, 2022 was $nil ~~within other comprehensive income.~~and $nil, respectively.

The Company performs quarterly testing of the covenants in the ~~RCD,~~ CD1 and CD2 and was in compliance with all such covenants as of June 30, ~~2022.~~2023.

On December 6, 2022, the Company closed a $5,000,000 loan facility with Sprott (the “Bridge Loan”). The Bridge Loan is secured by the same security package in place for the RCD, CD1, and CD2. The Bridge Loan bears interest of 10.5% per annum and matures at the earlier of (i) the advance of the Stream, or (ii) June 30, 2024. In addition, the minimum quantity of metal delivered under the Stream, if advanced, would increase by 5% relative to amounts previously announced.

On June 23, 2023 the Company repaid the outstanding principal and interest on the Bridge Loan recognizing a loss on extinguishment of debt of $222,754 in the condensed interim consolidated statements of (loss) income. At June 30, 2023 interest of $nil ($53,985 at December 31, 2022) is included in interest payable on the condensed interim balance sheets. Interest expense for three and six months ended June 30, 2023, was $168,166 and $346,550 respectively. Compared to the three and six months ended June 30, 2022, was $nil and $nil respectively.

~~A minimum of $27,000,000~~ ~~and a maximum of $37,000,000~~ ~~(the “Stream Amount”) will be made available under~~On June 23, 2023, all conditions were met for the ~~Stream, at the Company’s option, once the conditions of availability~~closing of the Stream, ~~have been satisfied including confirmation of full project funding by an independent engineer appointed by SRSR.~~ and $If46,000,000 was advanced to the ~~Company draws the maximum funding of $37,000,000, the~~Company. The Stream ~~would apply~~applies to 10% of all payable metals sold until a minimum quantity of metal is delivered consisting of, individually, 5563.5 million pounds of zinc, 3540.4 million pounds of lead, and 11.2 million ounces of silver (subsequently amended, as described below). Thereafter, the Stream would apply to 2% of payable metals sold. ~~If the Company elects to draw less than $37,000,000 under the Stream, the percentage and quantities of payable metals streamed will adjust pro-rata.~~ The delivery price of streamed metals will be 20% of the applicable spot price. 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. As~~funding. The Company incurred $824,156 of transactions costs directly related to the Stream which were capitalized against the initial recognition of the Stream of $45,175,844 on the condensed interim 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 condensed interim consolidated statements of income.

The Company determined the effective interest rate of the Stream obligation to be 11.6% and recorded accretion expense on the liability of $85,000 for the three and six months ended June 30, ~~2022,~~2023 ($nil for the ~~Stream had not been advanced.~~

~~Concurrent with~~three and six months 2022), bringing the ~~funding of the CD2 in June 2022, the Company and SRSR agreed that the minimum quantity of metal delivered under the Stream, if advanced, will increase by~~ 10~~% relative~~liability to ~~the amounts noted above.~~$45,260,844

~~The Company had an operating lease for office space that expired in May 2022. Below is a summary of the Company’s lease liability~~ as of June 30, ~~2022:~~2023.

On June 23, 2023 the Company closed a $21,000,000 debt facility with SRSR which is available for draw at the Company’s election for a period of 2 years. As of June 23, 2023, and June 30, 2023, the company has not drawn on the facility. Any amounts drawn will bear interest of 10% per annum, payable annually in cash or capitalized until three years from closing of the Debt Facility at the Company’s election, and thereafter payable in cash only. The maturity date of any drawings under the Debt Facility will be June 23, 2027. For every $5 million or part thereof advanced under the Debt Facility, the Company will grant a new 0.5% life-of-mine gross revenue royalty, on the same terms as the Royalty, to a maximum of 2.0% on the Primary Claims and 1.4% on the Secondary Claims. The Company may buy back 50% of these royalties for $20 million. The Company determined that no recognition is required on the financial statements as of June 30, 2023.

~~Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)~~

In ~~February 2021,~~March 2023, the Company ~~closed~~amended the exercise price and expiry date of 10,416,667 warrants previously issued in a ~~non-brokered~~ private placement ~~of units~~to Teck Resources (“Teck”) on May 13, 2022 in consideration for the Company’s acquisition of the ~~Company (the “February 2021 Offering”), issuing~~ ~~19,576,360~~ ~~units of the Company (“February 2021 Units”) at C$0.40~~ ~~per February 2021 Unit for gross proceeds of $6,168,069~~ ~~(C$7,830,544).~~ ~~Each February 2021 Unit consisted of one common share of the Company and one common share purchase~~Pend Oreille processing plant. The warrant ~~of the Company (each, “February 2021 Warrant”), which entitles~~entitled the holder to ~~acquire a common share~~purchase one Common Share of the Company ~~at C$0.60~~ ~~per common share for a period of~~ ~~five years. In connection with the February 2021 Offering, the Company incurred share issuance costs of $154,630~~ ~~and issued~~ ~~351,000~~ ~~compensation options (the “February 2021 Compensation Options”). Each February 2021 Compensation Option is exercisable into one February 2021 Unit~~ at an exercise price of C$~~0.40~~ 0.37~~for a period of three years.~~

per Warrant at any time on or prior to May 12, 2025. The Company ~~also issued~~ amended the exercise price from C$~~417,720~~0.37 ~~February 2021 Units~~ to ~~settle~~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 $~~132,000~~214,714. In March 2023, Teck exercised all 10,416,667 ~~of accrued liabilities~~warrants at ~~a deemed~~an exercise price of $C$~~0.45~~0.11, for aggregate gross proceeds of C$1,145,834 ~~based on~~to the ~~fair value of~~Company. During the ~~units issued. As a result,~~quarter the Company ~~recorded~~recognized a ~~loss on debt settlement~~change in derivative liability of $~~56,146~~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%.

In ~~April 2022,~~March 2023, the Company closed a brokered private placement of special warrants (the “March 2023 Offering”), issuing ~~37,849,325~~51,633,727 ~~Special Warrants and a non-brokered private placement of~~ ~~1,471,664~~ ~~units~~special warrants of the Company ~~for aggregate gross proceeds of approximately~~(“March 2023 Special Warrants”) at C$~~11,796,297~~0.12~~. Related parties, including management, directors, and consultants, participated in the~~ per March 2023 Special Warrant ~~private placement~~ for ~~a total~~$4,536,020 (C$6,196,047), of which $~~4,809,160~~3,661,822 ~~shares (included~~was received in ~~the total above).~~cash and $874,198 was applied towards settlement of accounts payable, accrued liabilities and promissory notes.

~~The Special Warrants were issued at a price of C$0.30~~ ~~per special warrant. Each~~In connection with the Offering, each March 2023 Special Warrant ~~shall be~~is automatically exercisable (without payment of any further consideration and subject to customary anti-dilution adjustments) into one unit (“March 2023 Unit”) of the Company ~~(a “Brokered Unit”)~~ on the earlier date ~~that is the earlier~~ of: (i) the ~~date that is three (3)~~third business ~~days~~day following the date onupon which the Company has obtained ~~both (A)~~notification that a receipt from the Canadian security commission in each of the each of the provinces of Canada which the purchasers and Agents (as defined herein) are residents where the Special Warrants are sold (the “Qualifying Jurisdictions”) for a (final) short-form prospectus qualifying the distribution of the common stockresale registration statement of the Company ~~(“Common Shares”~~to be filed with the U.S. SEC (the “SEC”) ~~and common stock purchase warrants~~registering the resale of the ~~Company (the “Warrants”)~~Underlying Shares (as defined below) issuable upon exercise of the March 2023 Special Warrants ~~(the “Qualification Prospectus”);~~ and ~~(B) notification that~~ the ~~registration statement, under U.S.~~ securities ~~laws, of the Company filed with the United States Securities and Exchange Commission (the “SEC”)~~issuable thereunder, has been declared effective by the ~~SEC (the “Registration Statement”);~~SEC; and (ii) September 27, 2023 (collectively, the ~~date that is six months following April 1, 2022 (the “Closing ‎Date”~~“Automatic Exercise Date”). , subject to compliance with U.S. securities laws.

Each ~~unit~~March 2023 Unit consists of one ~~common~~ share of Common Share of the Company (each, a “Unit Share”) and one ~~warrant.~~common stock purchase warrant of the Company (each, a “Warrant”). Each ~~warrant~~whole Warrant entitles the holder thereof to acquire one ~~common share for~~Common Share of the Company (a “Warrant Share”, and together with the Unit Shares, the “Underlying Shares”) at an exercise price of C$~~0.37~~0.15 per Warrant Share until ~~April 1, 2025. The warrants shall also be exercisable on a cashless basis~~March 27, 2026, subject to adjustment in certain events. In the event that the Registration Statement has not been ~~made~~declared effective by the SEC ~~prior to the date of exercise.~~

~~Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)~~

On May 31, 2022 the Company announced that it had received a receipt from the Ontario Securities Commission for its final short-form Canadian prospectus qualifying the distribution of the common stock of the Company and common stock purchase warrants of the Company issuable upon exercise of the special warrants of the Company that were issued on ~~April 1, 2022. The Company also announced that it received notice from the United States Securities and Exchange Commission that its Form S-1 has been declared effective as of May~~or before 5:00 p.m. (EST) on July 27, ~~2022. As a result of obtaining the receipt for the Canadian prospectus and the declaration of effectiveness for the Form S-1,~~2023, each unexercised Special Warrant ~~was automatically~~will be deemed to be exercised on the Automatic Exercise Date into one ~~Common Share and one Warrant without further action on the part~~penalty unit of the ~~holders.~~

~~The non-brokered~~ ~~1,471,664~~ ~~units were issued at~~Company (each, a ~~price~~“Penalty Unit”), with each Penalty Unit being comprised of C$~~0.30~~ ~~per unit. Each unit consists~~1.2 Unit Shares and 1.2 Warrants. Notice of ~~one common share and one warrant. Each warrant entitles~~such effectiveness was received on July 11, 2023, eliminating the ~~holder to acquire one warrant share~~potential for C$~~0.37~~issuance of the Penalty Units. ~~until April 1, 2025.~~

In connection with the ~~special warrants offering,~~March 2023 Offering, the ~~agents earned a cash commission in the amount~~Company incurred share issuance costs of $846,661 and issued 2,070,258 compensation options (the “March 2023 Compensation Options”). Each March 2023 Compensation Option is exercisable at an exercise price of C$~~563,968~~0.12 into one Unit Share and ~~compensation options exercisable~~one Warrant Share. Refer to ~~acquire an aggregate of~~ ~~1,879,892~~ ~~units~~note 15 subsequent events for details on the effectiveness of the ~~Company at C$0.30~~ ~~a unit until April 1, 2024. Each compensation unit consists of one common share~~registration statement and ~~one warrant. Each warrant entitles the holder to acquire one warrant share for C$0.37~~ ~~until April 1, 2024.~~conversion into units.

The Special Warrants issued on March 27, 2023 were converted to ~~In April 2022,~~51,633,727 Common Shares and common stock purchase warrants in the ~~Company issued~~ ~~1,315,856~~third quarter of 2023. As of June 30, 2023, the common shares and common stock purchase warrants had not been issued. The Company determined that in ~~connection~~accordance with ~~its election~~ASC 815 derivatives and hedging, each Special Warrant will be valued and carried as a single instrument, with the periodic changes to ~~satisfy interest payments under~~fair value accounted through earnings, profit and loss until the ~~outstanding convertible debentures for the three months ended March 31, 2022.~~common shares and common stock purchase warrants are issued.

~~In May 2022, the Company issued~~ ~~10,416,667~~ ~~units to Teck Resources Limited in consideration towards the purchase~~

The fair value of the ~~Pend Oreille Processing Plant~~Special Warrant is determined through the valuation of the Unit Share based on the observed price of the Company’s Common Shares, a Level 1 input, together with a valuation of the warrant component of the March 2023 Unit using the Binomial model calibrated with inputs as shown in the table below.

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

~~0.245~~ ~~per unit. Each unit consists~~Schedule of ~~one common share and one warrant. Each warrant entitles~~Estimated Fair Value of Special Warrant Liabilities

For prior financings, excluding the ~~holder to acquire one warrant share for $0.37~~ ~~until May 13, 2025.~~

~~In June 2022, the Company issued~~ ~~1,218,000~~ ~~units to contractors for bonuses accrued during the three months ended~~ March ~~31, 2022. Each unit consists of one common share and one warrant. Each warrant entitles the holder to acquire one warrant share for C$0.37~~ ~~until April 1, 2025.~~

~~For each financing,~~2023 Special Warrants, the Company has accounted for ~~the~~ warrants in accordance with ASC ~~Topic 815.~~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 ~~marks~~marked to market at each financial reporting period. The change in fair value of the warrant is recorded in the ~~unaudited~~ condensed interim consolidated statements of income (loss) and comprehensive income (loss) as a gain or loss and is estimated using the Binomial model.

The fair value of the warrant liabilities ~~as a result~~related to the various tranches of outstanding warrants during the ~~June 2019, August 2019, August 2020, February 2021, April 2022 special warrants, April 2022 non-brokered, May 2022 Teck purchase, and June 2022 contractor private placements~~period were ~~revalued~~estimated using the Binomial model to determine the fair value using the following assumptions as at June 30, ~~2022~~2023 and December 31, ~~2021 using the Binomial model and the following assumptions:~~2022:

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

April 2022 non-brokered issuance	June 30, 2022			December 31, 2021
April 2022 special warrants issuance							June 30, 2023			December 31, 2022
Expected life		1,006 days			-			641 days			822 days
Volatility		120	%		-	%		120	%		120	%
Risk free interest rate		3.14	%		-	%		4.58	%		4.06	%
Dividend yield		0	%		-	%		0	%		0	%
Share price	$	0.20		$	-
Share price (C$)							$	0.23		$	0.17
Fair value	$	137,046		$	-		$	3,284,658		$	2,406,104
Change in derivative liability	$	-		$	-		$	878,554

~~Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)~~

May 2022 Teck issuance	June 30, 2022			December 31, 2021
April 2022 non-brokered issuance							June 30, 2023			December 31, 2022
Expected life		1,048 days			-			641 days			822 days
Volatility		120	%		-	%		120	%		120	%
Risk free interest rate		3.14	%		-	%		4.58	%		4.06	%
Dividend yield		0	%		-	%		0	%		0	%
Share price	$	0.20		$	-
Share price (C$)							$	0.23		$	0.17
Fair value	$	991,063		$	-		$	127,713		$	93,553
Change in derivative liability	$	-		$	-		$	34,160

June 2022 issuance	June 30, 2022			December 31, 2021			June 30, 2023			December 31, 2022
Expected life		1,006 days			-			641 days			822 days
Volatility		120	%		-	%		120	%		120	%
Risk free interest rate		3.14	%		-	%		4.58	%		3.72	%
Dividend yield		0	%		-	%		0	%		0	%
Share price	$	0.20		$	-
Share price (C$)							$	0.23		$	0.17
Fair value	$	113,425		$	-		$	105,701		$	77,429
Change in derivative liability	$	-		$	-		$	28,272

February 2021 issuance	June 30, 2022			December 31, 2021			June 30, 2023			December 31, 2022
Expected life		1,320 days			1,501 days			955 days			1,136 days
Volatility		120	%		100	%		120	%		120	%
Risk free interest rate		3.14	%		1.25	%		4.21	%		3.72	%
Dividend yield		0	%		0	%		0	%		0	%
Share price	$	0.20		$	0.37
Share price (C$)							$	0.23		$	0.17
Fair value	$	1,896,071		$	3,483,745		$	1,810,642		$	1,335,990
Change in derivative liability	$	(1,587,675	)	$	(329,358	)	$	474,652

June 2019 issuance ~~(i)~~	June 30, 2022			December 31, 2021			June 30, 2023			December 31, 2022
Expected life		1,280 days			1,461 days			915 days			1,096 days
Volatility		120	%		100	%		115	%		120	%
Risk free interest rate		3.14	%		1.02	%		4.12	%		3.82	%
Dividend yield		0	%		0	%		0	%		0	%
Share price	$	0.20		$	0.37
Share price (C$)							$	0.23		$	0.17
Fair value	$	1,063,208		$	2,067,493		$	961,686		$	725,737
Change in derivative liability	$	(1,004,285	)	$	(1,371,346	)	$	235,949

~~Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)~~

~~Three and Six Months Ended~~Outstanding warrants at June 30, 2023 and June 30, 2022

During the six months ended June 30, 2023, 10,416,667 May 2022 Teck warrants were exercised. During the six months ended June 30, 2022, 239,284 February 2020 broker warrants expired.

					Number of
	Exercise		Number of		warrants		Exercise		Number of		Number of warrants
Expiry date	price (C$)		warrants		exercisable		price (C$)		warrants		exercisable

August 31, 2023		0.50		58,284,148		58,284,148		0.50		58,284,148		58,284,148
December 31, 2025		0.59		32,895,200		32,895,200		0.59		32,895,200		32,895,200
February 9, 2026		0.60		17,112,500		117,112,500		0.60		17,112,500		17,112,500
February 16, 2026		0.60		2,881,580		2,881,580		0.60		2,881,580		2,881,580
April 1, 2025		0.37		40,358,969		40,358,969		0.37		40,538,969		40,538,969
May 13, 2025		0.37		10,416,667		10,416,667
				162,129,064		162,129,064				151,712,397		151,712,379

~~Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)~~

~~The grant date fair value of the August 2020 and February 2021, and April 2022~~

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

	Exercise		Number of		Fair value		Exercise		Number of		Grant date Fair value
Expiry date	price (C$)		broker options		($)		price (C$)		broker options		($)

August 31, 2023 ⁽ⁱ⁾	$	0.35		3,239,907	$	521,993	$	0.35		3,239,907	$	521,993
February 16, 2024 ⁽ⁱⁱ⁾	$	0.40		351,000	$	68,078	$	0.40		351,000	$	68,078
April 1, 2024 ⁽ⁱⁱⁱ⁾	$	0.30		1,879,892	$	264,435	$	0.30		1,879,892	$	264,435
March 27, 2026^(v)							$	0.15		2,070,258	$	111,971
				5,470,799	$	854,506				7,541,057	$	966,477

The following table summarizes the stock option activity during the six months ended June 30, ~~2022:~~2023:

~~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~~

~~Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)~~

The following table reflects the actual stock options issued and outstanding as of June 30, ~~2022:~~2023:

~~Potentially dilutive securities include convertible loan payable, warrants, broker options,~~

The vesting of stock options during the three and ~~unvested restricted share units (“RSU”). Diluted income per share reflects the assumed exercise or conversion of all dilutive securities using the treasury stock method.~~

~~Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)~~

~~(Expressed~~2023, resulted in ~~United States Dollars)~~ stock based compensation expenses of $34,441 and $93,140 respectively ($66,384 and $168,994 for the three and six months ending June 30, 2022, respectively).

Effective March 25, 2020, the Board of Directors approved a Restricted Share Unit (“RSU”) Plan to grant RSUs to its officers, directors, key employees and consultants.

The following table summarizes the RSU activity during the six months ended June 30, ~~2022:~~2023:

~~400,000~~ ~~RSUs to a certain officer of the Company. The RSUs vest in one fourth increments upon each anniversary of the grant date.~~

The vesting of ~~these RSUs~~RSU’s during the three and six months ending June 30, 2023, resulted in ~~stock-based~~stock based compensation expense of $~~22,663~~419,754 and $~~43,161~~594,724 respectively ($15,922 and $38,859 for the three and six months ~~ended~~ending June 30, 2022, ~~and 2021, respectively, which is included in operation and administration expenses on the condensed interim consolidated statements of income and comprehensive income.~~respectively).

~~(ii) On April 20, 2020, the Company granted~~ ~~200,000~~ ~~RSUs to a certain director of the Company. The RSUs vest in one fourth increments upon each anniversary of the grant date. The vesting of these RSUs resulted in stock-based compensation of $7,834~~ ~~and $14,934~~ for the six months ended June 30, 2022 and 2021, respectively, which is included in operation and administration expenses on the condensed interim consolidated statements of income (loss) and comprehensive income (loss).

~~(iii) On November 16, 2020, the Company granted~~ ~~168,000~~ ~~RSUs to certain directors of the Company. The RSUs vest in one fourth increments upon each anniversary of the grant date. The vesting of these RSUs resulted in stock-based compensation of $8,362~~ ~~and $16,081~~ for the six months ended June 30, 2022 and 2021, respectively, which is included in operation and administration expenses on the condensed interim consolidated statements of income (loss) and comprehensive income (loss).

~~(iv) On December 6, 2020, the Company granted~~ ~~220,990~~ ~~RSUs to a consultant of the Company. The RSUs vest in one sixth increments per month. The vesting of these RSUs resulted in stock-based compensation of $nil~~ ~~and $58,740~~ for the six months ended June 30, 2022 and 2021, respectively, which is included in operation and administration expenses on the condensed interim consolidated statements of income (loss) and comprehensive income (loss).

~~(v) On January 1, 2021, the Company granted~~ ~~735,383~~ ~~RSUs to a consultant of the Company.~~ ~~245,128~~ ~~RSUs vested immediately with the remaining RSUs vesting in one twelfth increments per month. During the year ended 2021, a total of~~ ~~490,258~~ ~~RSUs vested, and in July 2021, the consultant forfeited the remaining~~ ~~245,125~~ ~~unvested RSUs, resulting in a reversal of share-based compensation of $64,870. The vesting of these RSUs resulted in stock-based compensation of $nil~~ ~~and $265,101~~ ~~for the six months ended June 30, 2022 and 2021, respectively.~~

~~(vi) On July 1, 2021, the Company granted~~ ~~17,823~~ ~~RSUs to a consultant of the Company, vesting immediately. The vesting of these RSUs resulted in stock-based compensation of $nil~~ ~~for the six months ended June 30, 2022 and 2021, respectively.~~

~~Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)~~

~~(vii) On August 5, 2021, the Company granted~~ ~~595,228~~ ~~RSUs to consultants of the Company, vesting immediately. The vesting of these RSUs resulted in stock-based compensation of $nil~~ ~~for the six months ended June 30, 2022 and 2021, respectively.~~

~~(viii) On January 10, 2022, the Company granted~~ ~~500,000~~ ~~RSUs to a consultant of the Company, vesting immediately. The vesting of these RSUs resulted in stock-based compensation of $122,249~~ ~~for the six months ended June 30, 2022, which is included in operation and administration expenses on the condensed interim consolidated statements of income (loss) and comprehensive income (loss).~~

~~(ix) On April 29, 2022, the Company granted~~ ~~76,750~~ ~~RSUs to certain consultants of the Company, vesting immediately. The vesting of these RSUs resulted in stock-based compensation of $16,800~~ ~~for the six months ended June 30, 2022, which is included in operation and administration expenses on the condensed interim consolidated statements of income (loss) and comprehensive income (loss).~~

~~(x) On June 30, 2022, the Company granted~~ ~~15,000~~ ~~RSUs to a consultant of the Company, vesting immediately. The vesting of these RSUs resulted in stock-based compensation of $2,328~~ ~~for the six months ended June 30, 2022, which is included in operation and administration expenses on the condensed interim consolidated statements of income (loss) and comprehensive income (loss).~~

Effective April 21, 2020, the Board of Directors approved a Deferred Share Unit (“DSU”) 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 share~~Common Share on the date of redemption in exchange for cash.

The following table summarizes the DSU activity during the six months ended June 30, ~~2022~~2023 and ~~2021:~~2022:

~~Notes to~~The vesting of DSU’s during the ~~Condensed Interim Consolidated Financial Statements (Unaudited)~~

~~Three~~three and ~~Six Months Ended~~six months ending June 30, 2023, resulted in stock based compensation expense of $486,602 and $287,324, respectively (stock based recovery of $695,494 and $895,416 for the three and six months ending June 30, 2022, respectively).

As stipulated in the agreement with the EPA and as described in Note 6, 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 ~~(formerly~~(as done formerly by the EPA) invoices the Company on an annual basis for the actual water treatment costs, which may exceed the recognized estimated costs significantly. When the Company receives the water treatment invoices, it records any liability for actual costs over and above any estimates made and adjusts future estimates as required based on these actual invoices received. The Company is required to pay for the actual costs regardless of the periodic required estimated accruals and payments made each year.

On July 28, 2021, a lawsuit was filed in the US District Court for the District of Idaho brought by Crescent Mining, LLC (“Crescent”). The named defendants include Placer Mining, Robert Hopper Jr., and the Company. The lawsuit alleges that Placer Mining and Robert Hopper Jr. intentionally flooded the Crescent Mine during the period from 1991 and 1994, and that the Company is jointly and severally liable with the other defendants for unspecified past and future costs associated with the presence of ~~AMD~~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 US District Court Judge, David C. Nye granted in part and denied in part the Company’s motion to dismiss. The court granted the Company’s motion to dismiss Crescent’s Cost Recovery claim under CERCLA Section 107(a), Declaratory Judgment, Tortious Interference, Trespass, Nuisance and Negligence claims. 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~~The Company 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 the lawsuit against Placer Mining Corp. is without merit and intends to defend Placer Mining Corp. vigorously 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 court is in the process of ruling with respect to the timeline for next steps in the legal process.~~

The Company incurred income tax expense of $3.5 million for the three and six months ended June 30, 2023, and incurred no income tax expense for the three and six months ended June 30, 2022. The Company’s effective income tax rate for the first six months of 2023 was -30.29% compared to 0.0% for the first six months of 2022. The effective tax rate during the first six months of 2023 rate differed from the statutory rate primarily due to the income tax treatment of the Stream proceeds as deferred revenue compared to its treatment as debt under U.S. GAAP thereby resulting in a decrease of the existing valuation allowance against deferred tax assets related to the utilization of $32.3 million of net operating losses not previously benefitted. The Company maintains a valuation allowance against net operating losses subject to Section 382 and other deferred tax assets. The effective tax rate during the first six months of 2022 rate differed from the statutory rate primarily due to changes in the valuation allowance established to offset net deferred tax assets.

A valuation allowance is provided for deferred tax assets for which it is more likely than not that the related tax benefits will not be realized. The Company analyzes its deferred tax assets and, if it is determined that the Company will not realize all or a portion of its deferred tax assets, it will record or increase a valuation allowance. Conversely, if it is determined that the Company will likely ultimately be able to realize all or a portion of the related benefits for which a valuation allowance has been provided, all or a portion of the related valuation allowance will be reduced.

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.

At June 30, ~~2022~~2023 and June 30, ~~2021,~~2022, $~~1,049,304~~52,148 and $~~69,835~~1,049,304, respectively is owed to key management personnel with all amounts included in accounts payable and accrued liabilities.

On July ~~2022,~~24, 2023, the “March 2023, Special Warrants” automatically converted into one share of common stock of the company and one common stock purchase warrant of the company which entitles each warrant holder to acquire one share of common stock of the Company ~~issued~~ at an exercise price of $~~1,975,482~~0.15 ~~common shares in connection with its election to satisfy interest payments under the outstanding convertible debentures for the three months ending June 30, 2022.~~per warrant share until March 27, 2026.

On July ~~29, 2022, the Company held its Annual General Meeting during which all director nominations~~4, 2023, 6,735,354 RSU’s were granted to employees and ~~other proposals were approved. This included the re-appointment of Dr. Mark Cruise, whose initial appointment was announced on June 30, 2022, replacing Mr. Wayne Parsons.~~ ~~The following notable proposals were approved: (i) an increase in the authorized common share capital~~executives of the ~~Company to~~ ~~1,500,000,000~~ ~~common shares, (ii) authorization for a share consolidation~~Company. The RSU awards vest in one-third increments on March 31 of ~~up to 50:1 if enacted within the following two years,~~2024, 2025 and ~~(iii) an increase in the maximum RSUs issuable under the Company’s Restricted Share Unit plan.~~2026.

On July 4, 2023, 1,611,826 DSU’s were granted to directors of the Company. The DSU awards vest immediately.

On July 6, 2023, 245,454 DSU’s were granted to a director of the Company. The DSU award vests on July 6, 2024.

Item 2. Management’s Discussion and Analysis of Financial Condition or Plan of Operation

Certain statements in this report, including statements in the following discussion, are what are known as “forward looking statements”, which are basically statements about the future. For that reason, these statements involve risk and uncertainty since no one can accurately predict the future. Words such as “plans,” “intends,” “will,” “hopes,” “seeks,” “anticipates,” “expects “and the like often identify such forward looking statements, but are not the only indication that a statement is a forward-looking statement. Such forward looking statements include statements concerning the ~~company’s~~Company’s plans and objectives with respect to the present and future operations of the ~~company,~~Company, and statements which express or imply that such present and future operations will or may produce revenues, income or profits. Numerous factors and future events could cause the ~~company~~Company to change such plans and objectives or fail to successfully implement such plans or achieve such objectives, or cause such present and future operations to fail to produce revenues, income or profits. Therefore, the reader is advised that the following discussion should be considered in light of the discussion of risks and other factors contained in this report and in the ~~company’s~~Company’s other filings with the ~~sec.~~SEC. No statements contained in the following discussion should be construed as a guarantee or assurance of future performance or future results.

Following the outbreak of the COVID-19 coronavirus global pandemic (“COVID-19”) in early 2020, in March 2020 the U.S. Centers for Disease Control issued guidelines to mitigate the spread and health consequences of COVID-19. The Company implemented changes to its operations and business practices to follow the guidelines and minimize physical interaction, including using technology to allow employees to work from home when possible. As long as they are required, the operational practices implemented could have an adverse impact on our results. The negative impact of COVID-19 remains uncertain, including on overall business and market conditions. There is uncertainty related to the potential additional impacts COVID-19 could have on our operations and financial results for the year.

The Company’s operations could be adversely affected by the effects of the escalating Russia/Ukraine crisis and the effects of sanctions imposed against Russia or that country’s retributions against those sanctions, embargos or further-reaching impacts upon energy prices, food prices and market disruptions. 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 energy bans, embargos and 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.

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. On February 11, 2010, the Company changed its name to Liberty Silver Corp and subsequently, on September 29, 2017, the Company changed its name to Bunker Hill Mining Corp. The Company’s registered office is located at 1802 N. Carson Street, Suite 212, Carson City Nevada 89701, and its head office is located at 82 Richmond Street East, Toronto, Ontario, Canada, M5C 1P1, and its telephone number is 416-477-7771. The Company’s website is www.bunkerhillmining.com. Information appearing on the website is not incorporated by reference into this report.

The Company’s sole focus is the development and restart of its 100% owned ~~flagship asset, the~~ Bunker Hill mine (the “Mine”). in Idaho, USA. The Mine remains the largest single producing mine by tonnage in the Silver Valley region of northwest Idaho, producing over 165 million ounces of silver and 5 million tons of base metals between 1885 and 1981. The ~~Bunker Hill~~ Mine is located within Operable Unit 2 of the Bunker Hill Superfund site (EPA National Priorities Listing IDD048340921), where cleanup activities have been completed.

In early 2020, a new management team comprised of former executives from Barrick Gold Corp. assumed leadership of the Company. Since that time, the Company has conducted multiple exploration campaigns, published multiple economic studies, purchased the Bunker Hill Mine, purchased a process plant, and advanced the rehabilitation and development of the Mine. The Company is focused on completing the financing for, and execution of, a potential restart of operations at the Mine.

The Company purchased the ~~Bunker Hill~~ Mine on January 7, 2022 for $5,400,000 in ~~January 2022, as described below.~~

cash. Prior to purchasing the Mine, the Company had entered into a series of agreements with Placer Mining Corporation (“Placer Mining”), the prior owner, for the lease and option to purchase the Mine. The first of these agreements was announced on August 28, 2017, with subsequent amendments and/or extensions announced on November 1, 2019, July 7, 2020, and November 20, 2020.

Under the ~~terms~~most recent of these agreements, the ~~November 20, 2020 amended agreement (the “Amended Agreement”), a purchase price of $7,700,000~~Company was agreed, with $5,700,000 payable in cash (with an aggregate of $300,000 to be credited toward the purchase price of the Mine as having been previously paid by the Company) and $2,000,000 in Common Shares of the Company. The Company agreedrequired to make an advance payment of $2,000,000, credited toward the purchase price of the Mine, which had the effect of decreasing the remaining amount payable to purchase the Mine to an aggregate of $3,400,000 payable in cash and $2,000,000 in Common Shares of the Company.

~~The Amended Agreement also required~~ payments pursuant to an agreement with the U.S. Environmental Protection Agency (“EPA”) whereby for so long as the Company leases, owns and/or occupies the Mine, the Company would make payments to the EPA on behalf of Placer Mining in satisfaction of the EPA’s claim for historical water treatment cost recovery in accordance with the Settlement Agreement reached with the EPA in 2018. Immediately prior to the purchase of the Mine, the Company’s liability to EPA in this regard totaled $11,000,000.

The Company completed the purchase of the Bunker Hill Mine on January 7, 2022. The terms of the purchase price were modified to $5,400,000 in cash, from $3,400,000 of cash and $2,000,000 of Common Shares. Concurrent with the purchase of the Mine, the Company assumed incremental liabilities of $8,000,000 to the EPA, consistent with the terms of the amended Settlement Agreement with the EPA that was executed in December 2021 (see “EPA 2018 Settlement Agreement & 2021 Amended Settlement Agreement” in the “Our Business” section ~~below)~~above).

~~EPA 2018~~In early 2020, a new management team comprised of former executives from Barrick Gold Corp. assumed leadership of the Company. Since that time, the Company conducted multiple exploration campaigns, published multiple economic studies and Mineral Resource Estimates, and advanced the rehabilitation and development of the Mine. In December 2021, it announced a project finance package with Sprott Private Resource Streaming & Royalty Corp. (“SRSR”), an amended Settlement Agreement ~~& 2021 Amended Settlement Agreement~~with the EPA, and the purchase of the Bunker Hill Mine, setting the stage for a restart of the Mine.

Bunker Hill entered into a Settlement Agreement and Order on Consent with the EPA on May 15, 2018. This agreement limits the Company’s exposure to the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) liability for past environmental damage to the mine site and surrounding area to obligations that include:

In December 2021, in conjunction with its intention to purchase the mine complex, the Company entered into an amended Settlement Agreement (the “Amendment”) between the Company, Idaho Department of Environmental Quality, US Department of Justice and the EPA modifying the payment schedule and payment terms for recovery of historical environmental response costs at Bunker Hill Mine incurred by the EPA. WithKey milestones following the purchase of the mine ~~subsequent~~have included the purchase and demobilization of a process plant to site, advancement of engineering and a Prefeasibility Study envisaging the ~~end~~restart of the ~~period,~~Mine, the ~~remaining payments~~completion of the ~~EPA cost recovery liability would be assumed by~~primary portion of the ~~Company, resulting in a total~~ramp decline connecting the 5 and 6 Levels and securing of ~~$19,000,000 liability to the Company, an increase~~$96,000,000 of $8,000,000. The new payment schedule included a $2,000,000 payment to the EPA within 30 days of execution of this amendment, which was made. The remaining $17,000,000 will be paid on the following dates:financing commitments from SRSR.

The resumption of payments in 2024 were agreed in order to allow the Company to generate sufficient revenue from mining activities at the Bunker Hill Mine to address remaining payment obligations from free cash flow.

The changes in payment terms and schedule were contingent upon the Company securing financial assurance in the form of performance bonds or letters of credit deemed acceptable to the EPA totaling $17,000,000, corresponding to the Company’s cost recovery obligations to be paid in 2024 through 2029 as outlined above. Should the Company fail to make its scheduled payment, the EPA can draw against this financial assurance. The amount of the bonds or letters of credit will decrease over time as individual payments are made. If the Company failed to post the final financial assurance within 180 days of the execution of the Amendment, the terms of the original agreement would be reinstated.

During the quarter ended June 30, 2022, the Company was successful in obtaining the financial assurance. Specifically, a $9,999,000 payment bond and a $7,001,000 letter of credit were secured and provided to the EPA. This milestone provides for the Company to recognize the effects of the change in terms of the EPA liability as outlined in the December 19, 2021, agreement. Once the financial assurance was put into place, the restructuring of the payment stream under the Amendment occurred with the entire $17,000,000 liability being recognized as long-term in nature. The aforementioned payment bond and letter of credit are secured by $2,475,000 and $7,001,000 of cash deposits, respectively.

~~Project Finance Package with Sprott Private Resource Streaming & Royalty Corp.~~

On December 20, 2021, the Company executed a non-binding term sheet outlining a $50,000,000 project finance package with Sprott Private Resource Streaming and Royalty Corp. (“SRSR”). The non-binding term sheet with SRSR outlined a $50,000,000 project financing package that the Company expects 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 “Stream”). The CD1 was subsequently increased to $6,000,000, increasing the project financing package to $51,000,000.

Concurrent with the funding of the CD2 in June 2022, the Company and SRSR 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 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 shares 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 Common Shares at a price of C$0.30 per Common Share, subject to stock exchange approval (subsequently amended, as described below). Alternatively, SRSR may elect to retire the CD1 with the cash proceeds from the Stream. The Company may elect to repay the CD1 early; if SRSR elects not to exercise its conversion option at such time, a minimum of 12 months of interest would apply.

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 shares at the Company’s option, and matures on March 31, 2025. The CD2 is secured by a pledge of the Company’s properties and assets. The repayment terms include 3 quarterly payments of $2,000,000 each beginning June 30, 2024, and $9,000,000 on the maturity date.

~~In light of the Series 2 Convertible Debenture financing, the previously permitted additional senior secured indebtedness of up to $15 million for project finance has been removed.~~

A minimum of $27,000,000 and a maximum of $37,000,000 (the “Stream Amount”) will be made available under the Stream, at the Company’s option, once the conditions of availability of the Stream have been satisfied including confirmation of full project funding by an independent engineer appointed by SRSR. If the Company draws the maximum funding of $37,000,000, the Stream would apply to 10% of payable metals sold until a minimum quantity of metal is delivered consisting of, individually, 55 million pounds of zinc, 35 million pounds of lead, and 1 million ounces of silver (subsequently amended, as described below). Thereafter, the Stream would apply to 2% of payable metals sold. If the Company elects to draw less than $37,000,000 under the Stream, the percentage and quantities of payable metals streamed will adjust pro-rata. The delivery price of streamed metals will be 20% of the applicable spot price. 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. As of June 30, 2022, the Stream had not been advanced.

Concurrent with the funding of the CD2 in June 2022, the Company and SRSR agreed that the minimum quantity of metal delivered under the Stream, if advanced, will increase by 10% relative to the amounts noted above.

On January 25, 2022, the Company announced that it had entered into a non-binding Memorandum of Understanding (“MOU”) with Teck Resources Limited (“Teck”) for the purchase of a comprehensive package of equipment and parts inventory from its Pend Oreille site (the “Process Plant”) in eastern Washington State, approximately 145 miles from the Bunker Hill Mine by road. The package comprises substantially all processing equipment of value located at the site, including complete crushing, grinding and flotation circuits suitable for a planned ~1,500 ton-per-day operation at Bunker Hill, and total inventory of nearly 10,000 components and parts for mill, assay lab, conveyer, field instruments, and electrical spares. The Company paid a $500,000 non-refundable deposit in January 2022.

On March 31, 2022, the Company announced that it had reached an agreement with a subsidiary of Teck to satisfy the remaining purchase price for the Process Plant by way of an equity issuance of the Company. Teck will receive 10,416,667 units of the Company (the “Teck Units”) at a deemed issue price of C$0.30 per unit. Each Teck Unit consists of one Common Share and one Common Share purchase warrant (the “Teck Warrants”). Each whole Teck Warrant entitles the holder to acquire one Common Share at a price of C$0.37 per Common Share for a period of three years. The equity issuance and purchase of the Process Plant occurred on May 13, 2022.

The following discussion and analysis provide information that is believed to be relevant to an assessment and understanding of the results of operation and financial condition of the Company for the three and six months ended June 30, ~~2022~~2023 and June 30, ~~2021.~~2022. Unless otherwise stated, all figures herein are expressed in U.S. dollars, which is the Company’s functional currency.

Comparison of the three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022

During the three and six months ended June 30, ~~2022~~2023, and ~~2021,~~2022, respectively, the Company generated no revenue.

During the three and six months ended June 30, ~~2022,~~2023, the Company reported total operating expenses of ~~$3,979,862~~$3,336,973 and $5,522,461, respectively (total operating expenses of $ 3,979,862 and $9,466,536 for the three and six months ending June 30, 2022, respectively).

The decrease in total operating expenses was primarily due to (i) a decrease in mine preparation expenses of $1,821,223, and $4,382,302 (ii) a decrease in consulting and wages expenses of $636,137 and $2,222,699 for the three and six months ending, respectively. ~~Compared~~Mine preparation expenses were $nil in the six months ended June 30, 2023, primarily as a result of the Company determining that costs directly attributed to the mine after September 30, 2022 (upon the release of the prefeasibility study) constituted mine development costs (capitalized to non-current assets) instead of mine preparation costs (expense) given the existence of probable mineral reserves and an economic study incorporating them. The decrease in consulting and wages expenses was impacted by a lower volume of transactions and a lower bonus accrual in the three and six months ended June 30, 2023, as compared to the three and six months ended June 30, ~~2021, the Company reported total operating expenses of $5,295,557 and $9,919,531, respectively.~~2022.

The Company had net loss of $16,857,782 for the three months ended June 30, 2023 (net income of $12,054,781 for the three months ended June 30, 2022). Offsetting the decrease in ~~total~~ operating expenses ~~is primarily~~(as described above), net loss in the three months ended June 30, 2023 was impacted by a $21,015,772, increase in the loss due to change in derivative liability (loss of $13,246,561 for the three months ended June 30, 2023 compared to gain of $7,769,211 for the three months ended June 30, 2022) and a loss of $1,884,232 for the 3 months ending June 30, 2023 relating to the change in fair of convertible debentures compared to a gain of 626,075 for the 3 months ending June 30, 2022). Both changes in fair value were driven by a proportionally greater incline in the Company’s share price for the three months ending June 30, 2023, relative to a decline in share price in the three months ending June 30, 2022. The change in net loss was further impacted by a decrease of $1,496,683 gain on extinguishment in ~~exploration costs and operation and administration costs when~~debt in the three months ending June 30, 2023, compared to the 3 months ending June 30, 2022. A gain of $7,117,420 was recognized in the three months ending June 30, 2023, relating to the sale of mineral properties, compared with a $8,614,103 gain on EPA settlement in the three months ending June 30, 2022. Net loss for the three months ending June 30, 2023, included the initial recognition of a deferred tax liability and ~~six-month periods~~corresponding deferred tax expense relating to the closing of the stream transaction ($3,508,741 for the six months ending June 30, 2023, compared to $nil for the 6 months ending June 30, 2022).

The Company had net loss of $15,066,635 for the six months ended June 30, ~~2021.~~ 2023 (net income of $9,173,895 for the six months ended June 30, 2022). Offsetting the decrease in operating expenses (as described above), net loss in the six months ended June 30, 2023 was impacted by a $20,243,206 increase in the loss due to change in derivative liability (loss of $9,019,987 for the six months ended June 30, 2023 compared to gain of $11,223,2019 for the six months ended June 30, 2022) and a loss of $194,531 for the 3 months ending June 30, 2023 relating to the change in fair of convertible debentures compared to a gain of 552,606 for the 3 months ending June 30, 2022). Both changes in fair value were driven by a proportionally greater incline in the Company’s share price for the six months ending June 30, 2023, relative to a decline in share price in the six months ending June 30, 2022. The change in net loss was further impacted by a decrease of $1,496,683 gain on extinguishment in debt in the six months ending June 30, 2023, compared to the 3 months ending June 30, 2022. A gain of $7,117,420 was recognized in the six months ending June 30, 2023, relating to the sale of mineral properties, compared with a $8,614,103 gain on EPA settlement in the six months ending June 30, 2022. Net loss for the six months ending June 30, 2023, included the initial recognition of a deferred tax liability and corresponding deferred tax expense relating to the closing of the stream transaction ($3,508,741 for the six months ending June 30, 2023, compared to $nil for the 6 months ending June 30, 2022).

The Company ~~was engaged in an active exploration campaign during~~had comprehensive loss of $17,231,197 and $14,633,038 for the three and ~~six-month periods~~six months ended June 30, ~~2021, whereas~~2023, respectively (comprehensive income of $12,426,367 and $9,545,481 for the ~~Company’s primary focus during the~~month three and ~~six-month periods~~six ended June 30, 2022, ~~was~~respectively). Comprehensive (loss) income for the three and six months ended June 30, 2023, is inclusive of a ($373,415) and $433,597 gain on ~~advancing mine restart efforts, which was accomplished with a lower level of expenditure.~~

~~The significant increase~~change in consulting fees reflects the engagement of numerous legal, accounting, engineering and other professional firms to assist the Company in consummating several complex debt and equity financings, the purchases of the Mine, the EPA financial assurance requirements, fair value ~~measurements of complex instruments,~~on own credit risk ($371,586 and ~~advancement of project activities. These fees were somewhat offset by a decrease in operational~~$371,586 for the three and ~~administration expenses.~~

For financial accounting purposes, the Company reports all direct exploration expenses under the exploration expense line item of the condensed interim consolidated statements of income (loss) and comprehensive income (loss). Management determined that costs of the mine in the most recent quarter constituted mine preparation costs rather than exploration costs, since it was not focused on expanding the mineral resources, but was invested to execute on the tasks and projects required to get the mine into shape for production activities. Certain indirect expenses may be reported as operation and administration expense or consulting expense on the unaudited condensed interim consolidated statements of income and comprehensive income.

These unaudited condensed interim consolidated financial statements have been prepared on a going concern basis. The Company has incurred losses since inception resulting in an accumulated deficit of $63,317,255 and further losses are anticipated in the development of its business. Additionally, the Company owes a total of $7,072,410 net of discount to the EPA (see Note 6) that is classified as long-term debt. The Company does not have sufficient cash to fund normal operations and meet debt obligations for the next 12 months without deferring payment on certain current liabilities and/or raising additional funds. In order to continue to meet its fiscal obligations in the current fiscal year and beyond, the Company must seek additional financing. This raises substantial doubt about the Company’s ability to continue as a going concern. Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The accompanying condensed interim consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Management is considering various financing alternatives including, but not limited to, raising capital through the capital markets, debt and multi-metals stream financings. These unaudited condensed interim 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.

The ability of the Company to emerge from the exploration stage is dependent upon, among other things, closing on the multi-metals stram transaction (see note 7), obtaining additional financing to continue operations, explore and developing the mineral properties and the discovery, development, and sale of reserves.

As described above, during the six months ended June 30, 2022, the Company closed on three convertible debentures totaling $29,000,000 and equity financings (net of issuance costs) totaling $7,769,745 and used the proceeds to purchase the Bunker Hill Mine, as well as satisfy short-term obligations to the EPA including satisfaction of its financial assurance commitments, cost recovery and water treatment payments, advancement of mine restart activities and the funding of working capital requirements.

As of June 30, ~~2022, the Company’s balance sheet reflects that~~2023, the Company ~~had: i)~~had total current assets of ~~$16,858,234,~~$42,831,724, compared to total current assets of ~~$3,622,548~~$7,741,052 at December 31, ~~2021~~2022 – an increase of ~~$13,235,686;~~$35,090,672; and ~~ii)~~ total assets of ~~assets of $36,662,582,~~$67,863,964, compared to total ~~current~~ assets of ~~$4,071,796~~$32,929,892 at December 31, ~~2021~~2022 – an increase of ~~$32,590,786.~~$34,934,072. The increase in current assets and total assets was primarily due to ~~an increase in available cash as a result~~the closing of the ~~proceeds from the convertible debentures and equity financings. Total assets increased principally due to the increase in cash from financings and the purchase~~$46,000,000 Stream, net of repayment of the ~~Bunker Hill Mine.~~

As of June 30, ~~2022, the Company’s balance sheet reflects that~~2023, the Company had total current liabilities of ~~$10,333,772~~$18,353,350 and total liabilities of ~~$56,110,157,~~$104,296,588, compared to total current liabilities of ~~$22,795,277~~$10,155,582 and total liabilities of ~~$38,314,164~~$59,106,835 at December 31, ~~2021. The decrease in the current~~2022. Current liabilities isdecreased primarily ~~reflective of the EPA cost recovery liability being moved from current to long term liabilities. Total liabilities increased~~ as a result of the repayment of the $5,000,000 Bridge Loan from the proceeds of the Stream. Total liabilities increased primarily as a result of closing of the ~~three convertible debentures, offset by~~$46,000,000 Stream (net of repayment of the ~~decrease~~$5,000,000 Bridge Loan) and an increase in the ~~long-term derivative warrant liability, promissory note.~~carrying values of the CD1 and CD2 and settlement of RCD.

OnAs of June 30, ~~2022,~~2023, the Company had a working capital balance of ~~$6,524,462~~$24,478,374 and a shareholders’ deficiency of $36,432,624 compared to a working capital deficit of ~~$19,447,575 compared to negative working capital of $19,172,729~~$2,414,530 and a shareholders’ ~~deficit~~deficiency of ~~$34,242,368 for the year ended~~$26,176,943 as of December 31, ~~2021. Working~~2022. The working capital balance increased during the six months ended June 30, ~~2022~~2023, primarily due to ~~funding~~cash received from ~~debt~~closing of the $46,000,000 Stream (net of repayment of the $5,000,000 Bridge Loan and ~~equity financings,~~transaction related costs) and cash received from the ~~reclassification~~closing of ~~cost recovery liabilities from current to long-term. Shareholders’ equity increased~~a brokered private placement of special warrants of the Company, partially offset by operating expenses and capital expenditures incurred during the period. The shareholders’ deficiency decreased due to net ~~income of $12,054,781 and $9,173,895~~loss for the ~~three and~~ six ~~month periods~~months ended June 30, ~~2022, driven~~2023, partially offset by ~~decreases~~an increase due to proceeds received from equity financing in the ~~fair value of the derivative warrant liability.~~six months ended June 30, 2023.

During the six months ended June 30, ~~2022,~~2023, the Company had a net cash increase of ~~$5,115,610, which represents cash provided from convertible debentures and equity financings, with proceeds used~~$34,425,054, primarily due to ~~satisfy short-term obligations with~~ the ~~EPA, purchase~~closing of a brokered private placement of special warrants of the ~~Bunker Hill Mine~~Company and ~~a processing plant, partial repayment~~proceeds received from the exercise of warrants and closing of the ~~outstanding promissory note, advancement of mine restart activities, and funding of working capital requirements.~~

~~During~~Stream agreement with SRSR. Cash expenditures during the six months ended June 30, ~~2022, cash of $23,070,946 was used in operating activities,~~2023, were primarily ~~due~~related to the usage of $9,476,000 to secure the Company’s financial assurance obligations with the EPA, $3,000,000 of payments against EPA cost recovery and water treatment payables, funding of mine restart activities, and other working capital requirements. ~~This compares with cash used in operating activities of $7,040,266 for the six months ended June 30, 2021.~~

During the quarter ended June 30, 2022, cash of $7,518,361 was used in investing activities for the purchase of the Bunker Hill Mine, a process plant, equipment, and real estate, compared with $94,693 used for investing activities in the six months ended June 30, 2021

During the six months ended June 30, 2022, cash of $35,704,917 was provided by financing activities by the three convertible debentures and the equity financings, offset by cash used for lease payments, compared with cash of $5,943,687 provided by financing activities in the six months ended June 30, 2021

On July ~~2022,~~24, 2023, the “March 2023, Special Warrants” automatically converted into one share of common stock of the company and one common stock purchase warrant of the company which entitles each warrant holder therof to acquire one share of common stock of the Company ~~issued 1,975,482 common shares in connection with its election to satisfy interest payments under the outstanding convertible debentures for the three months ending June 30, 2022.~~at an exercise price of $0.15 per Warrant share until March 27, 2026.

On July ~~29, 2022,~~4, 2023, 6,735,354 RSU’s were granted to employees and executives of the Company. The RSU awards vest in one-third increments on March 31 of 2024, 2025 and 2026.

On July 4, 2023, 1,611,826 DSU’s were granted to directors of the Company. The DSU awards vest immediately.

On July 6, 2023, 245,454 DSU’s were granted to a director of the Company. The DSU award vest on July 6, 2024.

On July 6, 2023, the Company appointed Paul Smith to its Board of Directors and Chair of its new Growth Committee.

The Company held its Annual General Meeting ~~during which all director nominations~~(the “Meeting”) on August 4, 2023. The nominees for the Board of Directors listed in the Company’s management information circular dated July 6, 2023 (the “Circular”), being (i) Sam Ash, (ii) Mark Cruise, (iii) Dickson Hall, (iv) Cassandra Joseph, (v) Pamela Saxton, (vi) Paul Smith and ~~other proposals~~(vii) Richard Williams, were ~~approved. This included~~elected to the board of directors of the Company (the “Board”) to hold office until the next annual meeting of shareholders or until their successors are duly appointed or elected.

In addition, at the Meeting, the shareholders of the Company approved: (ii) the re-appointment of Dr. Mark Cruise, whose initial appointment was announced on June 30, 2022, replacing Mr. Wayne Parsons. The following notable proposals were approved: (i) an increase in the authorized common share capitalMNP LLP Chartered Professional Accountants as auditor of the Company ~~to 1,500,000,000 common shares,~~for the ensuing year; (ii) ~~authorization for a share consolidation of up to 50:1 if enacted within~~ the ~~following two years,~~Company’s amended and restated stock option plan (the “Amended and Restated Stock Option Plan”); and (iii) ~~an increase~~the Company’s amended and restated restricted stock unit incentive plan (the “Amended and Restated RSU Plan” and, together with the Stock Option Plan, the “Security Based Compensation Plans”).

The Security Based Compensation Plans were each approved by the Board on July 5, 2023 and are being implemented to comply with the policies of the TSX Venture Exchange (the “TSXV”) in connection with Bunker Hill’s application to list its common stock (the “Common Shares”) on the TSXV.

The Amended and Restated Stock Option Plan is a rolling plan meaning that the maximum number of Common Shares issuable thereunder is 10% of the issued and outstanding Common Shares (on a non-diluted basis) at the time of the grant of options.

The Amended and Restated RSU Plan is a fixed plan meaning the maximum number of Common Shares issuable thereunder is fixed at 26,581,075, being 10% of the issued and outstanding Common Shares (on a non-diluted basis as at July 5, 2023.

Additional information regarding the Security Based Compensation Plans, including details regarding the amendments, can be found in the ~~maximum RSUs issuable under the Company’s Restricted Share Unit plan.~~Circular posted on Bunker Hill’s SEDAR+ profile at www.sedarplus.ca.

The preparation of the interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Estimates and judgments are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual outcomes can differ from these estimates. The key sources of estimation uncertainty that have a significant risk of causing material adjustment to the amounts recognized in the financial statements are:

Management determines costs for share-based payments using market-based valuation techniques. The fair value of the share awards and warrant liabilities are determined at the date of grant using generally accepted valuation techniques and for warrant liabilities at each balance ~~sheet~~sheets date thereafter. Assumptions are made and judgment used in applying valuation techniques. These assumptions and judgments include estimating the future volatility of the stock price and expected dividend yield. Such judgments and assumptions are inherently uncertain. Changes in these assumptions affect the fair value estimates.

Convertible loans, promissory notes, stream obligation and ~~accrued liabilities~~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 ~~and conversion feature~~ derivative liability, volatility and dividend yield and making assumptions about them.

The fair value estimates of the convertible loans use inputs to the valuation model that include risk-free rates, equity value per common share, USD-CAD exchange rates, spot and futures prices of minerals, expected equity volatility, expected volatility in minerals prices, discount for lack of marketability, credit spread, expected mineral production over the life of the mine, and project risk/estimation risk factors.

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.

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. 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.

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 IDEQ. Using the actual costs in the annual invoice, the Company will then reassess its estimate for future periods.

~~The~~ Given the nature, complexity and variability of the various actual cost items included in the invoice, the Company has ~~engaged in a series of complex financing transactions, which involve~~used the ~~issuance of certain conversion features embedded in the debt, including options to receive interest payments in the form~~most recent invoice as its estimate of the Company’s shares and to purchase a gross revenue royalty in the Bunker Hill Mine. These instruments require evaluation to determine fair values of the debt and the embedded conversion features, which require complex calculations of many appropriate inputs to the valuation model variables, including but not limited to the expected life of the debt instrument and conversion feature derivative liability, volatility of the Company’s shares, effective discount rates, probabilities of operational assumptions as related to an anticipated royalty revenue stream, the Company’s own credit risk and other inputs. The Company has to make estimates of each of these inputs in applying a valuation model to accountwater treatment costs for ~~the derivative values, the presentation of these values, the periodic changes to the fair values and the recognition of these changes.~~future periods.

The Securities and Exchange Commission (“SEC”) defines the term “disclosure controls and procedures” to mean a company’s controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Exchange Act is recorded, processed, summarized and reported within the time periods specified under the SEC’s rules and forms and that information required to be disclosed is accumulated and communicated to principal executive and principal financial officers to allow timely decisions regarding disclosure.

As of the end of the period covered by this report, the Company made an evaluation of the effectiveness of the design and operation of the disclosure controls and procedures over financial reporting for the timely alert to material information required to be included in the Company’s periodic SEC reports and of ensuring that such information is recorded, processed, summarized and reported within the time periods specified. This evaluation resulted in the ~~identification~~conclusion that the design and operation of significant deficiencies. Based on the context in which the individual deficiencies occurred, management has concluded that these significant deficiencies, in combination, represent a material weakness. The Company’s CEO and CFO also concluded that updates to the disclosure controls and procedures ~~should be made to improve the effectiveness~~were effective as of ~~the controls and procedures to provide reasonable assurance of the assurance of these objectives.~~June 30, 2023.

~~Mitigating these significant deficiencies, however, is that, commencing in December~~The management of ~~2021,~~ the Company ~~has replaced certain~~is responsible for the preparation of the financial statements and related financial information appearing in this report. The financial statements and notes have been prepared in conformity with accounting ~~resources by engaging qualified finance and accounting staff who are experienced in established and proven internal controls and accounting procedures with other companies~~principles generally accepted in the ~~same industry. As~~United States of America. The management of the ~~work product~~Company also is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. A company’s internal control over financial reporting is defined as a process designed to provide reasonable assurance regarding the reliability of ~~these qualified staff~~financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that: i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; ii) provide reasonable assurance that transactions are ~~reflected~~recorded as necessary to permit preparation of financial statements in ~~Company transactions more fully~~accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in ~~2022,~~accordance with authorizations of management ~~will be able to address these remaining significant deficiencies.~~and directors of the Company; and iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

~~As part~~Management, including the CEO and CFO, does not expect that the Company’s disclosure controls, procedures and internal control over financial reporting will prevent all error and all fraud. Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable, not absolute, assurance that the objectives of the ~~afore-mentioned engagement, Management has engaged~~control system are met and may not prevent or detect misstatements. Further, over time, control may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate. The design of a ~~third-party firm~~control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to ~~assist~~their costs. Because of the inherent limitations in ~~developing Disclosure Controls~~all control systems, no evaluation of controls can provide absolute assurance that all control issues and ~~Procedures~~instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and ~~Internal Controls Over Financial Reporting. The Company intends~~that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to ~~remedy these significant deficiencies dependent on having the financial resources available to complete them.~~do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

With the participation of the CEO and CFO, the Company’s management evaluated the effectiveness of the Company’s internal control over financial reporting as of June 30, 2023 to ensure that information required to be disclosed by the Company in the reports filed or submitted by the Company under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, including to ensure that information required to be disclosed by the Company in the reports filed or submitted by the Company under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, the Company’s CEO and CFO have concluded that the internal control over financial reporting was effective as of June 30, 2023.

Other than as described below, neither the Company nor its property is the subject of any current, pending, or threatened legal proceedings. The Company is not aware of any other legal proceedings in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of the Company’s voting securities, or any associate of any such director, officer, affiliate or security holder of the Company, is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries.

On July 28, 2021, a lawsuit was filed in the US District Court for the District of Idaho brought by Crescent Mining, LLC (“Crescent”). The named defendants include Placer Mining, Robert Hopper Jr., and the Company. The lawsuit alleges that Placer Mining and Robert Hopper Jr. intentionally flooded the Crescent Mine during the period from 1991 and 1994, and that the Company is jointly and severally liable with the other defendants for unspecified past and future costs associated with the presence of AMD in the Crescent Mine. The plaintiff has requested unspecified damages. On September 20, 2021, the Company filed a motion to dismiss Crescent’s claims against it, contending that such claims are facially deficient.  On March 2, 2022, Chief US District Court Judge, David C. Nye granted in part and denied in part the Company’s motion to dismiss. The court granted the Company’s motion to dismiss Crescent’s Cost Recovery claim under CERCLA Section 107(a), Declaratory Judgment, Tortious Interference, Trespass, Nuisance and Negligence claims. 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~~The Company 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 the lawsuit against Placer Mining Corp. is without merit and intends to defend Placer Mining Corp. vigorously 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 court is in the process of ruling with respect to the timeline for next steps in the legal process.~~

On October 26, 2021, the Company asserted claims against Crescent in a separate lawsuit. Bunker Hill Mining Corporation v. Venzee Technologies Inc. et al, Case No. 2:21-cv-209-REP, filed in the same court on May 14, 2021. The Company has subsequently executed a tolling agreement with Venzee in exchange for dropping its lawsuit. The Company originally filed this lawsuit on May 14, 2021 against other parties but has since filed an amended complaint to include its claims against Crescent. This lawsuit has been consolidated into the lawsuit Crescent filed on July 28, 2021.

There ~~are significant risks in investing~~have been no changes to our risk factors as reported in our ~~common shares. Reference is made to~~annual report on Form 10-K for the ~~risks described in our prospectus filed with the SEC on May~~year ended December 31, ~~2022, which is incorporated herein by reference.~~2022.

Pursuant to Section 1503(a) of the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, issued under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”) by the Mine Safety and Health Administration (the “MSHA”), as well as related assessments and legal actions, and mining-related fatalities.

The following table provides information for the three months ended June 30, ~~2022.~~2023.

Mine

Mine Act

§104

Violations

(1)

Mine

Act

§104(b)

Orders

(2)

Mine Act

§104(d)

Citations and

Orders (3)

Mine Act

§110(b)(2)

Violations

(4)

Mine

Act

§107(a)

Orders

(5)

Proposed

Assessments

from MSHA

(In dollars $)

Mining

Fatalities

Mine

Act

§104(e)

Notice

(yes/no)

(6)

Pending

Legal

Action

before

Federal

Mine Safety

and Health

Review

Commission

(yes/no)

Mine Act §104 Violations (1)

Mine Act §104(b) Orders (2)

Mine Act §104(d) Citations and Orders (3)

Mine Act §110(b)(2) Violations (4)

Mine Act §107(a) Orders (5)

Proposed Assessments from MSHA (In dollars $)

Mining Related Fatalities

Mine Act §104(e) Notice (yes/no) (6)

Pending Legal Action before Federal Mine Safety and Health Review Commission (yes/no)

Bunker Hill Mine

399

143.00

In accordance with Section 12 of the Securities Exchange Act of 1934, the Registrant has caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: August 14, 2023

	BUNKER HILL MINING CORP.

	By	/s/ Sam Ash
		Sam Ash, Chief Executive Officer and President

In accordance with Section 12 of the Securities Exchange Act of 1934, the Registrant has caused Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

~~Date: August 15, 2022~~

Date: August 14, 2023

	BUNKER HILL MINING CORP.

	By	/s/ David Wiens
		David Wiens, Chief Financial Officer and Corporate Secretary

82 Richmond Street East
Toronto, Ontario, Canada		M5C 1P1
(Address of Principal Executive Offices)		(Zip Code)

PART I – FINANCIAL INFORMATION	3

Item 1. Financial Statements	3

Item 2. Management’s Discussion and Analysis of Financial Condition or Plan of Operation	2523

Item 3. Quantitative and Qualitative Disclosures about Market Risk	3126

Item 4. Controls and Procedures	3126

PART II – OTHER INFORMATION	27
	32

Item 1. Legal Proceedings	3227

Item 1A. Risk Factors	3228

Item 2. Unregistered Sales of Equity Securities and Use Of Proceeds	3228

Item 3. Defaults upon Senior Securities	3228

Item 4. Mine Safety Disclosure	3228

Item 5. Other Information	3329

Item 6. Exhibits	3329


	June 30, 2022
Deposit paid	$	500,000
Sales tax paid		231,000
Value of shares issued		1,970,264
Value of warrants issued		1,273,032
Total plant & inventory purchased		3,974,296
Site preparation costs		471,724
Demobilization		427,756
Less spare parts inventory		(341,004	)
Pend Oreille plant asset, net	$	4,532,773

	June 30,		December 31,
	2023		2022

Plant purchase price less inventory	$	3,633,292	$	3,633,292
Ball mill purchase		745,626		-
Demobilization		2,204,539		2,201,414
Site preparation costs		3,408,933		2,296,266
Process Plant	$	9,992,390	$	8,130,972

	-	Contract purchase price of $7,700,000 less $300,000 credit by seller for prior maintenance payments.
	-	Net present value of water treatment cost recovery liability assumed of $6,402,425.
	-	Capitalized legal and closing costs of $444,785.
	-	As a result, the total value of the mine at the time of purchase was determined to be $14,247,210. The Company completed the purchase of the Mine on January 7, 2022. The terms of the purchase price were modified to $5,400,000 in cash, from $3,400,000 of cash and $2,000,000 of Common Shares. Concurrent with the purchase of the Mine, the Company assumed incremental liabilities of $8,000,000 to the EPA, consistent with the terms of the amended Settlement Agreement with the EPA that was executed in December 2021 (see “EPA Settlement Agreement” section below).

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, ~~2022~~2023
OR
OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	-	Value of common shares issued on May 13, 2022 at the market price of that day, a value of $1,970,264.
	-	Fair value of the warrants issued together with the inputs, as determined by a binomial model, resulted in a fair value of $1,273,032. See note 9.
	-	As a result, the total value of the mill at the time of purchase was determined to be $3,974,296., including $341,004 of spare parts inventory.


	January 7,
	2022

Contract purchase price	$	7,700,000
Less: Credit by seller for prior maintenance payments		(300,000	)
Net present value of water treatment cost recovery liability assumed		6,402,425
Closing costs capitalized		2,638
Mine acquisition costs – legal		442,147
Total carrying cost of mine	$	14,247,210

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


Reference (2)(4) (5)	Valuation date	Maturity date	Contractual Interest rate			Stock price (US$)		Expected equity volatility			Credit spread			Risk- free rate			Risk- adjusted rate
CD1 note (1)(3)	01-28-22	07-07-23		7.50	%		0.230		120	%		8.70	%		0.92	%		16.18	%
RCD note (stream not advanced scenario)	01-07-22	07-07-23		9.00	%		0.242		130	%		9.21	%		0.65	%		16.39	%
RCD note (stream advanced) scenario	01-07-22	06-30-22		9.00	%		0.242		130	%		9.16	%		0.23	%		15.96	%
CD1 note (1)(3)	03-31-22	07-07-23		7.50	%		0.235		120	%		8.85	%		1.80	%		17.12	%
RCD note (stream not advanced scenario)	03-31-22	07-07-23		9.00	%		0.235		120	%		8.85	%		1.80	%		17.12	%
RCD note (stream advanced) scenario	03-31-22	06-30-22		9.00	%		0.235		120	%		8.78	%		0.52	%		15.88	%
CD2 note	06-17-22	03-31-25		10.50	%		0.222		120	%		9.45	%		3.28	%		20.95	%
CD2 note	06-30-22	03-31-25		10.50	%		0.225		120	%		10.71	%		2.95	%		21.78	%
CD1 note	06-30-22	03-31-25		7.50	%		0.233		120	%		10.71	%		2.95	%		19.89	%
RCD note (stream not advanced scenario)	06-30-22	03-31-25		9.00	%				120	%		10.71	%		2.95	%		19.89	%
RCD note (stream advanced) scenario	06-30-22	09-30-22		9.00	%				120	%		10.85	%		1.72	%		18.89	%

	(1)	The ~~CD carries~~CD1 carried a Discount for Lack of Marketability (“DLOM”) of 5.0%. as of the issuance date and as of June 30, 2023. The CD2 carried a DLOM of 10.0% as of the issuance date and June 30, 2023
	(2)	~~All instruments~~CD1 and RCD carry an instrument-specific spread of 7.23%, CD2 carries an instrument-specific spread of 9.32%
	(3)	The conversion price of the CDCD1 is $~~0.235~~0.219 and CD2 is $0.226 as of June 30, 2023, and $0.219 and CD2 is $0.212 as of December 31, 2022
	(4)	A project risk rate of 13.0% was used for all scenarios of the RCD fair value computations
	(5)	The ~~probabilities~~valuation of the RCD is driven by the aggregation of (i) the present value of future potential cash flow to the royalty holder, in the event that the RCD is converted to a royalty, utilizing an estimate of future metal sales and Monte Carlo simulations of future metal prices, and (ii) the computation of the present value assuming no conversion to the 1.85% gross revenue royalty. The valuation of (i) is compared to the valuation of (ii) for each simulation, with the higher value used in the aggregation to arrive at the fair value of the RCD. This results in an implied probability of the RCD being converted to the royalty, in the event that the Stream is advanced. Based on this methodology, as of June 30, 2023 (pre-modification), the implied probability of the RCD being converted to a 1.85% royalty, in the event that the Stream is advanced, was 77%. Credit spread, Risk-free rate, and Risk-adjusted rate shown for the ~~stream being advanced and~~RCD are applicable to the ~~stream~~scenario where the Stream is not ~~being advanced~~advanced. There are immaterial differences in these inputs for the scenario where the Stream is 55~~% and~~ 45~~%, respectively.~~advanced.

	Office lease

Balance, December 31, 2020	$	176,607
Addition		-
Interest expense		12,696
Lease payments		(129,191	)
Foreign exchange loss		2,165
Balance, December 31, 2021		62,277
Addition		-
Interest expense		1,834
Lease payments		(64,828	)
Foreign exchange loss		717
Balance, June 30, 2022	$	-

	●	~~An increase to~~ 1,500,000,000 ~~common shares, as approved in the July 29, 2002 annual meeting of shareholders,~~Common Shares with a par value of $0.000001 per ~~common share;~~Common Share; and
	●	10,000,000 preferred shares with a par value of $0.000001 per preferred share

March 2023 special warrants	June 30, 2023			Grant Date
Expected life		1,001 days			1096 days
Volatility		24	%		24	%
Risk free interest rate		4.21	%		3.40	%
Dividend yield		0	%		0	%
Share price (C$)	$	0.23		$	0.11
Fair value	$	12,845,643		$	4,536,020
Change in derivative liability	$	8,309,623

August 2020 issuance	June 30, 2022			December 31, 2021
Expected life		427 days			608 days
Volatility		120	%		100	%
Risk free interest rate		3.10	%		0.95	%
Dividend yield		0	%		0	%
Share price	$	0.20		$	0.37
Fair value	$	2,456,021		$	6,790,163
Change in derivative liability	$	(4,334,142	)	$	(7,703,052	)

August 2019 issuance (ii)	June 30, 2022			December 31, 2021
Expected life		1,280 days			1,461 days
Volatility		120	%		100	%
Risk free interest rate		3.14	%		1.02	%
Dividend yield		0	%		0	%
Share price	$	0.20		$	0.37
Fair value	$	1,634,021		$	3,177,485
Change in derivative liability	$	(1,543,464	)	$	(2,744,785	)

August 2019 issuance	June 30, 2023			December 31, 2022
Expected life		915 days			1,096 days
Volatility		115	%		120	%
Risk free interest rate		4.21	%		3.82	%
Dividend yield		0	%		0	%
Share price (C$)	$	0.23		$	0.17
Fair value	$	1,477,994		$	1,115,369
Change in derivative liability	$	362,625

				Weighted		Weighted
				average		average
	Number of			exercise price		grant date
	warrants			(C$)		value ($)

Balance, December 31, 2020		95,777,806		$	0.54	$	0.08
Issued		19,994,080			0.60		0.19
Balance, June 30, 2021		115,771,886		$	0.55	$	0.10

Balance, December 31, 2021		111,412,712		$	0.54	$	0.18
Issued		50,955,636			0.37		0.15
Expired		(239,284	)		0.70		0.21
Balance, June 30, 2022		162,129,064		$	0.49	$	0.17

~~(iii)~~iii)	Exercisable into one April 2022 Unit
iv)	Exercisable into one March 2023 Unit

	Weighted average			Number of
	remaining	Number of		options
Exercise	contractual	options		vested		Grant date
price (C$)	life (years)	outstanding		(exercisable)		fair value ($)
0.50	0.5		235,000		235,000		46,277
0.60	1.25		200,000		200,000		52,909
0.60	2.35		1,575,000		1,575,000		435,069
0.55	2.81		5,957,659		1,489,415		1,536,764
0.335	3.64		1,037,977		1,037,977		204,213
			9,005,636		4,537,392	$	2,275,232


	Three Months ended June 30, 2022			Three Months ended June 30, 2021			Six Months ended June 30, 2022			Six Months ended June 30, 2021
Net income (loss) and comprehensive income (loss) for the period		12,426,367			45,056			9,545,481			5,882,865

Basic income (loss) per share Weighted average number of common shares - basic		210,586,156			163,677,564			187,638,287			158,916,637
Net income (loss) per share – basic		0.06			0.00			0.05			0.04
Net income (loss) and comprehensive income (loss) for the period		12,426,367			45,056			9,545,481			5,882,865

Dilutive effect of convertible debentures		(836,204	)		-			(865,015	)		-
Dilutive effect of warrants on net income		-			(175,816	)		-			(520,066	)
Diluted net income (loss) and comprehensive income (loss) for the period		11,590,163			(130,760	)		8,680,466			5,362,799
Diluted income (loss) per share
Weighted average number of common shares - basic		210,586,156			163,677,564			187,638,287			158,916,637
Diluted effect:
Warrants, broker options, and stock options, convertible debentures, and RSUs		35,719,674			703,569			26,998,311			1,027,400
Weighted average number of common shares - fully diluted		245,879,831			164,381,133			214,210,598			159,944,037
Net income (loss) per share - fully diluted		0.05			(0.00	)		0.04			0.03

	(i)	On January 10, 2022, the Company granted 500,000 RSUs to a consultant of the Company, vested immediately. The vesting of these RSUs resulted in stock-based compensation of $122,249 for the six months ended June 30, 2022, which is included in operation and administration expenses on the condensed consolidated statements of (loss) income and comprehensive (loss) income.

	(ii)	On April 29, 2022, the Company granted 76,750 RSUs to certain consultants of the Company, vested immediately. The vesting of these RSUs resulted in stock-based compensation of $16,800 for the year ended December, 2022, which is included in operation and administration expenses on the consolidated statements of (loss) income and comprehensive (loss) income.

	(iii)	On June 30, 2022, the Company granted 15,000 RSUs to a consultant of the Company, vested immediately. The vesting of these RSUs resulted in stock-based compensation of $2,328 for the year ended December 31, 2022, which is included in operation and administration expenses on the consolidated statements of (loss) income and comprehensive (loss) income.

	(iv)	On June 1, 2023, the Company granted 4,067,637 RSUs to executives and employees of the Company, vested immediately. The vesting of these RSUs resulted in stock-based compensation of $717,660 for the six months ended June 30, 2023, which is included in operation and administration expenses on the consolidated statements of (loss) income and comprehensive (loss) income.

	(v)	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 six months ended June 30, 2023, which is included in operation and administration expenses on the consolidated statements of (loss) income and comprehensive (loss) income.

	(i)	~~On April 21, 2020, the Company granted~~ ~~7,500,000~~ ~~DSUs. The DSUs vest in one fourth increments upon each anniversary of the grant date and expire in~~ 5 ~~years. During the six months ended June 30, 2022, and 2021 the Company recognized $507,398~~ ~~and $139,721~~, respectively, recovery of stock-based compensation related to the DSUs, which is included in operation and administration expenses on the condensed interim consolidated statements of income (loss) and comprehensive income (loss). Upon redemption of the ~~2,500,000~~ ~~DSUs (see (iii)) the fair value of the remaining DSU liability at June 30, 2022 was $635,993~~.
	~~(ii)~~	On March 31, 2022, the Board approved the early vesting of625,000 DSUs for one of the Company’s Directors.
	~~(iii)~~	During the three months ended June 30, 2022, the director redeemed 2,500,000 DSUs for C$750,000, and elected to use net proceeds to subscribe for 375,000 units in the Company’s April 2022 special warrant issuance at C$0.30 per unit, with the balance of the redeemed amount payable in cash after applicable withholding tax deductions.
(ii)	On April 21, 2023, 1,250,000 DSUs for one of the Company’s Directors vested.


	Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2022		2021		2022		2021
Consulting fees	$	486,241	$	245,936	$	1,583,850	$	570,555

	●	~~Payment of $20,000,000 for historical water treatment cost recovery for amounts paid by the EPA from 1995 to 2017~~
	●	Payment of for water treatment services provided by the EPA at the Central Treatment Plant (“CTP”) in Kellogg, Idaho until such time that Bunker Hill either purchases or leases the CTP or builds a separate EPA-approved water treatment facility
	●	~~Conducting a work program as described in the Ongoing Environmental Activities section of this study~~


(2)	The total number of orders issued by MSHA under §104(b) of the Mine Act, which represents a failure to abate a citation under §104(a) within the period of time prescribed by MSHA.


(4)	The total number of flagrant violations issued by MSHA under §110(b)(2) of the Mine Act.


(6)	A written notice from the MSHA regarding a pattern of violations, or a potential to have such pattern under §104(e) of the Mine Act.

Exhibit No.		Document
31.1		Certification of the Chief Executive Officer pursuant to Rule 13a-14 of the Exchange Act
31.2		Certification of the Chief Financial Officer pursuant to Rule 13a-14 of the Exchange Act
32.1		Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)