UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒

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

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

For the quarterly period ended March 31, 2024

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

For the transition period from to

Commission file number: 333-150028

BUNKER HILL MINING CORP.

(Exact Name of Registrant as Specified in its Charter)

nevada

32-0196442

(State of other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

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

(416) 477-7771

(Registrant’s Telephone Number, including Area Code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None

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.

Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☒		Smaller reporting company ☒
		Emerging Growth Company ☐

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

Number of shares of Common Stock outstanding as of ~~August 14, 2023:~~May 9, 2024: ~~317,444,482~~339,099,216

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION		3

	Item 1. Financial Statements	3

	Item 2. Management’s Discussion and Analysis of Financial Condition or Plan of Operation	2320

	Item 3. Quantitative and Qualitative Disclosures about Market Risk	2623

	Item 4. Controls and Procedures	2624

PART II – OTHER INFORMATION		2725

	Item 1. Legal Proceedings	2725

	Item 1A. Risk Factors	2825

	Item 2. Unregistered Sales of Equity Securities and Use Of Proceeds	2825

	Item 3. Defaults upon Senior Securities	2825

	Item 4. Mine Safety Disclosure	2826

	Item 5. Other Information	2926

	Item 6. Exhibits	2926

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

The condensed interim consolidated financial statements of Bunker Hill Mining Corp., (“Bunker Hill”, the “Company”, or the “Registrant”) a.a 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, ~~2022.~~2023, and all amendments thereto.

Bunker Hill Mining Corp.

Condensed Interim Consolidated Balance Sheets

(Expressed in United States Dollars)

Unaudited

	June 30,			December 31,			March 31,			December 31,
	2023			2022			2024			2023
ASSETS

Current assets
Cash	$	35,133,159		$	708,105		$	13,684,542		$	20,102,596
Restricted cash		6,476,000			6,476,000
Restricted cash (note 8)								6,476,000			6,476,000
Accounts receivable and prepaid expenses (note 3)		1,222,565			556,947			703,004			598,401
Total current assets		42,831,724			7,741,052			20,863,546			27,176,997

Non-current assets
Spare parts inventory		341,004			341,004
Spare parts inventory (note 5)								341,004			341,004
Long term deposit								249,265			249,265
Equipment (note 4)		534,784			551,204			1,164,830			946,661
Right-of-use asset (note 4)		102,151			-			608,725			625,022
Long term deposit		69,015			269,015
Bunker Hill Mine and mining interests (note 5)		13,992,896			15,896,645
Process plant (note 4)		9,992,390			8,130,972
Bunker Hill Mine and mining interests (note 6)								15,679,985			15,198,259
Process plant (note 5)								22,741,673			17,452,470
Total assets	$	67,863,964		$	32,929,892		$	61,649,028		$	61,989,678

EQUITY AND LIABILITIES

Current liabilities
Accounts payable	$	2,878,719		$	4,523,502
Accounts payable (note 16)							$	4,417,284		$	1,788,950
Accrued liabilities		644,930			1,500,164			1,321,239			1,225,525
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)		1,095,253			1,500,000
Current portion of lease liability (note 7)								271,743			353,526
Deferred share units liability (note 12)								644,305			569,327
Environment protection agency cost recovery payable (note 8)								3,000,000			3,000,000
Current portion of stream debenture								2,017,825			-
Interest payable (note 9)								529,450			534,998
Total current liabilities		18,353,350			10,155,582			12,201,846			7,472,326

Non-current liabilities
Bridge loan (note 7)		-			4,684,446
Series 1 convertible debenture (note 7)		5,812,092			5,537,360
Series 2 convertible debenture (note 7)		14,644,406			14,063,525
Stream obligation (note 7)		45,260,844			-
Royalty convertible debenture (note 7)		-			10,285,777
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
Lease liability (note 7)								9,983			71,808
Series 1 convertible debenture (note 9)								5,212,398			5,244,757
Series 2 convertible debenture (note 9)								13,359,789			13,458,570
Stream debenture (note 9)								50,695,175			51,138,000
Environment protection agency cost recovery liability, net of discount (note 8)								7,026,947			6,574,140
Deferred tax liability (note 14)								1,888,670			2,588,590
Derivative warrant liability (note 10)								2,072,592			1,808,649
Total liabilities		104,296,588			59,106,835			92,467,400			88,356,840

Shareholders’ Deficiency
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
Preferred shares, $0.000001 par value, 10,000,000 preferred shares authorized								-			-
Common shares, $0.000001 par value, 1,500,000,000 common shares authorized								331			321
Additional paid-in-capital (note 10)								58,691,397			57,848,953
Accumulated other comprehensive income		687,472			253,875			1,097,034			808,662
Accumulated deficit		(86,659,194	)		(71,592,559	)		(90,607,134	)		(85,025,098	)
Total shareholders’ deficiency		(36,432,624	)		(26,176,943	)		(30,818,372	)		(26,367,162	)
Total shareholders’ deficiency and liabilities	$	67,863,964		$	32,929,892		$	61,649,028		$	61,989,678

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

Bunker Hill Mining Corp.

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

(Expressed in United States Dollars)

~~Unaudited~~(Unaudited)

2023 2022 2023 2022
Three Months Ended Six Months Ended
June 30, June 30
2023 2022 2023 2022
Operating expenses
Operation and administration $ 2,003,905 $ 176,892 $ 2,883,897 $ 436,604
Mine preparation - 1,821,223 - 4,328,302
Legal and accounting 388,776 401,318 923,687 764,054
Consulting 944,292 1,580,429 1,714,877 3,937,576
Loss from operations (3,336,973 ) (3,979,862 ) (5,522,461 ) (9,466,536 )

Other income or gain (expense or loss)
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 (591 ) (249,244 ) (3,479 ) (221,324 )
(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
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 )
Finance costs (note 7, 8) (524,130 ) (455,653 ) (1,100,881 ) (455,653 )
Other income 24,439 24,191 24,439 24,191
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 (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 (373,415 ) 371,586 433,597 371,586
Comprehensive (loss) income $ (17,231,197 ) $ 12,426,367 $ (14,633,038 ) $ 9,545,481

Dilutive effect of convertible debentures - (836,204 ) - (865,015 )
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 (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 258,236,840 210,586,156 247,170,167 187,638,287
Weighted average common shares – fully diluted 258,236,840 245,879,831 247,170,167 214,210,598

	2024			2023
	Three Months Ended
	March 31,
	2024			2023

Operating expenses (note 15)	$	(3,787,631	)	$	(2,185,488	)

Other income or gain (expense or loss)
Interest income		291,330			-
Change in derivative liability (note 10)		(263,943	)		4,226,574
(Loss) gain on FV of convertible debentures (note 9)		(157,232	)		1,689,701
Gain on modification of warrants (note 10)		-			214,714
Gain (loss) on foreign exchange		5,654			(2,886	)
Interest expense (note 7,8,9)		(2,083,735	)		(1,324,629	)
Financing costs (note 10)		-			(576,751	)
Loss on stream debentures (note 9)		(217,000	)		-
Loss on debt settlement (note 9)		(70,093	)		(250,086	)
Other income		694			-
(Loss) income for the period pre tax		(6,281,956	)		1,791,149
Deferred income tax recovery (note 14)		699,920			-
(Loss) income for the period		(5,582,036	)		1,791,149

Other comprehensive income (loss), net of tax
Gain on change in FV on own credit risk (note 9)		288,372			807,012
Other comprehensive income		288,372			807,012
Comprehensive (loss) income		(5,293,664	)		2,598,161

Net (loss)/income per common share – basic	$	(0.02	)	$	0.01
Net (loss)/income per common share – fully diluted	$	(0.02	)	$	0.01

Weighted average common shares – basic		329,407,128			212,429,683
Weighted average common shares – fully diluted		329,407,128			314,666,701

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

Bunker Hill Mining Corp.

Condensed Interim Consolidated Statements of Cash Flows

(Expressed in United States Dollars)

Unaudited

	Six Months			Six Months			Three Months			Three Months
	Ended			Ended			Ended			Ended
	June 30,			June 30,			March 31,			March 31,
	2023			2022			2024			2023
Operating activities
Net (loss) income for the period	$	(15,066,635	)	$	9,173,895		$	(5,582,036	)	$	1,791,149
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation (note 9)		975,188			(135,128	)
Stock-based compensation (note 10)								336,927			34,391
Depreciation expense		89,193			129,445			90,814			51,076
Change in fair value of warrant liability		9,019,987			(11,223,219	)		263,943			(4,226,574	)
Deferred tax expense (note 12)		3,508,741			-
Gain on warrant settlement		(214,714	)		-
Deferred tax expense								(699,920	)		-
Gain on warrant extinguishment								-			(214,714	)
Units issued for services		111,971			1,060,858			-			68,656
Interest expense on lease liability (note 7)		5,080			1,834			27,008			3,611
Financing costs		-			264,435			-			(384,984	)
Foreign exchange loss (gain)		-			221,324
Foreign exchange loss (gain) on re-translation of lease		-			718
Loss on debt settlement								70,093			250,086
Loss on debt modification		99,569			-			217,000			-
Loss on debt settlement		491,643			-
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	)
Accretion of liabilities								1,551,867			374,307
Loss (gain) on fair value of derivatives								157,232			(1,689,701	)
Changes in operating assets and liabilities:
Accounts receivable and prepaid expenses		(470,181	)		(718,179	)		(104,603	)		236,893
Accounts payable		(61,969	)		(23,224	)		608,475			954,046
Accrued liabilities		(118,577	)		465,268			(304,831	)		498,412
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	)
Interest payable		1,041,361			766,955			504,864			892,753
Net cash used in operating activities		(6,656,263	)		(13,594,946	)		(2,863,167	)		(1,360,593	)

Investing activities
Additions to Bunker Hill Mine and mining interests		(514,127	)		(5,524,322	)
Land purchase		-			(202,000	)
Process plant		(3,155,362	)		(1,289,477	)		(2,596,535	)		(93,765	)
Purchase of equipment		(60,004	)		(161,558	)
Purchase of spare parts inventory		-			(341,004	)
Mine improvements								(495,050	)		(280,466	)
Purchase of machinery and equipment								(264,634	)		(60,004	)
Net cash used in investing activities		(3,729,493	)		(7,518,361	)		(3,356,219	)		(434,235	)

Financing activities
Proceeds from stream obligation		46,000,000			-
Transaction costs stream obligation		(304,156	)		-
Proceeds from convertible debentures		-			29,000,000
Proceeds from issuance of shares, net of issue costs		-			7,769,745
Proceeds from issuance of special warrants		3,661,822			-			-			3,661,822
Proceeds from warrants exercise		837,459			-			-			837,459
Proceeds from promissory note		390,000			-			-			240,000
Repayment of bridge loan		(5,000,000	)		-
Repayment of promissory notes		(654,315	)		(1,000,000	)
Lease payments		(120,000	)		(64,828	)		(198,668	)		(60,000	)
Net cash provided by financing activities		44,810,810			35,704,917
Net cash (used) provided by financing activities								(198,668	)		4,679,281
Net change in cash		34,425,054			14,591,610			(6,418,054	)		2,884,453
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
Cash, beginning of period								26,578,596			7,184,105
Cash, end of period							$	20,160,542		$	10,068,558

Supplemental disclosures
Cash interest paid	$	322,708		$	-

Non-cash activities
Accounts payable, accrued liabilities, and promissory notes settled with special warrants issuance	$	874,198		$	228,421		$	-		$	874,198
Mill purchase for shares and warrants	$	-		$	3,243,296
Units issued to settle DSU/RSU/Bonuses	$	-		$	872,399
Interest payable settled with common shares	$	2,039,282		$	269,750		$	580,498		$	1,368,724

Reconciliation from Cash Flow Statement to Balance Sheet:
Cash and restricted cash end of period	$	41,609,159		$	15,077,673		$	20,160,542		$	10,068,558
Less restricted cash		6,476,000			9,476,000			6,476,000			6,476,000
Cash end of period	$	35,133,159		$	5,601,673		$	13,684,542		$	3,592,558

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

Bunker Hill Mining Corp.

Condensed Interim Consolidated Statements of Changes in Shareholders’ Deficiency

(Expressed in United States Dollars)

Unaudited

Accumulated
Additional Stock other
Common stock paid-in- subscriptions comprehensive Accumulated
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 164,435,829 $ 164 $ 38,248,618 $ - $ - $ (72,491,150 ) $ (34,242,368 )
Stock-based compensation - - 161,107 - - - 161,107
Compensation options - - 264,435 - - - 264,435
Shares issued for interest payable 1,315,856 1 269,749 - - - 269,750
Shares issued for RSUs vested 933,750 1 (1 ) - - - -
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
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
Issue costs - - (896,009 ) - - - (896,009 )
Warrant valuation - - (6,246,848 ) - - - (6,246,848 )
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 217,641,091 $ 216 $ 43,497,877 $ - $ 371,586 $ (63,317,255 ) $ (19,447,576 )
Balance 217,641,091 $ 216 $ 43,497,877 $ - $ 371,586 $ (63,317,255 ) $ (19,447,576 )

										Accumulated
					Additional					other
	Common stock				paid-in-			Special		comprehensive		Accumulated
	Shares		Amount		capital			warrants		income		deficit			Total

Balance, December 31, 2023		322,661,482	$	321	$	57,848,953		$	-	$	808,662	$	(85,025,098	)	$	(26,367,162	)
Stock-based compensation						261,949										261,949
Compensation options						111,971			-		-		-			111,971
Shares issued for interest payable		7,392,859		7		580,498										580,505
Shares issued for RSUs vested		2,546,436		3		(3	)									-
Shares issued for warrant exercise		10,416,667		10		907,080			-		-		-			907,091
Special warrants		-		-		-			1,484,788		-		-			1,484,788
OCI		-		-		-					288,372		-			288,372
Net income (loss) for the period		-		-		-			-		-		(5,582,036	)		(5,582,036	)
Balance, March 31, 2024		332,600,777	$	331	$	58,691,397		$	-	$	1,097,034	$	(90,607,134	)	$	(30,818,372	)

Balance, December 31, 2022		229,501,661	$	228	$	45,161,513		$	-	$	253,875	$	(71,592,559	)	$	(26,176,943	)
Balance		229,501,661	$	228	$	45,161,513		$	-	$	253,875	$	(71,592,559	)	$	(26,176,943	)
Stock-based compensation						233,668			-		-		-			233,668
Compensation options						111,971			-		-		-			111,971
Shares issued for interest payable		16,180,846		16		1,618,811			-		-		-			1,618,827
Shares issued for warrant exercise		10,416,667		11		907,080			-		-		-			907,091
Special warrants		-		-		-			1,484,788		-		-			1,484,788
OCI		-		-		-			-		807,012		-			807,012
Net income (loss) for the period		-		-		-			-		-		1,791,149			1,791,149
Balance, March 31, 2023		256,099,174	$	255	$	48,033,043		$	1,484,788	$	1,060,887	$	(69,801,410	)	$	(19,222,437	)
Balance		256,099,174	$	255	$	48,033,043		$	1,484,788	$	1,060,887	$	(69,801,410	)	$	(19,222,437	)

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

Bunker Hill Mining Corp.

Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)

Three ~~and Six~~ Months Ended ~~June 30, 2023~~March 31, 2024

(Expressed in United States Dollars)

1. Nature and Continuance of Operations

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~~(“Silver Valley”, 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.

2. Significant Accounting Policies:

Basis of Presentation

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, ~~2022.~~2023. The interim results for the period ended ~~June 30, 2023,~~March 31, 2024, are not necessarily indicative of the results for the full fiscal year. The unaudited interim condensed consolidated financial statements are presented in United States dollars, which is the Company’s functional currency.

Use of Estimates

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.

3. Accounts receivable and prepaid expenses

Accounts receivable and prepaid expenses consists of the following:

Schedule of Accounts receivable and prepaid expenses

	June 30,		December 31,		March 31,		December 31,
	2023		2022		2024		2023

Prepaid expenses and deposits	$	1,162,565	$	386,218	$	557,480	$	382,198
Environment protection agency overpayment (note 6)		60,000		170,729
HST Receivable						145,524		121,621
Environment protection agency overpayment (note 8)						-		94,582
Total	$	1,222,565	$	556,947	$	703,004	$	598,401

4. Equipment, Right-of-Use ~~asset, and Process Plant~~Asset

Equipment consists of the following:

Schedule of Equipment

	June 30,			December 31,			March 31,			December 31,
	2023			2022			2024			2023

Equipment	$	980,575		$	920,571		$	1,725,009		$	1,460,375
Equipment, gross		980,575			920,571			1,725,009			1,460,375
Less accumulated depreciation		(445,791	)		(369,367	)		(560,179	)		(513,714	)
Equipment, net	$	534,784		$	551,204		$	1,164,830		$	946,661

The total depreciation expense relating to equipment during the three ~~and six~~ months ended ~~June 30,~~March 31, 2024, and March 31, 2023 was $~~31,732~~46,465 and $~~76,424, respectively. Compared to the three and six months ended June 30, 2022, was $38,692~~ ~~and $77,091~~44,692, respectively.

Right-of-use asset consists of the following:

Schedule of Right-of-use Asset

March 31, December 31,
2024 2023

Right-of-use asset 698,860 670,808
Less accumulated depreciation (90,135 ) (45,786 )
Right-of-use asset, net $ 608,725 $ 625,022
The total depreciation expense during the three months ended March 31, 2024, and March 31, 2023, was $44,349 and $6,384 (relating to an expired lease), respectively. The Company is a party primarily to lease contracts for mining related mobile equipment.

5. Process Plant

~~On May 13, 2022, the~~The Company ~~completed the purchase of~~purchased a comprehensive package of equipment and parts inventory from Teck Resources ~~Limited’s~~Limited (“Teck”) ~~Pend Oreille operation.~~. The package comprises substantially all ~~the mineral~~ processing equipment of value located at the Pend Oreille mine site, including complete crushing, grinding and flotation circuits suitable for a planned ~1,500 ton-per-day operation at the Bunker Hill site, and total inventory of nearly 10,000 components and parts for ~~the~~ mill, assay lab, conveyer, field instruments, and electrical spares.

The ~~purchase of the mill has been valued at:~~

	-	~~Cash consideration given, comprised of $500,000~~ ~~non-refundable deposit remitted on January 7, 2022 and $231,000~~ ~~sales tax remitted on May 13, 2022, a total of $731,000~~ ~~cash remitted.~~
	-	~~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.~~

~~The~~ process plant was purchased in an assembled state in the seller’s location, and included major processing systems, significant components, and a large inventory of spare parts. The Company has disassembled and transported it to the Bunker Hill site, and 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 condensed interim consolidated balance sheets as a non-current asset in accordance with ~~the~~a purchase price allocation. As the plant is demobilized, transported and reassembled, installation and other costs associated with these activities ~~will be~~is being captured and capitalized as components of the asset.

~~Process plant consists of the following:~~

~~Schedule of Plant Asset Consists~~

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

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

~~Right-of-use asset~~Process plant consists of the following:

Schedule of ~~Right-of-use~~Plant Asset Consists

June 30, December 31,
2023 2022

Loader lease 114,920 -
Loader accumulated depreciation (12,769 ) -
Right-of-use asset, net $ 102,151 $ -

	March 31,		December 31,
	2024		2023

Plant purchase price less inventory	$	3,633,292	$	3,633,292
Ball Mill		1,007,544		745,626
Demobilization		2,204,539		2,204,539
Site preparation costs		15,403,951		10,635,606
Capitalized interest (note 9)		492,347		233,407
Process Plant	$	22,741,673	$	17,452,470

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

5.6. Bunker Hill Mine and Mining Interests

~~Bunker Hill Mine Purchase~~

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

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 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 Agreement also required payments pursuant to an agreement with the 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 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.

~~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).~~

~~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.~~

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

	-	~~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).~~

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

~~Capitalized Development~~

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

~~Sale of Mineral Properties~~

~~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.~~

The carrying cost of the Mine is comprised of the following:

Schedule of Mining Interests

	June 30,			December 31,		March 31,			December 31,
	2023			2022		2024			2023

Bunker Hill Mine purchase	$	14,247,210		$	14,247,210	$	14,247,210		$	14,247,210
Capitalized development		1,517,526			1,447,435		3,204,615			2,722,889
Sale of mineral properties (royalty)		(1,973,840	)		-
Sale of mineral properties (note 9)							(1,973,840	)		(1,973,840	)
Bunker Hill mine	$	13,790,896		$	15,694,645	$	15,477,985		$	14,996,259

Land purchase and ~~lease~~leases

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

During the ~~six~~three months ended ~~June 30,~~March 31, 2023, the Company entered into a lease agreement with C & E Tree Farm LLC for the lease of a land parcel overlaying a portion of the Company’s existing mineral claims package. The Company is committed to making monthly payments of $10,000 through February 2026. The Company has the option to purchase the land parcel through March 1, 2026, for $3,129,500 less 50% of the payments made through the date of purchase.

7. Lease Liability

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

Schedule of Lease Liability

	March 31,			December 31,
	2024			2023
Gross lease obligation – minimum lease payments
1 year	$	288,007		$	393,673
2- 3 years		10,337			73,588
4-5 years		-			-

Future interest expense on lease obligations		(16,618	)		(41,927	)
Total lease liability		281,726			425,334

Current lease liability		271,743			353,526
Non-current lease liability		9,983			71,808
Total lease liability		281,726			425,334

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

~~Historical Cost Recovery Payables - 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 EPA whereby for so long as the Company leases, owns and/or occupies the Mine, 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 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 sheets as of December 31, 2021.~~

Prior to the purchase of the Mine, the Company engaged in discussions with the EPA 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, USU.S. Department of Justice, and the EPA (the “Amended Settlement”). Upon the ~~effectivity~~effectiveness of the Amended Settlement, the Company would become fully compliant with its payment obligations to these parties. The Amended Settlement modified the payment schedule and payment terms for recovery of the historical environmental response costs. Pursuant to the terms of the Amended Settlement, upon purchase of the Bunker Hill Mine and the satisfaction of financial assurance commitments (as described below), the $19,000,000 of cost recovery liabilities will be paid by the Company to the EPA on the following dates:

Schedule of Amended Settlement Environmental Protection Agency Agreement

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

Date	Amount
Within 30 days of Settlement Agreement	$	2,000,000
November 1, 2024	$	3,000,000
November 1, 2025	$	3,000,000
November 1, 2026	$	3,000,000
November 1, 2027	$	3,000,000
November 1, 2028	$	3,000,000
November 1, 2029	$	2,000,000 plus accrued interest

In addition to the changes in payment terms and schedule, the Amended Settlement ~~included~~includes a commitment by the Company to secure $17,000,000 of financial assurance in the form of performance bonds or letters of credit deemed acceptable to the EPA within 180 days from the effective date of the Amended Settlement. Once 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.EPA.

~~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. This was capitalized as $6,402,425~~ ~~to the carrying value of the Bunker Hill Mine at time of purchase, comprised of $3,000,000~~ ~~of incremental current liabilities and $5,000,000~~ ~~of non-current liabilities (discounted to $3,402,425). See note 5.~~

~~During the year ended 2022, the financial assurance was put into place, enabling the restructuring of the payment under the Amendment Settlement with the entire $17,000,000~~ ~~liability being recognized as long-term.~~ As of ~~June 30, 2023~~March 31, 2024 (unchanged from December 31, ~~2022)~~2023), the Company had two payment bonds of $9,999,000 and $5,000,000, and a $2,001,000 letter of credit, in place to secure this liability. The collateral for the payment bonds is comprised of two letters of credit of $4,475,000 in aggregate, as well as land pledged by third parties with whom the company has entered into a financing cooperation agreement that contemplates a monthly fee of $20,000 (payable in cash or common shares of the Company, at the Company’s election). The letters of credit of $6,476,000 in aggregate are secured by cash deposits under an agreement with a commercial bank, which comprise the $6,476,000 of restricted cash shown within current assets as of ~~June 30,~~March 31, 2024, and December 31, 2023.

The financial assurance can be drawn on by the EPA in the event of non-performance by the Company of its payment obligations under the Amended Settlement (the “Financial Assurance”). The amount of the bonds will decrease over time as individual payments are made.

The Company recorded accretion expense on the liability of $~~396,663~~ ~~and $770,969~~452,807 for the three ~~and six~~ months ended ~~June 30, 2023, respectively,~~March 31, 2024 ($374,306 for the three months ended March 31, 2023), bringing the net liability to $~~8,712,435~~10,026,947 ~~(previously accrued~~(inclusive of interest payable of $~~154,743~~156,343) ~~as of June 30, 2023.~~.

Water Treatment Charges – Idaho Department of Environmental Quality (“IDEQ”)

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

The Company currently makes monthly payments of $100,000 to the IDEQ as instalments toward the cost of treating water at the Central Treatment Plant. Upon receipt of an invoice from the IDEQ for actual costs incurred, a reconciliation is performed relative to payments made, with an additional payment made or refund received as applicable. The Company accrues $100,000 per month based on its estimate of the monthly cost of water treatment. As of ~~June 30, 2023,~~March 31, 2024, a prepaid expense of $~~60,000~~ nil~~(December~~ (December 31, ~~2022:~~2023: $~~170,729~~94,582) ~~represents~~represented the difference between the estimated cost of water treatment and net payments made by the Company to the IDEQ to date. This balance has been recognized on the condensed interim consolidated balance sheets as accounts receivable and prepaid expenses.

7.9. ~~Promissory Notes Payable and~~ Convertible Debentures

~~Promissory Notes~~

~~On September 22, 2021, the Company issued a non-convertible promissory note of $2,500,000~~ ~~bearing interest of~~ 15~~% per annum and payable at maturity. 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, 2023, the Company owes $1,095,253~~ ~~in promissory notes payable, which is included in current liabilities on the condensed interim consolidated balance 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, was $92,466~~ ~~and $167,877~~ ~~respectively. At June 30, 2023 financing costs of $3,151~~ ($~~384,041~~ ~~at December 31, 2022) is included in interest payable on the condensed 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 ~~SRSR.~~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 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.

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~~June 23, 2023, the Company ~~announced an~~closed the 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.~~

$8,000,000 Royalty Convertible Debenture

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%~~1.35% rate will apply to claims outside of these areas. The RCD was initially secured by a share pledge of the Company’s operating subsidiary, Silver Valley, until a full security package was put in place concurrent with the consummation of the CD1. In the event of non-conversion, the principal of the RCD will be repayable in cash.

Concurrent with the funding of the CD2 in June 2022, the Company and 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 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%~~1.85% of life-of-mine gross revenue (the “Royalty”) from mining claims historically worked as described above. A ~~1.35%~~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~~note 6 for further detail).

$6,000,000 Convertible Debenture (CD1)

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 ~~initially had a maturity date of the earlier of~~matures on 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, and is~~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, ~~at SRSR’s election at any time through~~subject to stock exchange approval (subsequently amended, as described below). Alternatively, SRSR may elect to retire the ~~maturity date.~~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.

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 or SRSR elects to exercise its share conversion option.~~repayment. The Company determined that the amendments in the terms of the CD1 should not be treated as an extinguishment of the CD1 and have therefore been accounted for as a modification.

Concurrent with the funding of the Stream in June 2023, the Company and ~~SRSR~~Sprott agreed to amend the maturity date of CD1 from March 31, 2025, to March 31, 2026, and that CD1 would remain outstanding until the new maturity date unless the company elects to exercise its option of early repayment. The Company determined that the amendments to the terms of the CD1 should not be treated as an extinguishment of the CD1 and have therefore been accounted for as a modification.

$15,000,000 Series 2 Convertible Debenture (CD2)

The Company closed the $15,000,000 CD2 on June 17, 2022. ~~The~~ CD2 bears interest at an annual rate of 10.5%, payable in cash or shares at the Company’s option, and ~~matured~~matures on March 31, ~~2025.~~2025. The CD2 is secured by a pledge of the Company’s properties and ~~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.~~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.

Concurrent with the funding of the Stream in June 2023, the Company and ~~SRSR~~Sprott agreed to amend the maturity date of the CD2 from 3 quarterly payments of $2,000,000 each beginning June 30, 2024, and $9,000,000 on March 31, 2025, to payment in full on March 31, 2026, and that the CD2 would remain outstanding until the new maturity date unless the ~~company~~Company elects to exercise its option of early repayment or ~~SRSR~~Sprott elects to exercise its share conversion option. The Company determined that the amendments to the terms of the CD2 should not be treated as an extinguishment of the CD2 and have therefore been accounted for as a modification.

The Company determined that in accordance with ASC 815 ~~derivatives~~Derivatives and ~~hedging,~~Hedging, each debenture will be valued and ~~carried~~recorded as a single instrument, with the periodic changes to fair value accounted through earnings, profit and loss.

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

Schedule of Key Valuation Inputs

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(3) (2)(4)(5)(3) 12-31-22 03-31-25 7.50 % 0.125 120 % 7.08 % 4.32 % 17.85 %
RCD note (2)(4)(5) 12-31-22 03-31-25 9.00 % 0.125 120 % 7.08 % 4.32 % 17.85 %
CD2 note(3) (2)(4)(5)(3) 12-31-22 03-31-25 10.50 % 0.125 120 % 7.08 % 4.32 % 19.76 %
CD1 note(3) (2)(4)(5)(3) 03-31-23 03-31-25 7.50 % 0.082 115 % 11.22 % 4.06 % 21.33 %
RCD note(5) (2)(4)(5) 03-31-23 03-31-25 9.00 % 0.082 115 % 11.22 % 4.06 % 21.33 %
CD2 note(3) (2)(4)(5)(3) 03-31-23 03-31-25 10.50 % 0.082 115 % 11.22 % 4.06 % 23.20 %
RCD note (2)(4)(5) 06-23-23 03-31-25 9.00 % 0.169 120 % 8.28 % 4.83 % 19.37 %
CD1 note(3) (2)(4)(5)(3) 06-30-23 03-31-26 7.50 % 0.186 120 % 7.93 % 4.58 % 18.83 %
CD2 note(3) (2)(4)(5)(3) 06-30-23 03-31-26 10.50 % 0.186 120 % 7.93 % 4.58 % 20.73 %


Reference (1,2,3)		Valuation date	Maturity date	Contractual Interest rate			Stock price (US$)		Expected equity volatility			Credit spread			Risk-free rate			Risk- adjusted rate
CD1 note	(1)(2)(3)	12-31-23	03-31-26		7.50	%		0.098		115	%		8.41	%		4.18	%		18.89	%
CD2 note	(1)(2)(3)	12-31-23	03-31-26		10.50	%		0.098		115	%		8.41	%		4.18	%		20.79	%
CD1 note	(1)(2)(3)	03-31-24	03-31-26		7.50	%		0.104		110	%		10.07	%		4.59	%		20.77	%
CD2 note	(1)(2)(3)	03-31-24	03-31-26		10.50	%		0.104		110	%		10.07	%		4.59	%		22.65	%
Convertible Debenture	(1)(2)(3)	03-31-24	03-31-26		10.50	%		0.104		110	%		10.07	%		4.59	%		22.65	%

	(1)	The CD1 carried a Discount for Lack of Marketability (“DLOM”) of 5.0% as of the issuance date and as of ~~June 30, 2023.~~March 31, 2022. The CD2 carried a DLOM of 10.0% as of the issuance date and June 30, ~~2023~~2022
	(2)	CD1 ~~and RCD carry~~carries an instrument-specific spread of 7.23%, CD2 carries an instrument-specific spread of 9.32%
	(3)	The conversion price of the CD1 is $~~0.219~~0.221 and CD2 is $~~0.226~~0.214 as of ~~June 30, 2023, and~~March 31, 2024. The conversion price of the CD1 is $~~0.219~~0.227 and CD2 is $~~0.212~~0.219 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 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 RCD are applicable to the scenario where the Stream is not advanced. There are immaterial differences in these inputs for the scenario where the Stream is advanced.2023.

The resulting fair values of the CD1 ~~RCD,~~ and CD2 at ~~June 30, 2023,~~March 31, 2024, and as of December 31, ~~2022,~~2023, were as follows:

Schedule of Fair Value Derivative Liability

Instrument Description	June 30, 2023		December 31, 2022		March 31, 2024		December 31, 2023
CD1	$	5,812,092	$	5,537,360	$	5,212,398	$	5,244,757
RCD		-		10,285,777
CD2		14,644,406		14,063,525		13,359,789		13,458,570
Total	$	20,456,498	$	29,886,662	$	18,572,187	$	18,703,327

1412

The ~~total~~ (loss) gain on ~~fair value~~changes in FV of convertible debentures recognized on the condensed interim consolidated statements of (loss) Income during the three ~~and six~~ months ended ~~June 30,~~March 31, 2024, and March 31, 2023, was $~~($1,884,232)~~ (157,232)~~and~~ ~~($194,531)~~, ~~respectively,~~ and $~~1,813,456~~ 1,689,701~~and $1,739,987~~ ~~for the three and six months ended June 30, 2022, respectively~~., respectively. The portion of changes in fair value that is attributable to changes in the Company’s credit risk is accounted for within other comprehensive ~~(loss) income during~~income. During the three ~~and six~~ months ended ~~June 30,~~March 31, 2024, and March 31, 2023, ~~was ($~~the Company recognized $~~373,415~~288,372) and $~~433,597,~~ 807,012~~respectively. Compared to the three and six months ended June 30, 2022 was $371,255~~ ~~and $371,255,~~ ~~respectively.~~ respectively, within other comprehensive income. Interest expense for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024, and 2023 was $~~670,562~~ 504,863and $~~1,347,411,~~ 676,849~~respectively. Compared to the three and six months ended June 30, 2022 was $348,574~~ ~~and $588,738,~~ respectively. At ~~June 30, 2023~~March 31, 2024 interest of $504,863 ($~~nil~~ 510,411($~~691,890~~ at December 31, ~~2022)~~2023) is included in interest payable on the condensed interim consolidated balance sheets. For the three ~~and six~~ months ended ~~June 30,~~March 31, 2024, and March 31, 2023, the Company recognized $~~18,803~~70,093 and $~~268,889~~250,086, respectively, loss on debt settlement inon the condensed interim consolidated statements of (loss) income ~~(loss)~~ and comprehensive (loss) income ~~(loss)~~ as a result of settling interest by issuance of shares. ~~Compared to the three and six months ended June 30, 2022 was $niland $nil~~, ~~respectively.~~

The Company performs quarterly testing of the covenants in the CD1 and CD2 and was in compliance with all such covenants as of ~~June 30, 2023.~~March 31, 2024.

~~$5,000,000 Bridge Loan~~

~~On December 6, 2022, the Company closed a $5,000,000~~ ~~loan facility with Sprott (the “Bridge Loan”).~~ The ~~Bridge Loan is secured by the same security package in place for the RCD, CD1, and CD2.~~ ~~The Bridge Loan bears interest 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.~~

~~$46,000,000~~ Stream

On June 23, 2023, all conditions were met for the closing of the Stream, and $46,000,000 was advanced to the Company. The Stream ~~applies~~is secured by the same security package that is in place with respect to the RCD, CD1, and CD2. The Stream is repayable by applying 10% of all payable metals sold until a minimum quantity of metal is delivered consisting of, individually, 63.5 million pounds of zinc, 40.4 million pounds of lead, and 1.2 million ounces of silver (subsequently amended, as described below). Thereafter, the Stream would ~~apply to~~be repayable by applying 2% of payable metals sold. The delivery price of streamed metals will be 20% of the applicable spot price. ~~The~~At the Company’s option, the Company may buy back 50% of the Stream Amount at a 1.40x multiple of the Stream Amount between the second and third anniversary of the date of funding, and at a 1.65x multiple of the Stream Amount between the third and fourth anniversary of the date of ~~funding~~funding.. The Company incurred $~~824,156~~740,956 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.~~Stream.

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 (loss) income and comprehensive (loss) income.

The Company determined the effective interest rate of the Stream obligation to be ~~11.6~~10.8% and recorded accretion expense on the liability of $~~85,000~~1,099,060 for the three ~~and six~~ months ended ~~June 30, 2023~~March 31, 2024 ($nil for the three months ended March 31, 2023) recognized in the consolidated statement of (loss) income and ~~six~~comprehensive (loss) income, accretion expense on the liability of $258,940 for the three months ~~2022)~~ended March 31, 2024 ($nil for the three months ended March 31, 2023) capitalized into the process plant (note 5) on the condensed interim consolidated balance sheets and loss on revaluation of the liability of $217,000 for the three months ended March 31, 2024 ($nil for the three months ended March 31, 2023), bringing the liability to $~~45,260,844~~52,713,000 as of ~~June 30, 2023.~~March 31, 2024. The revaluation is because of a change in projections. The key assumptions used in the revaluation are production of 700,000,000 lbs of zinc, 385,000,000 lbs of lead, 8,700,000 oz of silver over 14 years and commodity prices of 1.17 $/lb to 1.22 $/lb for zinc, 0.94 $/lb to 0.96 $/lb for lead, and 23.00 $/oz to $24.50 $/oz for silver.

$21,000,000 Debt Facility

On June 23, 2023, the Company closed a $21,000,000 debt facility with ~~SRSR~~Sprott which is available for draw at the Company’s election for a period of 2 years ~~years.~~. As of ~~June 23, 2023, and June 30, 2023,~~March 31, 2024, the ~~company~~Company has not drawn on the facility. Any amounts drawn will bear interest of 1010%% 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.~~March 31, 2024, as no amount has been drawn from the facility.

8.10. Capital Stock, Warrants and Stock Options

Authorized

The total authorized capital is as follows:

●	1,500,000,000 Common Shares with a par value of $0.000001 per Common Share; and
●	10,000,000 preferred shares with a par value of $0.000001 per preferred share

Issued and outstanding

In January 2024, the Company issued 6,377,272 shares of common stock in connection with its election to satisfy interest payments under the outstanding convertible debentures for the three months ending December 31, 2022.

In March 2023, the Company issued 9,803,574 shares of common stock in connection with its election to satisfy interest payments under the outstanding convertible debentures for the three months ending March 31, 2023.

In March 2023, the Company amended the exercise price and expiry date of 10,416,667 warrants which were previously issued in a private placement to Teck Resources (“Teck”) on May 13, 2022 in consideration for the Company’s acquisition of the Pend Oreille ~~processing~~process plant. The warrant entitled the holder thereof to purchase one share of Common Share of the Company at an exercise price of C$0.37 per Warrant at any time on or prior to May 12, 2025. The Company amended the exercise price of the warrants from C$0.37 to C$0.11 per Warrant and the expiry date from May 12, 2025, to March 31, 2023, resulting in a gain on modification of warrants of $214,714. In March 2023, Teck exercised all 10,416,667 warrants at an exercise price of C$0.11, for aggregate gross proceeds of C$1,145,834 to the Company. During the quarter the Company recognized a change in derivative liability of $400,152 relating to the Teck warrants using the following assumptions: volatility of 120%, stock price of C$0.11, interest rate of3.42% to 4.06%, and dividend yield of 0%.

In March 2023, the Company closed a brokered private placement of special warrants of the Company (the “March 2023 Offering”), issuing 51,633,727 special warrants of the Company (“March 2023 Special Warrants”) at C$0.12 per March 2023 Special Warrant for $4,536,020 (C$6,196,047), of which $3,661,822 was received in cash and $874,198 was applied towards settlement of accounts payable, accrued liabilities and promissory notes.

In connection with the Offering, each March 2023 Special Warrant is automatically exercisable (without payment of any further consideration and subject to customary anti-dilution adjustments) into one unit (“March 2023 Unit”) of the Company on the earlier date of: (i) the third business day following the date upon which the Company has obtained notification that a resale registration statement of the Company to be filed with the U.S. SEC (the “SEC”) registering the resale of the Underlying Shares (as defined below) issuable upon exercise of the March 2023 Special Warrants and the securities issuable thereunder, has been declared effective by the SEC; and (ii) September 27, 2023 (collectively, the “Automatic Exercise Date”), subject to compliance with U.S. securities laws.

Each March 2023 Unit consists of one share of ~~Common Share~~common stock of the Company (each, a “Unit Share”) and one common stock purchase warrant of the Company (each, a “Warrant”). Each whole Warrant entitles the holder thereof to acquire one ~~Common Share~~share of common stock of the Company (a “Warrant Share”, and together with the Unit Shares, the “Underlying Shares”) at an exercise price of C$0.15 per Warrant Share until March 27, 2026, subject to adjustment in certain events. In the event that the Registration Statement ~~has~~had not been declared effective by the SEC on or before 5:00 p.m. (EST) on July 27, 2023, each unexercised Special Warrant ~~will~~would be deemed to be exercised on the Automatic Exercise Date into one penalty unit of the Company (each, a “Penalty Unit”), with each Penalty Unit being comprised of 1.2 Unit Shares and 1.2 Warrants. Notice of such effectiveness was received on July 11, 2023, eliminating the potential for issuance of the Penalty Units.

In connection with the March 2023 Offering, the Company incurred share issuance costs of $~~846,661~~585,765 and issued 2,070,258 compensation options (the “March 2023 Compensation Options”). Each March 2023 Compensation Option is exercisable at an exercise price of C$~~0.12~~0.15 into one Unit Share and one Warrant Share. ~~Refer to note 15 subsequent events for details on the effectiveness of the registration statement and conversion into units.~~

The Special Warrants issued on March 27, 2023 were converted to 51,633,727 ~~Common Shares~~shares of common stock and common stock purchase warrants ~~in the third quarter of~~on July 24, 2023. ~~As of June 30, 2023, the common shares and common stock purchase warrants had not been issued.~~ The Company determined that in accordance with ASC 815 derivatives and hedging, each Special Warrant will be valued and carried as a single instrument, with the periodic changes to fair value accounted through earnings, profit and loss until the shares of common ~~shares~~stock and common stock purchase warrants are issued.

In January 2024, the Company issued 7,392,859 shares of common stock in connection with its election to satisfy interest payments under the outstanding convertible debentures for the three months ending December 31, 2023.

~~The fair value~~

In March 2024, the Company issued 2,546,436 shares of ~~the Special Warrant is determined through the valuation~~common stock in connection with settlement 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 applicable valuation dates:~~

RSUs.

~~Schedule of Estimated Fair Value of Special Warrant Liabilities~~

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

~~For prior financings, excluding the March~~In 2023 ~~Special Warrants,~~ the Company has accounted for the warrants in accordance with ASC ~~815 derivatives and hedging.~~Topic 815. The warrants are considered derivative instruments as they were issued in a currency other than the Company’s functional currency of the U.S. dollar. The estimated fair value of warrants accounted for as liabilities was determined on the date of issue and marked to market at each financial reporting period. The change in fair value of the warrant is recorded in the 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 related to the various tranches of ~~outstanding~~ warrants issued during the period were estimated using the Binomial model to determine the fair value using the following assumptions as at ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022:~~2023:

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

April 2022 special warrants issuance	June 30, 2023			December 31, 2022
March 2023 warrants							March 31, 2024			December 31, 2023
Expected life		641 days			822 days			726 days			817 days
Volatility		120	%		120	%		24	%		24	%
Risk free interest rate		4.58	%		4.06	%		4.17	%		3.88	%
Dividend yield		0	%		0	%		0	%		0	%
Share price (C$)	$	0.23		$	0.17		$	0.125		$	0.11
Fair value	$	3,284,658		$	2,406,104		$	563,970		$	281,085
Change in derivative liability	$	878,554					$	282,885

April 2022 special warrants issuance	March 31, 2024			December 31, 2023
Expected life		366 days			457 days
Volatility		100	%		110	%
Risk free interest rate		4.17	%		3.88	%
Dividend yield		0	%		0	%
Share price (C$)	$	0.125		$	0.11
Fair value	$	491,622		$	546,592
Change in derivative liability	$	(54,970	)

April 2022 non-brokered issuance	March 31, 2024			December 31, 2023
Expected life		366 days			457 days
Volatility		100	%		110	%
Risk free interest rate		4.17	%		3.88	%
Dividend yield		0	%		0	%
Share price (C$)	$	0.125		$	0.11
Fair value	$	19,115		$	21,252
Change in derivative liability	$	(2,137	)

June 2022 issuance	March 31, 2024			December 31, 2023
Expected life		366 days			457 days
Volatility		100	%		110	%
Risk free interest rate		4.17	%		3.88	%
Dividend yield		0	%		0	%
Share price (C$)	$	0.125		$	0.11
Fair value	$	15,821		$	17,589
Change in derivative liability	$	(1,768	)

February 2021 issuance	March 31, 2024			December 31, 2023
Expected life		680 days			771 days
Volatility		110	%		110	%
Risk free interest rate		4.17	%		3.88	%
Dividend yield		0	%		0	%
Share price (C$)	$	0.125		$	0.11
Fair value	$	455,954		$	367,349
Change in derivative liability	$	(88,605	)

June 2019 issuance	March 31, 2024			December 31, 2023
Expected life		640 days			731 days
Volatility		110	%		110	%
Risk free interest rate		4.17	%		3.88	%
Dividend yield		0	%		0	%
Share price (C$)	$	0.125		$	0.11
Fair value	$	207,385		$	226,570
Change in derivative liability	$	(19,185	)

1615

April 2022 non-brokered issuance	June 30, 2023			December 31, 2022
August 2019 issuance							March 31, 2024			December 31, 2023
Expected life		641 days			822 days			640 days			731 days
Volatility		120	%		120	%		110	%		110	%
Risk free interest rate		4.58	%		4.06	%		4.17	%		3.88	%
Dividend yield		0	%		0	%		0	%		0	%
Share price (C$)	$	0.23		$	0.17		$	0.125		$	0.11
Fair value	$	127,713		$	93,553		$	318,725		$	348,211
Change in derivative liability	$	34,160					$	(29,486	)

June 2022 issuance
June 30,
2023

December 31,
2022

Expected life 641 days 822 days
Volatility 120 % 120 %
Risk free interest rate 4.58 % 3.72 %
Dividend yield 0 % 0 %
Share price (C$) $ 0.23 $ 0.17
Fair value $ 105,701 $ 77,429
Change in derivative liability $ 28,272

February 2021 issuance
June 30,
2023

December 31,
2022

Expected life 955 days 1,136 days
Volatility 120 % 120 %
Risk free interest rate 4.21 % 3.72 %
Dividend yield 0 % 0 %
Share price (C$) $ 0.23 $ 0.17
Fair value $ 1,810,642 $ 1,335,990
Change in derivative liability $ 474,652

August 2020 issuance
June 30,
2023

December 31,
2022

Expected life 62 days 243 days
Volatility 100 % 120 %
Risk free interest rate 4.58 % 4.06 %
Dividend yield 0 % 0 %
Share price (C$) $ 0.23 $ 0.17
Fair value $ 1 $ 903,697
Change in derivative liability $ (903,696 )

June 2019 issuance
June 30,
2023

December 31,
2022

Expected life 915 days 1,096 days
Volatility 115 % 120 %
Risk free interest rate 4.12 % 3.82 %
Dividend yield 0 % 0 %
Share price (C$) $ 0.23 $ 0.17
Fair value $ 961,686 $ 725,737
Change in derivative liability $ 235,949

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

Outstanding warrants at ~~June 30,~~March 31, 2024 and March 31, 2023 ~~and June 30, 2022~~ were as follows:

Schedule of Warrant Activity

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

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

Balance, December 31, 2022 162,129,064 $ 0.49 $ 0.17
Exercised (10,416,667 ) 0.11 0.12
Balance, June 30, 2023 151,712,397 $ 0.50 $ 0.17

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

Balance, December 31, 2022		162,129,064		$	0.49	$	0.17
Exercised		(10,416,667	)		0.11		0.12
Balance, March 31, 2023		151,712,397		$	0.50	$	0.17

Balance, December 31, 2023		145,061,976		$	0.37	$	0.09
		-			-		-
Balance, March 31, 2024		145,061,976		$	0.37	$	0.09

During the ~~six~~three months ended ~~June 30,~~March 31, 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.~~

At ~~June 30, 2023,~~March 31, 2024, the following warrants were outstanding:

Schedule of Warrants Outstanding Exercise Price

Exercise Number of
Number of
warrants

Expiry date price (C$) warrants exercisable

August 31, 2023 0.50 58,284,148 58,284,148
December 31, 2025 0.59 32,895,200 32,895,200
February 9, 2026 0.60 17,112,500 17,112,500
February 16, 2026 0.60 2,881,580 2,881,580
April 1, 2025 0.37 40,538,969 40,538,969
151,712,397 151,712,379

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

April 1, 2025		0.37		40,538,969		40,538,969
December 31, 2025		0.59		32,895,200		32,895,200
February 9, 2026		0.60		17,112,500		17,112,500
February 16, 2026		0.60		2,881,580		2,881,580
March 27, 2026		0.15		51,633,727		51,633,727
				145,061,976		145,061,976

Compensation options

At ~~June 30, 2023,~~March 31, 2024, the following broker options were outstanding:

Schedule of Compensation Options

Weighted
Number of average
broker exercise price
options (C$)

Balance, December 31, 2021 3,590,907 0.35
Issued – April 2022 Compensation Options 1,879,892 0.30
Balance, December 31, 2022 5,470,799 $ 0.34
Issued – March 2023 Compensation Options 2,070,258 0.15
Balance, June 30, 2023 7,541,057 0.28

				Weighted
	Number of			average
	broker			exercise price
	options			(C$)

Balance, December 31, 2022		5,470,799		$	0.34
Issued – March 2023 Compensation Options (i)		2,070,258			0.15
Balance, March 31, 2023		7,541,057			0.28

Balance, December 31, 2023		4,301,150			0.24
Expired – February 2024		(351,000	)		0.50
Balance, March 31, 2024		3,950,150			0.22

(i)	The grant date fair value of the March 2023 Compensation Options ~~were~~was estimated at $111,971using the Black-Scholes valuation model with the following underlying assumptions:

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

Grant Date

Risk free interest rate

Dividend yield

Volatility

Stock price

Weighted average life

Risk free

interest rate

Dividend yield

Volatility

Stock price

Weighted average life

March 2023

3.4

120

C$0.11

3 years

3.4

120

C$0.11

3 years

Schedule of Broker Exercise Prices

Exercise Number of
Grant date
Fair value

Expiry date price (C$) broker options ($)

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

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

April 1, 2024 ⁽ⁱ⁾	$	0.30		1,879,892	$	268,435
March 27, 2026⁽ⁱⁱ⁾	$	0.15		2,070,057	$	111,971
				3,950,150	$	380,406

i)	~~Exercisable into one August 2020 Unit~~
~~ii)~~	~~Exercisable into one February 2021 Unit~~
~~iii)~~	Exercisable into one April 2022 Unit
~~iv)~~ii)	Exercisable into one March 2023 Unit

Stock options

The following table summarizes the stock option activity during the ~~six~~three months ended ~~June 30,~~March 31, 2024 and March 31 2023:

Schedule of Stock Options

Weighted
average
Number of exercise price
stock options (C$)

Balance, December 31, 2022 9,053,136 $ 0.58
Granted 700,000 $ 0.15
Expired, May 1, 2022 (47,000 ) $ 10.00
Forfeited (150,000 ) $ 0.15
Expired, December 31, 2022 (235,500 ) $ 0.50
Balance, December 31, 2022 9,320,636 $ 0.51
Balance, June 30, 2023 9,320,636 $ 0.51

			Weighted
			average
	Number of		exercise price
	stock options		(C$)

Balance, December 31, 2022		9,320,636	$	0.51
Balance, March 31, 2023		9,320,636	$	0.51

Balance, December 31, 2023		8,970,636	$	0.52
Balance, March 31, 2024		8,970,636	$	0.52

The following table reflects the actual stock options issued and outstanding as of ~~June 30, 2023:~~ March 31, 2024:

Schedule of Actual Stock Options Issued and Outstanding

Number of
remaining Number of options
Exercise contractual options vested Grant date
price (C$) life (years) outstanding (exercisable) fair value ($)
0.60 0.25 200,000 200,000 52,909
0.60 1.32 1,575,000 1,575,000 435,069
0.55 1.81 5,957,659 4,468,245 1,536,764
0.335 2.64 1,037,977 1,037,977 204,213
0.15 0.41 150,000 150,000 14,465
0.15 4.40 400,000 200,000 37,387
9,320,636 7,631,222 $ 2,280,807

						Number of
		remaining		Number of		options
Exercise		contractual		options		vested		Grant date
price (C$)		life (years)		outstanding		(exercisable)		fair value ($)
	0.60		0.57		1,575,000		1,575,000		435,069
	0.335		0.59		1,037,977		1,037,977		204,213
	0.55		1.05		5,957,659		4,468,245		1,536,764
	0.15		3.65		400,000		300,000		37,387
					8,970,636		7,381,222	$	2,213,433

The vesting of stock options during the three ~~and six~~ months ending ~~June 30,~~March 31, 2024 and March 31, 2023, resulted in stock based compensation expenses of $~~34,441~~25,093 and $~~93,140~~58,700 ~~respectively ($~~respectively.

~~66,384~~ ~~and $168,994~~ ~~for the three and six months ending June 30, 2022, respectively).~~

9.11. Restricted Share Units

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~~three months ended ~~June 30,~~March 31, 2024 and March 31, 2023:

Schedule of Restricted Share Units

Weighted
average
grant date
fair value
Number of per share
shares (C$)

Unvested as at December 31, 2021 576,000 $ 0.62
Granted 6,620,641 0.17
Vested (2,373,900 ) 0.18
Unvested as at December 31, 2022 4,822,741 $ 0.22
Granted 4,109,637 0.24
Vested (5,767,218 ) 0.24
Unvested as at June 30, 2023 3,165,160 $ 0.22

				Weighted
				average
				grant date
				fair value
	Number of			per share
	shares			(C$)

Unvested as at December 31, 2022		4,822,741		$	0.22
Granted ^{(i, ii)}		-			-
Vested		-			-
Unvested as at March 31, 2023		4,822,741		$	0.22

Unvested as at December 31, 2023		7,044,527		$	0.24
Granted ^{(i, ii)}		9,720,403			0.11
Vested		(2,546,436	)		0.21
Unvested as at March 31, 2024		14,218,493		$	0.16

	(i)	On January ~~10, 2022,~~29, 2024, the Company granted ~~500,000~~672,450 RSUs to ~~a consultant~~the CFO of the Company, ~~vested immediately.~~which vest on January 29, 2025. The vesting of these RSUs resulted in stock-based compensation of $~~122,249~~8,880 for the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2024, which is included in ~~operation and administration~~operating expenses ~~on the~~ condensed interim consolidated statements of (loss) income and comprehensive (loss) income.

	(ii)	On ~~April 29, 2022,~~March 13, 2024, the Company granted ~~76,750~~9,047,953 RSUs to certain ~~consultants~~executives and employees of the Company, ~~vested immediately.~~which vest in one-third increments on March 13 of 2025, 2026 and 2027. The vesting of these RSUs resulted in stock-based compensation of $~~16,800~~22,220 for the ~~year~~three months ended ~~December, 2022,~~March 31, 2024, which is included in ~~operation and administration~~operating 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~~condensed interim consolidated statements of (loss) income and comprehensive (loss) income.

The vesting of RSU’s during the three ~~and six~~ months ending ~~June 30,~~March 31, 2024, and March 31, 2023, resulted in stock based compensation expense of $~~419,754~~236,856 and $~~594,724~~174,970 ~~respectively ($15,922~~ ~~and $38,859~~ ~~for the three and six months ending June 30, 2022, respectively).~~

respectively.

~~10.~~12. Deferred Share Units

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 on the date of redemption in exchange for cash.

The following table summarizes the DSU activity during the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 and ~~2022:~~2023:

Schedule of Deferred Share Units

			Weighted
			average
			grant date
			fair value
	Number of		per share
	shares		(C$)

Unvested as at December 31 2022, and March 31, 2023		2,710,000	$	0.97

Unvested as at December 31 2023, and March 31, 2024		1,495,454	$	0.90

Weighted
average
grant date
fair value
Number of per share
shares (C$)

Unvested as at December 31, 2021 5,625,000 $ 1.03
Vested (i) (3,125,000 ) 1.03
Unvested as at June 30, 2022 2,500,000 $ 1.03

Unvested as at December 31, 2022 2,710,000 0.97
Vested (ii) (1,250,000 ) 1.03
Unvested as at December 31 2022 and June 30, 2023 1,460,000 $ 1.00

~~(i)~~

~~On March 31, 2022, the Board approved the early vesting of~~ ~~625,000~~ ~~DSUs for one of the Company’s Directors. During the three months ended June 30, 2022, the director redeemed~~ ~~2,500,000~~ ~~DSUs for C$750,000, and elected to use net proceeds to subscribe for~~ ~~375,000~~ ~~units in the Company’s April 2022 special warrant issuance at C$0.30~~ ~~per unit, with the balance of the redeemed amount payable in cash after applicable withholding tax deductions.~~

~~(ii)~~

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

The vesting of DSU’s during the three ~~and six~~ months ~~ending June 30, 2023,~~ended March 31, 2024 resulted in stock based compensation expense of $~~486,602~~74,978 and $~~287,324, respectively (stock based~~a recovery of stock-based compensation of $~~695,494~~ ~~and $895,416~~199,278 for the three months ended March 31, 2023. The fair value of each DSU is $0.09 as of March 31, 2024, and ~~six months ending June 30, 2022, respectively).~~$0.08 as of March 31, 2023.

~~11.~~13. Commitments and Contingencies

As stipulated in the agreement with the EPA and as described in ~~Note 6,~~note 8, the Company is required to make two types of payments to the EPA and IDEQ, one for historical water treatment cost-recovery to the EPA, and the other for ongoing water treatment. Water treatment costs incurred through December 2021 are payable to the EPA, and water treatment costs incurred thereafter are payable to the IDEQ. The IDEQ (as done formerly by the EPA) invoices the Company on an annual basis for the actual water treatment costs, which may exceed the recognized estimated costs significantly. When the Company receives the water treatment invoices, it records any liability for actual costs over and above any estimates made and adjusts future estimates as required based on these actual invoices received. The Company is required to pay for the actual costs regardless of the periodic required estimated accruals and payments made each year.

On July 28, 2021, a lawsuit was filed in the US District Court for the District of Idaho brought by Crescent Mining, LLC (“Crescent”). The named defendants include Placer Mining, Robert Hopper Jr., and the Company. The lawsuit alleges that Placer Mining and Robert Hopper Jr. intentionally flooded the Crescent Mine during the period from 1991 and 1994, and that the Company is jointly and severally liable with the other defendants for unspecified past and future costs associated with the presence of ~~Acid Mine Drainage~~AMD in the Crescent Mine. The plaintiff has requested unspecified damages. On September 20, 2021, the Company filed a motion to dismiss Crescent’s claims against it, contending that such claims are facially deficient.  On March 2, 2022, Chief US District Court Judge, David C. Nye granted in part and denied in part the Company’s motion to dismiss. The court granted the Company’s motion to dismiss Crescent’s Cost Recovery claim under CERCLA Section 107(a), Declaratory Judgment, Tortious Interference, Trespass, Nuisance and Negligence claims. 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. ~~The Company~~Bunker Hill responded to the amended filing, refuting and denying all allegations made in the complaint except those that are assertions of fact as a matter of public record. The Company believes ~~the~~Crescent’s lawsuit ~~against Placer Mining Corp.~~ is without merit and ~~intends to defend~~is vigorously defending itself, as well as 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 lawsuit is currently in the discovery phase, in which information is gathered and exchanged.

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.~~

~~12.~~14. Deferred tax liability

The Company incurred income tax ~~expense~~recovery of $~~3.5~~699,920 ~~million~~ for the three ~~and six~~ months ended ~~June 30, 2023,~~March 31, 2024 and incurred noincome tax recovery or expense for the three ~~and six~~ months ended ~~June 30, 2022.~~March 31, 2023. The Company’s effective income tax rate for the first ~~six~~three months of ~~2023~~2024 was ~~-30.29~~12.6% compared to 0.0% for the first ~~six~~three months of ~~2022.~~2023. The effective tax rate during the first ~~six~~three months of ~~2023~~2024 rate differed from the statutory rate primarily due to the ~~income tax treatment~~recognition 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~~available to offset the ~~utilization of $32.3~~ ~~million of net operating losses not previously benefitted.~~deferred tax liability associated with the Stream Obligation. The Company maintains a valuation allowance against net operating losses subject to Section 382 and other deferred tax assets. The effective tax rate during the first ~~six~~three months of ~~2022~~2023 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.

~~13.~~15. Operating Expenses

Schedule of Operating Expenses


	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023
Salaries, wages, and consulting fees	$	942,394	$	770,585
General administration expenses		2,845,237		1,414,903
Total	$	3,787,631	$	2,185,488

16. Related party transactions

The Company’s key management personnel have the authority and responsibility for planning, directing and controlling the activities of the Company and consists of the Company’s executive management team and management directors.

Schedule of Related Party Transactions

Three Months
Ended Three Months
Ended Six Months
Ended Six Months
Ended
June 30, June 30, June 30, June 30,
2023 2022 2023 2022
Consulting fees & wages $ 357,468 $ 486,241 $ 572,917 $ 1,583,850

		Three Months Ended March 31, 2024				Three Months Ended March 31, 2023
Consulting Fees and Salaries		$	474,185			$	215,448

At ~~June 30,~~March 31, 2024 and March 31, 2023, ~~and June 30, 2022,~~ $~~52,148~~89,324 and $~~1,049,304~~248,533, respectively is owed to key management personnel with all amounts included in accounts payable and accrued liabilities.

~~14.~~17. Subsequent Events

~~Conversion of March 2023 Special Warrants~~

On July 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 at an exercise price of $~~0.15~~ ~~per warrant share until March 27, 2026.~~

~~2023 RSU Grant~~Share Issuance

On ~~July 4, 2023,~~April 1, 2024, the Company granted ~~6,735,354~~2,527,888 ~~RSU’s were granted~~DSUs to ~~employees and executives~~certain members of the ~~Company. The RSU awards vest in one-third increments on March 31~~board of ~~2024, 2025 and 2026.~~

~~2023 DSU Grant~~

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

On ~~July 6, 2023,~~April 4, 2024, the Company issued ~~245,454~~ 6,398,439 shares of common stock in connection with its election to satisfy interest payments under the outstanding convertible debentures for the three months ending March 31, 2024.

~~DSU’s were granted~~

On April 5, 2024, the $2,001,000 letter of credit, in place to secure the environment protection agency cost recovery payable was returned to the Company and cancelled. As a result of this transaction the restricted cash balance was decreased by $2,001,000 (from $6,476,000 to $4,475,000) and the cash and cash equivalents was increased by the corresponding amount.

On April 16, 2024, the Company issued 100,000 shares to a ~~director~~member of the ~~Company. The DSU award vests on~~ ~~July 6, 2024~~.executive team for the vesting of RSUs.

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

SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS

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 plans and objectives with respect to the present and future operations of the Company, and statements which express or imply that such present and future operations will or may produce revenues, income or profits. Numerous factors and future events could cause the Company to change such plans and objectives or fail to successfully implement such plans or achieve such objectives, or cause such present and future operations to fail to produce revenues, income or profits. Therefore, the reader is advised that the following discussion should be considered in light of the discussion of risks and other factors contained in this report and in the Company’s other filings with the SEC. No statements contained in the following discussion should be construed as a guarantee or assurance of future performance or future results.

Description of Business

Corporate Information

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.

~~Background and~~

Overview

The Company’s sole focus is the development and restart of its 100% owned flagship asset, the Bunker Hill mine (the “Bunker Hill Mine” or 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.

The Company ~~purchased~~was incorporated for the ~~Mine on January 7, 2022 for $5,400,000~~initial purpose of engaging in ~~cash. Prior to~~mineral exploration activities at the Mine. The Company has moved into the development stage concurrent with (i) 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 most recent of these agreements, the Company was required to make 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. 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 above).

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 with the EPA, and the purchase of the Bunker Hill Mine, setting the stage for a restart of the Mine.

~~Key milestones following the purchase of the mine have included the purchase and demobilization of~~ a process plant, ~~to site, advancement of engineering~~(ii) completing successive technical and economic studies, including a Prefeasibility Study, ~~envisaging~~(iii) delineating mineral reserves, and (iv) conducting the ~~restart~~program of ~~the Mine, the completion of the primary portion of the ramp decline connecting the 5 and 6 Levels and securing of $96,000,000 of financing commitments from SRSR.~~activities outlined above.

Results of Operations

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, 2023~~March 31, 2024 and ~~June 30, 2022.~~March 31, 2023. 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,~~March 31, 2024 and 2023 ~~and 2022~~

Revenue

During the three ~~and six~~ months ended ~~June 30,~~March 31, 2024, and 2023, ~~and 2022,~~ respectively, the Company generated no revenue.

Expenses

During the three ~~and six~~ months ended ~~June 30,~~March 31, 2023, and 2022, the Company reported total operating expenses of ~~$3,336,973~~$3,787,631 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).~~$2,185,488, respectively.

The ~~decrease~~increase in total operating expenses was primarily due to ~~(i) a decrease~~increase in the volume of transactions as the mine ~~preparation~~continues to develop. Operation and administration expenses ~~of $1,821,223, and $4,382,302 (ii) a decrease in consulting and wages expenses of $636,137 and $2,222,699~~increased by $1,018,781 ($1,898,773 for the three ~~and six months ending, respectively. Mine preparation expenses were $nil in the six~~ months ended ~~June 30, 2023,~~March 31, 2024, compared to $879,992 for the three months ended March 31, 2023). Legal and accounting fees increased by $411,553 ($946,464 for the three months ended March 31, 2024, compared to $534,911 for the three months ended March 31, 2023) primarily ~~as a result~~because of the ~~Company determining that costs directly attributed~~Company’s uplisting from the Canadian Stock Exchange to the ~~mine after~~Toronto Stock Exchange Venture which occurred in 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 consulting2023. Consulting and wages ~~expenses was impacted~~increased by ~~a lower volume of transactions and a lower bonus accrual in~~$171,809 ($942,394 for the three ~~and six~~ months ended ~~June 30, 2023, as~~March 31, 2024, compared to $770,585 for the three ~~and six~~ months ended ~~June 30, 2022.~~March 31, 2023) also increased to increased head count as the Bunker Hill Mine moves towards production.

Net Income ~~(loss)~~ and Comprehensive Income ~~(loss)~~

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 operating expenses (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 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 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~~$5,582,036 for the ~~six~~year three months ended ~~June 30, 2023 (net~~March 31, 2024 (compared to net income of ~~$9,173,895~~$1,791,147 for the ~~six~~three months ended ~~June 30, 2022)~~March 31, 2023). ~~Offsetting~~In addition to the ~~decrease~~increase in operating expenses (as described above), net loss infor the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 was impacted by ~~a $20,243,206~~ increase in interest expense of $759,106 ($2,083,735 and $1,324,629 for the ~~loss due to~~three months ended March 2024 and 2023 respectively), a decrease in change in derivative liability of $4,490,517 (loss of ~~$9,019,987~~$263,943 for the ~~six~~three 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 debenturesMarch 31, 2024 compared to a gain of ~~552,606~~$4,226,574 for the 3three months ~~ending June 30, 2022). Both changes in fair value were~~ended March 31, 2023), driven by a proportionally greater ~~incline~~decline in the Company’s share price ~~for the six months ending June 30,~~in Q1 2023 relative to Q1 2024. Additionally, a ~~decline in share price in~~loss on fair value of the ~~six~~convertible debenture of $263,943 was recognized for 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 debt in the six months ending June 30, 2023,~~ended March 31, 2024, compared to ~~the 3 months ending June 30, 2022. A~~a gain of ~~$7,117,420 was recognized in~~$4,226,574 for the ~~six~~three months ~~ending June 30, 2023, relating~~ended March 31, 2024. The three months ended March 31, 2024, also includes $217,000 ($nil for the three months ended March 31, 2023) loss on revaluation of the stream debenture due to ~~the sale of mineral properties, compared with a $8,614,103 gain on EPA settlement in the six months ending June 30, 2022.~~updated key assumptions such as commodity prices. Net loss for the ~~six~~three months ending ~~June 30, 2023, included the initial recognition of~~March 31, 2024, includes a deferred tax ~~liability~~recovery of $699,920 and ~~corresponding deferred tax expense relating to the closing~~interest income of ~~the stream transaction ($3,508,741 for the six months ending June 30, 2023,~~$291,330 compared to $nil and $nil respectively for three months ended March 31, 2023. Additionally, net loss for the 6three months ~~ending June 30, 2022).~~ended March 31, 2024, includes $nil of financing costs compared to $576,751 for the three months ended March 31, 2023.

The Company had comprehensive loss of ~~$17,231,197 and $14,633,038~~$5,293,664 for the three ~~and six~~ months ended ~~June 30, 2023, respectively~~March 31, 2024 (comprehensive income of ~~$12,426,367 and $9,545,481~~$2,598,159 for the month three ~~and six~~ ended ~~June 30, 2022, respectively)~~March 31, 2023). Comprehensive ~~(loss)~~ income for the three ~~and six~~ months ended ~~June 30, 2023,~~March 31, 2024, is inclusive of a ~~($373,415) and $433,597~~$288,372 gain on change in fair value on own credit risk ($~~371,586 and $371,586~~807,012 for the three ~~and six~~ months ended ~~June 30, 2022, respectively)~~March 31, 2023).

Liquidity and Capital Resources

Current Assets and Total Assets

As of ~~June 30, 2023,~~March 31, 2024, the Company had total current assets of ~~$42,831,724,~~$20,863,546, compared to total current assets of ~~$7,741,052~~$27,176,997 at December 31, ~~2022~~2023 – ~~an increase~~a decrease of ~~$35,090,672;~~$6,313,451; and total assets of ~~$67,863,964,~~$61,649,028, compared to total assets of ~~$32,929,892~~$61,989,678 at December 31, ~~2022~~2023 – an ~~increase~~decrease of ~~$34,934,072. The~~$340,650. During the three months ended March 31, 2024, the Company’s current assets decreased due to cash expenditures on the process plant, purchasing of equipment and additions to the Bunker Hill Mine. Total assets remained constant as the increase in ~~current assets~~property plant and ~~total assets~~equipment was ~~primarily due to~~offset by the ~~closing of the $46,000,000 Stream, net of repayment of the $5,000,000 Bridge Loan and transaction related costs.~~decrease in cash.

Current Liabilities and Total Liabilities

As of ~~June 30, 2023,~~March 31, 2024, the Company had total current liabilities of ~~$18,353,350~~$12,201,846 and total liabilities of ~~$104,296,588,~~$92,467,400, compared to total current liabilities of ~~$10,155,582~~$7,472,326 and total liabilities of ~~$59,106,835~~$88,356,840 at December 31, ~~2022. Current liabilities decreased primarily as a result of the repayment of the $5,000,000 Bridge Loan from the proceeds of the Stream.~~2023. Total liabilities increased ~~primarily~~because of accretion on the stream debenture and environmental protection agency payable as ~~a result of closing of the $46,000,000 Stream (net of repayment of the $5,000,000 Bridge Loan) and~~well as an increase in ~~the carrying values~~accounts payable and accruals due to timing of ~~the CD1~~invoices and ~~CD2 and settlement of RCD.~~

payments.

Working Capital and Shareholders’ Deficit

As of ~~June 30, 2023,~~March 31, 2024, the Company had a working capital ~~balance~~ of ~~$24,478,374~~$8,661,700 and a shareholders’ deficiency of ~~$36,432,624~~$30,818,372 compared to a working capital ~~deficit~~ of ~~$2,414,530~~$19,704,671 and a shareholders’ deficiency of ~~$26,176,943~~$26,367,162 as of December 31, ~~2022.~~2023. The working capital balance ~~increased~~decreased during the ~~six~~three months ended ~~June 30, 2023,~~March 31, 2024, primarily due to cash ~~received from closing~~expenditures on the process plant, purchasing of equipment, and additions to the $46,000,000 Stream (net of repayment of the $5,000,000 Bridge Loan and transaction related costs) and cash received from the closing of a brokered private placement of special warrants of the Company, partially offset by operating expenses and capital expenditures incurred during the period.Bunker Hill Mine. The shareholders’ deficiency ~~decreased~~increased primarily due to the net loss ~~for the six months ended June 30, 2023, partially offset by an increase due to proceeds received from equity financing~~ in the ~~six months ended June 30, 2023.~~2024 quarter.

Cash Flow

During the ~~six~~three months ended ~~June 30, 2023,~~March 31, 2024, the Company had a net cash ~~increase~~decrease of ~~$34,425,054,~~$6,418,054, primarily due to cash expenditures on the ~~closing~~process plant, purchasing of ~~a brokered private placement of special warrants of~~equipment, and additions to the Company and proceeds received from the exercise of warrants and closing of the Stream agreement with SRSR. Cash expenditures during the six months ended June 30, 2023, were primarily related to working capital requirements.Bunker Hill Mine.

Subsequent Events

~~Conversion of March 2023 Special Warrants~~

On ~~July 24, 2023,~~April 1, 2024, the ~~“March 2023, Special Warrants” automatically converted into one share of common stock~~Company granted 2,527,888 DSUs to certain members of the ~~company and one common stock purchase warrant~~board of ~~the company which entitles each warrant holder therof to acquire one share of common stock of the Company at an exercise price of $0.15 per Warrant share until March 27, 2026.~~

~~2023 RSU Grant~~

~~On July 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.~~

~~2023 DSU Grant~~

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

On ~~July 6, 2023, 245,454 DSU’s were granted~~April 1, 2024, the Company appointed Brenda Dayton as its Vice President Investor Relations.

On April 4, 2024, the Company issued 6,398,439 shares of common stock in connection with its election to ~~a director of~~satisfy interest payments under the ~~Company. The DSU award vest on July 6,~~outstanding convertible debentures for the three months ending March 31, 2024.

~~New Director~~On April 5, 2024, the $2,001,000 letter of credit, in place to secure the environment protection agency cost recovery payable was returned to the Company and cancelled. As a result of this transaction the restricted cash balance was decreased by $2,001,000 (from $6,476,000 to $4,475,000) and the cash and cash equivalents was increased by the corresponding amount.

On ~~July 6, 2023,~~April 16, 2024, the Company ~~appointed Paul Smith~~issued 100,000 shares to ~~its Board~~a member of ~~Directors and Chair~~the executive team for the vesting of ~~its new Growth Committee.~~RSUs.

On April 30, 2024, the Company received approval to commence construction from the Idaho Department of Environmental Quality (IDEQ, Air Quality Division) in accordance with IDAPA 58.01.01.213, Rules for the Control of Air Pollution in Idaho. The Company will continue to work with IDEQ regarding issuance of the full Air Permit.

~~AGM Results and Amendments to Equity Compensation Plans~~

The Company held its Annual General Meeting (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 (vii) Richard Williams, were 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 MNP LLP Chartered Professional Accountants as auditor of the Company for the ensuing year; (ii) the Company’s amended and restated stock option plan (the “Amended and Restated Stock Option Plan”); and (iii) 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 Circular posted on Bunker Hill’s SEDAR+ profile at www.sedarplus.ca.

Critical accounting estimates

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:

Share-based payments

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 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~~Loans, Promissory Notes, Stream Obligation and ~~warrants~~Warrants

Estimating the fair value of derivative warrant liability requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the issuance. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the warrants derivative liability, volatility 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 share of common ~~share,~~stock, USD-CAD exchange rates, spot and futures prices of minerals, expected equity volatility, expected volatility in minerals prices, discount for lack of marketability, credit spread, expected mineral production over the life of the mine, and project risk/estimation risk factors.

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.

Accrued liabilities

The Company has to make estimates to accrue for certain expenditures due to delay in receipt of third-party vendor invoices. These accruals are made based on trends, history and knowledge of activities. Actual results may be different.

The Company makes monthly estimates of its water treatment costs, with a true-up to the annual invoice received from the IDEQ. Using the actual costs in the annual invoice, the Company will then reassess its estimate for future periods. Given the nature, complexity and variability of the various actual cost items included in the invoice, the Company has used the most recent invoice as its estimate of the water treatment costs for future periods.

Incremental Borrowing rate

The Company estimates the incremental borrowing rate to determine the present value of future lease payments. Actual results may be different from estimates.

Borrowing Cost Capitalization rate

The Company makes estimates to determine the percentage of borrowing costs that are capitalized into property plant and equipment. Actual results may be different.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

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 conclusion that the design and operation of the disclosure controls and procedures were effective as of ~~June 30, 2023.~~March 31, 2024.

Internal Control Over Financial Reporting

The management of the Company 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 principles generally accepted in the United States of America. The management of the 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 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 recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management 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.

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 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 control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and 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 that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to 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~~March 31, 2024 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.~~March 31, 2024.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

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. ~~The Company~~Bunker Hill responded to the amended filing, refuting and denying all allegations made in the complaint except those that are assertions of fact as a matter of public record. The Company believes ~~the~~Crescent’s lawsuit ~~against Placer Mining Corp.~~ is without merit and ~~intends to defend~~is vigorously defending itself, as well as 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.

On October 26, 2021, the Company asserted claims against Crescent in a separate lawsuit, which has been consolidated into the Crescent lawsuit. The Company commenced Bunker Hill Mining Corporation v. Venzee Technologies Inc. et al, Case No. 2:21-cv-209-REP, ~~filed~~ in the ~~same court~~US District Court for the District of Idaho on May 14, 2021. The Company has subsequently executed a tolling agreement with Venzee in exchange for dropping its ~~lawsuit.~~claims against Venzee. 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~~The Court consolidated ~~into~~ the ~~lawsuit Crescent filed~~two lawsuits on ~~July 28, 2021.~~April 19, 2022. The consolidated lawsuits are currently in the discovery phase, in which information is gathered and exchanged.

Item 1A. Risk Factors

There have been no changes to our risk factors as reported in our annual report on Form 10-K for the year ended December 31, ~~2022.~~2023.

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

Not Applicable.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosure

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, 2023.~~March 31, 2024.

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 Related 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

143.00

143

(1)	The total number of violations received from MSHA under §104 of the Mine Act, which includes citations for health or safety standards that could significantly and substantially contribute to a serious injury if left unabated.

(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.

(3)	The total number of citations and orders issued by MSHA under §104(d) of the Mine Act for unwarrantable failure to comply with mandatory health or safety standards.

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

(5)	The total number of orders issued by MSHA under §107(a) of the Mine Act for situations in which MSHA determined an imminent danger existed.

(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.

Item 5. Other Information

None.

Item 6. Exhibits

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)

SIGNATURES

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~~May 9, 2024

	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 14, 2023~~May 9, 2024

	BUNKER HILL MINING CORP.

	By	/s/ ~~David Wiens~~Gerbrand van Heerden
		~~David Wiens,~~Gerbrand van Heerden, Chief Financial Officer and Corporate Secretary

											Accumulated
					Additional			Stock			other
	Common stock				paid-in-			subscriptions			comprehensive		Accumulated
	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		164,435,829	$	164	$	38,248,618		$	-		$	-	$	(72,491,150	)	$	(34,242,368	)
Stock-based compensation		-		-		161,107			-			-		-			161,107
Compensation options		-		-		264,435			-			-		-			264,435
Shares issued for interest payable		1,315,856		1		269,749			-			-		-			269,750
Shares issued for RSUs vested		933,750		1		(1	)		-			-		-			-
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
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
Issue costs		-		-		(896,009	)		-			-		-			(896,009	)
Warrant valuation		-		-		(6,246,848	)		-			-		-			(6,246,848	)
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		217,641,091	$	216	$	43,497,877		$	-		$	371,586	$	(63,317,255	)	$	(19,447,576	)
Balance		217,641,091	$	216	$	43,497,877		$	-		$	371,586	$	(63,317,255	)	$	(19,447,576	)


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(3)	(2)(4)(5)(3)	12-31-22	03-31-25		7.50	%		0.125		120	%		7.08	%		4.32	%		17.85	%
RCD note	(2)(4)(5)	12-31-22	03-31-25		9.00	%		0.125		120	%		7.08	%		4.32	%		17.85	%
CD2 note(3)	(2)(4)(5)(3)	12-31-22	03-31-25		10.50	%		0.125		120	%		7.08	%		4.32	%		19.76	%
CD1 note(3)	(2)(4)(5)(3)	03-31-23	03-31-25		7.50	%		0.082		115	%		11.22	%		4.06	%		21.33	%
RCD note(5)	(2)(4)(5)	03-31-23	03-31-25		9.00	%		0.082		115	%		11.22	%		4.06	%		21.33	%
CD2 note(3)	(2)(4)(5)(3)	03-31-23	03-31-25		10.50	%		0.082		115	%		11.22	%		4.06	%		23.20	%
RCD note	(2)(4)(5)	06-23-23	03-31-25		9.00	%		0.169		120	%		8.28	%		4.83	%		19.37	%
CD1 note(3)	(2)(4)(5)(3)	06-30-23	03-31-26		7.50	%		0.186		120	%		7.93	%		4.58	%		18.83	%
CD2 note(3)	(2)(4)(5)(3)	06-30-23	03-31-26		10.50	%		0.186		120	%		7.93	%		4.58	%		20.73	%

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, 2023			December 31, 2022
Expected life		62 days			243 days
Volatility		100	%		120	%
Risk free interest rate		4.58	%		4.06	%
Dividend yield		0	%		0	%
Share price (C$)	$	0.23		$	0.17
Fair value	$	1		$	903,697
Change in derivative liability	$	(903,696	)

	Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2023		2022		2023		2022
Consulting fees & wages	$	357,468	$	486,241	$	572,917	$	1,583,850