Bunker Hill Mining Corp. (TSX-V: BNKR) (OTCQB: BHLL) announces a significant capital restructuring involving Teck Resources Limited, Sprott Streaming and Royalty Company and Monetary Metals Bond III LLC, intended to ensure the Bunker Hill Mine remains on track for commissioning and operations in H2 2025 and full nameplate production in H1 2026. This transaction will result in the conversion into equity of certain outstanding debt whilst modifying the existing royalty and stream financing arrangements.

Concurrently, the Company intends to complete a non-brokered private placement of equity units of the Company with Teck for aggregate gross proceeds of up to US$40 million (C$57,480,000)¹. In addition, the Company has entered into an agreement with a syndicate of agents led by BMO Capital Markets, CIBC Capital Markets and Red Cloud Securities Inc. as joint book runners, to support a “best efforts” marketed private placement of Units, at a price of US$0.105 per Unit, for aggregate gross proceeds of up to US$20 million (C$28,740,000)¹. Each Unit will consist of one share of common stock of the Company and one-half of one Common Share purchase warrant. Each whole Warrant will be exercisable for one additional Common Share at a price of C$0.25 per Warrant Share for a period of 12 months following the date of issuance.

“Working with our strategic investors, Teck, Sprott Streaming and Monetary Metals, the Company is pleased to announce this transformational deal, which not only enables the Project restart, but also critically strengthens our balance sheet for the long-term benefit of all Bunker Hill stakeholders,” said Sam Ash, President & CEO. “This Teck-led investment helps to further strengthen and de-risk American metal supply chains, whilst creating new American mining jobs in the Silver Valley, Idaho at a critical time”.

HIGHLIGHTS

• Up to approximately US$60 million (C$86,220,000)¹ equity financings to ensure resilient construction, start-up and ramp up – this deal is intended to provide sufficient working capital to bring one of the only near-production American mining projects, currently 65% complete, into commissioning and operations in H2 2025.
• Transformational strengthening of the balance sheet – the flexibility shown by Bunker Hill’s financial partners – Sprott Streaming and Monetary Metals, has enabled a catalytic reduction in financing costs, increasing life of mine (“LOM”) free-cash flow and a much healthier ratio of debt to equity. This is expected to significantly reduce risk and increase the capital available to Bunker Hill for investment in exploration and expansion.
• Risk reduced further with the provision of up to US$10 million in a standby facility – to further improve asset resilience, intended to reduce risk to equity investors during the critical first three years of operation.
• Enabled by the strategic cross-border partnership with Teck – building upon the joint work done to transfer Teck’s Pend Oreille mill to the Bunker Hill site in 2023, this investment locks in LOM supply of zinc and lead-silver concentrate to Teck and their Trail smelter in British Columbia.
• Expansion financing in place to enhance exposure to project upside – the restart budget incorporates sufficient funds to conduct brownfield exploration focused on higher-grade silver targets near to existing infrastructure, resource expansion activities as well as technical studies designed to support the development of the Bunker Hill 2.0 Expansion Project.

Figure 1 – Bunker Hill Construction and Operations Team within the Processing Plant, Kellogg, Idaho

DETAILS

Equity Financings

The Brokered Offering will consist of up to 190,476,190 Units at a price of US$0.105² (C$0.15) per Unit for aggregate gross proceeds of up to US$20 million (C$28,740,000)³ to certain: (i) accredited investors (as defined in National Instrument 45-106 – Prospectus Exemptions) in the Provinces of British Columbia, Alberta and Ontario; (ii) Accredited Investors (as defined under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”)) and (iii) investors in certain offshore jurisdictions on a basis which does not require the qualification or registration of the securities comprising the Units offered in such jurisdictions.

In addition, the Company intends to grant the Agents an option, exercisable in whole or in part by the Agents at any time up to 48 hours prior to the closing date of the Brokered Offering, to offer for sale up to 28,571,428 additional Units to cover over-allocations, if any. The definitive terms of the Agents’ engagement, including the Agents’ Option and the fees and expenses payable in connection with the Brokered Offering, will be contained in an agency agreement to be entered into by the Company and the Agents prior to the closing of the Brokered Offering.

The Non-Brokered Offering consists of up to 380,952,381 Units at the Offering Price for aggregate gross proceeds of up to US$40 million (C$57,480,000)⁴, subscribed for in full by Teck or its affiliate(s) in accordance with the terms of a subscription agreement entered into by the Company and Teck. The Non-Brokered Offering is subject to negotiation and execution of all additional necessary definitive documentation and various closing conditions, including the completion of the Restructuring Transactions and the Brokered Offering and certain amendments to the previously entered into silver loan with Monetary Metals, and receipt of all necessary stockholder, regulatory and stock exchange approvals. The Company expects that Teck will own greater than 20% of the issued and outstanding Common Shares following the closing of the Transactions (as defined below) and therefore will become a Control Person (as defined in the TSX Venture Exchange (the “TSX-V”) policies).

As at the date hereof, Teck beneficially owns, directly or indirectly, or exercises control or direction over, 23,784,723 Common Shares and warrants to purchase an additional 2,951,389 Common Shares, representing approximately 6.6% of the issued and outstanding Common Shares on a non-diluted basis and approximately 7.4% on a partially diluted basis. Assuming the completion of (i) the maximum offering amount under the Brokered Offering (excluding the exercise of the Agents’ Option), (ii) the maximum offering amount under the Non-Brokered Offering and (iii) the issuance of the maximum number of Common Shares in connection with the Sprott Tranche I Shares and Sprott Tranche II Shares (each as defined below), the Company expects that Teck will beneficially own, directly or indirectly, or exercise control or direction over, 404,737,104 Common Shares and warrants to purchase an additional 193,427,579 Common Shares, representing approximately 35.8% of the Company’s then issued and outstanding Common Shares on a non-diluted basis and approximately 45.2% on a partially diluted basis.

Therefore, in accordance with the TSX-V policies, the approval of the Company’s stockholders will be required with respect to Teck becoming a Control Person. In lieu of a special meeting of its stockholders, the Company intends to obtain the written consent of disinterested stockholders holding more than 50% of the current issued and outstanding Common Shares (the “Stockholder Consent”), which Stockholder Consent will exclude any votes held by Teck and its Affiliates or Associates (each as defined in the TSX-V policies).

Teck’s purchase of the Units is being made for investment purposes. Teck may determine to increase or decrease its investment in the Company depending on market conditions and any other relevant factors. This release is required to be issued under the early warning requirements of applicable securities laws. Teck’s head office is located at Suite 3300 – 550 Burrard Street, Vancouver, BC, V6C 0B3. In satisfaction of the requirements of the National Instrument 62-104 – Take-Over Bids And Issuer Bids and National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, early warning reports respecting the acquisition of Common Shares by Teck or its affiliates will be filed under the Company’s SEDAR+ at www.sedarplus.ca. A copy of Teck’s early warning report to be filed in connection with the Non-Brokered Private Placement may also be obtained by contacting Dale Steeves at 236-987-7405.

In connection with the Non-Brokered Offering, the Company intends to enter into a customary investor rights agreement with Teck at closing of the Non-Brokered Offering pursuant to which, among other things, for as long as Teck holds 10% or more of the issued and outstanding Common Shares (on a fully diluted basis), Teck will have certain pre-emptive and information rights, including the right to appoint one nominee to the Company’s board of directors. In addition, in accordance with the terms of the Teck IRA, the Company will not be permitted to incur any additional indebtedness or grant any additional liens (other than certain permitted indebtedness and liens) nor grant any additional royalties, enter into any streaming arrangements or conduct any non-equity financings without the prior written consent of Teck.

The Company is also pleased to announce that it has agreed to amend certain offtake agreements previously entered into by the parties with respect to 100% of the zinc and lead concentrate production from the Project, including, among other amendments, applying the offtake to the life-of-mine production rather than the previously agreed 5-year term.

The Company intends to use the net proceeds of the Equity Financings to advance its efforts to re-start the Project and for general working capital purposes. The Equity Financings are expected to close concurrently on or before April 1, 2025, subject to the negotiation and execution of all necessary definitive documentation, customary closing conditions, and the receipt of all necessary stockholder, regulatory and stock exchange approvals, including the Stockholder Consent and, in the case of the Non-Brokered Offering, the completion of the Brokered Offering. There can be no assurance as to whether or when either or both of the Equity Financings may be completed, either on the terms disclosed herein or at all.

The securities to be issued under the Equity Financings will be subject to statutory hold period of four months and one day in accordance with applicable Canadian securities laws and to a concurrent six-month hold period in accordance with applicable U.S. securities laws. Such securities have not been registered under the U.S. Securities Act or any U.S. state securities laws, and may not be offered or sold in the United States without registration under the U.S. Securities Act and all applicable state securities laws or compliance with requirements of an applicable exemption therefrom. This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

Standby Prepayment Facility

Also in connection with the Non-Brokered Offering, the Company and its wholly-owned subsidiary Silver Valley Metals Corp. intend to enter into a standby facility agreement with Teck (or an affiliate thereof) pursuant to which, among other things, Teck will provide an uncommitted revolving standby prepayment facility of up to US$10 million to the Company, which will be available to the Company until the earlier of (i) June 30, 2028, and (ii) the date on which the Project hits 90% of name plate capacity or the date on which the Company is cash positive for a quarter, unless terminated earlier by Teck. The SP Facility will bear interest at a to-be-agreed-basis per annum, calculated and capitalized quarterly. The Company may use the SP Facility to pay any operating costs during ramp up and capital costs relating to the Project, for working capital and to pay accrued interest on the previously entered into silver loan with Monetary Metals. The SP Facility is to be secured by security interest over all assets, properties and undertaking of the Company and Silver Valley in form and scope similar to the security held by Sprott Streaming, with certain security to be held on a first priority basis. No securities of the Company will be issued to Teck in connection with the SP Facility.

Debt Restructuring Transactions

The Company also intends to restructure, either directly or indirectly, its existing debt financing package with Sprott Streaming and certain other creditors on the following principal terms:

In consideration for, and in connection with, the Debt Amendments, the Company intends to, either directly or indirectly:

The Company expects that Sprott Streaming will own greater than 20% of the issued and outstanding Common Shares following the closing of the Transactions and therefore will become a Control Person. As at the date hereof, Sprott Streaming beneficially owns, directly or indirectly, or exercises control or direction over, approximately 49,251,872 Common Shares, warrants to purchase an additional 3,000 Common Shares and secured debentures convertible into up to an aggregate of approximately 98,909,523 Common Shares⁵ (based on the principal amount only), representing approximately 13.7% of the current issued and outstanding Common Shares on a non-diluted basis and approximately 32.3% on a partially diluted basis. Assuming the completion of (i) the maximum offering amount under the Brokered Offering (excluding the exercise of the Agents’ Option), (ii) the maximum offering amount under the Non-Brokered Offering and (iii) the issuance of the maximum number of Common Shares in connection with the Sprott Tranche II Shares and Sprott Loan Conversion, the Company expects that Sprott Streaming will beneficially own, directly or indirectly, or exercise control or direction over, approximately 250,251,871 Common Shares, warrants to purchase an additional 3,000 Common Shares and secured debentures convertible into up to an aggregate of approximately 194,147,618 Common Shares (based on the principal amount only), representing approximately 22.1% of the Company’s then issued and outstanding Common Shares on a non-diluted basis and approximately 33.5% on a partially diluted basis. Therefore, in accordance with the TSX-V policies, the approval of the Company’s stockholders will be required with respect to Sprott Streaming becoming a Control Person, which the Company anticipates obtaining in the aforementioned Stockholder Consent, with the votes of Sprott Streaming and its Affiliates and Associates being excluded from the Stockholder Consent.

Furthermore, in connection with the Restructuring Transactions, the Company intends to enter into an investor rights agreement with Sprott Streaming pursuant to which, for as long as Sprott Streaming holds 10% or more of the issued and outstanding Common Shares (on a fully diluted basis), Sprott Streaming will have the right to appoint one nominee (or an observer) to the Board.

Each of the Restructuring Transactions with Sprott Streaming constitutes a “related party transaction” within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. The Company intends to rely on the exemptions from the formal valuation and minority shareholder approval requirements provided under Section 5.5(g) and 5.7(e) under MI 61-101 related to the financial hardship of the Company. Furthermore, the Restructuring Transactions are expected to close on or before the Closing Date, subject to the execution of all necessary definitive documentation, customary closing conditions, and the receipt of all necessary regulatory and stock exchange approvals. There can be no assurance as to whether or when the Restructuring Transactions may be completed, either on the terms disclosed herein or at all.

The Common Shares to be issued in connection with the Restructuring Transactions will be subject to statutory hold period of four months and one day in accordance with applicable Canadian securities laws and to a concurrent six month hold period in accordance with applicable U.S. securities laws. Such Common Shares have not been registered under the U.S. Securities Act or any U.S. state securities laws, and may not be offered or sold in the Unites States without registration under the U.S. Securities Act and all applicable state securities laws or compliance with requirements of an applicable exemption therefrom. This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

Amendment to Articles of Incorporation

In connection with the Transactions, the Company anticipates amending its articles of incorporation to increase the total number of shares of capital stock that the Company is authorized to issue from 1,510,000,000 shares to 2,510,000,000 shares, which requires the approval of the Company’s stockholders. In lieu of a special meeting of its stockholders, the Company intends to obtain the written consent of disinterested stockholders by way of the aforementioned Stockholder Consent.

Closing of Royalty Amendment

Further to the news release dated February 25, 2025, the TSX-V has approved the amendment to the First Royalty which, for greater certainty, is separate from the further amendments to the First Royalty discussed above. The First Royalty currently applies to certain primary, residual and other claims comprising the Project, with the applicable percentage currently being between 1.35% to 1.85% based on the type of claim.

Under the First Amendment, the First Royalty now also applies to certain additional surface and mineral parcels between patented mining claims that are within the existing boundaries of the Land Package, as required by the terms of the First Royalty. The Additional Claims in aggregate cover an immaterial portion of the total Land Package and were identified by the Company as part of its annual review of the Land Package to ensure there are no gaps in the claims comprising the Land Package.

ABOUT BUNKER HILL MINING CORP. 

Bunker Hill is an American mineral exploration and development company focused on revitalizing our historic mining asset: the renowned zinc, lead, and silver deposit in northern Idaho’s prolific Coeur d’Alene mining district. This strategic initiative aims to breathe new life into a once-productive mine, leveraging modern exploration techniques and sustainable development practices to unlock the potential of this mineral-rich region. Bunker Hill Mining Corp. aims to maximize shareholder value while responsibly harnessing the mineral wealth in the Silver Valley mining district by concentrating our efforts on this single, high-potential asset. Information about the Company is available on its website, www.bunkerhillmining.com, or within the SEDAR+ and EDGAR databases.