Bunker Hill secures $7.3 million for Idaho silver project

Bunker Hill Mining Corp. [BNKR-CSE, BHLL-OTCQB] said Tuesday it has secured equity investments worth approximately $7.3 million, following the closing of a private placement and the exercise of warrants by  Teck Resources Ltd. (TECK.B-TSX, TECK.A-TSX, TECK-NYSE) . The company said it intends to use part of the net proceeds for expenses related to the Bunker Hill mine in Idaho.

As previously announced on February 15, 2023, Bunker Hill issued 51.6 million special warrants priced at 12 cents each, generating gross proceeds of $6.2 million. In addition, 10.4 million common share purchase warrants were exercised at 11 cents per warrant for gross proceeds of $1.1 million.

In compliance with the policies of the Canadian Securities Exchange, the company previously amended the expiry date and exercise price of the 10.4 million warrants, which were issued to Vancouver-based Teck as payment for the acquisition of the Pend Oreille process plant.

On Tuesday, Bunker Hill shares were unchanged at 11 cents and trade in a 52-week range of 30 cents and $0.085.

 Bunker Hill has said it intends to develop the Bunker Hill Mine as a first step in consolidating a portfolio of North American precious metal assets with a focus on silver.

Production at the historical Bunker Hill Mine began in 1885 and ran for 95 years. It was a lead metal mine with silver and zinc produced as a by-product. The mine produced over 42 million tonnes, yielding more than 165 million ounces of silver, 3.0 million tonnes of lead and 1.3 million tonnes of zinc.

During its long history, over 40 separate mineralized zones were exploited. Of those, 13 were high grade silver orebodies.

The mine is situated in the Coeur d’Alene Mining District, a region that has yielded historic silver production of over 1.2 billion ounces, with the Bunker Hill Mine accounting for nearly 15% of the historic silver production.

In September, 2021, Bunker Hill released the results of a preliminary economic assessment (PEA), which contemplated a US$44 million initial capital cost (including 20% contingency) to rapidly restart the mine over an 18-month period. The PEA envisaged generating approximately $25 million of annual average free cash flow over an extended 11-year-mine life while producing nearly 1.0 billion zinc equivalent pounds of metal, including over 8.0 million ounces of silver.

The company said the majority of the initial capital costs are related to the cost of the process plant, shaft and tunnel rehabilitation. It predicted that production could commence six months after the start of construction at a rate of 200 tons per day, ramping up to 1,000 tons per day within six months.

In connection with the offering, each special warrant is automatically exercisable into one unit of the company. Each unit consists of one common share and one common share purchase warrant. Each warrant entitles the holder to acquire one common share at an exercise price of 15 cents until March 27, 2026.

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