Bunker Hill Updated PEA

0:07 Hello, everyone, and welcome to Bunker Hill's live summit today, hosted by 6. Today, I'm joined by Sam Ash, the CEO of Bunker Hill, David Weins, their Chief Financial Officer, and Richard Williams, their Executive Chairman. The team is gonna walk us through their updated PEA results and after, they'll be accepting questions. You can submit your questions using the Q&A panel found on the right-hand side of your screen at any time. As always, this summit is being recorded and will be available to watch afterwards on six.com. So without further ado, Sam, we're gonna kick things off to you to get things started.

0:37 Thank you, Cameron. And thank you everybody for dialing in today. It's really kind of an exciting day for us. We put out a press release yesterday on our updated PEA. We've been working pretty hard at optimizing the mine plan and moving towards restart of the mine. And I think what you see here today is really a positive move in the direction that we always knew that it was going to move. You know, when we put out the initial PEA, we were really looking to make sure that we had a solid, conservative case for the economics of the mine that supported a rapid restart, And we immediately went to work on optimization. And what we're looking at today is the results of that effort. And the primary driver of the improved economics that you're seeing here on this mine plan is around a mining method change. Our PEA

1:33 had cut and fill mining as the mining method approach, which is a somewhat selective mining method. And what you see here, after putting in the technical work with the mining engineering team and the mining consultants, is the result of a move towards a more bulk method, long-haul open stoking. Now there's a little bit more development that is required for that, but the benefits as you see here are a significant reduction in operating costs. That's the key driver behind the positive movement in the economics on this updated PEA. And it's the plan that we're going to be moving forward with as we move to restart production. You can see the high level numbers here, you know we've had about a 40% or 40 million dollar improvement of NPV.

2:23 You know we still have a short payback at just over 2.5 years, but you still see that modest CapEx bill, which is really a function of the amount of existing in-place infrastructure that we have in the mine. And you see that we have a little bit of a mine life extension. As the mining costs and the operating costs come down, we're able to bring a little bit more material into the life of mine. And really, it's all of that. And just to keep everybody focused as well, we still have a huge amount of upside silver exploration to both extend to the mine life and leverage higher grade, higher margin silver into the mine plan. So everything's moving in the right direction.

3:10 We're extremely excited to be able to share this results with the market and our investors and show that we're really moving forward with very positive moves towards restart. When you look at some of the details where some of the metrics has moved, you see significant improvements across really kind of all the financial metrics. And that's exactly what you'd expect to see when you go to a more productive mining method. Now, you know, cut and fill mining is a, it's a, it's a great mining method, but it is somewhat selective and, and you pay for the price for that selectivity with, with increased operating costs, long haul mining, as we've gotten to know the deposit a little bit better, the ore body geometry fully supports long-hole mining, the ground conditions support long-hole mining, and it's really the appropriate method for this deposit. And I think it's also interesting, there's a perception that the mines in the Silver Valley are all kind of very narrow vein and highly selective by nature. But what you see here with the long hold mining approach is that the key ore body that's in this plan is different. It is amenable to very productive bulk mining techniques.

4:31 And quite honestly, you know, we're looking to advance and improve on that productivity by increasing the stope size as we move forward with our technical study and and de-risking efforts.

4:47 And then just this kind of helps visualize, you know, where the changes are coming from. You see that mine plan optimization that's result of bringing a little bit more material into the mine plan as a result of that reduced operating cost. You see the main driver, which we talked about was the unit cost reduction between cut and fill and long-haul mining. You see the additional expense development. That's to be expected. And really, in making the decision to change mining method from a cut and fill to a long hole open stoke is that balance between the additional cost for expense development versus the savings that you get with the reduced operating costs.

5:33 What's interesting as well is that we kept all of the metal prices exactly the same as in our PEA. So you can compare these 2 plans like to like. But just for directional understanding, we did put what this plan would be valued at, the spot metal prices. And you can see that we have a tremendous amount of upside leverage to metal price. And keep in mind, the metal prices that we're using in this plan are really pretty conservative, well under the spot price today. And that's before any upside potential. We are just getting started at this site. We think of Bunker Hill as a multi-generational asset with a world-class mineral endowment.

6:22 And as we get into the mine and we get into production, using a portion of that cashflow to fully rehabilitate and explore the entire mineralized area and claim block, we expect significant additions both to economics and mine life and metal content coming out in the plan. So, you know, really the end of the story here and the key takeaways are that, you know, we've been hard at work on the technical side. You see the results of it here, significantly improved economics, continuing to de-risk the project, making positive advancements towards restart. And we still have an enormous amount of leverage on the exploration side and upside potential.

7:11 So, you know, quick and dirty, but certainly I wanted to share that with you and excited to answer any questions that the audience might have. Great. Thanks a lot. Talk about quick. Yeah, and so I'd just like to take this opportunity to remind everyone, if you'd like to ask a question, please do so in the Q&A chat found on the right hand side of your screen.

7:34 But maybe in the meantime, maybe we could go around the horn. Is there any one aspect that each of you consider to be the most exciting or the most interesting about this update? Yeah, from my perspective, I think what you're seeing is the natural progression of a robust project. You know you have a you have a solid solid economics out of the gate and a continued refinement and I think that what I would say is that you can expect to see more of the same. As we continue to move towards restarting the mine, you're going to see additional optimizations and improvements in the economics and the mine plant as we go forward and continue to do our work. I say from my perspective, one of the most exciting things is that you see in that square box at the top left where our current market cap is. And as a fellow investor, I can tell you when I look at our market cap of $27 million relative to $245 million at spot levels, and that's before all the additional upside.

8:34 That is an extremely attractive opportunity for investment in terms of re-rating potential as we move towards commercial production over the next couple of years. And so certainly, You know, I think the only thing we got wrong about yesterday, I think, was the day that we chose to put it out when the Dow Jones was down 3%. So I think the market was a little bit distracted yesterday. But we're looking forward, as we continue to move with these other catalysts and continue to improve the value of the mine, a re-rating in our stock, which we certainly think is deserved. Right, Rich, any words?

9:11 Now, up front on this slide, I just wanted to emphasize what the team is here, and Sam in particular. When we were both at Barrick and over the period that I was there as chief operating officer, we nearly doubled that company's operating margin. And the we that we're talking about was the Sam Ashes and the Matt Gillies and others who were on the ground running the operations and in doing that, just like every other mining company, just like Barrett today, you're looking for opportunities to achieve a step change in productivity. And in mining, it's a change of mining method, which is only possible in this case because the mineralized zones or the ore bodies can take that type of bulk mining. And you can see the significant change that it made. This is precisely what we did in Cortez and Turquoise Ridge and so on. So, so Sam has been there before.

10:12 He was there at the 2 although an open pit. This is exactly why we had Sam come in here as CEO. We knew some time ago, and this was before we even got involved, that when looking at the history of Bunker Hill Mine, that it suited a much more efficient mining method than cut and fill. But the guys over the summer have worked exceedingly hard to affirm that and what you're seeing now in my view

10:43 is the effect of Sam Ash and team getting their hands on an asset that was run exceedingly well in the 1970s, the difficult commodity price time following the oil shocks of the early 70s. And you're gonna see much more of this going forward. We are a team and SAM representatives very, very focused on productivity. And that's why we have a mining engineer that such as SAM running the project right now. You should expect, And we certainly will challenge ourselves to be able to do much better than this particular chart shows by bringing in more of those good ideas and more of that Understanding in precisely the ways that Sam's and Matt Gillies and others did in Barrick back in the day.

11:33 Great, thanks a lot, guys. We have had a few questions come in. The first is from Rob Schumacher. First, he wants to say thank you for keeping the shareholders informed. But he'd really like to know if you could share any information on the $44 million financing. When will this be announced? Any large strategic investors? Is there a debt equity raise, for instance? Well, let me just start off before I hand over to Dave on this, is as you're Dave coming in, because everything's about teamwork. He put, he supported by the excellent Cutfield Freeman, have been running a process for some time now to provide to the board, which I chair, the most effective restart financing, which is defined at the lowest cost of capital.

12:22 That process is ongoing at the moment. It hasn't closed. We have people looking at this in detail. And again, I give you, you know, this is very market sensitive insight, clearly. We have to be very careful what we say right now, but I say that the process to secure that which Dave is leading, working with Sam, is going from the board's perspective exceedingly well. David? No, I think you said it well, Richard. We're pretty excited about the next couple of months. We don't have a firm date to communicate at this time, but as Richard alluded to, we've got a number of parties looking at this in detail. People are eager to finance this thing once they take a look under the hood. And so together with the continued optimization work, we're looking forward to hopefully having some good news on that over the next couple of months. And again, working with David and Cutfield and team, this suits, this type of asset suits streaming, suits royalty, suits debt, suits equity. So you should expect a mix.

13:31 And again, we're working exceedingly hard and are experienced in doing this. And we've got some very good advisors to ensure that the blend of that is for us, the optimal cost of capital and for the finance providers provides them a very exciting business opportunity on a go-forward basis. Because we look at these providers just as we look at equity partners as partners and when you've got yourself an asset like this which has all of that upside, a long long potential life ahead of it, to be affirmed through exploration, but we're talking potential here now, it really does suit that blend of financiers that are prepared to come in with us and act as partners over the long term. And so you shouldn't be surprised that we've got that happening, even though we're doing it off what is a PEA.

14:24 But a PEA, in our case, because we've inherited all of this data and all of this infrastructure, is a very different type of PEA to that which typically comes onto the market. And if you are benchmarking anything in terms of those type of studies, as engineers or financiers or equity shareholders, such as we all are, you need to do it on the basis of a restart plan of a closed site where you've got 100 years worth of data. And we're finding that every single check of the old data, you know, by drilling or by met testing or whatever it is, is coming back with no variance in a negative sense and there's variance in a positive sense of what we were told beforehand. Our confidence is increasing therefore and and so that's also being passed on to a potential finance partners And what I would add to that, Cameron, is that in terms of the mix, as Richard alluded to, if you had to put it into 2 buckets of equity and non-equity, certainly our plan, and we have very high confidence that we will be able to finance the majority of the restart capital not from equity. And certainly in terms of the timing of that, what we're working very hard on right now is securing that non-equity part of the finance package. And we will look to phase, in terms of our overall funding needs, the non-equity piece first, followed by whatever equity we need at the end. So we certainly think that will add the most value for shareholders.

15:52 Again watch this space. Again as the board, these guys are working exceedingly hard for the company and for us coming forward with options and the moment in which we are able to communicate with that option, we will do. It's going to be exciting. Great, thanks a lot for that. Tim in the audience wants to know what the current status is with regulatory folks like the EPA and Idaho.

16:15 Well, just to recap a little bit, you know, the key environmental challenge that we face at Bunker Hill is acid mine drainage. And just to remind everyone, the water that comes out of the Bunker Hill mine reports to an EPA-owned and operated water treatment facility, and it's treated to a very high quality and then subsequently discharged into the environment. Now what we are working on with the EPA is there, you know, as I'm sure everybody's aware, there was a settlement agreement reached and in that settlement agreement, it articulates a $20 million payment for historic water treatment. Now, That's incredibly valuable in itself, just to remind everyone, because it quantifies quite clearly the entire historic environmental liability at Bunker Hill. Now, what we're doing is we're in discussions with the EPA, and those discussions are going very, very well, about how we can structure the repayment and the and the and meeting that liability and that commitment out of cash flow in a mind that is up and operating and and has been restarted.

17:33 So, you know, there are, as 1 can imagine, there are a lot of conversations going on, particularly with us being as active as we are on the restart financing. And what I can say is that as soon as we have something that we, at the appropriate time that we can communicate, that we will. But I would say that those conversations are ongoing and are proceeding very, very well. If I can just add a bit to that, Sam, because it's really important, not in the team chat at the moment, is Bradley Barnett, who is our Vice President of Sustainability. And he came in, and you know that from the website, and thank you for attendance here. But he's been working with Sam and David with the EPA and the IDEQ, you know, for for nearly 18 months now and just to give you a feel for the frequency of meetings.

18:33 You know, this is a minimum, a once a week meeting. And over our time, Bradley and team, everybody here, has improved the quality of the water leaving the Bunker Hill mine. And we've done that as a deliberate choice. We've gone beyond that, which we are required to do as a result of the bare minimum standards to go into the local water treatment plant. We've done a lot of work to understand what is the whole environmental complexity here and have done it in partnership with the EPA and the IDEQ and at every step along the way, it's been a partnership approach.

19:19 So, as Sam said, the next piece of news you should hear is with respect to our our go forward plan to deal with that past liability. The the 19 million dollars outstanding and that will come relatively soon But again, I just want to emphasize again, we're doing this in partnership with the EPA and IDEQ. It is not them on one side of the table inspecting our homework. We're looking at all of these problems together and coming to a common solution because of course as we know in life that's the best way to achieve progress and we're finding them to be exceedingly helpful. Thank you for that. Rob Schumacher has another follow-up question.

20:05 What's the plan to promote Bunker and ultimately the share price and market cap? Many folks haven't heard about Bunker, according to Rob. What are your thoughts on that? I'll take a first crack at that question. So certainly we have an investor relations program and part of that, I'm actually pretty excited about this weekend and Monday, Tuesday, where we're gonna be sponsoring the Silver Symposium in Coeur d'Alene. So for those of you that are local, as you may have seen in the press release we put out a few days ago, Sam and I will be hosting an in-person live event here at the Bunker Hill Mine and would love for you to join us. That happens this Sunday with a bus that leaves from Corder Lane. So please do reach out to IR if you would like to join that. But I'd love to speak with investors at the booth. We'll be presenting at the conference as well. Apart from that, you know, we're going to be doing a bit of a virtual tour through a number of European markets in a couple of weeks.

20:58 We've made some good progress on getting research coverage, which is a key outlet to institutional investors. So Sprott Capital Partners is currently covering us, as many viewers would have seen, they actually upgraded our price target yesterday as a result of our PEA that you see on the screen here, which was a nice. And apart from that, we are in constant outreach to institutional investors and and and it's an educational process and and people are waking up to the fact that this is not the company that it was 2 years ago. This is a brand new team we've been you know we've been making all this progress and there's big catalysts to come. Yeah, and I'm looking at the next question too from Rob Schumacher, by the way, great questions, Rob, on marketing and bunker as an ESG investment. This is very important to us.

21:49 Is that the answer is, Rob, are we going to be marketing Bunker as an ESG investment? If we're doing it now, let's just think about what we're going to achieve here at Bunker. When the restart happens and we start being in the business of P&L, active and healthy P&L, which is this P&A, P-A represents here, from mining. That's not just what we're going to be doing. We're also going to be actively working to improve the water treatment solutions for this part of the valley and we We want to go much further than people have done before. We want our standards to be higher than than have been in the past because new technology is available. It's not because people in the past were lazy or difficult or anything like that.

22:42 It's because new technology is available. We want to ensure that bunker has the maximum impact on a community and in the 2 counties here, but wider. There was knockback severely devastated, some would say, as a result of the closing of the mines from 1980 in this case, but throughout the Silver Valley as a result of the new and welcome, in a strategic sense, environmental regulations that came out at that particular time. We're looking to not just maximize the impact here through paying miners, getting them into the community and so on. But we're looking at other businesses around here, partnering with other people to build real estate, green power, support the leisure industry here, which is skiing, golf, hiking, hunting, and much more as a deliberate part of our strategy.

23:38 We see this as essential. We see that it's essential when mining anywhere in the world but it's essential for good common sense with mining because at some point, the mine here and we think it'll be very very long time. Multi-generational will end and when the mine ends, we don't just want to make sure it meets its minimum requirements to ensure it doesn't upset the environment to all those living here. We'll do that, obviously. That's a defensive play. But on an offensive play, what we want to be doing is generating businesses that will outlast the mine. So you do have ski resource, you do have golf, you do have real estate, you do have a range of green power opportunities here in the Silver Valley that our company wants to help with. So, I draw your attention onto our website to when you go to the corporate tab, look down to the development partners section And in there are companies like Minewater, Digby ESG, and Edwards Group, all of whom Brad Barnett and the team here are working with to look at how we can multiply the impact of what we're going to do here for mining through other non-mining businesses and we see that being core to our offering to local stakeholders and to shareholders because we believe and we sincerely believe this and it's and it's starting to be understood well in the market that if you have very high ESG standards and you aim towards maximizing the impact of your investments

25:09 beyond just mining, you will deliver superior returns on investment over the life of mine. And that's critical to what we're doing. So, it's a very good question, Rob. You can tell by my very long answer that we are are positioning ourselves to emphasize those points at the right time to the market. And that right time is starting now, which is why I'm so grateful for your question, Rob, and going forward. So watch this space. Bunker is more than just a very valuable mining story. It's a regeneration story of an area that is going to really welcome what this team to my left and others around this mine site and beyond are going to do. So thanks for your question, Rob.

25:57 Great, well, thank you. Sam, David, Richard, I'd really like to thank you for coming on today and I'd also like to of course thank everyone in the attendance for coming in and tuning in especially asking questions. If you didn't get a chance to ask a question or if you think of one later we'll be sending out a short survey where you can leave feedback and get in touch with the team. You can also of course always go to bunkerhillmining.com if you'd like to learn more information as Rich had pointed you to earlier and with that I'll hand it to Sam and the team for some final words before we wrap up for the day. Thank you everyone for dialing in and it's great to talk to everyone again. And, you know, final words and final thoughts for myself are really that, you know, what you're seeing here is a great step forward. It's a positive movement towards restarting this mine and realizing that vision of a fully integrated restart of a truly historic mine.

26:52 And as Richard said, that ESG component is a key piece of not only this project, but of the company that we're looking to build. And certainly as we move forward, you know, we will see a lot more around that aspect of the business. In addition, you know, we're continuing to advance the technical work and we would expect to see additional optimization and improvement as we move forward. And on the financing side, you know, we're hard at work there and we're nearing the finish line. So with that, I'll turn it over to Dave. I think you stole my words there, Sam. I think it's time for us to get back to work, which is what we do here and how we add value. And thank you very much for your time. It was a pleasure to be able to bring this to you today.

27:40 And my final word is, I wanna thank the team here for what they're doing, but the team extends beyond our employees to contractors and other partners locally. You know, the Josh Haynes is the Jeffs and Steves of CMC and others that are really guiding us, and it will always be the case as we're outsiders coming in, Sam lives here, as the best way to do this. And if we didn't have that type of partnership with some really exceptional Silver Valley people and what you're seeing on the screen would be more theoretical than real and so thank you, Jeff. Thank you, Josh. Thank you, Steve. Thank you. All of those that are working with us to leverage this opportunity for the benefit of everybody.

28:26 Great gentlemen. Well, with that, I think we're going to wrap things up. I hope you have a good rest of your day. Day. Cheers. Thank you. Thank you.