Bunker Hill Value Creation by Exploration

0:07 Hello everyone and welcome to Bunker Hill Mining's live event hosted by 6. I'm pleased to introduce the speakers for today. We're joined with Sam Ash, CEO, Richard Williams, Executive Chairman and Mark Crowder, Chief Geologist of Bucket Hill Mining. This presentation will be focusing on the opportunity for investors to gain insight into the company's plan to deliver more shareholder value through exploration. We encourage you to ask questions in the chat in the bottom right corner of your screen, and there's no need to wait to the Q&A session at the end to post

0:38 your questions. Please feel free to submit them as they come to mind. This event is being recorded and will be available in the coming days as well. So without further ado, I'll pass things over to Sam to kick things off. Thank you very much and welcome everybody. This is a pretty exciting presentation for us today. As you all know, and people who have been following us, We've talked the last few of these events about how the project is progressing. Like to say that, you know, just as a lead in, things are still going very, very well. We're advancing on schedule and on budget. And with that in mind, as we look forward to 2024, 1 of the things that we're really focused on as a company is beginning to take positive and definitive steps towards unlocking the upside potential of what we see as a world-class asset in Bunker Hill.

1:30 And our strategy is really three-pronged, focusing on resource conversion, near mine exploration, and also some very exciting new target exploration in our larger claim package. And just for a bit of reference, our mineral inventory includes not only 7 million tons of measured and indicated mineralization, but another 6.9 million tons of inferred mineralization. And really, this inferred mineralization needs a very modest amount of work to begin the resource conversion process. There's no inferred mineralization in our pre-feasibility mine plan, which is about 5 years. And we expect when we look at the quality of the inferred mineralization, that we'll have a conservatively a conversion rate of 75% plus.

2:25 That gives us a potential to double the mine life and more than double the ongoing value that's indicated in the pre-feasibility with a very low risk, high reward, and low cost conversion drilling program. And Mark Crowder is going to talk a bit more about that. But we also have near mine exploration. And this is very high-quality exploration targets that is in close proximity to the existing mine workings and areas throughout the entire footprint of the mine that have a high potential for new discoveries

3:10 and an expansion of existing mineralization. It's important to remember that the deposit is open in all directions along strike and at depth. In particular at depth we see an opportunity to bring more silver and become a more silver focused resource base and there's some really exciting opportunities right on our doorstep within easy access of existing underground workings. And potentially the biggest opportunity for us, a real game-changing opportunity is new target exploration. Our claim package is quite extensive. The existing mine footprint only represents about a third of the entire claim package that we control.

4:00 We've done some geophysics work that we've talked about before, and we are looking to follow up, identify targets, and begin the work of what we hope will be a game-changing discovery in close proximity, but entirely separate from the historic mine footprint. And with that, I'm going to turn it over to Mark Crowder, who's our chief geologist, has recently joined the team to run through that threefold strategy in a bit more detail. So Mark. Thank you, Sam. As you mentioned, I'm a chief geologist here. I just joined the team. I've got extensive experience in this district with both the Sunshine Mine and the Lucky Friday mine. So it's been an exciting change to jump over here to the Bunker Hill and continue to expand and improve this resource.

4:54 So on the resource conversion, we've got 3 different areas that we believe that are really, really good opportunities for us to expand our resource conversion. On the upper part, we've got a place called the New Guard Gap. It's up in the upper reaches of our mine. It's very reachable from current development. A little bit of drilling and we can do some conversion. About a million tons is available to convert over to M&I, which is exciting. We already have places to drill those locations. Also in that same neighborhood is a fold definition. We're in a fold belt here and the fold has very minimal definition along the edges. There's an opportunity there to expand it a little bit.

5:39 And again, they're short holes. They're very easy to get out. We have existing development in the area. So It's a place that we would like to start, expanding our resource, and converting about 5 million tons over to M&I. And finally, in the New Garden area, there's an opportunity. This is beyond any existing drilling. The area that we're talking about over there on the right-hand side is an area that has a great opportunity to see another little bit of like a little finger out there of mineralization. It's beyond the existing resource And so it will fully expand this new guard area to a great deposit. And all of this stuff is above the water table. So we're not dealing with any major water pumping. We're not dealing with any major development because this is already an existing working area.

6:35 They are readily available to us today. It's a very low cost, low risk, and very near-term opportunity. It's accessible by all the existing development. Finally, there's 6M tons of M&I. This is part of the M&I conversion that Sam was previously talking about that is very readily available for us to go and do very quickly this year.

7:04 Now on the resource expansion side, this is a look a little longer-term look looking at the whole entire deposit. There's an area up there in the upper area that we've got we've kind of got 3 areas. We've got an upper country area, a mid zone, and a down deep area. The upper country are multiple high-grade silver targets above the water table. We have existing drill platforms that can be re-established with minimal rehabilitation. So that's to get us the air power and water needed to set up proper drill stations so we can continue to drill out this resource in the upper area. In the mid-zone, these are down-dip extensions of the existing ore bodies. These are just places where the mining stopped in the past, and we can restart in that. All these areas are the middle band in this picture, and they're at or just below the current water table.

8:01 It's not going to take a whole lot to get access to this area. The middle zone is a mixture of silver, lead, and zinc. Each of those are really big bulk mineable areas. We're looking at long-hole stoping as one of our primary methods. These are big bulk deposits, so we'll be able to mine it in a low-cost manner.

8:23 Finally, the down deep areas are extensions that are all open at depth and open in all directions. Generally, as we move down in this deposit, we see higher-grade silver and lead with depth. As the drill platforms become available, these targets are predicted to be drilled. The takeaways are that This is a 100-year-old mine and it probably has another at least 50 to 100 years left in it. So the potential to increase the silver as we go deep and we'll be using new modern exploration technology, new drilling, new geophysics. These are the kind of technologies that we're bringing to the forefront so that we can be very successful in our exploration.

9:15 Then Finally, the big game changer is geophysics. We've got 1200 acres of unexplored, untested, near-surface drill targets. These are to the south of our current mining operation. We've got 2 of them that we really are excited about. One of them is the Government Gulch Target. This is a similar orientation to the Quill New Guard Zone. It's on 2 major structures in the area. It has a 7 to 10 million ton potential. It's a huge large-scale deposit potential down to the south of us. The second one that we're excited about is the Midland Target Zone, a little bit closer to our current workings. This is a deeper target, and it's pretty neat to see that these geophysics are coming back with some really good targets for us to go and follow up on.

10:09 A little more detail on each of them. The government gulch, like I mentioned, center section of 2 major faults. It's the Government Gulch Fault and the Midland Fault. The mineralization appears to be at or near the intersections of these faults. It's in St. Regis Court Sites. St. Regis is one of the favorable hosts for mineralization in this district and always has been. It's a very strong geophysical target. Signature is why it's nice and hot and red.

10:38 It's a good idea that there might be some mineralization in that area that warrants further research and investigation. The second one is also along a major fault, the Midland. This is a major east-west fault. It's in Rivette court sites, which is also a favorable host for mineralization both here at the Bunker Hill and elsewhere in this district. It's a little bit deeper geophysics signature, which may mean that maybe the mineralization leaks from the surface and the debris deposits itself in the revet, which is at a deeper location.

11:10 The takeaways, strong geophysical anomalies, there's some favorable geology and there are along major structures, And each of these have a potential to totally redefine what the Bunker Hill is all about, that we have a whole nether deposit really close and nearby us. Thank you, Mark. So when you take a step back, what is our strategy and what are you going to see us do over 2024? Well, first of all, the resource conversion. You know, the way I would characterize that is that is really very low hanging fruit and an opportunity exists for us and we're going to be starting to drill in Q2 through Q3 and we expect that to result in a resource update with significant resource conversion and a strong potential for resource expansion by the end of the year.

12:08 And then that leads into the resource expansion, kind of the same timeline. A lot of that drilling will be both resource conversion and resource expansion from the same drill locations, which is nice. And again, resulting in what we expect to be an updated resource in Q4. And then on the new target exploration,

12:31 Mark and the team have a little bit of field work to do this this spring, followed by a little bit more interpretation to really make sure that you know the you know the first drill hole that we poke in there is targeted and targeted properly. We're looking to be drilling in Q3 and a successful year would see us having some drill results coming back late Q4, potentially early in 2025.

13:06 And what does this mean from a value creation perspective? You know, so you can see here where we're sitting at our pre-feasibility study, and I circled and outlined, you know, just the inferred conversion at, you know, 75% conversion rate has enormous upside potential.

13:25 And that's before you get to the resource expansion and exploration opportunity. And we see that as having a significant long-term value-creating potential for us here at Bunker Hill. So it's a really exciting program that we're embarking on. We always knew that this day would come and our focus up to this point has certainly been on project delivery, project financing, making sure that we're getting the Bunker hill mine into production. But now, as we begin to turn the page and focus a little bit more on exploration and value creation, this is really where you're going to see the bunker hill team and the bunker hill deposit begin to add significant value.

14:19 And with that, I'd open the floor to any questions. Great, thank you so much, Sam and Mark. We do have some questions in the audience, but just as a reminder for people that tuned in late, please feel free to submit them.

14:34 I guess I'll kick off with the resource conversion section. So what I gathered was there's 3 zones, the gap, the fold, and I believe the opportunity zone, correct? Would you be punching holes in all 3 of those zones for the resource conversion?

14:54 Mark, do you want to take that? Yep, so coming back to that slide. Yes, we will be looking a little bit in the gap zone, a lot in the full definition, and maybe a little bit in opportunity. The full definition area is where the bulk of that resource conversion is. That's where we're going to start. In our initial pass right there in the middle of that, do a few up high and then a few long. Excellent, thank you. Rock in the audience is wondering, do your existing permits cover the mining in the newly defined areas or will you need additional permits? It's a little bit early to, and I assume you're talking about the, I assume you're talking about the game-changing geophysics opportunity.

15:41 So it's early in the game, but what I can say is that Bunker Hill is on 100% private land, 100% patented mining claims. It's all considered a single operation.

15:55 So although there may be some permitting required, ultimately, if there is, you know, surface disturbance, we would, you can expect that permitting to be associated with actually building and constructing a mine to be pretty straightforward

16:16 and not all that extensive. For drilling, no, there's no permits required to begin the drilling or the geologic field work. Great, thank you. R Walker from the audience is wondering, when is the last time this round and claim package was subject to concerted systematic exploration? Yeah, I would say really never. And that might sound strange, But when you think about it in context of an operation that operated for 100 years continuously, discovered by an outcrop on surface, and then essentially mined down dip and within the existing mine footprint, the mine always had 5 to 10 years worth of reserves in front of it.

17:06 And because of that, the value proposition simply wasn't there for significant exploration activity across the larger claim package. You have to remember that when the mine was in operation, it was vertically integrated. There was a lead smelter and a zinc plant. The mine was feeding that

17:29 and it was operated as a vertically integrated business. So the refining and smelting operations were really driving the strategy of the business. And it didn't call for the need to really go and greatly expand the resource and maximize the resource area from a geologic perspective. Because of that, inside the mine, you see the opportunities that Mark outlined, particularly down dip. Your Bunker Hill's the shallowest mine in the Silver Valley,

18:06 but when you look at the exploration there's very few, if any, holes below the bottom of the shaft level and that's because they simply didn't need to add resource. And the same holds true across the larger claim package. There's certainly geologic mapping and we have a reasonable geologic understanding of what the claim package looks like, but it was never tested with any drilling campaign and never really followed up and taken to that next step, which makes it one of the reasons that Bunker Hill is such an exciting opportunity. If I just add a little bit more to the history too, and perhaps Sam, I'll ask you a question on it. Is that the ownership of the Bunker Hill mine and Sullivan smelting operation changed in 1968 when Gulf Resources, an oil business out of Texas, bought the business for a billion dollars on the New York Stock Exchange in a hostile takeover.

19:10 That was happening quite a lot in American mining history at that time with energy businesses getting into hard rock mining. As you'd expect with the new owner, they did a review of the mine's potential prior to purchase and then subsequent to purchase. There was some systematic geological work done or survey work done under that new ownership. And if I'm correct, Sam, the New Guard was discovered or certainly outlined for mining at that particular time. And also, they had a look, a much closer look at the deeper silver that existed at that time. So the answer to the question, which is a corollary in addition to what Sam said, was when the new owners came in before the mine subsequently shut, they did work and that's given us a number of clues.

20:02 But no one did geophysical work like what the team has done at the moment on the surface there. And what it shows us, those of us who are the new owners that came in, is that we're following on the work done by Gulf Resources team, But we're then applying new technology to the larger land package

20:21 and discovering, which was really exciting when we did this, that up in the upper areas of the mine, not just going all the way deep, which requires us to dewater the mine, which we will do, is a whole bunch of opportunities that Mark, in particular here, who we welcome to the team, has really got his eyes on. Sam, is that right in terms of the history? I may have got some of it a bit wrong, but that was, I think, a time that they did invest in exploration or geological survey work. I would say you're correct, Richard. Your characterization, I think, is spot on. It's not like there was not geology work done. There was significant geology work done on the larger claim package.

21:08 But it would never, to the point where there was opportunities identified, but it was never,

21:16 the next step was never taken to outline exploration targets and follow up from a drilling perspective and that's what's really exciting. So you're right Richard, There's certainly some clues and some hints in the historic work that we're leveraging, but taking this next step is pretty exciting. Yeah, and I mean, again, for those of us who came to this, and I keep on spinning around the history because it's really important. Not just the history of the rocks goes back a very long way, but the history of the ownership and the activity is quite recent. Just think about it. You know, Gulf Resources bought this in 68, 69, the Environmental Protection Act comes in, 72 and 74 the Clean Air and Clean Water Acts, 73 the oil crisis that collapsed the world's economy.

22:13 The new owners didn't just have some geology to look at, they had some very, very significant external shocks to their business that led ultimately the combination of all of that and other factors to the closing of the mine in 1981. And then nothing happened with respect to this until what you're hearing now. And because of that understanding of the history, the human history on top of the geological history, that's what drew us to this mine. Not just the ability to get it into production quickly, the first to do so in a superfund site.

22:51 But secondly, to be able to use modern techniques with the right team to unlock a whole bunch of potential that had been identified by those new owners, Gulf Resources back in the 70s, but never been able to take into a mineable economic position. And that's what we're here to show you today, as well as introduce you to Mark, who is going to be leading the team to do this. So again, I double down when people say, why did we come to bunker?

23:23 Not just because of the short-term production, but because of its very, very serious, large, considerable and valuable potential. And I hope at the risk of repeating myself, that that is what people are taking away from the call. So the question was a very good one and I appreciate it. I'm gonna hand that back to 6. Thank you. Well, thank you, Richard. And That leads into a good question in the audience. You just explained why your team chose this mine and this property specifically, but an individual is wondering why Mark joined the Bunker Hill team. Maybe you can elaborate further on your decision to jump on the team. Absolutely. I think the biggest reason why I jumped on this team was because of the people running this team. I've enjoyed working with them, several of them in past lives and past places, and we're all in the same place at the right time at the right mind right

24:15 now. So it's an exciting time to work with people that I enjoy working with and it's also exciting to be in a project that is getting it back up off the ground. And frankly, it's been under explored and under appreciated in this district. And so I'm excited to bring this place back to life. That is why I joined this team.

24:35 Excellent. Thank you, Mark. And since we have you on, Chief Geologist, I did write down revet quartzites. I was wondering if you could elaborate that for non-geological folk like me. What's the significance of this? Could you see higher concentrations of a specific metal in these types of rock?

24:56 Absolutely. There's 2 rock types here in the district that host 90% of the ore bodies. It's the Revet Quartzite, which is a quartzite in a old sedimentary package that got heated up a little bit and then it became a quartzite. And the other one is the St. Regis Quartzite. So these 2 quartzite units, hosted in a old layered sedimentary package,

25:25 host most of the deposits in this area. There are a few other deposits and a few other different lithologies. But Whenever you see St. Regis and Revet court sites and the Coeur d'Alene district, that's when you should start paying attention. Those are the places where you find mineralization for both silver, lead, and zinc. Thank you, Mark. Mike was wondering if you could elaborate a bit more on the estimated drilling costs. So, the estimated cost of the drill programs we're looking at anywhere from 50 dollars to 100 dollars a foot, depending on what size of core we're going to drill. We're planning on drilling mostly NQ with a little HQ here and there.

26:10 It varies based on the drill hole size, but between $50 and $100 per foot is what we're looking at. Thank you. And a fitting follow-up question is posed by Rock here. Once you are in production, do you expect that the cash flows will be enough to continue the exploration or will you need to go to market again?

26:32 Look, that's why we've pushed so quickly to get the mine into production and generating cash flow. Because we see that the most efficient investment and value creation potential from a shareholder's perspective is to fund the exploration out of free cash flow. If you think about it like a like an engine, it becomes a kind of a self reinforcing cycle where we generate cash flow. We take a portion of that cash flow. We invest it into exploration and the return on that exploration generates additional cash flow and it creates a virtuous cycle of value creation.

27:18 So the simple answer to your question is yes, when we're in production, exploration is to be fully funded out of free cash flow. Thank you. Another individual is wondering if mining will occur in Q4 this year. We are certainly on track for mining and production in Q4. Perfect. Well, gentlemen, that's all I see from the Q&A chat for today. A lot of good questions here. If you did come in a little late just note that this is being recorded so you can watch it the replay available on YouTube probably within the day if not we will most certainly have it up tomorrow. Any closing remarks from you gentlemen before we close things off here?

28:04 Just for myself, thank you all for turning in and thank you for the excellent questions. This is a very exciting program and this is a day that we've been working for, is to really get to the point where we can talk about and action the value creating opportunity and potential that we see at Bunker Hill and what drew us as a management team to the Bunker Hill project.

28:34 Mark, have you got anything to say because I'll say a thing at the end. I just want to thank everybody for tuning in because this is an exciting time for the Bunker Hill. Good and for everybody down again, you're all going to get to hear a lot more of Mark and his important work as we go on. Many people look from the outside into Bunker Hill, perhaps looking for investment opportunities and they go, well, it's a little bit small. What we've hopefully shown today is we're making a mine that will then unlock a much larger mine. And so for those equity holders participating today or those that have participated in the past.

29:19 What that is, is a ticket to scale and this slide shows that. All miners, exploration, financiers, investors know that those things take time and 1 needs to be exceedingly thoughtful and patient about the accurate delivery of decent results. And I hope that the impression that we've created here is of measured, considered, thoughtful exploration, not rushing the gate.

29:50 And Mr. Kraut's style here, I hope has emphasized that. That's exceedingly important. This chart shows it. The second piece is as we go into production, every mine is different. In the Silver Valley, we are blessed with the fact that we're able to use long-haul open stoping with base backfill, what Mark referred to as bulk mining methods, given the nature of certain ore bodies, as he referred to them earlier on. That is not the same with every other mine in the Silver Valley. And it's the one of the things that ensures that our operating costs will be in the lower quartile of that zinc-lead-silver industry comparison.

30:38 Because we've got fixed infrastructure in place, we've got good access to the mineable areas and we can use bulk operations. So we're not just looking at geology for geology's sake, expanded resources, we're looking at low cost, high margin reserves. And that's the way in which we're working the development of this mine over obviously this year, but many, many years to come. And so thank you very much for the

31:08 call. I've really enjoyed, I've really wanted this call to happen for a long time to explain the geology, but we wanted to wait until we got Mark with his hands around it, his brain into it and his team really ready to go. So thank you, Sam. Thank you, Mark. Mark, you did an outstanding job. And thank you for everybody else who's been on the call. And as always, 6, great job. Thank you. And thank you. We look forward to seeing more, Mark. Thank you, Mark. And Sam and Richard, hopefully, AME Roundup goes well. So thank you all and enjoy the rest of your day.