Thanks to a recently upsized and improved deal with Sprott Streaming, Bunker Hill Mining (BNKR.CN; BHLL.OTC) has the money it needs to restart the historic Bunker Hill zinc-silver mine in Idaho.

With funding in place, plans to dramatically improve the mine’s economics, and today’s announcement of a new board appointment to turbo-charge future growth, Bunker Hill Mining has the potential for a big re-rating in the months just ahead.

Dear Fellow Investor,

It was just the shot in the arm the company needed.

After temporarily pausing its march toward production on its Bunker Hill zinc-silver mine earlier this year, Bunker Hill Mining (BNKR.CN: BHLL.OTC) is now back on track to execute on phase 1 of the Bunker Hill mine restart.

That’s thanks to a $67 million deal with Sprott Streaming. The deal closed last week and includes a $46 million streaming deal and a $21 million debt facility.

That money, combined with the money Sprott has already invested in Bunker Hill Mining ($96 million in total), will essentially fund the capital costs required to build phase 1 at the mine.

And, as you’re about to see, things are going to get really interesting well before the mine gets built.

None of this is surprising, considering the turnaround expertise the company brings to this project. The Bunker Hill team is full of seasoned veterans at getting brownfields projects like this one into production.

And because of that, the path looks smooth from here to have Bunker Hill producing its first zinc and silver concentrates by Q4 2024.

Sprott Ups Its Streaming Deal To $46 Million

Sprott Streaming was originally supposed to provide a $37 million stream, but agreed to up that amount to $46 million on the same terms.

The improvements to the deal materially lower the cost of capital to Bunker Hill shareholders without affecting leverage to metals price. Sprott maintains a 10% stream on all metals from the mine until a minimum quantity is met. After that, the stream steps down to just 2%.

In addition to the stream, Sprott Streaming is also providing a $21 million debt facility that will have 10% interest on drawn amounts and include a 0.5% gross revenue royalty for each $5 million drawn.

With no standby fee, this provides a free option for Bunker Hill to ensure that the mine restart is backstopped, while also allowing them to hunt for a better deal while they move the project forward with the money from the stream.

The previously agreed to Series 1 and Series 2 convertible debentures ($21 million total) will be extended to March 31, 2026, giving the company adequate time to get into free cash flow before needing to service the debt. A previous royalty convertible debenture will convert to a royalty upon the stream being advanced.

In all, Sprott has now provided $96 million of committed capital to restart the Bunker Hill Mine.

Teck Steps Up With Concentrate Deal

The mine’s operations are further backstopped by a five-year concentrate offtake option with Teck, who is now Bunker Hill’s second-largest shareholder and a strategic partner.

That deal will see Bunker Hill process its concentrate on site and then truck it to Teck’s Trail smelter, which is only 190 miles from Bunker Hill.

The result: Bunker Hill Mining has all the pieces in place to engage in full-scale recommencement of project activities this month.

Again, if all goes well, Bunker Hill will be producing its first concentrate and trucking it to Teck’s smelter by Q4 2024.

A Chance To Goose Bunker Hill’s Economics

And that’s just phase 1 of the recommencement of operations at the historic Bunker Hill Mine.

Because the mine was in production for almost 100 years before it was shut down for environmental reasons (issues which have now been solved), there is a wealth of on-site infrastructure that lowers the capex for a restart.

As management executes on the restart, it plans to delineate a ‘phase 2’ at Bunker Hill which could include:

• Increasing throughput from 1,800 tonnes per day (“tpd”) to 2,500 tpd

• Increasing recoveries for zinc and silver

• Improving processing grades through ore sorting

• Converting five-years+ of life-of-mine inferred resource into the measured and indicated categories

With a current pro forma market cap of only around $60 million, an increase in NPV on the mine, with what are “low-lying fruit” optimizations, could justify a very rewarding re-rating in Bunker Hill Mining’s share price.

A Clear Path To Production

Looking ahead, Bunker Hill Mining has a clear path to production here.

The funding needed to drive development has closed, allowing the company to get back on-schedule and on-budget for delivery of phase 1 at the mine.

And the exploration upside for this mine remains robust, with enough in situ metal (in particular, higher-grade silver) to support a very lucrative phase 2 at Bunker Hill.

Board Appointment To Turbo-Charge Growth Strategy

Plus, just today it made a long-term move for growth by appointing former Glencore head of strategy Paul Smith to its board.

Smith will lead the company’s new Growth Committee in support of building a portfolio of mines to go with Bunker Hill.

Adding Smith’s expertise is a huge deal for Bunker Hill and will ensure it remains laser-focused on adding value for shareholders.

With zinc in a shortage situation (with no other North American zinc mines coming online), silver looking primed to follow gold to higher prices soon, and the right team in place to execute and deliver value, now is a great time to do your due diligence on Bunker Hill Mining.

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