Business Enquirer Issue 109 | Bunker Hill Mining | Jan'23

Transforming the Industry and Generating Value for All

Bunker Hill Mining

Transforming the Industry and Generating Value for All

PROJECT DIRECTED BY WRITTEN BY

Gary Smith

Laura Watling

Bunker Hill Mining

After 140 years, this is just the beginning for Bunker Hill Mine

Many businesses talk the talk when it comes to being change-makers, but do they walk the walk?

Taking strides in providing value for its shareholders whilst being driven by its ESG values is Bunker Hill Mining Corporation, which is delivering a rapid restart of the Bunker Hill Mine, in Kellogg, North America.

Business Enquirer speaks with its passionate leadership team (Richard Williams, Executive Chairman, Sam Ash, CEO and Tom Francis, General Manager) about the restart project, why it is underpinned by ESG and the impact it will have.

Bringing an Historical Mine into the 21st Century

The Bunker Hill Mine, found in the world class Silver Valley Mining District in Idaho, is a story steeped in history.

Initial discovery and development at the site began in 1885, the mine became an icon in American silver, lead and zinc mining. During its near 100 years of life, it produced 165 Moz of Silver and 5Mt of Base Metals from 42.77 million tons mined at an average grade of 8.43% lead, 3.52 ounces silver per ton and 4.52% zinc.

The mine and its smelter closed in 1981 due to being unable to adjust to the environmental legislation passed in the 1960s and 70s, devastating the local economy. The closed site was then cleaned up by the United States Environmental Protection Agency as part of its Superfund rehabilitation programme.

After a very effective clean-up and nearly 40 years of closure, the mine is ripe for re-opening, as long as the environment can be protected.

In 2020 the Bunker Hill Mining Corporation received new management in Richard, Sam and Tom, a modern team with years of operational

Bunker Hill Mining

turnaround experience in the global mining industry and passionate belief in the value to be created from regeneration and modernisation.

“We’re focussed on a low CAPEX, rapid, sustainable restart of the mine and the subsequent exploration and development of its significant silver and zinc potential,” shared Richard. “Our published PEA and PFS describe the short-term restart plan and place a spotlight on a small part of the immense value that we intend to unlock by reinvesting the mine’s cash flow”.

In addition to extending the mine life by exploration, the team has already identified a number of ways to increase the mine’s output and operating profits following the restart using modern mining techniques and systems and all without having to return to the equity holders for more cash. This includes increasing mine throughput from 1800t/day to 2500t/day over time.

“We are laser-focused on sustainable value creation for all our stakeholders, including our many partners in Idaho. Our vision is to invest scarce capital to quickly create a sustainable cash-flow engine that will not only fund the development of the mine, but also ensure decades of employment for the local community, at no cost to the environment,” explained Richard. “In addition we will play our part in ensuring the necessary supply of strategic metals to a world attempting to move away from fossil fuels to more sustainable power systems”.

Creating Value for Shareholders and the Community

Of course, the business purpose of any mine is to make money. However, for Bunker Hill Mining Corporation, this can only be done if it places people, partnerships, community and a passionate respect for the environment at the centre of its business. Without this, there can be no trust, no teamwork and therefore no licence to operate.

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“When the mine originally shut in the 1980’s, it impacted the local community greatly and life hasn’t improved much for the people of Kellogg since then. We know that the restart of the Bunker Hill Mine will regenerate the local economy in many ways, via direct and indirect employment and all the benefits that will bestow,” highlighted Richard.

As part of Bunker Hill Mining Corporation’s long-term ‘regeneration vision’ it plans to help build a diversified ecosystem of other new and green businesses whose operations will improve not only the sustainability of the mining operations but also offer socioeconomic benefits to the local community, during and after mining operations end in the future.

“The Bunker Hill Mine has a legacy in the community, and by restarting the mine the right way we can now offer an opportunity to carry on that legacy for many generations to come,” shared Sam, himself a resident of the local town, “we feel that it is also our responsibility to create non-mining investment opportunities as part of maximising our positive impact”.

Considering sustainability, the team ensures minimal impact on the environment by maximum use of green/hydro-electric power, no surface disturbance, underground tailings and waste deposition and the use of a longterm water solution to eliminate the need for water treatment.

“To remain true to our Regeneration Vision we are implementing eco mining techniques to ensure low impact, high margins and a long life” explained Tom, “this includes the use of hydropower. In addition, we intend to convert waste to electricity to save approximately 50,000 metric tonnes of CO2 equivalent emissions per year, concurrently saving Shoshone County 10% on its waste disposal budget,”.

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There are also plans in place for Bunker Hill Mining Corporation to partner with the State of Idaho to generate affordable housing, create recreation facilities and implement skills development and training opportunities.

Getting Back Online

Having built the essential relationships needed with the community, the US Environmental Agency and the State of Idaho, Bunker Hill Mining Corporation is taking a staged approach to the restart of the mine:

1. Inject $57 million to restart the mine by end of 2023, yielding c$40m EBITDA and $25m of annual cash flow, employing up to 250 workers;

2. Re-invest that cash flow from 2024 into exploration and mining optimization projects to double, as a minimum, the starting EBITDA and cash-flow over time;

3. Concurrently conduct strategic exploration to unlock the mine’s deeper high-grade silver potential and thereby lengthen its life;

4. Investigate other opportunities for growth by M&A.

“The restart project is already underway. We have recently completed the demolition of older infrastructure and have dismantled and moved a processing facility from a recently closed mine 140 miles away to our site. This will be rebuilt and commissioned at Bunker Hill through 2023,” shared Tom. “Underground, we have just completed the construction of a new ramp to connect all the upper parts of the mine in ways that will enable modern mechanised mining”.

Currently employing 42 staff (all from the local community), the business understands it will need to grow rapidly.

“In the coming months we will need to grow to around 200 staff to meet the demands of the project. A challenge for us is to ensure that we have a first class, well-trained team by the end of next year that is capable of playing their

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vital part in the new Bunker Hill,” said Sam.

“Safety is paramount,” added Tom, “so as well as rapidly building the right team, we need to ensure that their capability is underpinned by robust policies, procedures and led by supervisors and mine leaders that are capable of achieving the very highest performance standards”.

Becoming the Change

Richard considers “extreme ownership” to be key to the culture of the company and one of the key contributing factors to the success of the restart project thus far.

“All of us are invested financially and professionally in the mine. As operator shareholders, we all own the future of the mine, we all own the outcome, the

FIRST TO ARRIVE, LAST TO LEAVE!

We provide “SMS”, surface mining solutions, dirt work and road construction, land clearing, placer mining, materials handling and logistics, heavy equipment operations, Metal fabrication, material concentrating and recovery, Gold and Silver Fire Assay, and welding.

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performance,” he said. “This ownership culture creates an extraordinary level of commitment, performance and teamwork, which has been critical to achieving here what some had previously believed to be impossible; and there’s more to come yet”.

With that in mind, Richard, Sam and Tom all agree that success, in part, will come down to “good people, the right people”.

“Mining is a difficult and risky business. To succeed you need really good people doing really good things, all the time” shared Sam.

Ultimately though, those good people need good direction and inspiration and that’s what the management team aims to deliver.

“We aim to inspire with a challenging but achievable vision, and then empower and support our leaders to find the best ways to excel the task given to them,” explained Richard. “Well led, supported and informed, the Silver Valley miners have the potential to be some of the best in the world.”.

To help achieve this, the Company conducts a weekly progress conference involving everyone from the whole Board to the key front-line operational leaders, to review progress, risk, and new opportunities. This creates a level of transparency which Richard believes to be both unique and critical to building this culture of ownership.

Driving the importance of the business’ purpose home, Richard closed by highlighting a crucial point. Without the mining industry supplying critical metals, it will be incredibly difficult for the world to meet net zero goals.

“We need zinc to produce wind farms, silver to create solar energy farms and lead for batteries and battery storage. All these materials need to be mined in ways that have minimal negative impact on the environment and maximum positive impact for the communities in which we work. A modern industry-wide approach that Bunker Hill Mine seeks to exemplify,” he said.

www.bunkerhillmining.com

Coeur d’ Alene Mine Contracting (CMC)

Coeur d’ Alene Mine Contracting (CMC) is a company that provides contract mining labor, production, repair services and more. CMC’s team is a product of the partnership of Jeff Lambert and Steve Ivie who manage a skilled collection of men and women. Much of the manpower is local to the area near Bunker Hill Mine of Kellogg Idaho, many of which being generational miners as their parents and grandparents worked at Bunker Hill prior to its closure in 1980. CMC is complete with a full force to take on any mining job, to include miners and mining staff, diesel mechanics, millwrights, hoist man, and office managers. Being it’s own force of nature, CMC is responsible for the safe rehabilitation of

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the famous Kellogg Tunnel as well as the Russel Portal and all underground work that pertains to Bunker Hill structurally and progressively. Their attentive and efficient work plays a key factor in the ongoing restart of the mine. CMC’s maintenance team has both the knowledge and ability to service the rail motors and hoists within the Kellogg Tunnel to routinely utilize as transportation for access to the pumps that are working continuously to drain the shaft. Their crew is currently working on a decline tunnel from the 5 Level of the Russel into the 6 level to gain truck access for the hauling of materials and ore in and out of the tunnels. The completion of this decline will be a monumental step towards the reopening of Bunker Hill Mine.

Bunker Hill Mining

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