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Bunker Hill Announces Updated Forecast for Mine Restart and Revised Financing Plan

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Bunker Hill Mining Corp.
Bunker Hill Mining Corp.

KELLOGG, Idaho and VANCOUVER, British Columbia , Dec. 13, 2024 (GLOBE NEWSWIRE) -- Bunker Hill Mining Corp. (“Bunker Hill” or the “Company”) (TSXV:BNKR |OTCQX:BHLL) announces that the Bunker Hill Mine restart project, which is approximately 64% complete with 98% of procurement completed, has undergone a strategic review resulting in an updated timeline and capital requirements.

Pursuant to this review, the Company now forecasts a total restart expenditure (excluding working capital) of $103 million, up from the previously forecasted $67 million and the $56 million in the 2022 Pre-Feasibility Study (the “PFS”), with the restart project anticipated to be delayed by up to four months. To provide sufficient project finance for the ongoing development of the Bunker Hill Mine, the Company intends to draw down on the $21 million standby facility (the “Standby Facility”) provided by Sprott Private Resource Streaming and Royalty Corp. and finalize the ongoing discussions with its strategic partners for potential offtake or similar financing for an additional $30 million.

Sam Ash, President and CEO, commented: “This revised plan takes full account of the many challenges facing the project and the rest of the US mining industry. Work onsite continues round the clock at the highest intensity possible to complete mechanical installation and commissioning and deliver the demanding restart plan. The adjustment we’re announcing reflects the outcome of weeks of intense work by the small Bunker team, Gypsy LLC, our procurement, construction, and management contractor and their many supporters to counter the worst effects of inflation, scope changes since the PFS, and an unplanned contractor change. We are pleased to be able to draw upon the Standby Facility and conclude offtake and associated financing discussions to ensure that profitable and sustainable operations may commence by the revised start date of Q2 2025. We wish to thank our partners at Sprott Private Resource Streaming and Royalty Corp. and our many skilled contractors working on this critical US project for their steadfast and enduring support.”

STRATEGIC REVIEW – ACTIVITY AND CONCLUSIONS

Over the past eight weeks, the Company has reviewed the impact of the following key factors on the restart plan, seeking ways to mitigate them and incorporate them within the revised forecast:

  • Input Cost Inflation—As widely reported across the US Mining Industry, the cost of skilled construction labor (specifically electricians) has increased by 53% over the last 12 months, from an average of $75/hour to $114/hour. The cost of structural steel has also increased by 40%, copper (a proxy for electrical fittings) by 40%, and concrete by 20%. These are extraordinary numbers that deeply impact every aspect of the project.

    With labor being the primary input cost in the project's mechanical installation and commissioning phases, this has been the most challenging to mitigate. Efforts have been made to bring some of this work in-house, but these have not significantly impacted total cost projections, particularly given the impact of steel, concrete, electrical and other inflation (as crystallized in the recent and final procurement orders).