UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended SeptemberJune 30, 20202021

¨☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 333-150028

BUNKER HILL MINING CORP.

(FORMERLY LIBERTY SILVER CORP.)

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: 416-477-7771

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act ☐ Yes ☒ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the ☒ Yes ☐ No

Indicate by check mark whether the registrantRegistrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the precedingpast 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x☒ Yes¨ ☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x☒ Yes¨  No ☐ No.

Indicate by check mark whether the Registrantregistrant is¨ a large accelerated filer, ¨an accelerated file, xfiler, a non-accelerated filer, xor a smaller reporting company (as definedcompany. See the definitions of “large accelerated filer,” “accelerated filer” and smaller reporting company” in Rule 12b-2 of the Exchange Act) or ¨ an emerging growth companyAct.

Indicate by check mark whether the Registrantregistrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

¨  Yes  x   No

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price  at which the common equity was last sold, or the average bid and asked price on June 30, 2021: CDN$45,858,830. As a result of the change in fiscal year end from the last day of June to a calendar fiscal year ending on the last day of December of each year, effective January 1, 2021, the reporting period for this Form 10-Q represents the second quarter for the fiscal year ended December 31, 2021.

As of November 23, 2020,August 13, 2021, the Issuer had 143,117,068 shares of common stock164,435,827Common Shares issued and outstanding.

PART I -– FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The financial statements of Bunker Hill Mining Corp. (formerly Liberty Silver Corp.), (“Bunker Hill”, the “Company”, or the “Registrant”) a Nevada corporation, included herein were prepared, without audit, pursuant to rules and regulations of the Securities and Exchange Commission. Because certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.”) were condensed or omitted pursuant to such rules and regulations, these financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company'sCompany’s Form 10-K10-KT for the fiscal yearsix months ended June 30,December 31, 2020, and all amendments thereto.

BUNKER HILL MINING CORP. (FORMERLY LIBERTY SILVER CORP.)

INTERIM CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

PERIOD ENDED SEPTEMBER 30, 2020

Bunker Hill Mining Corp.

Condensed Interim Consolidated Statements of Income (loss) and Comprehensive Income (loss) (Expressed in United States Dollars)

Unaudited

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

Bunker Hill Mining Corp.

Condensed Interim Consolidated Statements of Cash Flows

(Expressed in United States Dollars)

Unaudited

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

Bunker Hill Mining Corp.

Condensed Interim Consolidated Statements of Changes in Shareholders’ Deficiency

(Expressed in United States Dollars)

Unaudited

(i) Shares and units issued at C$0.05, converted to US at $0.04 (note 11)

(ii) Units issued at C$0.35, converted to US at $0.26 (note 11)

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

Bunker Hill Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended SeptemberJune 30, 20202021

(Expressed in United States Dollars)

Unaudited

1.Nature and continuance of operations and going concern

Bunker Hill Mining Corp. (the “Company”) was incorporated under the laws of the state of Nevada, U.S.A on February 20, 2007 under the name Lincoln Mining Corp. Pursuant to a Certificate of Amendment dated February 11, 2010, the Company changed its name to Liberty Silver Corp., and on September 29, 2017 the Company changed its name to Bunker Hill Mining Corp. The Company’s registered office is located at 1802 N. Carson Street, Suite 212, Carson City Nevada 89701, and its head office is located at 401 Bay82 Richmond Street Suite 2702,East, Toronto, Ontario, Canada, M5H 2Y4.M5C 1P1. As of the date of this Form 10-Q, the Company had two subsidiaries, Bunker Hill Operating LLC, a Colorado corporation that is currently dormant, andone subsidiary, Silver Valley Metals Corp. (formerly American Zinc Corp.), an Idaho corporation created to facilitate the work being conducted at the Bunker Hill Mine in Idaho.

The Company was incorporated for the purpose of engaging in mineral exploration activities. It continues to work at developing its project with a view towards putting it into production.

These unaudited condensed interim consolidated financial statements have been prepared on a going concern basis. Bunker Hill Mining Corp. (the "Company")The Company has incurred losses since inception resulting in an accumulated deficit of $64,192,278$60,206,008 and further losses are anticipated in the development of its business. The Company does not have sufficient working capital needed to meet its current fiscal obligations and commitments. In order to continue to meet its fiscal obligations in the current fiscal year and beyond, the Company must seek additional financing. This raises substantial doubt about the Company’s ability to continue as a going concern. Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The accompanying condensed interim consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Management is considering various financing alternatives including, but not limited to, raising capital through the capital markets and debt financing. These condensed interim consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.as a going concern.

The ability of the Company to emerge from the exploration stage is dependent upon, among other things, obtaining additional financing to continue operations, explore and develop the mineral properties and the discovery, development, and sale of reserves.

The Company’s operations could be significantly adversely affected by the effects of a widespread global outbreak of a contagious disease,epidemics, pandemics, or other health crises, including the recent outbreak of respiratory illness caused by COVID-19.the novel coronavirus (“COVID19”). The Company cannot accurately predict the impact COVID-19COVID19 will have on its operations and the ability of others to meet their obligations with the Company, including uncertainties relating to the ultimate geographic spread of the virus, the severity of the disease, the duration of the outbreak, and the length of travel and quarantine restrictions imposed by governments of affected countries. In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could further affect the Company’s operations and ability to finance its operations.

Bunker Hill Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended SeptemberJune 30, 20202021

(Expressed in United States Dollars)

Unaudited

2. Basis of presentation

The accompanying unaudited condensed interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, shareholders’ equity or cash flows. It is management'smanagement’s opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The unaudited condensed interim consolidated financial statements should be read in conjunction with the Company’s Annual Report on Amended Form 10-K/A,T, which contains the annual audited consolidated financial statements and notes thereto, together with the Management’s Discussion and Analysis, for the yearsix months ended June 30,December 31, 2020. The interim results for the period ended SeptemberJune 30, 20202021 are not necessarily indicative of the results for the full fiscal year. The unaudited interim condensed consolidated financial statements are presented in USD, which is the functional currency.

3. EquipmentNew and recently adopted technical and accounting pronouncements

On July 1, 2020, the Company adopted Account Standards Update (ASU) 2016-03, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 changed the impairment model for most financial instruments. Previous guidance required the recognition of credit losses based on an incurred loss impairment methodology that reflects losses once the losses are probable. Under ASU 2016-13, the Company is required to use a current expected credit loss ("CECL") model that immediately recognizes an estimate of credit losses that are expected to occur over the life of the financial instruments that are in the scope of the update, including trade receivables. The CECL model uses a broader range of reasonable and supportable information in the development of credit loss estimates. The adoption of ASU 2016-13 did not have a material impact on the unaudited condensed interim consolidated financial statements, as the Company's accounts receivable only consisted of sales taxes receivable.

4. Restatement of previously issued financial statements

In November 2020, it was determined that the Company has underaccrued for invoices issued by the United States Environmental Protection Agency ("EPA") for excess water treatment costs relating to years ended June 30, 2018, 2019 and 2020, interest payable on the outstanding EPA balance, and for a finder's fee related to the Company's February 2020 private placement, which resulted in an understatement of liabilities for 2019 and 2020, an overstatement of additional paid-in-capital for 2020, an understatement of opening and closing deficit for 2019 and 2020, and an understatement of exploration expenses and net losses for 2019 and 2020.

The following tables present the impact of the restatement adjustments on the Company's previously issued condensed interim consolidated financial statements for the three months ended September 30, 2019.

Impact to Condensed Interim Consolidated Statements of Loss and Comprehensive Loss

- 6 -

Bunker Hill Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

Three Months Ended September 30, 2020

(Expressed in United States Dollars)

Unaudited

4. Restatement of previously issued financial statements (continued)

Impact to Condensed Interim Consolidated Statements of Cash Flows

Impact to Consolidated Statements of Changes in Shareholders' Deficiency

5. Equipment

Equipment consists of the following:

Schedule of Equipment

The total depreciation expense during the three and six months ended SeptemberJune 30, 2021 was $34,566 and $64,396, respectively (three and six months ended June 30, 2020 was $20,034 (three months ended September 30, 2019 - recovery of $1,550 due to write off of lease incentive liability)$14,392 and $16,673, respectively).

Bunker Hill Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

Three Months Ended September 30, 2020

(Expressed in United States Dollars)

Unaudited

6. 4. Right-of-use asset

Right-of-use asset consists of the following:

Schedule of Right-of-Use Asset

The total depreciation expense during the three and six months ended SeptemberJune 30, 2021 was $26,594 and $53,189, respectively (three and six months ended June 30, 2020 was $27,430 (three months ended September- $27,430 and $53,362, respectively).

Bunker Hill Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended June 30, 2019 - $26,595).2021

(Expressed in United States Dollars)

7. Unaudited

5. Mining interests

Bunker Hill Mine Complex

On November 27, 2016, the Company entered into a non-binding letter of intent with Placer Mining Corp. (“Placer Mining”), which letter of intent was further amended on March 29, 2017, to acquire the Bunker Hill Mine in Idaho and its associated milling facility located in Kellogg, Idaho, in the Coeur d’Alene Basin (the(as amended, the “Letter of Intent”). Pursuant to the terms and conditions of the Letter of Intent, the acquisition, which was subject to due diligence, would include all mining claims, surface rights, fee parcels, mineral interests, existing infrastructure, machinery and buildings at the Kellogg Tunnel portal in Milo Gulch, or anywhere underground at the Bunker Hill Mine Complex. The acquisition would also include all current and historic data relating to the Bunker Hill Mine Complex, such as drill logs, reports, maps, and similar information located at the mine site or any other location.

During the year ended June 30, 2017, the Company made payments totaling $300,000$300,000 as part of this Letter of Intent. These amounts were initially capitalized and subsequently written off during fiscal 2018 and were included in exploration expenses.

On August 28, 2017, the Company announced that it signed a definitive agreement (the “Agreement”) for the lease and option to purchase the Bunker Hill Mine assets (the “Bunker Assets”).

Under the terms of the Agreement, the Company was required to make a $1 million$1,000,000 bonus payment to Placer Mining no later than October 31, 2017, which payment was made, along with two additional $500,000$500,000 bonus payments in December 2017. The 24-month24month lease commenced November 1, 2017. During the term of the lease, the Company was to $100,000make $100,000 monthly mining lease payments, paid quarterly.

The Company had an option to purchase the Bunker Assets at any time before the end of the lease and any extension for a purchase price of $45 million$45,000,000 with purchase price payments to be made over a ten-yearten year period to Placer Mining. Under the terms of the agreement, there is a 3%3% net smelter return royalty (“NSR”) on sales during the Leaselease and a 1.5%1.5% NSR on the sales after the purchase option is exercised, which post-acquisition NSR is capped at $60 million.$60,000,000.

On October 2, 2018, the Company announced that it was in default of its Lease with Option to Purchase Agreement with Placer Mining.the Agreement. The default arose as a result of missed lease and operating cost payments, totaling $400,000,$400,000, which were due at the end of September and on October 1, 2018. As per the Agreement, the Company had 15 days, from the date notice of default was provided (September 28, 2018), to remediate the default by making the outstanding payment. While Managementmanagement worked with urgency to resolve this matter, Managementmanagement was ultimately unsuccessful in remedying the default, resulting in the leaseAgreement being terminated.

Bunker Hill Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

Three Months Ended September 30, 2020

(Expressed in United States Dollars)

Unaudited

7.Mining interests (continued)

Bunker Hill Mine Complex (continued)

On November 13, 2018, the Company announced that it was successful in renewing the lease,Agreement, effectively with the original Agreement intact, except that monthly payments arewere reduced to $60,000$60,000 per month for 12 months, with the accumulated reduction in payments of $140,000$140,000 per month (“deferred payments”) being accrued. As at SeptemberJune 30, 2020,2021, the Company has accrued for a total of $1,787,300 (June 30,$nil (December 31, 2020 - $1,847,300)$nil), which is included in accounts payable. These deferred payments will be waived should the Company choose to exercise its option.

Bunker Hill Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended June 30, 2021

(Expressed in United States Dollars)

Unaudited

5. Mining interests (continued)

Bunker Hill Mine Complex (continued)

On October 22,November 1, 2019, the Company signed a further amendment to the Agreement.Agreement was amended (the “Amended Agreement”). The key terms of this amended agreementthe Amended Agreement are as follows:

*The lease period has been extended for an additional period of nine months to August 1,On July 27, 2020, with the option to extend for a further 6 months based upon payment of a 1 time $60,000 extension fee (extended). 

*The Company will continue to make monthly care and maintenance payments to Placer Mining of $60,000 until exercising the option to purchase.  

*The purchase price is set at $11 million for 100% of the marketable assets of Bunker Assets to be paid with $6,200,000 in cash, and $4,800,000 in shares. The purchase price also includes the negotiable EPA costs of $20 million. The amended lease provides for the elimination of all royalty payments that were to be paid to the mine owner. Upon signing the amended agreement, the Company paid a one-time, non-refundable cash payment of $300,000 to the mine owner. This payment will be applied to the purchase price upon execution of the purchase option.  In the event the Company elects not to exercise the purchase option, the payment shall be treated as an additional care and maintenance payment. 

On August 12, 2020, the Company extended the lease with Placer Mining for a further 18 months for a $150,000$150,000 extension fee. This extension expires on August 1, 2022.

On November 20, 2020, the Company signed a further amendment to the Amended Agreement. Under the terms of this amendment:

Bunker Hill Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended June 30, 2021

(Expressed in United States Dollars)

Unaudited

5. Mining interests (continued)

Bunker Hill Mine Complex (continued)

In addition to the payments to Placer Mining, and pursuant to an agreement with the United States Environmental Protection Agency (“EPA”)EPA whereby for so long as Bunker leases, owns and/or occupies the Bunker Hill Mine, the Company will make payments to the EPA on behalf of the current owner in satisfaction of the EPA’s claim for cost recovery. These payments, if all are made, will total $20 million.$20,000,000. The agreement calls for payments starting with $1 million$1,000,000 30 days after a fully ratified agreement was signed followed by a payment schedule detailed below: