Mr. Sam Ash reports

BUNKER HILL ANNOUNCES UPSIZED AND IMPROVED $67 MILLION FINANCING PACKAGE TO ENABLE COMPLETION OF THE MINE RESTART, OFFTAKE AGREEMENT

Bunker Hill Mining Corp. has executed a non-binding term sheet outlining an upsized and improved $67-million non-dilutive project finance package with Sprott Private Resource Streaming & Royalty Corp. All figures in this news release are in U.S. dollars unless otherwise stated.

Sam Ash, chief executive officer, stated: "We are excited to announce an upsized and improved project finance package that we expect to backstop the full financing of the Bunker Hill mine restart, materially strengthen our balance sheet and liquidity, and support our [TSX Venture Exchange] application. This will enable the full-scale recommencement of project activities, and allows us to target a restart of the mine and first concentrate production by the end of 2024. We are thrilled to have partnered with Sprott Streaming, who have demonstrated their commitment and support for the project each step of the way. We are also delighted to announce that Teck has exercised its option to acquire 100 per cent of our concentrate production for a minimum five-year period, ensuring a long-term sustainable revenue source."

$67-million project finance package

The company has executed a non-binding term sheet with Sprott Streaming, outlining an upsized and improved $67-million project finance package that the company expects to enable the completion of the Bunker Hill mine restart and achieve first concentrate production by the end of 2024. The package consists of a $46-million multimetals stream expected to be financed in June, 2023, and a commitment for a $21-million new debt facility that will be available for draw, subject to certain terms and conditions, for two years at the company's election. Including the previously financed $8-million royalty convertible debenture, $6-million Series 1 convertible debenture (the CD1) and $15-million Series 2 convertible debenture (the CD2), Sprott Streaming's total commitment to the Bunker Hill mine restart would increase to $96-million.

Subject to settlement of definitive documentation with Sprott Streaming, the company expects that gross proceeds of $46-million will be advanced under the stream in June, 2023, concurrent with closing of the debt facility. These proceeds, less $5-million for repayment of the bridge loan (as announced on Dec. 6, 2022), and certain legal and other costs, will finance the immediate recommencement of restart project activities (see "next steps" section of this news release for further detail) and near-term working capital requirements. The terms of the stream are unchanged from those previously announced, applying to 10 per cent of payable metals sold until a minimum quantity of metal is delivered consisting of, individually, approximately 63.5 million pounds of zinc, 40.4 million pounds of lead and 1.2 million ounces of silver. Thereafter, the stream would apply to 2 per cent of payable metals sold. The delivery price of streamed metals will be 20 per cent of the applicable spot price. The company may buy back 50 per cent of the stream amount at a 1.40 times multiple of the stream amount between the second and third anniversary of the date of financing, and at a 1.65 times multiple of the stream amount between the third and fourth anniversary of the date of financing.

As previously contemplated, upon financing of the stream, the royalty convertible debenture will be repaid by the company granting a royalty for 1.85 per cent of life-of-mine gross revenue from mining claims considered to be historically worked, contiguous to current accessible underground development, and covered by the company's 2021 ground geophysical survey. A 1.35-per-cent rate will apply to claims outside of these areas. The previously announced royalty put option permits Sprott Streaming to resell the royalty to the company for $8-million upon default under the Series 1 convertible debentures or Series 2 convertible debentures until such time that they are repaid in full.

The debt facility is expected to close in June, 2023,concurrent with closing of the stream and consists of a $21-million facility that will be available for draw at the company's election for a period of two years. Any amounts drawn will bear interest of 10 per cent per annum, payable annually in cash or capitalized until three years from closing of the debt facility at the company's election, and thereafter payable in cash only. The maturity date of any drawings under the debt facility will be four years from closing of the debt facility. For every $5-million or part thereof advanced under the debt facility, the company will grant a new 0.5 per cent life-of-mine gross revenue royalty, on the same terms as the royalty, to a maximum of 2.0 per cent on the primary claims and 1.4 per cent on the secondary claims. The company may buy back 50 per cent of these royalties for $20-million.

The parties have also agreed to extend the maturities of the CD1 and CD2 to March 31, 2026, when the full $6-million and $15-million, respectively, will become due.

Closing of the stream, debt facility and other transactions above are conditional on the conclusion of a number of matters, including finalization of definitive documentation, regulatory and stock exchange approvals.

Teck exercises offtake option

The company is pleased to report that Teck has exercised its option, as previously announced on March 31, 2022, to acquire 100 per cent of the zinc and lead concentrate production from the Bunker Hill mine for a five-year period. The parties are advancing a definitive agreement, which is expected to conclude over the following weeks.

The proposed agreement would secure a long-term, sustainable revenue source for the mine.

The company also remains in discussions with potential providers of offtake financing. Any agreement with a metal trader, in lieu of the debt facility, would be subject to approval by Teck and Sprott Streaming.

Next steps

With project financing secured, the company plans to recommence engineering and construction activities, targeting first concentrate production by the end of 2024 and commercial production shortly thereafter. Process plant engineering is approximately 90 per cent complete with full completion projected to take approximately three months. Detailed engineering to date has focused on civil engineering designs, which allow construction to commence concurrently starting with laying the foundations for the process plant building and associated infrastructure.

Long-lead procurement will also be initiated, with purchase commitments issued. This includes concluding the purchase of the ball mill (previously announced on Sept. 20, 2022), designed to upgrade the existing comminution circuit and increase the plant's throughput from 1,800 tpd to 2,100 tpd.

Mine infrastructure workstreams will initially be focused on upgrading the old Russell portal to a production-ready condition, finalizing the installation of line power to the Reed Landing and continuing scheduled rehabilitation activities in the mine. This will set the conditions for the most efficient definition drilling of the initial mining stopes in the Quill and Newgard areas, and any associated early development activity.

Related party transaction

The stream and debt facility constitute a "related party transaction" pursuant to Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions (MI 61-101). The directors of the company, all of whom are considered independent pursuant to Part 7 of MI 61-101, have determined that the stream and debt facility are exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as the company is relying on: (i) the "financial hardship" exemption provided under Section 5.5(g) of MI 61-101 from the requirement to obtain a formal valuation; and (ii) the financial hardship exemption provided under Section 5.7(e) from the requirement to obtain minority approval. The material change report will not be filed less than 21 days prior to the closing of the stream and debt facility due to the company's immediate need for financing.

Qualified person

Scott E. Wilson, CPG, president of Resource Development Associates Inc. and a consultant to the company, is an independent qualified person as defined by Canadian National Instrument 43-101 -- Standards of Disclosure for Mineral Projects and is acting as the qualified person for the company. He has reviewed and approved the technical information summarized in this news release.

About Bunker Hill Mining Corp.

Under new Idaho-based leadership, Bunker Hill Mining intends to sustainably restart and develop the Bunker Hill mine as the first step in consolidating a portfolio of North American mining assets with a focus on silver.

We seek Safe Harbor.