Bunker Hill purchases processing plant

KELLOGG — Bunker Hill Mining Corp. appears to be making strides in its pursuit of bringing the historic mine back toward full production.

Last week, it was announced that BHC had signed a memorandum of understanding with Teck Resources Limited for the purchase of its Pend Oreille County processing plant.

The non-binding purchase agreement has two potential price tags for the purchase — they can either spend $2.75 million to buy the processing equipment outright, or they could go with the $3 million option that would consist of both cash and shares of BHC. However, both options include a $500,000 non-refundable deposit, which has already been paid.

“We are excited to announce a signed MOU with Teck for a process plant that is perfectly suited for our restart plan at Bunker Hill. This meets most of our capital equipment needs and significantly de-risks the project concurrent with advancement of our pre-feasibility study,” Sam Ash, Bunker Hill CEO, said. “The purchase price also represents potential [capital expenditures] savings relative to our PEA calculations at a time of industry-wide inflation, and the plant’s proximity will enable timely delivery at a time of global supply chain insecurity while also giving us access to skilled professionals who have extensive, firsthand experience working it. We look forward to finalizing our construction plans and further exploring a broader strategic partnership with Teck.”

The process plant sits 145 miles from the Bunker Hill Mine in Metaline Falls, in eastern Washington, and includes a vast array of equipment and parts including all of the processing equipment that a mine would need in their mill.

Silver Valley mining expert Kurt Hoffman said the ability to mill the ore that is extracted within the mine makes this purchase an important one for Bunker Hill.

“Without a mill, you really don’t have any marketable product. It doesn’t allow for any large scale production,” he said.

The purpose of a mine’s mill is essentially to process the raw material removed from the mine and turn it into concentrates. These concentrates are then trucked off to a smelting facility to further refine the concentrates and separate the precious metals from other mineral/impurities.

Teck owns and operates one of the world’s largest fully integrated zinc and lead smelting and refining complexes, Trail Operations, located in southern British Columbia.

Bunker Hill officials said the 10,000 pieces of equipment from Teck's processing plant will be transported to the Bunker Hill Mine and assembled underground to create the mine’s new mill.

This new venture is an aggressive move by the company, which will allow them the opportunity to return to large-scale production, officials said.

Hoffman said the purchase is one of the most significant economic events in Shoshone County in several decades and one of the largest mining investments outside from the new shaft at the Lucky Friday Mine.

This news comes roughly one month after another big announcement from the company when it was made public that BHC had completed its purchase of the mine from the Placer Mining Corp. and had signed a settlement agreement with the United States Environmental Protection Agency, resolving the issue of the treatment of waters that came from the mine.

Part of the purchase price of the mine included $50 million that are to be used in the efforts to bring the mine back to production.

Hoffman explained that over the years, several different companies had unsuccessfully attempted to buy/operate the Bunker Hill; the reasons always coming back to cash in hand or the liability that came from the EPA.

“None of the previous parties that attempted a deal on the property actually had the cash in hand or cash available to follow through with the deal and start moving towards production. With BHC the cash is now available and is a very real thing,” Hoffman said. “The investor is Eric Sprott, Eric Sprott is a Canadian billionaire and is one of the five most successful mining entrepreneurs in the world.”

Sprott is already known in the Silver Valley mining world, thanks to his purchase of a significant interest in the Galena Mine near Osburn a few years back as part of their Recapitalization Plan.

Hoffman credits the Bunker Hill executive team for the positive movement at the Bunker Hill, citing Chairman Richard Williams and CEO Sam Ash as major players in the mining world.

“Executive Chairman Richard Williams is the former vice president and chief operating officer of Barrick Gold, the world's second largest gold mining company,” Hoffman said. “This is a serious position. Barrick Gold has over 22,000 employees and over $12 billion in annual revenue with a market valuation of $35 billion, this easily makes him the most accomplished mining executive operating in Idaho. CEO Sam Ash worked for [Williams] at Barrick and was the mine manager at one of Barrick's mines in Africa.”

Ash’s father previously worked at the Bunker Hill Mine in the 1970s.

Hoffman has been involved in mining in the Silver Valley since the early '90s, as well as elsewhere throughout the world. In 1990, he put together the deal to purchase the property from bankruptcy by Placer Mining Corp.

“When BHC first got the lease option on the property, I conducted the due diligence on the land and property as a consultant,” Hoffman said. “Now that the deal has been completed I have no official involvement, though I stay in contact with the leadership team and help out when asked.”