Bunker Hill Announces Updated Forecast for Mine Restart and Revised Financing Plan
Bunker Hill Mining announces updates to its mine restart project, which is currently 64% complete. The total restart expenditure has increased to $103 million from the previously forecasted $67 million, with a delay of up to four months. The company plans to secure financing through a $21 million standby facility from Sprott Private Resource Streaming and Royalty Corp and seeks an additional $30 million through potential offtake agreements.
The cost increase is attributed to significant input cost inflation, including a 53% rise in skilled construction labor costs, 40% increases in structural steel and copper costs, and a 20% increase in concrete prices. The project also faced setbacks due to a filter press scope change and an unexpected contractor departure. The revised timeline now targets operations to commence in Q2 2025.
Bunker Hill Mining annuncia aggiornamenti sul suo progetto di riavvio della miniera, attualmente completato al 64%. La spesa totale per il riavvio è aumentata a 103 milioni di dollari rispetto ai 67 milioni di dollari precedentemente previsti, con un ritardo di fino a quattro mesi. L'azienda intende assicurarsi finanziamenti tramite una linea di credito standby di 21 milioni di dollari da Sprott Private Resource Streaming and Royalty Corp e cerca ulteriori 30 milioni di dollari attraverso potenziali accordi di approvvigionamento.
L'aumento dei costi è attribuito a un'inflazione significativa dei costi di input, compreso un aumento del 53% nei costi della manodopera specializzata, un incremento del 40% nei costi dell'acciaio strutturale e del rame, e un aumento del 20% nei prezzi del cemento. Il progetto ha anche affrontato ritardi a causa di un cambiamento nell'ambito della pressa a filtro e della partenza imprevista di un appaltatore. Il cronoprogramma rivisitato ora mira a far partire le operazioni nel Q2 2025.
Bunker Hill Mining anuncia actualizaciones sobre su proyecto de reinicio de mina, que está completado en un 64%. El gasto total para el reinicio ha aumentado a 103 millones de dólares desde los 67 millones de dólares pronosticados anteriormente, con un retraso de hasta cuatro meses. La empresa planea asegurar financiamiento a través de una línea de crédito standby de 21 millones de dólares de Sprott Private Resource Streaming and Royalty Corp y busca otros 30 millones de dólares a través de posibles acuerdos de compra.
El aumento de costos se atribuye a una inflación significativa de los costos de insumos, incluyendo un aumento del 53% en los costos de mano de obra calificada, un incremento del 40% en los costos de acero estructural y cobre, y un aumento del 20% en los precios del concreto. El proyecto también enfrentó contratiempos debido a un cambio en el alcance de la prensa de filtros y a la salida inesperada de un contratista. La nueva línea de tiempo ahora tiene como objetivo comenzar las operaciones en Q2 2025.
벙커힐 마이닝은 현재 64% 완료된 광산 재개 프로젝트에 대한 업데이트를 발표했습니다. 재개 총 지출은 이전 예측된 6,700만 달러에서 1억 3백만 달러로 증가했으며, 최대 4개월의 지연이 발생했습니다. 이 회사는 Sprott Private Resource Streaming and Royalty Corp로부터 2,100만 달러의 대출 준비금을 통해 자금을 확보할 계획이며, 잠재적인 구매 계약을 통해 추가로 3,000만 달러를 모색하고 있습니다.
비용 증가의 원인은 숙련된 건설 노동 비용이 53% 상승하고, 구조용 강철 및 구리 비용이 40% 상승하며, 콘크리트 가격이 20% 상승하는 등 주요 입력 비용의 인플레이션 때문입니다. 이 프로젝트는 필터 프레스 범위 변경과 예상치 못한 계약자의 이탈로 인해 차질을 겪었습니다. 수정된 일정은 이제 2025년 2분기에 운영을 시작하는 것을 목표로 합니다.
Bunker Hill Mining annonce des mises à jour sur son projet de redémarrage de mine, qui est actuellement achevé à 64 %. Les dépenses totales de redémarrage ont augmenté à 103 millions de dollars contre 67 millions de dollars précédemment prévus, avec un retard de jusqu'à quatre mois. L'entreprise prévoit de sécuriser un financement par le biais d'une facilité de réserve de 21 millions de dollars de Sprott Private Resource Streaming and Royalty Corp et cherche un montant supplémentaire de 30 millions de dollars par le biais d'accords d'achat potentiels.
L'augmentation des coûts est attribuable à une inflation significative des coûts des intrants, y compris une augmentation de 53 % des coûts de la main-d'œuvre qualifiée, des hausses de 40 % des coûts de l'acier structurel et du cuivre, et une augmentation de 20 % des prix du béton. Le projet a également rencontré des retards en raison d'un changement de portée de la presse à filtre et d'un départ inattendu d'un entrepreneur. Le calendrier révisé vise désormais à commencer les opérations au Q2 2025.
Bunker Hill Mining gibt Updates zu seinem Minenwiederinitsprojekt bekannt, das derzeit zu 64 % abgeschlossen ist. Die Gesamtausgaben für die Wiederinbetriebnahme haben sich von zuvor prognostizierten 67 Millionen Dollar auf 103 Millionen Dollar erhöht, mit einer Verzögerung von bis zu vier Monaten. Das Unternehmen plant, Finanzierungen über eine 21 Millionen Dollar Standby-Einrichtung der Sprott Private Resource Streaming and Royalty Corp zu sichern und sucht zusätzlich 30 Millionen Dollar durch potenzielle Abnahmeverträge.
Der Kostenanstieg wird auf eine signifikante Inflation der Inputkosten zurückgeführt, einschließlich eines Anstiegs der Kosten für Facharbeiter um 53 %, eines Anstiegs der Kosten für Baustahl und Kupfer um 40 % und einer Erhöhung der Betonpreise um 20 %. Das Projekt hatte zudem Rückschläge aufgrund von Änderungen des Filterpressenbereichs und einem unerwarteten Abgang eines Auftragnehmers. Der überarbeitete Zeitplan zielt nun darauf ab, die Betriebsaufnahme im Q2 2025 zu beginnen.
- 98% of procurement completed
- Underground development on track and budget with 80% completion
- Five mining stopes already prepared for mining
- Access to $21 million standby facility secured
- Project cost increased by $36 million to $103 million
- Project delayed by up to 4 months to Q2 2025
- 53% increase in skilled construction labor costs
- Additional $30 million financing still needed
- Unexpected contractor departure causing delays
- Filter press system cost increased from $10M to $18M
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
Pursuant to this review, the Company now forecasts a total restart expenditure (excluding working capital) of
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 by40% , copper (a proxy for electrical fittings) by40% , and concrete by20% . 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).
- Filter Press Scope Change - As reported in the news release dated May 21, 2024 the Company chose to change the Tailings Management System envisaged in the 2022 PFS and starting budget, in order to improve long-term efficiency and sustainability, following tailings filtration testing. The more effective and expensive filter press (as compared to the
$5 million disk filter system described in the 2022 PFS) passed the90% engineering milestone in October 2024. This final design and associated inflation-effected procurement through November resulted in the final cost forecast increase from$10 million to$18 million . - Specialist Contractor Walk-Out - In August 2024, the specialist contractor conducting the auger-cast deep piers for the tailings filter press demobilized unexpectedly to pursue other work in North America. Given the tight market for this specialty construction work, securing and mobilizing a replacement contractor for this deep pier construction onto the mine site was challenging passing on delays to the construction timeline.
To mitigate this unexpected schedule delay, the Company conducted an engineering study to consider the deferral of the construction of the Tailings Filter Press into 2026, with tailings instead being pumped directly from the Kellogg Yard to the paste plant in the Wardner operating base and into voids underground at start-up. After conducting trade-off analysis, it was determined that this phased solution was not workable and that it would be more prudent to continue the complete construction as planned, albeit on a delayed timeline. It was judged to be far better to have the optimal system at restart geared to serving the 1,800 tons per day plan, than a potentially risky work-around that would put initial cash flow at risk.
Taking account of these key factors and any mitigating actions, the review determined that the project restart would be delayed until at least Q2 2025 and that the total project expenditure (including working capital) is expected to increase by approximately
RESTART PLAN UPDATE
Processing Plant -
Figure 1: Conveyor installation
Figure 2: Mezzanine floor and equipment installation
Tailings Filter Press -
Figure 3: Rendering of the final tailings filter press design
Figure 4: Tailings storage tank construction (December 2024)
Underground -
Figure 5: Steel Sets supporting ramp through Cate Fault
Mine Planning - This revised forecast incorporates the Company’s optimization efforts conducted over the prior months to ensure the most sustainable and profitable restart operation possible while mitigating the impact of cost increases. The plan update includes an adjusted mine plan to maximize cash flows from year one.
Resource and Reserve Expansion - This revised forecast incorporates more drilling and technical work into the plan. Specifically, it incorporates the identified silver targets in the upper part of the mine into the early mine plan and technical studies for Bunker 2.0: the move to 2,500 tons per day. The Company is processing the data gathered from the 2024 drilling campaign and intends to issue a Resource and Reserve update as planned in Q1 2025, as well as provide periodic updates on these results over the next few weeks.
FINANCING PLAN
The Company intends to commence drawing in tranches upon the Standby Facility provided from December 12, 2024. The first tranche will provide
Concurrent with this, the Company will continue to advance the process required to unlock the
Even with the Company’s plans to secure the necessary financing for the project restart pursuant to the updated forecast, there is no certainty that the Company will be able to raise the funds required to complete the necessary development work needed to restart operations and advance the ongoing mine plan adjustments. While the Company anticipates operations to commence in the second quarter of 2025, there is no certainty that this will be the case.
CORPORATE UPDATE WEBINAR
The Company will host a webinar on Friday, December 13, 2024 at 9:00am PST/12:00pm EST featuring a presentation from Bunker Hill’s President and CEO Sam Ash, Executive Chairman Richard Williams and CFO Gerbrand Van Heerden. A recording of the webinar will be available on the Company’s website.
Attendees can register for the webinar using the following link: https://6ix.com/event/bunker-hill-announces-updated-forecast-for-mine-restart-and-revised-financing
ABOUT BUNKER HILL MINING CORP.
Under Idaho-based leadership, Bunker Hill intends to sustainably restart and develop the Bunker Hill Mine as the first step in consolidating and then optimizing a number of mining assets into a high-value portfolio of operations, centered initially in North America. Information about the Company is available on its website, www.bunkerhillmining.com, or within the SEDAR+ and EDGAR databases.
On behalf of the Board of Directors of Bunker Hill Mining Corp.
Sam Ash
President and Chief Executive Officer
For additional information, please contact:
Brenda Dayton
Vice President, Investor Relations
T: 604.417.7952
E: brenda.dayton@bunkerhillmining.com
Cautionary Statements
Neither the TSX Venture Exchange (the “TSX-V”) nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this news release.
Certain statements in this news release are forward-looking and involve a number of risks and uncertainties. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, as well as within the meaning of the phrase ‘forward-looking information’ in the Canadian Securities Administrators’ National Instrument 51-102 – Continuous Disclosure Obligations (collectively, “forward-looking statements”). Forward-looking statements are not comprised of historical facts. Forward-looking statements include estimates and statements that describe the Company’s future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as “believes”, “anticipates”, “expects”, “estimates”, “may”, “could”, “would”, “will”, “plan” or variations of such words and phrases.
Forward-looking statements in this news release include, but are not limited to, statements regarding: the Company’s objectives, goals or future plans, including the restart and development of the Bunker Hill Mine and the updated timeline and forecast and anticipated capital requirements in connection therewith; the achievement of future short-term, medium-term and long-term operational strategies and objectives and the expected timing thereof, including with respect to planned production; the Company raising the required funds for the planned project restart through its project finance initiatives, including by way of debt, equity, offtake or similar financings; and the expected budget and estimated completion time for the underground development of the Bunker Hill Mine. Forward-looking statements reflect material expectations and assumptions, including, without limitation, expectations and assumptions relating to: Bunker Hill’s ability to receive sufficient project financing for the restart and development of the Bunker Hill Mine on acceptable terms or at all; the revised forecast, capital requirements and updated timeline for the project restart resulting in planned production by Q2 2025; the future price of metals; and the stability of the financial and capital markets. Factors that could cause actual results to differ materially from such forward-looking statements include, but are not limited to, those risks and uncertainties identified in public filings made by Bunker Hill with the U.S. Securities and Exchange Commission (the “SEC”) and with applicable Canadian securities regulatory authorities, and the following: the Company’s ability to operate as a going concern and its history of losses; the Company’s ability to raise sufficient project financing for the restart and development of the Bunker Hill Mine on acceptable terms or at all, including through equity or debt financings, concentrate offtake financings or otherwise; the Company requiring more capital expenditures than anticipated in the updated forecast, resulting in delays in the updated timeline; the fluctuating price of commodities; capital market conditions; restrictions on labor and its effects on international travel and supply chains; failure to identify mineral resources; failure to convert estimated mineral resources to reserves; the preliminary nature of metallurgical test results; the Company’s ability to restart and develop the Bunker Hill Mine and the risks of not basing a production decision on a feasibility study of mineral reserves demonstrating economic and technical viability, resulting in increased uncertainty due to multiple technical and economic risks of failure which are associated with this production decision including, among others, areas that are analyzed in more detail in a feasibility study, such as applying economic analysis to resources and reserves, more detailed metallurgy and a number of specialized studies in areas such as mining and recovery methods, market analysis, and environmental and community impacts and, as a result, there may be an increased uncertainty of achieving any particular level of recovery of minerals or the cost of such recovery, including increased risks associated with developing a commercially mineable deposit, with no guarantee that production will begin as anticipated or at all or that anticipated production costs will be achieved; failure to commence production would have a material adverse impact on the Company’s ability to generate revenue and cash flow to fund operations; failure to achieve the anticipated production costs would have a material adverse impact on the Company’s cash flow and future profitability; delays in obtaining or failures to obtain required governmental, environmental or other project approvals; political risks; changes in equity markets; uncertainties relating to the availability and costs of financing needed in the future; the inability of the Company to budget and manage its liquidity in light of the failure to obtain additional financing, including the ability of the Company to complete the payments pursuant to the terms of the agreement to acquire the Bunker Hill Mine complex; inflation; changes in exchange rates; changes in labor costs and availability of skilled labor and specialists; fluctuations in commodity prices; delays in the development of projects; and capital, operating and reclamation costs varying significantly from estimates and the other risks involved in the mineral exploration and development industry. Although the Company believes that the assumptions and factors used in preparing the forward-looking statements in this news release are reasonable, undue reliance should not be placed on such statements or information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all, including as to whether or when the Company will achieve its project finance initiatives, or as to the actual size or terms of those financing initiatives or as to whether and when the Company will achieve its operational and construction targets. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
Readers are cautioned that the foregoing risks and uncertainties are not exhaustive. Additional information on these and other risk factors that could affect the Company’s operations or financial results are included in the Company’s annual report and may be accessed through the SEDAR+ website (www.sedarplus.ca) or through EDGAR on the SEC website (www.sec.gov).
Photos accompanying this announcement are available at:
https://www.globenewswire.com/NewsRoom/AttachmentNg/7cf78a59-dcd6-473e-9eca-0e3d3e2cf415
https://www.globenewswire.com/NewsRoom/AttachmentNg/e4917b71-939b-4ee3-bdff-93b2f4c7e7ab
https://www.globenewswire.com/NewsRoom/AttachmentNg/5d897893-9f21-4e64-abdc-f3f00bdd6452
https://www.globenewswire.com/NewsRoom/AttachmentNg/7c786dc5-e95e-4f33-af66-bce2b86595ee
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FAQ
What is the new total cost estimate for BHLL's mine restart project?
When is the new expected restart date for Bunker Hill's mining operations?
How much additional financing does BHLL need to complete the mine restart?
What percentage of the Bunker Hill mine restart project is currently complete?
How much have construction labor costs increased for BHLL's project?
