Bunker restart delayed, positive momentum continues

KELLOGG –– The finish line for the anticipated restart of the Bunker Hill Mine is still clearly in sight, but a few setbacks have delayed the previously forecasted return to production.  

The delay is a minor inconvenience compared to the amount of positive momentum the mine is experiencing. 

Previously scheduled to be back in production during the first quarter of 2025, Bunker Hill Mining Corp. President and CEO Sam Ash announced earlier this month that the mine would be moving that deadline back to quarter two. The two driving factors behind the delay were the loss of a specialist contractor and rising costs associated with inflation.  

According to a recent release from Bunker Hill, 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 increases are being across the mining world, but with Bunker Hill still actively in several phases of construction and restart, the effects are being felt at the highest level.  

The specialist contractor who left in August 2024, had been handling the deep pier construction for one of the mine’s new processing plant’s tailings filter. Finding a replacement company to finish this type of specialized work was challenging. The mine attempted to find an alternative solution to maintain their schedule, but determined finishing the construction was the best course of action.

To combat the inflation cost, Bunker Hill is drawing on a $21 million facility agreement between them and Sprott Private Resource Streaming and Royalty Corp., while also finalizing agreements with other partners to secure an additional $30 million.  

“This revised plan takes full account of the many challenges facing the project and the rest of the US mining industry,” Ash said. “Work on site 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.”  

If we’re discussing this as a good news, bad news situation, that is the bad news. The good news is that everything else at the mine remains on track.  

Progress on the mine’s new processing plant sits at 70%, with only mechanical work to be completed. The rehabilitation and preparation work going on underground sits at 80% complete. Access to five mining stopes has already been prepared and are ready to be mined right now.  

On December 17, the mine announced the discovery of a high-grade zinc zone, which was part of the recently completed underground resource conversion drill program. Zinc is a strategic metal for the United States, as defined by the US Energy Act of 2022 – Meaning that it is essential to the economic or national security of the United States. 

This is just the latest in what have been many positive exploratory drill programs for the mine – Which ultimately suggests that the mine life may be greater than originally expected.  

"Our geology team continues to be impressed by the drill results, which consistently meet or exceed our initial projections,” Ash said. “The mineralized intercepts align well with historical mining records, allowing us to confidently model grade distribution and variability."