Initiation: Ex Barrick Team Building USA Mining Franchise

Bunker Hill (BNKR CN, BHLL US) Initiation: ex Barrick team building USA mining franchise

RECOMMENDATION: BUY TARGET: C$0.60/sh RISK RATING: HIGH

SHARE DATA Shares (basic, FD) 164 / 287 USA Pb-Zn miner with silver optionality and ex Barrick power team 52-week high/low (Cc) 0.27 / 1 Bunker Hill Mining is fast-tracking a restart of the iconic Bunker Hill mine in Market cap (C$m) 51 northern Idaho. The 2Q21 PEA inventory of 5Mt @ 9% ZnEq (60-25-15 Zn-Pb- Net cash (debt) (C$m) 6.4 Ag) supports ~~41kt pa ZnEq at US$0.86/lb ZnEq AISC over 10Y from a FD EV (C$m) 15 modernized underground mine. Existing infrastructure and shallow ore body Average daily value (C$m, 3M) 0.03 enable a 15M US$42m restart for reported post-tax NPV8% of US$78m. The ex Barrick team is now looking to add HG Ag veins, and evaluate Silver Valley FINANCIALS CY22E CY23E CY24E consolidation as well as other precious metal acquisitions / consolidation. Prod'n (000t ZnEq) - 40.5 41.1 This time really is different: new team & approach, caveat emptor lifted AISC (US$/lb ZnEq) - 0.70 0.76 Prod'n (000t AgEq) - 4.2 4.2 Previously Liberty Silver, Bunker rebooted with the 2020 appointment of ex Barrick COO Richard Williams as Chair, ex GM Sam Ash as CEO, plus Head of AISC (US$/t ZnEq) - 10.52 11.87 Closure / Rehabilitation Brad Barnett as VP Sustainability. The new group Revenue (US$m) - 18.3 92.5 cleaned up the balance sheet, severed all ties with prior investors including Net income (US$m) - 2.1 23.9 SEC-sanctioned promoters, and today has legacy caveat emptor lifted to allow EPS (Cc) - 1.49 17.40 US retail trading of the stock. This team has put ESG at the forefront of their PER (x) - 20.8x 1.8x plans to build a premier mining company in the U.S, starting with the resurrection CFPS (Cc) - - 3.88 of the Bunker Hill Mine and Silver Valley consolidation opportunities ahead. FCF yield (%) 0% 0% 28% EBITDA (US$m) 3.6 33.1 - The thesis: Pb-Zn opens the mine, re-interpretation highlights Ag EV/EBITDA (x) - - - Silver represents ~15% of the metal in the current PEA. However, some 15% the Silver Valley’s historic >1.2Boz of Ag production made up the ~50% NSR

PRICE TARGET (C$/sh): C$0.60c/sh from Bunker Hill as discrete high-grade veins contributed. The company’s 3D model capturing >95 years of digitized data and 180km of drilling has highlighted an abundance of high-grade silver exploration targets after the ‘ah hah’ moment 1.20 2.4 identifying post-mineralization faults to pinpoint offsets of high-grade historically TSX vol mined veins, plus preferential host rock and post-closure PhD studies.

1.00 2.0 Averagedaily vol. (m) Consolidation and opportunities: building a company around a mine 0.80 1.6 Four mills operate in the Silver Valley today, but Bunker Hill has the only shallow above water-table ore, with attractive upfront margins driven by the quick ramp 0.60 1.2 up and high grades. That, and management’s background, place the company well to evaluate consolidation, a key piece of the intangible upside in our view. C$/sh 0.40 0.8 With high-grade brownfield silver optionality, a domestic location and ex Barrick management team, this under-the-radar name has all the right ingredients to 0.20 0.4 grab investor attention in coming years. - - Initiate coverage with BUY rating and C$0.60/sh PT

We model the PEA for an asset NPV7% of US$129m at 127c/lb Zn, 104c/lb Pb and US$24/oz Ag, and apply a 0.5xNAV multiple given the PEA-status. We add Source: Fidessa resources outside the PEA at just 5% in-situ (ie 120c/oz AgEq), plus cash and from options, net of ~US$22m of option and EPA payments due to CY24. As such, we initiate coverage with a BUY rating and C$0.60/t PT. Silver drilling and Brock Salier +44 7400 666 913 [email protected] further studies in 2H21 should act as key catalysts ahead of the restart on one Justin Chan +44 7554 784 688 [email protected] of the few domestic mining assets in the USA that require no major permits. Brandon Gaspar: +1 437 533 3142 [email protected] Eleanor Magdzinski: +1 705 669 7456 [email protected]

Bunker Hill, June 14 2021

Zinc-lead restart with high-grade silver optionality, in the heart of Idaho’s ‘Silver valley’ Pre 1991 closure, the Bunker Hill UG mined 35Mt @ 12.1% ZnEq or (557Moz @ 495g/t AgEq, 35-34-31 Ag-Pb- Zn*), making it the largest producing mine in the Coeur D'Alene Zn-Pb-Ag mining district in northern Idaho, alongside still-operating Lucky Friday and recently restarted Galena. The mine shut after a silver price fall from US$42/oz to US$8/oz made environmental upgrades of processing and smelting operations prohibitive. Post Superfund site remediation, and a revamped ex Barrick management team plus government support, the Bunker Hill Mine requires no major permits to restart mining operations. The 2Q21 PEA outlined a low cost US$42m build for production of ~41kt ZnEq pa (~4.4Moz AgEq) over a 10-year mine life from a mining inventory of 5Mt @ 9% ZnEq (52Moz @ 328g/t AgEq), a subset of the 9.1Mt @ 8.0% ZnEq resource (85Moz @ 289g/t AgEq). Bunker is infill drilling while concurrently aiming to bulk out high-grade silver resources by drilling high-grade silver vein offsets and extensions at Sierra Nevada (340-500g/t) and Caledonia (685-1030g/t) veins. The goal is to take those to reserve with lower cost UG drilling once in production, bulking out the mine plan from there. Figure 1. Location in (A) Idaho’s (B) Silver Valley showing (C) section with neighbouring mines

Source: Bunker Hill Corporate history: legacy Superfund site remediated, new mine-building team takes over from promoters Liberty Silver Corp was renamed to Bunker Hill Mining in late 2017 after taking an option to purchase the asset from Placer Mining (expires in 3Q22). Despite securing an agreement with the Environmental Protection Agency (EPA) to operate the Bunker Hill mine, ending 14 years of Superfund litigation, the company quickly ran into financial trouble as former shareholder Bobby Genovese ultimately accepted a permanent penny-stock ban from the SEC for share price manipulation. The step-change came with a clean management slate, concurrent with share consolidation, and several key financings. Essential to Bunker’s transformation was former Barrick COO Richard Williams joining as Chairman, and former Barrick GM, Sam Ash, as CEO in 1H20, along with Brad Barnett as VP Sustainability, former head of closure for Barrick. Management cleaned up the balance sheet in 2020, reducing debt, renegotiating the purchase price down by 30%. Digitisation of the project’s historical data into a 3D model then formed the basis of the maiden MRE in 3Q20. This formed the foundation for the current 1Q21 MRE, and also identified several new high-grade silver exploration targets in the upper levels of the mine, themselves the subject to drilling underway now. Figure 2. Corporate evolution of Bunker Hill against share price, shares out and market cap EPA agreement New Chairman New CEO Maiden MRE 1.5m @ 648g/t Ag MRE 4m@997g/t AgEq PEA

Genovese litigation Option agreement $10m@125c $5m@125c $0.5m@75c $3m@5c $4m@56c $20m @ 35c $3m@49c $8m@40c 5050c

Source: Bloomberg *All ZnEq and AgEq in this report at SCP LT US$24/oz Ag, US$1.27/lb Zn, US$0.91/lb Pb Sprott Capital Partners Equity Research

Bunker Hill, June 14 2021

Step 1: Turn lemons into lemonade as Superfund site legacy saves costs and accelerates permitting Historic operations discharged polluted water and tailings into streams, waste stockpiles generated acid mine drainage, and air emissions contaminated the soil and groundwater. The evolving environmental landscape and modernizing costs ultimately drove the closure. The EPA declared it a Superfund site, with over $200m spent by 2007 on clean up and water management. That process expanded to the entire Silver Valley, using funds from two large court settlements. The restart gained momentum in 1Q18 when Bunker Hill secured the right to operate the mine without incurring liability for prior contaminants migrating from the mine in exchange for annual cash payments over seven years totalling US$20m. The new PEA excludes an onsite smelter. To date, Bunker Hill has successfully reduced the metal content released from the mine by ~70%, with a long-term solution for sustainable water management over the life of the mine once underground access is put in place. Figure 3. Bunker Hill asset history summary 1885 to present

Source: Bunker Hill Step 2: Management cleanout adds tier-one leadership and governance, with technical mine building skills The Bunker Hill management team is here to build a company, hence understanding the DNA is key. A key interim issue was Bunker’s past association with Bobby Genovese, a large shareholder who settled with the SEC in 2019 over trading in the Liberty Silver era in 2012. Cutting ties completely, the new team’s backbone is the ex Barrick trio; Chairman Richard Williams, former COO of Barrick who handpicked Sam Ash, former GM who led the successful turnaround of the Lumwana Copper mine for Barrick, and Brad Barnett, experienced in managing several of Barrick’s Superfund sites. NED Pam Saxton joined to lead the audit committee with 30 years of financial leadership experience in mining in the western U.S, joining NED Cassie Joseph, the general counsel at Nevada copper with a record of success in environmental and corporate law. Figure 4. Current management, board and governance system of Bunker Hill

Source: Bunker Hill

Sprott Capital Partners Equity Research

Bunker Hill, June 14 2021

Step 3: Existing Zn-Pb resource allows quick restart A digitization program launched in 2Q20 took 95 years of historical data, including ~180km of drilling and workings maps, to generate a 3D exploration model. Six months of forensic work focused on the zinc-rich zones (Newgard, Quill and UTZ), supported a 3Q20 inferred MRE of 8Mt @ 4.8% ZnEq (45Moz @ 175g/t AgEq) from only 2,680m drilled. The model identified high-grade silver targets where historical drilling intersected 1.5m @ 2,778 g/t Ag, 1.5m @ 1,145 g/t Ag, and 1.5m @ 950 g/t Ag. Adding ~4,500m of surface and underground drilling focused on targets in the upper levels of the mine near existing infrastructure confirmed shallow high-grade zinc with 2.4m @ 20% ZnEq outside the resource, lifting the global MRE to 9.1Mt @ 9.0% ZnEq (85Moz @ 289g/t AuEq) with 42% M&I. This formed the basis for the 2Q21 PEA (Figure 5). Bunker is now carrying out 3-5,000m of resource expansion drilling, targeting high-grade silver veins as well. Figure 5. (A) Oblique view showing decline access, (B) oblique- and (C) plan-views of 2020 MRE drilling

UTZ

Source: Bunker Hill, SCP

Step 4: Existing development enables fast-track production and lowers capex The 2Q21 PEA (Figure 6B) extends 160km of existing underground development from a surface portal. Y1-3 mining above the water table has a low US$42m capex over 15M with 2.5yr payback. Production of 41ktpa ZnEq (4.4Moz AgEq) at US$0.86/lb ZnEq AISC. The staged approach lowers risk and upfront capital, dewatering and rehabbing infrastructure as mining advances (Y4-7). The tail Y7-10 transitions to lead-rich mineralization below the 16L. A driver for low $25m plant capex (including 20% contingency) is the plan to use an existing UG hoist room and other developed areas to house the processing plant and tailings disposal, minimizing haulage and surface tailings facilities while mitigating long-standing environmental challenges by backfilling tails. Pre-concentration underground is not uncommon, albeit crushing and grinding is more common. Examples include Rosh Pina in Namibia and Codelco’s Andina concentrator is underground, developed in three large excavations to house the secondary-tertiary crushing unit, grinding and float plants. We expect to see more details and optimizations as Bunker progresses further technical studies. Figure 6. (A) Bunker Mine resources and mine infrastructure, (B) PEA highlights including breakdown of capex Bunker Hill (100%) PEA Bunker Hill Mine (100%) PEA UG inventory (Mt ore) 5.0 UG mining cost (US$/t)^ 58.0 Grade (% Zn) 5.5% Processing cost (US$/t)^ 15.0 Grade (% Pb) 2.9% G&A cost (US$/t ROM)^ 6.0 Grade (g/t Ag) 52.2 AISC (US$/lb Zn payable) 0.65 Zinc mined (000t Zn) 274 Initial capex (US$m) 42.0 Lead mined (000t Pb) 144 LOM sust. capex (US$m) 73.5 Silver mined (000oz) 7401 LOM FCF (US$M) 196 LOM avg ROM (Mt pa) 0.5 Discount rate (%) 8% Zn Recovery (LOM, %) 92% Project NPV (US$m) 78.4 Prod'n (000t pa ZnEq) 41 Asset IRR (%) 46.0% Mine life (years) 10 Initial capex breakdown: Zinc price (US$000/t) 2,535 Process Plant (US$m) 25.4 Lead price (US$000/t) 1,984 Rehab (US$m) 7.4 Silver price (US$/oz) 20 Development (US$m) 6.4 Other (US$m) 4.9 Pre-prod rev. (US$m) (2.2) Source: Bunker Hill, SCP; ^Small delta to unit costs linked to pre/post production tonnes, US$m costs Sprott Capital Partners Equity Research matched here 4

Bunker Hill, June 14 2021

Step 5: More than a flyer on silver optionality with history of un-explored high-grade silver veins Time to wake up the ‘silver bugs': silver represents 13% of the current resource, but ~35% of metal-value from historic production or as much as ~50% NSR given higher payability, validating Bunker’s view that new silver veins can make a meaningful addition. With higher payability, a 20% lift in silver price already offers a 12% lift in NPV, hence the strategic shift to silver-focused exploration today. The modern 3D model that reconstructed the stratigraphy and post-mineral fault offsets (supported by post-closure PhD studies) has allowed Bunker to pinpoint offsets of historically mined veins (Sierra Nevada, Caledonia) and target the specific host rock (fractured quartzite) with the best potential mineable grades and widths. Drilling confirmed the potential of multi-ounce silver grades near the upper levels in 1H20 and was taken further with 7.6m @ 165g/t Ag, including 1.5m @ 648g/t Ag drilled in 4Q20. Whilst results to date have been impressive and shallow for quick access, the blue-sky (Figure 7) potential exists at depth below the 11L and beyond the 29L (lowest mined area), including extensions of the existing J-Vein / Emery. ‘Geologic potential’ targets outside the MRE have been identified, totalling >350Moz (~150Moz potentially near mine workings). Although ‘just’ an exploration target, even half of this would position Bunker Hill as a potential premier silver operation in North America. With evidence of silver grades increasing at depth and a lack of previous silver-focused exploration, a real step-change could come from a significant silver discovery. Figure 7. Brownfield exploration targets, >150Moz to be validated within range of existing infrastructure Top targets J-Vein Caledonia Emery Francis / FW Francis Total Hybrid Vein includes Tetrahedrite Vein: Hybrid Vein includes tetrahedrite: Hybrid Vein includes tetrahedrite tetrahedrite • HGSilver Vein, mined from surface to 8L • Mined in 1981, historic prod'n • Mined in 1981. Historical • Mined in 1981 at 18L, • Options exist (B White –ex BH Geo 3.7Mt @ 20 Oz/t with Vein widths of production of 1.1Mt @ 15 Oz/t AgEq. considerable drill data available. 1970s) to find Vein from 9L from Kellogg 12-20’ • Could greatly benefit from Insights • Pb:Ag ratio was converging on Tunnel) • Mined and developed from 18-28L mechanized mining methods 1:1, grade increases with depth. • Cut-off by Slavonian Fault and has 2000’ average strike • Lowest development of Francis • Vein width is 8-12’, which suits • Downward projection indicates potential • Silver Valley ‘rule of thumb’: dip system is at 25L mechanized, high productivity, to re-find vein near 28 Level (4000’ total extent double the strike, suggesting extraction275k ton at 18 opt Ag Eq offset)No current resource known dip110k potential tons @ of20 4000’ opt Ag Eq. 412k tons @ 15 opt AgEq 13Moz Historical Resource = 4.9 Moz Ag = 2.2 Moz Ag = 6.2 Moz Ag 1000’ x 750’ x 10’ at 30 opt Ag Eq 1000’ x 750’ x 6’ at 30 opt Ag 1000’ x 2000’ x 12’ at 25 opt Ag Eq. 1000’ x 1000’ x 10’ at 25 95 Moz MID depth potential = 19.6 Moz = 11.7 Moz Ag = 52.1 Moz Ag opt Ag Eq. = 21.7 Moz Ag

1500’ x 1000’ x 12’ at 40 opt 2000’ x 1200’ x 8’ at 30 opt Ag 1800’ x 1500’ x 18’ at 35 opt Ag Eq. 2000’ x 1500’ x 12’ at 30 355Moz MAX depth potential AgEq = 50.1 Moz Ag =147.9 Moz Ag opt Ag Eq. = 93.9 Moz Ag = 62.6 Moz Ag Source: Bunker Hill 2020 Corporate Presentation Step 6: M&A and Superfund sites, opportunity within the Silver Valley, but also beyond Idaho’s Silver Valley in the Coeur d’Alene mining district produced >1.2B oz of silver with ~15% coming from Bunker Hill mine. The only fully operating mine today is Hecla’s Lucky Friday mine and 900tpd mill, ~30km from Bunker Hill, targeting 3.4-3.9Moz Ag in 2021. Its long +20-year resource life provides the runway for peers to grow. Also in the peer group, (i) Crescent mine: is connected to Bunker UG on 23L with a high grade silver resource of 23Moz @ 663g/t Ag (1.1Mt @ 16% ZnEq for comparison) but is under water for potentially shared dewatering costs, (ii) Sunshine mine: privately held past silver mine and 1,000tpd mill (360Moz Ag historically), immediately adjacent to Crescent, but the project is deep and also underwater. Further east, (iii) Galena Complex: three adjoining mines but only mining at Galena, exploring at Caladay while Coeur is on care and maintenance, but combined mill capacity is ~950tpd (Coeur and Galena mills) exemplifies consolidation opportunity in the Valley. Whilst a sizable reserve base of 2.2Mt @ 14% ZnEq (33Moz AgEq @ 465g/t), the opportunities at depth are already quite deep and can be expensive to drill. In our view, Bunker Hill stands out as the only shallow opportunity, above the water level, with attractive upfront margins driven by the quick ramp up and high grades, only needing a $25m plant. Figure 8. Silver Valley mining landscape in (A) plan view and (B) SCP summary table

Bunker Hill, June 14 2021

Costs, deductions and by-products: 4.4Moz pa @ US$11.00/oz AISC AgEq Some issuers report production and costs on metal equivalent (the method we use), while others show main-metal only, net of by products (Bunker). Similarly, some issuers add deductions / discount / transport of concentrate as costs (Bunker), while most show lower costs to mine gate (where royalties are charged), which need to be compared to payable revenue (us). Bunkers reported 65c/lb Zn AISC is net of by products, but includes smelter costs / transport; we estimate 51c/lb AISC to mine-gate. We show the only number that matters below; cash breakeven commodity price, the screen price of zinc at which margins go to zero, quite an important figure for investors. By product credits: producers reporting zinc-only headline production can legitimately deduct by-product credits. This would make Bunker Hill a ~21kt pa producer with AISC of US$0.17/lb Zn. This is less useful as it shows diminutive production and with no indication of break-even levels. As such, we show zinc equivalent where production is lifted by adding by-product revenue, which would make Bunker Hill a ~43ktpa ZnEq producer with AISC of US$0.51/lb if reported on peer-basis excluding deductions or US$0.71/lb ‘cash-break even price’ net of smelter deductions. Bring it back to silver and we have LOM 4.4Moz AgEq pa @ US$11.00/oz AISC. Table 1. C1 and AISC for Zn and ZnEq, on both NSR (excluding smelter costs) and absolute (cash breakeven) basis Rev. deduction as cost Costs as costs PEA Zn SCP Zn SCP Zn/AgEq SCP Zn SCP Zn/AgEq LOM payable Zn (000t) 206 206 431 206 431 LOM payable Ag (Moz) 7.4 7.4 44 7.4 44 Operating costs (US$m) 413 413 413 413 413 By-prod val (Pb,Ag US$m)^ (379) (408) - (408) - Treatment + Transport (US$m) 181 181 181 - - Smelter deductions (US$m) 9 9 9 - - Sustaining capex (US$m) 74 74 74 74 74 AISC (US$m) 297 268 676 78 486 AISC cost (US$/lb) 0.65 0.59 0.71 0.17 0.51 Cash break even price (US$/lb)* 0.65 0.59 0.71 0.59 0.71 AISC cost (US$/oz) (11.79) (11.76) (1.97) 10.56 11.00 Cash break even price (US$/oz)* 40.14 36.19 15.29 36.19 15.29 Source: BNKR, SCP; ^PEA value on gross in-concentrate basis, SCP value on NSR basis

Valuation: US$78m NPV8% PEA, US$129m NPV7% Mining inventory: The March 2021 PEA mines 5Mt @ 9% ZnEq (48Moz @ 303g/t AgEq) carved out from primarily shallow, Zn-Pb rich resources of the 9.1Mt global resource and we expect this to continue to grow with drilling, especially with the company’s ongoing focus on high-grade silver exploration guided by the modern 3D model. Table 2. Mineable inventory from 2Q21 PEA GLOBAL RESOURCE Tonnes (Mt) Grade (% ZnEq) ZnEq (kt) Grade (g/t AgEq) Moz (AgEq) Total Indicated 4,001 7.60% 304 276 35 Total Inferred 5,097 8.26% 421 300 49 Grand Total 9,097 7.97% 725 289 85 D (3Q20) 13% 65% 87% 65% 87% PEA INVENTORY 4,953 9.05% 448 328 52 Bunker Hill, SCP Mining and processing: We model a 0.5Mtpa operation at the PEA production schedule for grade, throughput and recovery. Zn grades >6% Zn are mined in the first five years and average modestly lower to ~4.5% Zn over a 10- year life of mine (LOM). Processing and tailings disposal will be from an underground plant producing a Zn concentrate and Pb-Ag concentrate and shipped to an offsite smelter, driving a low capex of US$42m and fast track to production. Figure 9 captures the gradual transition from the upper zinc rich levels in the first half of the mine life to more lead in the later years as mining gets deeper. Same for silver, grades begin to pop in the later years increasing CF. With further focus on delineating higher-grade silver targets near mine infrastructure, we could see more silver ounces brought forward in the mine plan—potentially accretive to NPV and payback.

Sprott Capital Partners Equity Research

Bunker Hill, June 14 2021

Figure 9. SCPe Bunker Hill mine production profile 60kt 120 Zn equivalent production (000t) Zn produced in con (000t) Lead produced in con (000t) Silver produced in Pb con (Moz, LHS) AISC (US$/lb ZnEq, RHS) Mill (kt / 10, RHS) 50kt 100

40kt 80

30kt 60

20kt 40 AISC, ROM/10, ROM gr %. * 1k * %. gr ROM ROM/10, AISC, 10kt 20

Concentrate production (kt/yr), Ag Moz/yr Moz/yr Ag (kt/yr), production Concentrate 0kt 0 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Source: SCP estimates Valuation: We model the PEA inputs to match the US$78m published NPV on like for like commodity prices 17% below spot across the Ag-Pb-Zn basket, a good sense-check to our own model (Table 3) and to cost-nomenclature above. From here we simply lift the price deck in line with our LT assumptions (US$1.27/t Zn, US$0.91/t Pb and US$24.00/oz Ag, 9% under spot), and drop our discount to 7% for US$129m ungeared project NPV. Table 3. Bunker Hill PEA and SCP PEA-case BNKR SCP BNKR SCP Bunker Hill (100%) PEA PEA SCP Bunker Hill (100%) PEA PEA SCP UG inventory (Mt ) 5.0 >> >> UG mining cost (US$/t)^ 58.0 61.6 >> Grade (% Zn) 5.5% >> >> Processing cost (US$/t)^ 15.0 15.5 >> Grade (% Pb) 2.9% >> >> G&A cost (US$/t ROM)^ 6.0 6.2 >> Grade (g/t Ag) 52.2 >> >> TC + Transport (US$/t con) na 286.8 >> Zinc mined (000t Zn) 274 >> >> AISC (US$/lb Zn payable) 0.65 0.66 0.59 Lead mined (000t Pb) 144 >> >> AISC (SCP, US$/lb ZnEq)+ na 0.70 0.71 Silver mined (000oz) 7401 >> >> Initial capex (US$m) 42 >> >> LOM avg ROM (Mt pa) 0.5 >> >> LOM sust. capex (US$m) 74 >> >> Zn Recovery (LOM, %) 92% >> >> LOM FCF (US$M) 196.5 136.5 199.0 Prod'n (000t pa ZnEq) 41 >> >> Discount rate (%) 8.0% >> 7.0% Mine life (years) 10 >> >> Project NPV (US$m) 78 78 129 Zinc price (US$000/t) 2,535 >> 2,800 Asset IRR (%) 46% 34% 50% Lead price (US$000/t) 1,984 >> 2,000 Source: 1Q21 PEA, SCPe; *BNKR AISC Zn only, incl. smelter costs, net by- Silver price (US$/oz) 20.00 >> 24.00 product, +SCP AISC ZnEq mine gate, cash break even US$0.71/lb; ^Small Zinc Payability (%) 82% >> >> delta to unit costs linked to pre/post production tonnes, US$m costs Exploration leverage is the main reason to own Bunker in our view, as investors get exposure to base metals with drill bit momentum from silver exploration while capable of re-rating to producer in less than 2Y, enabling FCF to fund further growth. In our view, the high-grade silver optionality at Bunker Hill presents a potential lift in NPV, while a significant discovery at depth could be a real step change. At the very least, we expect continued additions to the global resource with a combination of near-mine resource expansion drilling and exploration. Recommendation: initiating coverage with BUY rating and C$0.60/sh PT As above, our base case matches the published PEA identically for US$78m NPV. At our price deck, this drives a US$129m asset NPV7%. We add a conservative 5% in-situ (ie US$1.20/oz AgEq) for the 32Moz AgEq of resources excluded from the reserve / DCF for US$32m – this is where we capture the silver upside, a key pillar of the value. Diluted for cash and options / warrants, we also net off scheduled EPA and water costs to CY24 (Appendix II) for a NAV of US$201m (C$240m). Herein lies our investment thesis – the stock is trading at ~0.37xNAV mainly on resources, below base metal peers but even more so below the pure-play silver peers. In our view Bunker offers the best of both worlds: high-grade brownfield exploration in a safe jurisdiction with fast-tracked production to self fund exploration. Nonetheless, with a PEA only just out, we conservatively apply a 0.5xNAV to the project. Adding cash and cash from ITM options, we initiate with a BUY rating and C$0.60/sh PT. This includes C$63m of cash from warrants, with the lion’s share being 58m @ 50c expiring 3Q23, but also 33m @ 59c existing in 4Q25 a key variable going forward.

Sprott Capital Partners Equity Research

Bunker Hill, June 14 2021

Table 4. Bunker Hill valuation and sensitivities to Zn price / discount, and resource tonnes Commodity price CY21E CY22E CY23E CY24E CY25E Sensitivities to discount and zinc price (US$m, ungeared)* Zn price (US$/t) 1.27 1.27 1.27 1.27 1.27 Group NAV (US$m) 1.08/lb 1.18/lb 1.27/lb 1.37/lb 1.50/lb Pb price (US$/t) 0.91 0.91 0.91 0.91 0.91 9.0% discount 137 162 188 213 248 Ag price (US$/oz) 24.0 24.0 24.0 24.0 24.0 7.0% discount 148 175 201 228 266 SOTP project valuation* US$m o/ship NAVx C$/sh 5.0% discount 160 189 217 246 286 Bunker Hill NPV (build start 4Q22) 129 100% 0.27 0.50x Price target (C$/sh) 1.08/lb 1.18/lb 1.27/lb 1.37/lb 1.50/lb Option / EPA payments (22) 100% (0.04) 9.0% discount 0.47 0.53 0.58 0.64 0.72 Resor. ex rsv @ 5% (120c/oz AgEq) 32 100% 1.00x 0.13 7.0% discount 0.49 0.55 0.61 0.67 0.75 SCPe Net Cash 5.4 100% 1.0x 0.02 5.0% discount 0.52 0.58 0.65 0.71 0.80 Cash from ITM options 56.3 100% 1.0x 0.23 *Project level NPV, excl finance costs and central SGA, discounted to build start NAV @ 4Q22 201 0.61 *Build start, ex fin. cost + G&A, dil. for optns not build P/NAV today: 0.37x Source: SCP estimates To convert to a group NAV, we model 65% gearing for US$27m of debt and US$12m of mine-build equity, for a rough estimate of 333m share fully-funded fully-diluted (FF FD) for production. To convert from asset to company, we deduct finance costs and central G&A, and show a FF FD 1xNAV over time below. Again the key unknown is warrants, which could support much lower dilution than our model, hence we don’t use the below to drive our price- target, but to provide a broad-brush guesstimate at the future capital structure and evolution of value over time. Table 5. Group NAV over time diluted for options / warrants, but also for mine build equity Group valuation over time^ 2Q21 2Q22 2Q23 2Q24 2Q25 Funding: uses Funding: sources Project NPV (US$m) 115 124 152 182 167 Mine build capex (US$m) 42.0 Cash+ITM options (US$m) 51.8 Centra G&A/fin. cost (US$m) (34) (24) (21) (18) (14) SCPe pre-prod'n expl'n 11.0 SCPe debt @ 65% (US$m) 27.3 Net cash prior qtr (US$m) 5.4 6.5 (3.2) (27.1) (7) SCPe work cap(US$m) 7.4 SCPe DFS equity (US$m) 12.0 SCPe G&A+fin cost (US$m) 7.1 Total sources (US$m) 91.2 Cash from ITM options 56.3 56.3 56.3 56.3 56.3 Total uses: group (US$m) 68 Buffer C$24m Option / EPA payments 21.6 21.6 21.6 21.6 21.6 Share data (m) Basic FD FF FD NAV (US$m) 165 184 205 215 224 Shares (m) 163.7 286.71 333 FD share count (m) 287 287 333 333 333 1xNAV7%/sh FF FD (US$/sh) 0.57 0.64 0.62 0.65 0.67 Source: SCP estimates, ^fully diluted for mine build and dilutive options Risks  Resource: Our investment thesis is part predicated on defined inventory but is reliant on conversion of resources to reserves to extend this. Only 42% of the 9.1Mt global resource in the M&I category and only a 5Mt is used in the PEA inventory, mitigates this risk as resources don’t form a large part of our valuation.  Metallurgy: In our view, the metallurgical risk is low to moderate given the long history of production from two smelters, suggesting that metallurgy was understood or, at the very least, not problematic.  Scheduling is a moderate risk as with any ramp-up project as growing pains are typical, thus we model a conservative restart timeline of 20 months to first ore compared to the 15 months in the PEA. This sees 4Q23 production – the risk to this is mitigated by the potential not to miss, but to actually see production earlier in 2023. Whilst we don’t model that, it speaks to de-risking of this falling back to 2024.  Funding: As with most development projects, financing is a key risk. The current estimated treasury stands at $2.5m would see the company through its exploration plans, requiring further financing to get to feasibility. Construction is likely to start in CY22 we are modelling US$42m capex, which is only modestly higher than the company’s market cap and likely manageable.  Permitting: In our view, permitting risk is low. Bunker Hill is a past producing mine on 100% private ground with 100% patented mining claims, so an operating permit is not required. Catalysts  CY21: Resource expansion drilling and high-grade silver exploration results  2H21: Further technical studies  2H21: TSX-V listing  Year end 2021: Financing and construction decision  2H23: First production

Sprott Capital Partners Equity Research

Bunker Hill, June 14 2021

APPENDIX 1: SILVER VALLEY LAY OF THE LAND Silver Valley is ~64km long, east of Coeur d'Alene along I-90 and host to many deposits that collectively have produced >1.2 billion oz of silver, Bunker Hill accounting for ~15% of that, making it one of the most prolific silver districts globally. Today, the Valley has >1.1Mtpa of milling capacity between four mills, but only one mine is in production along the short ~30km drive between Lucky Friday and Bunker Hill (Figure 11). Latent mill capacity is an obvious opportunity, but the strategic value of permitted TMFs (or UG backfill in Bunker’s case) can’t be underplayed either, given the savings in both capital cost for a potential new entrant, as well as savings on permitting time frames. In our view, the Silver Valley presents multiple opportunities broadly divided into (i) shared mining / water infrastructure, (ii) toll-treatment potential, and (iii) consolidation / acquisition opportunities. Among the closest peers discussed below, Bunker Hill is the only shallow opportunity above the water level, with attractive upfront margins driven by the quick ramp up and high grades. That, and management’s background, place the company well to drive the narrative going forward, a key piece of the intangible upside in our view. Peer group summary: who’s who in the zoo? (i) Crescent: owned by private Crescent Silver Co, the mine and mill are fully permitted and JV’d (~65/35) with the New Jersey Mining Company and only 2km from Bunker Hill mine. Although only a small 1Mt global resource, it is primarily high-grade silver with 23Moz @ 663g/t Ag (19Moz @ 547g/t AuEq). Even better, is the mine connects with Bunker Hill underground on 23L, but would require significant dewatering as the mine is flooded up to 11L. Here lies an opportunity to share costs and accelerate dewatering. Figure 10. (A) Water flowsheet schematic for Bunker Hill and (B) UG long section of Bunker to Sunshine

Source: Bunker Hill, Crescent Silver (ii) Sunshine Mine: located immediately adjacent to Crescent, is privately held by the investment advisor Electrum, themselves led by Thomas Kaplan. Sunshine has a rich past (360Moz Ag historically) and most importantly, its own 1,000tpd mill. However, the project is deep, mined to 32L historically (Figure 10) and underwater. Whilst not much disclosure has been made to date, Kaplan has publically stated that the Electrum Group has managed to increase the mines inferred “resource from around 30m [ounces] to about 200m inferred [ounces]” and the long-term plan is to take Sunshine mine public. (iii) Galena Mine Complex: further east lies Americas Gold & Silver’s Galena Complex, 60/40 JV with Eric Sprott that kicked off in 2019 and now undergoing recapitalization. Galena comprises three adjoining mines, only produces from Galena, exploring at Caladay, while Coeur is on care and maintenance. Two separate crushing, milling and flotation circuits allow concurrent production of Ag-Cu and Ag-Pb concentrates at a combined ~950tpd. Reserves stand at 2.2Mt @ 14% ZnEq (33Moz AgEq @ 465g/t), with deeper resource extensions to be tested, albeit can be more expensive and timely to access. Of note, that company is currently down 50% YTD after poor leaching at Relief Canyon – with debt of ~C$14m against C$5m cash, the company isn’t currently in a strong position to expand. (iv) Lucky Friday: Hecla is the big fish in the pond, producing 2.0Moz of in 2020 and not even in full production as ramp up was only completed in 4Q20. CY21 guidance is 3.4-3.9Moz Ag at US$7.75-9.75/oz net of by-product credits using its 100% owned 900tpd mill. The mine’s reserve is sizable at 5.2Mt @ 10.4% ZnEq (586Moz AgEq @ 3,488g/t) and an even larger global resource at 13Mt points to a long, +20 year operating life in the camp, leaving the runway for peers to grow.

Sprott Capital Partners Equity Research

Bunker Hill, June 14 2021

Figure 11. Silver Valley mining landscape in (A) plan view and (B) SCP summary table

Source: Bunker Hill, SNL, SCP Asset Bunker Hill Crescent Sunshine Mine Coeur Galena Caladay Lucky Friday Owner Bunker Hill Mining Crescent Silver Electrum Americas Gold & Silver Hecla Mining ~Capacity Proposed 0.5Mtpa 0.13Mtpa 0.36Mtpa 0.15Mtpa 0.16Mtpa - 0.3Mtpa Process Flotation Flotation Flotation Care & Maintenace Flotation - Flotation Stage Prefeas/Scoping Preproduction Preproduction Satellite Operating Exploration Operating APPENDIX 2: OPTION AGREEMENT AND TRADING Bunker Hill revised the initiation option agreement in 4Q20, with the new agreement outlining US$60k/month care and maintenance to Placer Mining until exercised. The remaining purchase price is US$5.4m, comprising US$3.4m residual cash, and US$2m in common shares. Valuation: we model the EPA payments scheduled through to 2024, and thus the monthly care and maintenance costs through to that time. This drives an NPV7% liability of US$22m, which we net off against the asset NPV in our SOPT valuation. Trading restrictions: were placed on the stock for US broker dealers as a consequence of SEC charges against legacy holders. These are expected to be lifted imminently which in parallel to a OTCQB upgrade and TSX listing should enable liquidity to open up materially.

APPENDIX 3: SILVER OPTIONALITY & EXPLORATION LEVERAGE The Bunker Hill mine has never seen silver focused exploration historically, despite 50% NSR from Ag and several rich silver deposits in the same geology. Hence, the strategic shift makes sense today given the leverage the mine has to spot prices. The PEA outlines 7.4Moz @ 52g/t Ag over the 10-year mine plan for about 15% of the NSR already at the PEA US$20/oz silver price. Table 6 below shows our project NPV and its leverage to silver prices and / or grades and therefore leverage to high-grade silver exploration near mine infrastructure. Table 6. SCPe Bunker Hill project NAV sensitivities to silver price / grade SCPe Asset Value: Silver Price vs Grade Asset NPV (US$m) -40% Ag px -20% Ag px SCPe 0% +20% Ag px +40% Ag px +40% Silver grade 26 94 160 227 293 +20% Silver grade 9 78 145 211 278 SCPe 0% (7) 62 129 195 262 -20% Silver grade (25) 46 113 180 246 -40% Silver grade (44) 29 97 164 230 Source: SCP estimates With 7.4Moz in mine inventory already, this is mainly above the 11L, providing quick access to early mining while giving runway to expand as mining progresses deeper. The thesis is simple, there are two distinct types of silver mineralization at Bunker: tetrahedrite hybridization (Ag + Pb-Zn) and silver zonation being the key one as this is high-grade, primarily silver-bearing tetrahedrite veins identified in the lower levels of the mine and at depth. Stepping back, not only did Bunker lack silver-focused exploration until 1970s, the mine is shallow (~365m below sea level) compared to Lucky Friday mining at >1800m below sea level (Figure 13B). Also, the Pb:Ag ratio nears 1:1 below the 27L, pointing to a potential transition zone typical of mesothermal systems with silver being deposited at higher temperatures found at depth. With this and new 3D model, the company has outlined the blue-sky potential at depth ranging from 95Moz up to 350Moz Ag, including extensions of the high-grade existing J-Vein / Emery and primary tetrahedrite Caledonia veins (Figure 13). Although this is geologic potential, it offers attractive upside to the project as any significant discovery at depth would be a real step change. We expect this to gain more market visibility as drilling progresses.

Sprott Capital Partners Equity Research

Bunker Hill, June 14 2021

Figure 12. Brownfield exploration targets, >150Moz to be validated within range of existing infrastructure Top targets J-Vein Caledonia Emery Francis / FW Francis Total Hybrid Vein includes Tetrahedrite Vein: Hybrid Vein includes tetrahedrite: Hybrid Vein includes tetrahedrite tetrahedrite • HGSilver Vein, mined from surface to 8L • Mined in 1981, historic prod'n • Mined in 1981. Historical • Mined in 1981 at 18L, • Options exist (B White –ex BH Geo 3.7Mt @ 20 Oz/t with Vein widths of production of 1.1Mt @ 15 Oz/t AgEq. considerable drill data available. 1970s) to find Vein from 9L from Kellogg 12-20’ • Could greatly benefit from Insights • Pb:Ag ratio was converging on Tunnel) • Mined and developed from 18-28L mechanized mining methods 1:1, grade increases with depth. • Cut-off by Slavonian Fault and has 2000’ average strike • Lowest development of Francis • Vein width is 8-12’, which suits • Downward projection indicates potential • Silver Valley ‘rule of thumb’: dip system is at 25L mechanized, high productivity, to re-find vein near 28 Level (4000’ total extent double the strike, suggesting 275kextraction ton at 18 opt Ag Eq Nooffset) current resource known 110kdip potential tons @ of20 4000’ opt Ag Eq. 412k tons @ 15 opt AgEq 13Moz Historical Resource = 4.9 Moz Ag = 2.2 Moz Ag = 6.2 Moz Ag 1000’ x 750’ x 10’ at 30 opt Ag Eq 1000’ x 750’ x 6’ at 30 opt Ag 1000’ x 2000’ x 12’ at 25 opt Ag Eq. 1000’ x 1000’ x 10’ at 25 95 Moz MID depth potential = 19.6 Moz = 11.7 Moz Ag = 52.1 Moz Ag opt Ag Eq. = 21.7 Moz Ag

Figure 13. (A) Isometric view showing Ag targets, (B) Silver Valley mine depths and (C) evidence of silver zonation

Source: Bunker Hill

Sprott Capital Partners Equity Research

Bunker Hill, June 14 2021

Ticker: BNKR CN Price / mkt cap: C$0.31/sh, C$51m mkt cap P/NAV today: 0.44x Country: USA, Idaho Author: B Salier / B Gaspar Rec / PT: BUY, C$0.60/sh 1xNAV7%: C$0.92c/sh Asset: Bunker Hill Mine

Commodity price CY21E CY22E CY23E CY24E CY25E Resource/Inventory Mt Zn % Mt Zn % Zn price (US$/t) 1.27 1.27 1.27 1.27 1.27 0.2766 4Q20 MRE SCP inventory Pb price (US$/t) 0.91 0.91 0.91 0.91 0.91 Indicated 4.0 5.52% 5.0 5.53% Ag price (US$/oz) 24.0 24.0 24.0 24.0 24.0 Inferred 5.1 4.88% SOTP project valuation* US$m o/ship NAVx C$/sh Total 9.1 5.16% Total 5.0 5.5% Bunker Hill NPV (build start 4Q22) 129 100% 0.27 Funding: uses Funding: sources 0.50x Option / EPA payments (22) 100% (0.04) Mine build capex (US$m) 42.0 Cash+ITM options (US$m) 51.8 Resor. ex rsv @ 5% (120c/oz AgEq) 32 100% 1.00x 0.13 SCPe pre-prod'n expl'n 11.0 SCPe debt @ 65% (US$m) 27.3 SCPe Net Cash 5.4 100% 1.0x 0.02 SCPe work cap(US$m) 7.4 SCPe DFS equity (US$m) 12.0 Cash from ITM options 56.3 100% 1.0x 0.23 SCPe G&A+fin cost (US$m) 7.1 Total sources (US$m) 91.2 NAV @ 4Q22 201 0.61 Total uses: group (US$m) 68 Buffer C$24m *Build start, ex fin. cost + G&A, dil. for optns not build P/NAV today: 0.37x Share data (m) Basic FD FF FD Sensitivities to discount and zinc price (US$m, ungeared)* Shares (m) 163.7 286.71 333 Group NAV (US$m) 1.08/lb 1.18/lb 1.27/lb 1.37/lb 1.50/lb Ratio analysis CY20E CY21E CY22E CY23E CY24E 9.0% discount 137 162 188 213 248 Shares out (m) 114.3 163.7 163.7 163.7 163.7 7.0% discount 148 175 201 228 266 EPS (Cc/sh) 21.8 - - 1.5 17.4 5.0% discount 160 189 217 246 286 CFPS before w/c (C$/sh) - - - - 3.9 Price target (C$/sh) 1.08/lb 1.18/lb 1.27/lb 1.37/lb 1.50/lb EV (C$m) 65.1 51.4 54.8 84.9 70.5 9.0% discount 0.47 0.53 0.58 0.64 0.72 FCF yield (%) - - - - 28% 7.0% discount 0.49 0.55 0.61 0.67 0.75 Income statement CY20E CY21E CY22E CY23E CY24E 5.0% discount 0.52 0.58 0.65 0.71 0.80 Revenue (US$m) - - - 18.3 92.5 *Project level NPV, excl finance costs and central SGA, discounted to build start COGS (US$m) - - - 11.2 55.6 Group valuation over time^ 2Q21 2Q22 2Q23 2Q24 2Q25 Gross profit (US$m) - - - 7.1 36.9 Project NPV (US$m) 115 124 152 182 167 G&A (US$m) 2.1 2.4 2.0 2.0 2.4 Centra G&A/fin. cost (US$m) (34) (24) (21) (18) (14) Exploration (US$m) 13.0 10.1 4.0 - - Net cash prior qtr (US$m) 5.4 6.5 (3.2) (27.1) (7) Finance costs (US$m) 1.6 0.1 - 1.6 2.0 Cash from ITM options 56.3 56.3 56.3 56.3 56.3 Tax (US$m) - - - - 2.1 Option / EPA payments 21.6 21.6 21.6 21.6 21.6 Other (US$m) (37.6) (8.4) 1.4 1.4 6.6 NAV (US$m) 165 184 205 215 224 Net income (US$m) 20.9 (4.1) (7.4) 2.1 23.9 FD share count (m) 287 287 333 333 333 Cash flow statement CY20E CY21E CY22E CY23E CY24E 1xNAV7%/sh FF FD (US$/sh) 0.57 0.64 0.62 0.65 0.67 EBITDA (US$m) (15.7) (14.6) (7.5) 3.6 33.1 1xNAV/sh over time (US$, geared)^ Add share based (US$m) 2.3 2.0 1.5 1.5 1.5 1xNAV (US$/sh) 1.08/lb 1.18/lb 1.27/lb 1.37/lb 1.50/lb Net change wkg cap (US$m) 7.7 0.0 - - 9.0 9.0% discount 0.45 0.53 0.61 0.69 0.80 Cash flow ops (US$m) (21.2) (12.5) (6.0) 3.5 21.4 7.0% discount 0.48 0.56 0.65 0.73 0.85 PP&E: build + sust (US$m) 2.7 - 8.4 33.6 7.1 5.0% discount 0.51 0.60 0.69 0.77 0.90 PP&E - expl'n (US$m) - - - - - *Diluted for options under PT but not mine build; ^ Fully diluted for mine build Cash flow inv. (US$m) (2.7) - (8.4) (33.6) (7.1) SCPe Production CY24 CY25 CY26 CY27 CY28 Share issue (US$m) (59.4) (18.0) (11.0) - - Production (000kt ZnEq) 40.5 41.1 45.0 43.5 43.4 Debt draw (repay) (US$m) - - (27.3) - 6.8 AISC BNKR (US$/t Zn)* 0.78 0.88 0.81 0.80 0.81 Cash flow fin. (US$m) 58.3 18.0 38.3 - (6.8) AISC SCP (US$/t ZnEq)^ 0.70 0.76 0.71 0.72 0.72 Net change in cash (US$m) 34.4 5.5 24.0 (30.1) 7.5 Production (000kt AgEq) 4.2 4.2 4.6 4.5 4.5 Balance sheet CY20E CY21E CY22E CY23E CY24E AISC SCP (US$/t AgEq)^ 10.52 11.87 10.80 11.16 11.12 Cash (US$m) 3.6 9.0 33.0 2.9 10.4 *deductions as cost, net by-product; ^Eq, costs to mine gate ex. deductions Acc rec. + invet. (US$m) 2.7 2.7 2.7 2.7 14.5 50kt 1.00 PP&E & expl'n (US$m) 0.4 0.4 8.8 42.4 44.4 Total assets (US$m) 6.7 12.1 44.5 48.0 69.3 40kt 0.85 Debt (US$m) 0.1 - 27.3 27.3 20.5 30kt 0.70 Accounts payable (US$m) 2.4 1.8 1.8 1.8 4.6 20kt 0.55 Others (US$m) 4.0 9.5 33.5 3.4 22.7 Total liabilities (US$m) 38.2 31.3 58.6 58.6 54.6 10kt 0.40 Shareholders' equity (US$m) 0.0 13.5 26.0 27.4 28.9 0kt 0.25 Reserves (US$m) 34.6 37.6 37.6 37.6 37.6 CY24 CY25 CY26 CY27 CY28 Retained earnings (US$m) (66.1) (70.2) (77.7) (75.6) (51.7) Bunker HIll prod'n (LHS, 000t ZnEq) AISC (RHS, US$/t Zn) Liabilities + equity (US$m) 6.7 12.1 44.5 48.0 69.3 Source: SCP estimates

Sprott Capital Partners Equity Research

Bunker Hill, June 14 2021

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Sprott Capital Partners Equity Research

Bunker Hill, June 14 2021

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9 The analyst has been reimbursed for travel expenses for a site visit by the issuer NO

Sprott Capital Partners Equity Research Ratings:

Summary of recommendations as of June 2021 BUY: 42 HOLD: 0 SELL: 0 UNDER REVIEW: 0 TENDER: 0 NOT RATED: 0

TOTAL 42

1 As at the end of the month immediately preceding the date of issuance of the research report or the end of the second most recent month if the issue date is less than 10 calendar days after the end of the most recent month

Sprott Capital Partners Equity Research