Bunker Hill Mining Corp. [BNKR-CSE; BHLL-OTC] reported results of its preliminary economic assessment (PEA) for the Bunker Hill mine in Idaho’s Silver Valley, United States.
The PEA contemplates a $42 million initial capital cost (including 20% contingency) to rapidly restart the mine, generating approximately $20 million of annual average free cash flow over a 10-year mine life, and producing over 550 million pounds of zinc, 290 million pounds of lead, and 7 million ounces of silver at all-in sustaining costs (AISC) of $0.65 per payable pound of zinc (net of by-products).
The PEA offers attractive returns of $101 million NPV, 46% IRR, and 2.5-year payback at $1.15/lb zinc, $0.90/lb lead, $20.00/oz silver. There would be a low-cost, rapid restart based on $42 million initial capital expenditures over a 15-month period.
There is a low environmental footprint with minimal surface disturbance and long-term water management solution and a significant positive economic impact for the Shoshone County, Idaho community.
The life-of-mine zinc equivalent production is 912 million pounds at a zinc equivalent grade of 9.3%, including over 550 million pounds of zinc, 290 million pounds of lead, and 7 million ounces of silver. Key upsides include ongoing exploration focused on high-grade silver and resource expansion
Sam Ash, CEO of Bunker Hill, stated: “Our PEA confirms that by maximizing the use of existing resources, partnerships and infrastructure, the Bunker Hill Mine has the potential to be re-started rapidly as a low-cost, long life, sustainable operation. Pleasingly for our investors, the robust financial returns in the PEA, including a $101 million NPV, 46% IRR, and 2.5-year payback, do not include the significant upside to come from the on-going high-grade silver exploration which we expect to further increase cash flow margins. Based an annual average free cash flow of $20 million at metal prices below spot levels, we can self-fund these exploration efforts while continuing to grow the company. We look forward to progressing further technical studies and project finance discussions over the coming months.”
The early and robust cash-flow generated by this restart plan is designed to deliver optimal returns to all stakeholders, creating 150-200 new mining and administrative jobs within the local community, ensuring long-term environmental-management partnerships with the U.S. EPA and IDEQ, and driving the long-term development of the mine’s resources for many years to come.
In April 20 trading, Bunker Hill shares gained 3 cents to 35 cents on a volume of 142,600.