Bunker Hill Mining (CSE: BNKR) says it is ready to restart the past-producing Bunker Hill silver mine project in Idaho after closing a US$67-million deal first announced on May 23.
Bunker Hill completed a prefeasibility study on restarting the project last year that estimated a capital cost of US$54.8 million for the first phase of the restart. With a mine life of five years, the study pegged the project’s after-tax net present value at US$52 million (using an 8% discount rate) and its internal rate of return at 36%.
The deal with Sprott Private Resource Streaming and Royalty includes a US$46 million multi-metals stream and a US$21-million debt facility. On Monday, Bunker Hill announced it had closed the deal and that US$46 million, minus US$5 million to cover bridge loans, had already been advanced to the company.
Bunker Hill chose not to draw on the debt facility until other financing opportunities are considered.
In a press release, Bunker Hill CEO Sam Ash said that closing the deal allows for “full-scale recommencement of project activities.”
Bunker Hill shares rose 11% or 2.5¢ on the day to end at 25¢ apiece. The stock has traded in a 52-week window of 8.5-28¢ and the company has a market cap of US$49.1 million.
The Bunker Hill mine project is in Idaho’s historic Coeur d’Alene mining district and produced 42.8 million tons at an average grade of 8.43% lead, 120.62 grams silver per tonne and 4.52% zinc between 1856 and 1991.
The mine remained in care and maintenance until 2020 when new management took over the project. The company says the historical mine “has the potential to be re-started as a high-grade silver mine [with] a low-cost, long life, sustainable operation.”
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