The legacy Bunker Hill zinc-lead-silver mine in Shoshone County, Idaho, is ready for a near-term revival with proponent Bunker Hill Mining (CSE: BNKR; US-OTC: BHLL) on monitor to ship money circulation by the third quarter of 2023.
The Toronto-headquartered firm plans to restart operations on the mine in brief order after the asset languished on care and upkeep for greater than 30 years. Over almost a century, it has produced greater than 165 million oz. of silver and 5 million tons of base metals.
“Many mission proponents are watching our progress intently for the reason that Bunker Hill restart would show to the market that stranded brownfields websites comparable to Bunker Hill with legacy environmental challenges can certainly be funded for redevelopment and manufacturing,” stated government chair and former Barrick government Richard Williams throughout a tour of the location in late September.
The Northern Miner witnessed underground growth and rehabilitation of the outdated gear in progress on the outskirts of the dual cities of Kellogg and Wardner throughout the go to. The important thing takeaway from the go to is that the historic asset is in the suitable palms on the proper time, contemplating the skilled crew driving the restart amid compelling fundamentals for the metals it would produce.
Bunker Hill Mining printed a prefeasibility research for the mine early in September, outlining a speedy restart for a complete funding of US$54.8 million, which incorporates continency.
It covers the primary section of the restart, with an estimated lifetime of mine (LOM) of 5 years.
A second-phase enlargement is anticipated to supply upside potential from useful resource conversion, metallurgical optimization, and mine life extension.
Based on the prefeasibility, the mission is anticipated to generate a pre-tax free money circulation of US$137 million over the preliminary mine plan (common of US$27 million per yr) and US$130 million on an after-tax foundation (common of US$26 million per yr).
The research delivered an NPV (8% low cost) of US$52 million and an IRR of 36%, each figures on an after-tax foundation.
So agency is administration’s conviction of the mineralization in place, it has determined to go forward with manufacturing with out finishing a bankable feasibility research.
Possible reserves at Bunker Hill are estimated at 3.2 million brief tons (2.9 million tonnes), grading 5.3% zinc, 2.4% lead and 1.02 oz. silver per ton.
Historic mine
Improvement of the Bunker Hill property dates again to 1885, with the mine closing in 1981 on account of low base steel costs. The choice to droop mining was additionally pressured by monetary causes as the brand new environmental rules at the moment required vital capital funding to improve the processing and smelting operations.
The mine was reopened in 1988 and operated till 1991. Since then, it has been below care and upkeep.
The mine produced 42.8 million tons at a median grade of 8.43% lead, 3.52 oz. silver per ton, and 4.52% zinc.
The lead smelter and zinc processing vegetation had been dismantled following the ultimate closure.
The federal authorities needed to step in to treatment acid water discharge from the mine, requiring vital funding to arrange a state-run water therapy facility close to the mine web site. Website clean-up actions had been additionally accomplished to adjust to environmental rules below the auspices of the U.S. Environmental Safety Company’s so-called Superfund program.
Extra lately, Bunker Hill Mining signed an settlement with Placer Mining and two people, William Pangburn and Shirley Pangburn, to buy the mine property, together with the mineral titles and floor rights in December 2021, in addition to committing to pony up environmental bonding fee of US$17 million due by November 2024. The corporate assumed possession of the property in January 2022.
In the meantime, Bunker Hill Mining signed an settlement with Teck Sources (TSX: TCK.A/TCK.B; NYSE: TCK) to purchase the Pend Oreille course of plant in January 2022 and accomplished the transaction in June. The mill was dismantled from Teck’s Pend Oreille web site and demobilized to the Bunker Hill web site in August 2022.
Nonetheless, the corporate lately introduced that it had secured a bigger ball mill with 2,100 tons per day capability. That’s sufficient for the primary section’s envisaged 1,800 tons per day throughput, with enlargement upside inbuilt.
“Topic to future detailed engineering and mine planning, the mill might additionally help a throughput enhance to 2,100 tons per day. Given the possibly very lengthy lifetime of the Bunker Hill mine, this optionality represents an apparent supply of worth creation,” stated CEO Sam Ash, one other former Barrick supervisor and amining engineer by commerce.
Ash defined that the brand new ball mill would exchange the three different mills procured from the Pend Oreille web site. “We stay up for finalizing the acquisition and integrating it into our mill building plans.”
In preparation for the redevelopment work, Bunker Hill executed a non-binding time period sheet with Sprott Personal Useful resource Streaming and Royalty (SRSR) for a US$50-million mission finance bundle in December 2021. The bundle is getting used to fund the mine restart.
Teck additionally holds an unique choice to amass all of the zinc and lead focus produced from the Bunker Hill mine for 5 years.
The corporate has appointed Strike Group as its PCM accomplice for the mine restart actions.
“Now we have a low-cost producer of metals right here in a top-tier jurisdiction which ranked first within the Fraser Institute’s 2020 survey, and in essentially the most prolific international silver area within the Silver Valley,” Williams stated.
“Now we have no allowing constraints for the reason that asset is on patented claims and personal floor, enabling us to work in direction of a speedy restart to generate free money circulation to fund additional progress within the close to time period.”
In Williams’ view, the vital danger to the corporate’s success lies in execution. Nonetheless, he can see a possible future the place the cash-flowing firm pivots to turning into a progress firm. “When the mine begins producing free money circulation, we will see a transparent path to worth creation by way of strategic mergers and acquisitions alternatives within the zinc-silver area and apply the turnaround technique to different stranded belongings,” he stated.
The mine plan
The Bunker Hill administration crew is assured they’ll conduct enterprise in a low-cost, sustainable approach, capitalizing on traditionally larger steel costs and vital infrastructure in place, together with the continued therapy of acid wastewater streams.
Based on the prefeasibility research, the Newgard and Quill zones can be mined first utilizing the underground mining technique of long-hole open stoping with backfill. Stopes are proposed to be accessed by way of lateral shafts from the Newgard ramp.
The Northern Miner witnessed new excavations underway to supply main entry to the brand new stoping areas and connect with a number of the current decrease ranges, that are to be dewatered over time and rehabilitated, or in some instances, fully rebuilt.
A hydraulic backfill plant and distribution system will present the backfill for the operations.
The method circulation sheet requires run-of-mine ore to be transferred to a cell jaw crusher on the floor portal in Wardner and trucked to the secondary crushing circuit after the crushing course of utilizing a haul highway bypassing the 2 cities.
The central processing facility and secondary crusher can be within the Kellogg yard, which lies adjoining to the Kellogg adit. A brand new concentrator facility may also be constructed on the current Bunker Hill upkeep constructing web site. There are additionally negotiations underway to make use of different current infrastructure comparable to a truck wash earlier than loaded vehicles head out on the open highway to ship their concentrates to Teck’s Path smelter in B.C.
The brand new concentrator facility will home a main ball milling circuit that feeds a standard differential flotation circuit for lead and zinc. The north finish of the concentrator web site can be used for focus dewatering and loadout to help the loading of focus vehicles. Concentrator tailings can be filtered to provide a tailings filter cake, defined Ash.
The Bunker Hill mine has a lot of the underground infrastructure and growth nonetheless in place, with a couple of amenities requiring refurbishment.
The Kellogg Tunnel opened in 1893 and is straight away subsequent to the mine workplaces. It’s presently used for rail haulage and connecting to the primary hoist rooms and incline shafts. There are two current shafts offering entry to the decrease ranges of the mine.
Avista Utilities present energy provide for the mine operations through a substation close to the Kellogg-side workplace advanced. Administration had indicated that the location has sufficient energy for the preliminary restart of operations, with plans to improve the substation to help the ability necessities of all the mine by the third yr of operation.
The corporate will faucet into underground water sources for the mine and course of distribution. The freshwater wants of the concentrator are anticipated to be met from mine water sources or a water therapy facility throughout the concentrator plant.
An on-site pilot water therapy plant turned operational in Could. It’s designed to deal with the effluent earlier than the ultimate therapy by the government-owned water therapy plant, with administration indicating passable efficiency. A protracted-term, on-site pilot water therapy plant is deliberate on the mine.
As for the continued exploration potential at Bunker Hill, Ash is optimistic. He stated many of the vital Silver Valley mines, together with Sunshine, Galena, Star-Morning and Fortunate Friday, have produced, in complete, a whole bunch of thousands and thousands of ounces of silver at depths effectively exceeding the utmost developed depth of the Bunker Hill mine. He emphasises that there’s glorious exploration potential for high-grade silver mineralization beneath the 4,000-feet stage, representing one of many shallowest underground mine backside ranges within the Silver Valley.
The property is throughout the Coeur d’Alene silver district within the Northern Idaho Panhandle area, which is underlain by sedimentary rocks of the center Proterozoic-aged Belt-Purcell Supergroup, technical providers lead Kyle Ermann informed the tour delegates.
He defined the mineralization on the Bunker Hill mine happens as mineralized shoots hosted in quartzite items intersected by vein buildings.
Williams says the corporate would search to improve its CSE itemizing to the higher-tier TSX Enterprise alternate. “Our market cap just isn’t even 1x our anticipated money circulation subsequent yr,” he stated.
Bunker Hill Mining’s CSE-traded shares final traded at 11.5¢ apiece, giving it a market capitalization of $25.3 million. The fairness is down simply over 36% previously 12 months, having examined 11.5¢ and 42¢ because the decrease and higher bounds of a unstable trajectory.
