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Restart of Historic Idaho Mine with “Tremendous Untapped Potential” is More than a Silver Lining

Simon Druker Simon Druker , The Market Herald Canada
3 Comments| March 2, 2021

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(Click image to play video)

The price of silver broke USD$30 per ounce earlier this month, the first time it topped that mark since 2013 as consumers buy up the lustrous white metal.

That should equate to much more than a silver lining for the new management team at Bunker Hill Mining Corp. (BNKR) (CSE.BNKR, OTC: BHLL, Forum) .

The company is going through the processes and protocols as it aims to reopen a historic mine in the most prolific silver region in the United States.

Located in Idaho’s Coeur D’Alene District, the Bunker Hill mine first opened 115 year ago, eventually shutting down in 1982. But decades later, it is seen as a rapid restart option with minimal work and a huge amount of “significant” untapped potential. It’s that speed and ultimate payoff that appeals so much to the company’s management.

Bunker Hill Mining acquired the option to purchase the mine in 2020. It also installed a new management team and board of directors, showing it’s serious about a major restart.

A Preliminary Economic Assessment of the site is underway as the company gets a better sense of the scope of the exploration upside.

The Market Herald Canada’s Simon Druker met up with Sam Ash, the Chief Executive Officer for Bunker Hill Mining with an update as the company works to restart a historic silver mine in the U.S.

TRANSCRIPT BELOW:

SH: Let’s start by talking about the Bunker Hill Mine. It is an iconic historic silver mine located in the Silver Valley in Idaho that was in production for more than 100 years, producing about 165 million ounces of silver before closing in 1981. Fast forward nearly three decades, and you’re trying to re-activate it. Tell me about your approach, and why you think you’re the team to do it.

SA: When I think about the equation for success, it really comes down to me to three things. You need to have the asset; you need to have the team and you need to have the strategy. So let's talk a bit about the asset. You know, you mentioned that 165 million ounces. What's interesting about Bunker Hill is that was all a by-product, and it didn't really have any geological focus or operational focus over that hundred-year operating history. It was mined as a base metal mine. That being said, you know, when the mine closed, there was over 9 million tons in reserve, obviously not 43-101 compliant. You know, that was one of the first things that we did when we came in, did some confirmatory drilling and as you know, our 43-101 resource that we published was able to bring across 8.8 million tons of inferred resource with 11 million ounces of silver and quite a substantial base metal component.

We're obviously interested in the upside potential in that silver, which is what the silver focused exploration is working on. On the team side, you know, we brought across a strong operating team as you mentioned, the mine closed for environmental reasons. One of the key team members is Brad Barnett. He headed up all of Barrack’s closure facilities across the United States. And is well-versed in working through the environmental and the social impacts and social issues and then it's the strategy. We're in a unique position, you know, we can advance the silver exploration project, but we can do that on the back of, we believe a cash generating base metal restart operation, which is really what we're focused on. So really what you're looking at is you're looking at a project with compelling restart potential on the base metal side, but with all the exploration upside potential in the world on the silver side. So it was really quite exciting.

SH: Give me a sense of what a re-start would look like. I understand you’re working on a Preliminary Economic Assessment – how is that tracking?

SA: The PEA is really looking pretty good. We're looking, first of all, I'd start by saying, we're looking at publishing that late March, early April and in conjunction with that, you're going to see that inferred resource upgraded and expanded with some of the drilling that we were doing in support of that PEA you know, the strategy and some of the details are really starting to come together. Some of the highlights, you know, we're going to be looking at underground processing and underground tails deposition. You know, that's really important for us. And it's in alignment with our ESG focus, minimizing the surface impact the cert, and really focusing on secondarily addressing some of the acid mine drainage challenges by filling up and reducing the acid generating capacity in the, through the underground tails deposition. So it's really coming along nicely.

SH: Going back several decades the site around the Bunker Hill mine had a troubled history as a Superfund site. As you target a re-start today, how are you approaching this from an environmental and broader ESG perspective?

Click to enlargeSA: Well, first and foremost, we believe that we have the opportunity to advance this site in such a way that will have a positive net benefit to the environment. You know, as you know, right now one of the key aspects of the environmental challenges is the acid mine drainage. You know, we believe that over time we have the opportunity to move towards a long-term passive water treatment for the mine effluent coming out of the mine. And just in the last couple of weeks, we were able to press release that we've made some great and significant advancements already in that regard. We have a pre-treatment facility that's up and running. It's reduced the metal loading in the water coming out of the mine by 70%. I would just remind everybody, and I want to make this clear that all of the mine water drainage at, at the moment does report to a water treatment plant. That is a, that is run. And before the water is discharged it needs all the environmental quality standards. What we're really looking at now is how do we engage and involve ourselves as a responsible operator and really look at how we affect a long-term solution that reduces the financial impact and burden of that water treatment.

SH: I understand your team has a lot of faith in untapped silver potential at the Bunker Hill mine. Tell me what you mean by that, and what you’re doing to unlock it.

SA: It goes right back to the 165 million ounces of silver that were produced historically over that hundred-year period. You know, that makes it one of the largest silver producers in the Silver Valley, and that was all produced as a by-product. So we're pretty excited about that, just from the standpoint of, you know, there is a track record of significant silver production at Bunker Hill. When you look at the potential, you know, we have you know, we have over a hundred years of geologic information and data that is supporting us. You know, we created a 3D geologic model with that historic data. And we're really beginning to unlock the, the geologic picture and the, and an updated understanding of that geology is pointing us towards what we believe is significant potential, both near surface, which is important. There was historic silver production on the site from surface that was high-grade 30 ounce plus.

But also more importantly at depth where we see the potential for silver zonation to take place where silver becomes potentially the dominant mineralizing event. And in a case like that, you would see silver grades rise dramatically. You know, we're obviously focused on the near surface, above the water table at the moment. And really because that's will be that we'll be able to transition into production much more quickly than some of the deeper mineralization. But ultimately, we believe the deep silver potential is really where the true value lies. The strategy for unlocking that is to get ourselves into production, become a stable operating business and fund that effort through cashflow rather than the equity markets.

SH: Longer term, what is your vision for the company?

SA: Really the long-term vision is to be a multi-asset precious metal focused producer based in Northern Idaho and with Bunker Hill as the cornerstone asset. Long life, high margin, and a fundamental cornerstone of a new and emerging precious metals focused producer in the Americas.

SH Anything else that we haven't mentioned that you want to let people know at this point?

SA: No, I don't think so. It's great to have the opportunity to tell the story, and we're really quite excited about it, and I encourage everybody to keep a close eye on us.


To find out more about this company, visit bunkerhillmining.com.


FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.


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