The process plant was purchased in an assembled state
in its current location, including major processing systems, significant components, and a large inventory of spare parts. The Company
intends to disassemble and transport it to the Bunker Hill site, reassembling it as an integral part of the Company’s future operations.
The Company determined that the transaction should be accounted for as an asset acquisition, with the process plant representing a single
asset with the exception of the inventory of spare parts, which has been separated out and appears on the balance sheet as a current asset
in accordance with a preliminary purchase price allocation. As the plant is demobilized, transported and reassembled, installation and
other costs associated with these activities will be captured and capitalized as components of the asset.
Schedule
of Amended Settlement Environmental Protection Agency Agreement
| | |
| | |
| Date | |
Amount | |
| Within 30 days of Settlement Agreement | |
$ | 2,000,000 | |
| November 1, 2024 | |
$ | 3,000,000 | |
| November 1, 2025 | |
$ | 3,000,000 | |
| November 1, 2026 | |
$ | 3,000,000 | |
| November 1, 2027 | |
$ | 3,000,000 | |
| November 1, 2028 | |
$ | 3,000,000 | |
| November 1, 2029 | |
$ | 2,000,000 plus accrued interest | |
In
addition to the changes in payment terms and schedule, the Amended Settlement included a commitment by the Company to secure $17,000,000
of financial assurance in the form of performance bonds or letters of credit deemed acceptable to the EPA within 180 days from the effective
date of the Amended Settlement Agreement. Once put in place, the financial assurance can be drawn on by the EPA in the event of non-performance
by the Company of its payment obligations under the Amended Settlement (the “Financial Assurance”). The amount of the bonds
will decrease over time as individual payments are made.
The
Company completed the purchase of the Mine (see note 5) and made the initial $2,000,000 cost recovery payment on January 7, 2022. Concurrent
with the purchase of the Mine, the Company assumed the balance of the EPA liability totaling $17,000,000, an increase of $8,000,000.
As
of March 31, 2022, the financial assurance had not yet been secured, and as such the
Company accounted for the $17,000,000 liabilities according to the previous payment schedule, resulting in $12,000,000 classified as
a current liability and $5,000,000 as a long-term liability. The long-term portion was discounted at an interest rate of 16.5% to
arrive at a net present value of $3,402,425 after discount.
During
the quarter ended June 30, 2022, the Company was successful in obtaining the final financial assurance. Specifically, a $9,999,000
payment bond and a $7,001,000
letter of credit were secured and provided to the EPA. This milestone provides for the Company to recognize the effects of the
change in terms of the EPA liability as outlined in the December 19, 2021 agreement. Once the financial assurance was put into
place, the restructuring of the payment stream under the Amendment occurred with the entire $17,000,000
liability being recognized as long-term in nature. The aforementioned payment bond is secured by a $2,475,000 letter of credit. The
$2,475,000
and $7,001,000
letters of credit are secured by $9,476,000 of cash deposits under an agreement with a commercial bank. These cash deposits comprise
the $9,476,000
of restricted cash shown within current assets as of June 30, 2022.
Under
ASC 470-50, Debt Modifications and Extinguishments, the Company performed a comparison of NPV’s of the pre-settlement Cost
Recovery obligation to the post-settlement schedule of Cost Recovery obligation to determine this was an extinguishment of debt. The
Company recorded a gain on extinguishment of debt totaling $8,614,103.
The old debt, including any discount, was written off and the new payment stream of the amended $17,000,000
table, including the new discount of $9,927,590
using the effective interest rate of 19.95% was recorded to result in a net liability of $7,072,410,
which is due long-term.
Bunker Hill Mining Corp.
Notes to the Condensed Interim Consolidated
Financial Statements (Unaudited)
Three and Six Months Ended June 30, 2022
(Expressed in United States Dollars)
Water
Treatment Charges – EPA
Separate
to the cost recovery liabilities outlined above, the Company is responsible for the payment of ongoing water treatment charges.
Water treatment charges incurred through December 31, 2021 are payable to the EPA, and charges thereafter are payable to the Idaho
Department of Environmental Quality (“IDEQ”) given a handover of responsibilities for the Central Treatment Plant from
the EPA to the IDEQ as of that date. The Company previously estimated a balance due to the EPA of $5,110,706
for ongoing water treatment through December 31, 2021. During the six months ended June 30, 2022, the Company received an invoice
from the EPA for water treatment through October 2021. As a result, the Company reversed its previous accruals for this period and
adjusted its estimated charges for November and December 2021. Through recent discussions with the EPA, the Company has confirmed
that payments to the IDEQ for water treatment charges cannot be netted against invoices payable to the EPA. After taking this into
account, the additional invoice received from the EPA, and a $1,000,000
payment made in April 2022, the Company has estimated water treatment payables to the EPA of $3,847,141
as of June 30, 2022 which is reflected in current liabilities.
Water
Treatment Charges – IDEQ
For
water treatment charges beginning January 2022, the Company makes a monthly accrual of $80,000 to cover the IDEQ’s estimated costs
of treating water at the water treatment facility. The Company also pays an agreed-upon monthly amount of $140,000, with a true-up to
be recorded and paid by the Company once the actual annual costs are determined each year. At June 30, 2022, the Company has accrued
$480,000 for water treatment costs to IDEQ and has prepaid $840,000 leaving a net prepaid of $360,000 which is included in prepaids on
the unaudited condensed interim consolidated balance sheet.
7.
Promissory Note Payable and Convertible Debentures
On
September 22, 2021, the Company issued a non-convertible promissory note in the amount of $2,500,000 bearing interest of 15% per annum
and payable at maturity. The promissory note was scheduled to mature on March 15, 2022; however, the note holder agreed to accept $500,000
payment, which the Company paid, by April 15, 2022, and the remaining principal and interest was deferred to June 20, 2022. Prior to
the revised maturity of June 20, 2022, the note holder agreed to accept a further $500,000 payment by June 30, 2022, which the Company
paid, and the remaining principal and interest was deferred to November 30, 2022. The Company purchased a land parcel for approximately
$202,000 on March 3, 2022, which may be used as security for the promissory note. At June 30, 2022, the Company owes $1,500,000 in promissory
notes payable and is included in current liabilities on the condensed consolidated balance sheet. Interest expense for the six months
ended June 30, 2022 and 2021 was $167,877 and $nil, respectively. At June 30, 2022 interest of $270,616 is included in interest payable
on the condensed consolidated balance sheet.
Project
Finance Package with Sprott Private Resource Streaming & Royalty Corp.
On
December 20, 2021, the Company executed a non-binding term sheet outlining a $50,000,000 project finance package with Sprott Private
Resource Streaming and Royalty Corp. (“SRSR”).
The
non-binding term sheet with SRSR outlined a $50,000,000 project financing package that the Company expects to fulfill the majority of
its funding requirements to restart the Mine. The term sheet consisted of an $8,000,000 royalty convertible debenture (the “RCD”),
a $5,000,000 convertible debenture (the “CD1”), and a multi-metals stream of up to $37,000,000 (the “Stream”).
The CD1 was subsequently increased to $6,000,000, increasing the project financing package to $51,000,000.
On
June 17, 2022, the Company consummated a new $15,000,000
convertible debenture (the “CD2”). As a result, total potential funding from SRSR was further increased to $66,000,000
including the RCD, CD1, CD2 and the Stream (together, the “Project Financing Package”).
$8,000,000
Royalty Convertible Debenture (RCD)
The
Company closed the $8,000,000 RCD on January 7, 2022. The RCD bears interest at an annual rate of 9.0%, payable in cash or Common Shares
at the Company’s option, until such time that SRSR elects to convert a royalty, with such conversion option expiring at the earlier
of advancement of the Stream or July 7, 2023 (subsequently amended as described below). In the event of conversion, the RCD will cease
to exist and the Company will grant a royalty for 1.85% of life-of-mine gross revenue from mining claims considered to be historically
worked, contiguous to current accessible underground development, and covered by the Company’s 2021 ground geophysical survey (the
“SRSR Royalty”). A 1.35% rate will apply to claims outside of these areas. The RCD was initially secured by a share pledge
of the Company’s operating subsidiary, Silver Valley, until a full security package was put in place concurrent with the consummation
of the CD1. In the event of non-conversion, the principal of the RCD will be repayable in cash.
Bunker
Hill Mining Corp.
Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)
Three
and Six Months Ended June 30, 2022
(Expressed
in United States Dollars)
Concurrent
with the funding of the CD2 in June 2022, the Company and SRSR agreed to a number of amendments to the terms of the RCD, including
an amendment of the maturity
date from July 7, 2023 to March 31, 2025. The parties also agreed to enter into a Royalty Put Option such that in the event
the RCD is converted into a royalty as described above, the holder of the royalty will be entitled to resell the royalty to the
Company for $8,000,000
upon default under the CD1 or CD2 until such time that the CD1 and CD2 are paid in full. The Company determined that the amendments in the terms of the RCD should not be treated as an extinguishment of
the RCD, and have therefore been accounted for as modifications.
$6,000,000
Series 1 Convertible Debenture (CD1))
The
Company closed the $6,000,000 CD1 on January 28, 2022, which was increased from the previously-announced $5,000,000. The CD1 bears interest
at an annual rate of 7.5%, payable in cash or shares at the Company’s option, and matures on July 7, 2023 (subsequently amended,
as described below). The CD1 is secured by a pledge of the Company’s properties and assets. Until the closing of the Stream, the
CD1 was to be convertible into Common Shares at a price of C$0.30 per Common Share, subject to stock exchange approval (subsequently
amended, as described below). Alternatively, SRSR may elect to retire the CD1 with the cash proceeds from the Stream. The Company may
elect to repay the CD1 early; if SRSR elects not to exercise its conversion option at such time, a minimum of 12 months of interest would
apply.
Concurrent
with the funding of the CD2 in June 2022, the Company and SRSR agreed to a number of amendments to the terms of the CD1, including that
the maturity
date would be amended from July 7, 2023 to March 31, 2025,
and that the CD1 would remain outstanding until the new maturity date regardless of whether the Stream is advanced, unless the Company
elects to exercise its option of early repayment. The Company determined that the amendments in the terms of the RCD should not
be treated as an extinguishment of the CD1, and have therefore been accounted for as modifications.
$15,000,000
Series 2 Convertible Debenture (CD2)
The
Company closed the $15,000,000 CD2 on June 17, 2022. The CD2 bears interest at an annual rate of 10.5%, payable in cash or shares at
the Company’s option, and matures on March 31, 2025. The CD2 is secured by a pledge of the Company’s properties and assets.
The repayment terms include 3 quarterly payments of $2,000,000 each beginning June 30, 2024 and $9,000,000 on the maturity date.
In
light of the Series 2 Convertible Debenture financing, the previously permitted additional senior secured indebtedness of up to $15 million
for project finance has been removed.
The Company determined that in accordance with ASC
815, each debenture will be valued and carried as a single instrument, with the periodic changes to fair value accounted through earnings,
profit and loss.
Consistent
with the approach above, the following table summarizes the key valuation inputs:
Schedule of Key Valuation Inputs
| | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Reference (2)(4) (5) | |
Valuation
date | |
Maturity
date | |
Contractual
Interest
rate | | |
Stock
price
(US$) | | |
Expected
equity
volatility | | |
Credit
spread | | |
Risk-
free
rate | | |
Risk-
adjusted
rate | |
| CD1 note (1)(3) | |
01-28-22 | |
07-07-23 | |
| 7.50 | % | |
| 0.230 | | |
| 120 | % | |
| 8.70 | % | |
| 0.92 | % | |
| 16.18 | % |
| RCD note (stream not advanced scenario) | |
01-07-22 | |
07-07-23 | |
| 9.00 | % | |
| 0.242 | | |
| 130 | % | |
| 9.21 | % | |
| 0.65 | % | |
| 16.39 | % |
| RCD note (stream advanced) scenario | |
01-07-22 | |
06-30-22 | |
| 9.00 | % | |
| 0.242 | | |
| 130 | % | |
| 9.16 | % | |
| 0.23 | % | |
| 15.96 | % |
| CD1 note (1)(3) | |
03-31-22 | |
07-07-23 | |
| 7.50 | % | |
| 0.235 | | |
| 120 | % | |
| 8.85 | % | |
| 1.80 | % | |
| 17.12 | % |
| RCD note (stream not advanced scenario) | |
03-31-22 | |
07-07-23 | |
| 9.00 | % | |
| 0.235 | | |
| 120 | % | |
| 8.85 | % | |
| 1.80 | % | |
| 17.12 | % |
| RCD note (stream advanced) scenario | |
03-31-22 | |
06-30-22 | |
| 9.00 | % | |
| 0.235 | | |
| 120 | % | |
| 8.78 | % | |
| 0.52 | % | |
| 15.88 | % |
| CD2 note | |
06-17-22 | |
03-31-25 | |
| 10.50 | % | |
| 0.222 | | |
| 120 | % | |
| 9.45 | % | |
| 3.28 | % | |
| 20.95 | % |
| CD2 note | |
06-30-22 | |
03-31-25 | |
| 10.50 | % | |
| 0.225 | | |
| 120 | % | |
| 10.71 | % | |
| 2.95 | % | |
| 21.78 | % |
| CD1 note | |
06-30-22 | |
03-31-25 | |
| 7.50 | % | |
| 0.233 | | |
| 120 | % | |
| 10.71 | % | |
| 2.95 | % | |
| 19.89 | % |
| RCD note (stream not advanced scenario) | |
06-30-22 | |
03-31-25 | |
| 9.00 | % | |
| | | |
| 120 | % | |
| 10.71 | % | |
| 2.95 | % | |
| 19.89 | % |
| RCD note (stream advanced) scenario | |
06-30-22 | |
09-30-22 | |
| 9.00 | % | |
| | | |
| 120 | % | |
| 10.85 | % | |
| 1.72 | % | |
| 18.89 | % |
| |
(1) |
The
CD carries a Discount for Lack of Marketability (“DLOM”) of 5.0%. |
| |
(2) |
All
instruments carry an instrument-specific spread of 7.23% |
| |
(3) |
The
conversion price of the CD is $0.235 |
| |
(4) |
A
project risk rate of 13.0% was used for all scenarios of the RCD fair value computations |
| |
(5) |
The
probabilities for the stream being advanced and the stream not being advanced is 55% and 45%, respectively. |
Bunker Hill Mining Corp.
Notes to the Condensed Interim Consolidated
Financial Statements (Unaudited)
Three and Six Months Ended June 30, 2022
(Expressed in United States Dollars)
The
resulting fair values of the CD1, RCD, and CD2 at the issuance dates, March 31, 2022, and as of June 30, 2022 were as follows:
Schedule
of Fair Value Derivative Liability
| Instrument Description | |
Issuance date
CD1 and RCD | | |
Issuance date
CD2 | | |
March 31, 2022 | | |
June 30, 2022 | |
| CD1 | |
$ | 6,320,807 | | |
$ | - | | |
$ | 6,303,567 | | |
$ | 5,633,253 | |
| RCD | |
| 7,679,193 | | |
| - | | |
| 7,886,473 | | |
| 7,078,596 | |
| CD2 | |
| - | | |
| 15,000,000 | | |
| - | | |
| 14,176,578 | |
| Total | |
$ | 14,000,000 | | |
$ | 15,000,000 | | |
$ | 14,190,040 | | |
$ | 26,888,427 | |
The total gain on fair value of debentures recognized
during the three and six months ended June 30, 2022 was $1,813,456 and $1,739,987, respectively. The portion of changes in fair value
that is attributable to changes in the Company’s credit risk is accounted for within other comprehensive income. During the three
and six months ended June 30, 2022, the Company recognized $371,255 within other comprehensive income.
The
Company performs quarterly testing of the covenants in the RCD, CD1 and CD2, and was in compliance with all such covenants as of June
30, 2022.
The
Stream
A
minimum of $27,000,000 and a maximum of $37,000,000 (the “Stream Amount”) will be made available under the Stream, at the
Company’s option, once the conditions of availability of the Stream have been satisfied including confirmation of full project
funding by an independent engineer appointed by SRSR. If the Company draws the maximum funding of $37,000,000, the Stream would apply
to 10% of payable metals sold until a minimum quantity of metal is delivered consisting of, individually, 55 million pounds of zinc,
35 million pounds of lead, and 1 million ounces of silver (subsequently amended, as described below). Thereafter, the Stream would apply
to 2% of payable metals sold. If the Company elects to draw less than $37,000,000 under the Stream, the percentage and quantities of
payable metals streamed will adjust pro-rata. The delivery price of streamed metals will be 20% of the applicable spot price. The Company
may buy back 50% of the Stream Amount at a 1.40x multiple of the Stream Amount between the second and third anniversary of the date of
funding, and at a 1.65x multiple of the Stream Amount between the third and fourth anniversary of the date of funding. As of June 30,
2022, the Stream had not been advanced.
Concurrent
with the funding of the CD2 in June 2022, the Company and SRSR agreed that the minimum quantity of metal delivered under the Stream,
if advanced, will increase by 10% relative to the amounts noted above.
8.
Lease Liability
The
Company had an operating lease for office space that expired in May 2022. Below is a summary of the Company’s lease liability
as of June 30, 2022:
Schedule of Operating Lease Liability
| | |
Office lease | |
| | |
| |
| Balance, December 31, 2020 | |
$ | 176,607 | |
| Addition | |
| - | |
| Interest expense | |
| 12,696 | |
| Lease payments | |
| (129,191 | ) |
| Foreign exchange loss | |
| 2,165 | |
| Balance, December 31, 2021 | |
| 62,277 | |
| Addition | |
| - | |
| Interest expense | |
| 1,834 | |
| Lease payments | |
| (64,828 | ) |
| Foreign exchange loss | |
| 717 | |
| Balance, June 30, 2022 | |
$ | - | |
Bunker Hill Mining Corp.
Notes to the Condensed Interim Consolidated
Financial Statements (Unaudited)
Three and Six Months Ended June 30, 2022
(Expressed in United States Dollars)
9.
Capital Stock, Warrants and Stock Options
Authorized
The
total authorized capital is as follows:
| |
● |
An
increase to 1,500,000,000 common shares, as approved in the July 29, 2002 annual meeting of shareholders, with a par value of $0.000001
per common share; and |
| |
● |
10,000,000
preferred shares with a par value of $0.000001 per preferred share |
Issued
and outstanding
In
February 2021, the Company closed a non-brokered private placement of units of the Company (the “February 2021 Offering”),
issuing 19,576,360
units of the Company (“February 2021 Units”)
at C$0.40
per February 2021 Unit for gross proceeds of
$6,168,069
(C$7,830,544).
Each February 2021 Unit consisted of one common
share of the Company and one common share purchase warrant of the Company (each, “February 2021 Warrant”), which entitles
the holder to acquire a common share of the Company at C$0.60
per common share for a period of five
years. In connection with the February 2021 Offering,
the Company incurred share issuance costs of $154,630
and issued 351,000
compensation options (the “February 2021
Compensation Options”). Each February 2021 Compensation Option is exercisable into one February 2021 Unit at an exercise price
of C$0.40
for a period of three years.
The
Company also issued 417,720 February 2021 Units to settle $132,000 of accrued liabilities at a deemed price of $0.45 based on the fair
value of the units issued. As a result, the Company recorded a loss on debt settlement of $56,146.
In
April 2022, the Company closed a private placement of 37,849,325 Special Warrants and a non-brokered private placement of 1,471,664
units of the Company for aggregate gross proceeds of approximately C$11,796,297. Related parties, including management, directors, and consultants,
participated in the Special Warrant private placement for a total of 4,809,160 shares (included in the total above).
The
Special Warrants were issued at a price of C$0.30 per special warrant. Each Special Warrant shall be automatically exercisable (without
payment of any further consideration and subject to customary anti-dilution adjustments) into one unit of the Company (a “Brokered
Unit”) on the date that is the earlier of: (i) the date that is three (3) business days following the date on which the Company
has obtained both (A) a receipt from the Canadian security commission in each of the each of the provinces of Canada which the purchasers
and Agents (as defined herein) are residents where the Special Warrants are sold (the “Qualifying Jurisdictions”) for a (final)
short-form prospectus qualifying the distribution of the common stock of the Company (“Common Shares”) and common stock purchase
warrants of the Company (the “Warrants”) issuable upon exercise of the Special Warrants (the “Qualification Prospectus”);
and (B) notification that the registration statement, under U.S. securities laws, of the Company filed with the United States Securities
and Exchange Commission (the “SEC”) has been declared effective by the SEC (the “Registration Statement”); and
(ii) the date that is six months following April 1, 2022 (the “Closing Date”). Each unit consists of one common share
and one warrant. Each warrant entitles the holder to acquire one common share for C$0.37 until April 1, 2025. The warrants shall also
be exercisable on a cashless basis in the event the Registration Statement has not been made effective by the SEC prior to the date of
exercise.
Bunker
Hill Mining Corp.
Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)
Three
and Six Months Ended June 30, 2022
(Expressed
in United States Dollars)
On
May 31, 2022 the Company announced that it had received a receipt from the Ontario Securities Commission for its final short-form Canadian
prospectus qualifying the distribution of the common stock of the Company and common stock purchase warrants of the Company issuable
upon exercise of the special warrants of the Company that were issued on April 1, 2022. The Company also announced that it received notice
from the United States Securities and Exchange Commission that its Form S-1 has been declared effective as of May 27, 2022. As a result
of obtaining the receipt for the Canadian prospectus and the declaration of effectiveness for the Form S-1, each unexercised Special
Warrant was automatically exercised into one Common Share and one Warrant without further action on the part of the holders.
The
non-brokered 1,471,664 units were issued at a price of C$0.30 per unit. Each unit consists of one common share and one warrant. Each
warrant entitles the holder to acquire one warrant share for C$0.37 until April 1, 2025.
In
connection with the special warrants offering, the agents earned a cash commission in the amount of C$563,968 and compensation options
exercisable to acquire an aggregate of 1,879,892 units of the Company at C$0.30 a unit until April 1, 2024. Each compensation unit consists
of one common share and one warrant. Each warrant entitles the holder to acquire one warrant share for C$0.37 until April 1, 2024.
In
April 2022, the Company issued 1,315,856 common shares in connection with its election to satisfy interest payments under the outstanding
convertible debentures for the three months ended March 31, 2022.
In
May 2022, the Company issued 10,416,667 units to Teck Resources Limited in consideration towards the purchase of the Pend Oreille Processing
Plant at C$0.245 per unit. Each unit consists of one common share and one warrant. Each warrant entitles the holder to acquire one warrant
share for $0.37 until May 13, 2025.
In
June 2022, the Company issued 1,218,000 units to contractors for bonuses accrued during the three months ended March 31, 2022. Each unit
consists of one common share and one warrant. Each warrant entitles the holder to acquire one warrant share for C$0.37 until April 1,
2025.
For
each financing, the Company has accounted for the warrants in accordance with ASC Topic 815. The warrants are considered derivative
instruments as they were issued in a currency other than the Company’s functional currency of the U.S. dollar. The estimated
fair value of warrants accounted for as liabilities was determined on the date of issue and marks to market at each financial
reporting period. The change in fair value of the warrant is recorded in the unaudited condensed interim consolidated statements of
income and comprehensive income as a gain or loss and is estimated using the Binomial model.
The
warrant liabilities as a result of the June 2019, August 2019, August 2020, February 2021, April 2022 special warrants, April 2022 non-brokered,
May 2022 Teck purchase, and June 2022 contractor private placements were revalued as at June 30, 2022 and December 31, 2021 using the
Binomial model and the following assumptions:
Schedule of Estimated Using the Binomial Model to Determine the Fair Value of Warrant Liabilities
| April 2022 special warrants issuance | |
June 30, 2022 | | |
December 31, 2021 | |
| Expected life | |
| 1,006
days | | |
| - | |
| Volatility | |
| 120 | % | |
| - | % |
| Risk free interest rate | |
| 3.14 | % | |
| - | % |
| Dividend yield | |
| 0 | % | |
| - | % |
| Share price | |
$ | 0.20 | | |
$ | - | |
| Fair value | |
$ | 3,524,693 | | |
$ | - | |
| Change in derivative liability | |
$ | - | | |
$ | - | |
| April 2022 non-brokered issuance | |
June 30, 2022 | | |
December 31, 2021 | |
| Expected life | |
| 1,006 days | | |
| - | |
| Volatility | |
| 120 | % | |
| - | % |
| Risk free interest rate | |
| 3.14 | % | |
| - | % |
| Dividend yield | |
| 0 | % | |
| - | % |
| Share price | |
$ | 0.20 | | |
$ | - | |
| Fair value | |
$ | 137,046 | | |
$ | - | |
| Change in derivative liability | |
$ | - | | |
$ | - | |
Bunker Hill Mining Corp.
Notes to the Condensed Interim Consolidated
Financial Statements (Unaudited)
Three and Six Months Ended June 30, 2022
(Expressed in United States Dollars)
| May 2022 Teck issuance | |
June 30, 2022 | | |
December 31, 2021 | |
| Expected life | |
| 1,048 days | | |
| - | |
| Volatility | |
| 120 | % | |
| - | % |
| Risk free interest rate | |
| 3.14 | % | |
| - | % |
| Dividend yield | |
| 0 | % | |
| - | % |
| Share price | |
$ | 0.20 | | |
$ | - | |
| Fair value | |
$ | 991,063 | | |
$ | - | |
| Change in derivative liability | |
$ | - | | |
$ | - | |
| June 2022 issuance | |
June 30, 2022 | | |
December 31, 2021 | |
| Expected life | |
| 1,006 days | | |
| - | |
| Volatility | |
| 120 | % | |
| - | % |
| Risk free interest rate | |
| 3.14 | % | |
| - | % |
| Dividend yield | |
| 0 | % | |
| - | % |
| Share price | |
$ | 0.20 | | |
$ | - | |
| Fair value | |
$ | 113,425 | | |
$ | - | |
| Change in derivative liability | |
$ | - | | |
$ | - | |
| February 2021 issuance | |
June 30, 2022 | | |
December 31, 2021 | |
| Expected life | |
| 1,320 days | | |
| 1,501 days | |
| Volatility | |
| 120 | % | |
| 100 | % |
| Risk free interest rate | |
| 3.14 | % | |
| 1.25 | % |
| Dividend yield | |
| 0 | % | |
| 0 | % |
| Share price | |
$ | 0.20 | | |
$ | 0.37 | |
| Fair value | |
$ | 1,896,071 | | |
$ | 3,483,745 | |
| Change in derivative liability | |
$ | (1,587,675 | ) | |
$ | (329,358 | ) |
| August 2020 issuance | |
June 30, 2022 | | |
December 31, 2021 | |
| Expected life | |
| 427 days | | |
| 608 days | |
| Volatility | |
| 120 | % | |
| 100 | % |
| Risk free interest rate | |
| 3.10 | % | |
| 0.95 | % |
| Dividend yield | |
| 0 | % | |
| 0 | % |
| Share price | |
$ | 0.20 | | |
$ | 0.37 | |
| Fair value | |
$ | 2,456,021 | | |
$ | 6,790,163 | |
| Change in derivative liability | |
$ | (4,334,142 | ) | |
$ | (7,703,052 | ) |
| June 2019 issuance (i) | |
June 30, 2022 | | |
December 31, 2021 | |
| Expected life | |
| 1,280 days | | |
| 1,461 days | |
| Volatility | |
| 120 | % | |
| 100 | % |
| Risk free interest rate | |
| 3.14 | % | |
| 1.02 | % |
| Dividend yield | |
| 0 | % | |
| 0 | % |
| Share price | |
$ | 0.20 | | |
$ | 0.37 | |
| Fair value | |
$ | 1,063,208 | | |
$ | 2,067,493 | |
| Change in derivative liability | |
$ | (1,004,285 | ) | |
$ | (1,371,346 | ) |
| (i) |
During the six months ended December 31, 2020, the Company
amended the exercise price to C$0.59 per common share and extended the expiry date to December 31, 2025 for 11,660,000 warrants. |
| August 2019 issuance (ii) | |
June 30, 2022 | | |
December 31, 2021 | |
| Expected life | |
| 1,280 days | | |
| 1,461 days | |
| Volatility | |
| 120 | % | |
| 100 | % |
| Risk free interest rate | |
| 3.14 | % | |
| 1.02 | % |
| Dividend yield | |
| 0 | % | |
| 0 | % |
| Share price | |
$ | 0.20 | | |
$ | 0.37 | |
| Fair value | |
$ | 1,634,021 | | |
$ | 3,177,485 | |
| Change in derivative liability | |
$ | (1,543,464 | ) | |
$ | (2,744,785 | ) |
| (ii) |
During the six months ended December 31, 2020, the Company
amended the exercise price to C$0.59 per common share and extended the expiry date to December 31, 2025 for 17,920,000 warrants. The
terms of the remaining 2,752,900 warrants remain unchanged. |
Bunker Hill Mining Corp.
Notes to the Condensed Interim Consolidated
Financial Statements (Unaudited)
Three and Six Months Ended June 30, 2022
(Expressed in United States Dollars)
Warrants
Schedule of Warrant Activity
| | |
| | |
Weighted | | |
Weighted | |
| | |
| | |
average | | |
average | |
| | |
Number of | | |
exercise price | | |
grant date | |
| | |
warrants | | |
(C$) | | |
value ($) | |
| | |
| | |
| | |
| |
| Balance, December 31, 2020 | |
| 95,777,806 | | |
$ | 0.54 | | |
$ | 0.08 | |
| Issued | |
| 19,994,080 | | |
| 0.60 | | |
| 0.19 | |
| Balance, June 30, 2021 | |
| 115,771,886 | | |
$ | 0.55 | | |
$ | 0.10 | |
| | |
| | | |
| | | |
| | |
| Balance, December 31, 2021 | |
| 111,412,712 | | |
$ | 0.54 | | |
$ | 0.18 | |
| Issued | |
| 50,955,636 | | |
| 0.37 | | |
| 0.15 | |
| Expired | |
| (239,284 | ) | |
| 0.70 | | |
| 0.21 | |
| Balance, June 30, 2022 | |
| 162,129,064 | | |
$ | 0.49 | | |
$ | 0.17 | |
During
the six months ended June 30, 2022, 239,284 February 2020 broker warrants expired.
At
June 30, 2022, the following warrants were outstanding:
Schedule of Warrants Outstanding Exercise Price
| | |
| | |
| | |
Number of | |
| | |
Exercise | | |
Number of | | |
warrants | |
| Expiry date | |
price (C$) | | |
warrants | | |
exercisable | |
| | |
| | |
| | |
| |
| August 31, 2023 | |
| 0.50 | | |
| 58,284,148 | | |
| 58,284,148 | |
| December 31, 2025 | |
| 0.59 | | |
| 32,895,200 | | |
| 32,895,200 | |
| February 9, 2026 | |
| 0.60 | | |
| 17,112,500 | | |
| 117,112,500 | |
| February 16, 2026 | |
| 0.60 | | |
| 2,881,580 | | |
| 2,881,580 | |
| April 1, 2025 | |
| 0.37 | | |
| 40,358,969 | | |
| 40,358,969 | |
| May 13, 2025 | |
| 0.37 | | |
| 10,416,667 | | |
| 10,416,667 | |
| | |
| | | |
| 162,129,064 | | |
| 162,129,064 | |
Broker
options
At
June 30, 2022, the following broker options were outstanding:
Schedule of Broker Options
| | |
| | |
Weighted | |
| | |
Number of | | |
average | |
| | |
broker | | |
exercise price | |
| | |
options | | |
(C$) | |
| | |
| | |
| |
| Issued - August 2020 Compensation Options | |
| 3,239,907 | | |
$ | 0.35 | |
| Balance, December 31, 2020 | |
| 3,239,907 | | |
| 0.35 | |
| Issued – February 2021 Compensation Options | |
| 351,000 | | |
| 0.35 | |
| Balance, December 31, 2021 | |
| 3,590,907 | | |
| 0.35 | |
| Issued – April 2022 Compensation Options | |
| 1,879,892 | | |
| 0.30 | |
| Balance, June 30, 2022 | |
| 5,470,799 | | |
$ | 0.34 | |
Bunker Hill Mining Corp.
Notes to the Condensed
Interim Consolidated Financial Statements (Unaudited)
Three and Six Months Ended June 30,
2022
(Expressed in United States Dollars)
The
grant date fair value of the August 2020 and February 2021, and April 2022 Compensation Options were estimated at $521,993, $68,078 and
$264,435 respectively, using the Black-Scholes valuation model with the following underlying assumptions:
Schedule of Estimated Using Black-Scholes Valuation Model for Fair Value of Broker Options
| Grant Date | |
Risk free interest rate | | |
Dividend yield | | |
Volatility | | |
Stock price | | |
Weighted average life | |
| August 2020 | |
| 0.31 | % | |
| 0 | % | |
| 100 | % | |
| C$0.35 | | |
| 3 years | |
| February 2021 | |
| 0.26 | % | |
| 0 | % | |
| 100 | % | |
| C$0.40 | | |
| 3 years | |
| April 2022 | |
| 2.34 | % | |
| 0 | % | |
| 120 | % | |
| C$0.30 | | |
| 2 years | |
Schedule of Warrants Outstanding Broker Option Exercise Prices
| | |
Exercise | | |
Number of | | |
Fair value | |
| Expiry date | |
price (C$) | | |
broker options | | |
($) | |
| | |
| | |
| | |
| |
| August 31, 2023 (i) | |
$ | 0.35 | | |
| 3,239,907 | | |
$ | 521,993 | |
| February 16, 2024 (ii) | |
$ | 0.40 | | |
| 351,000 | | |
$ | 68,078 | |
| April 1, 2024 (iii) | |
$ | 0.30 | | |
| 1,879,892 | | |
$ | 264,435 | |
| | |
| | | |
| 5,470,799 | | |
$ | 854,506 | |
| (i) |
Exercisable into one August 2020 Unit |
| (ii) |
Exercisable into one February 2021 Unit |
| (iii) |
Exercisable into one April 2022 Unit |
Stock
options
The
following table summarizes the stock option activity during the six months ended June 30, 2022:
Schedule of Stock Options
| | |
| | |
Weighted | |
| | |
| | |
average | |
| | |
Number of | | |
exercise price | |
| | |
stock options | | |
(C$) | |
| | |
| | |
| |
| Balance, December 31, 2020 | |
| 8,015,159 | | |
$ | 0.62 | |
| Granted (i) | |
| 1,037,977 | | |
| 0.34 | |
| Balance, December 31, 2021 | |
| 9,053,136 | | |
$ | 0.58 | |
| Expired May 01, 2022 | |
| 47,500 | | |
| | |
| Balance, June 30, 2022 | |
| 9,005,636 | | |
$ | 0.58 | |
| (i) | | On February 19,
2021, 1,037,977 stock options were issued to an officer of the Company, of which 273,271 stock options vested immediately and the balance
of 764,706 stock options vested on December 31, 2021. These options have a 5-year life and are exercisable at C$0.335 per common share.
The grant date fair value of the options was estimated at $204,213. The vesting of these options resulted in stock-based compensation
of $204,213 for the year ended December 31, 2021, which is included in operation and administration expenses on the consolidated statements
of income (loss) and comprehensive income (loss). |
The
fair value of these stock options was determined on the date of grant using the Black-Scholes valuation model, and using the following
underlying assumptions:
Schedule of Estimated Using Black-Scholes Valuation Model for Fair value of Stock Options
| | | |
Risk free
interest rate | | |
Dividend yield | | |
Volatility | | |
Stock price | | |
Weighted
average life | |
| | (i) | | |
| 0.64 | % | |
| 0 | % | |
| 100 | % | |
| C$0.34 | | |
| 5 years | |
Bunker Hill Mining Corp.
Notes to the Condensed Interim Consolidated
Financial Statements (Unaudited)
Three and Six Months Ended June 30, 2022
(Expressed in United States Dollars)
The
following table reflects the actual stock options issued and outstanding as of June 30, 2022:
| | | |
Weighted average | | |
| | |
Number of | | |
| |
| | | |
remaining | | |
Number of | | |
options | | |
| |
| Exercise | | |
contractual | | |
options | | |
vested | | |
Grant date | |
| price (C$) | | |
life (years) | | |
outstanding | | |
(exercisable) | | |
fair value ($) | |
| 0.50 | | |
0.5 | | |
| 235,000 | | |
| 235,000 | | |
| 46,277 | |
| 0.60 | | |
1.25 | | |
| 200,000 | | |
| 200,000 | | |
| 52,909 | |
| 0.60 | | |
2.35 | | |
| 1,575,000 | | |
| 1,575,000 | | |
| 435,069 | |
| 0.55 | | |
2.81 | | |
| 5,957,659 | | |
| 1,489,415 | | |
| 1,536,764 | |
| 0.335 | | |
3.64 | | |
| 1,037,977 | | |
| 1,037,977 | | |
| 204,213 | |
| | | |
| | |
| 9,005,636 | | |
| 4,537,392 | | |
$ | 2,275,232 | |
10.
Income per Share
Potentially
dilutive securities include convertible loan payable, warrants, broker options, stock options, and unvested restricted share units (“RSU”).
Diluted income per share reflects the assumed exercise or conversion of all dilutive securities using the treasury stock method.
Schedule
of Income Per Share
| | |
| | |
| | |
| | |
| |
| | |
Three Months
ended
June 30, 2022 | | |
Three Months
ended
June 30, 2021 | | |
Six Months
ended
June 30, 2022 | | |
Six Months
ended
June 30, 2021 | |
| Net income (loss) and comprehensive income (loss) for the period | |
| 12,426,367 | | |
| 45,056 | | |
| 9,545,481 | | |
| 5,882,865 | |
| | |
| | | |
| | | |
| | | |
| | |
Basic income (loss) per share
Weighted average number of common shares - basic | |
| 210,586,156 | | |
| 163,677,564 | | |
| 187,638,287 | | |
| 158,916,637 | |
| Net income (loss) per share – basic | |
| 0.06 | | |
| 0.00 | | |
| 0.05 | | |
| 0.04 | |
| Net income (loss) and comprehensive income (loss) for the period | |
| 12,426,367 | | |
| 45,056 | | |
| 9,545,481 | | |
| 5,882,865 | |
| | |
| | | |
| | | |
| | | |
| | |
| Dilutive effect of convertible debentures | |
| (836,204 | ) | |
| - | | |
| (865,015 | ) | |
| - | |
| Dilutive effect of warrants on net income | |
| - | | |
| (175,816 | ) | |
| - | | |
| (520,066 | ) |
| Diluted net income (loss) and comprehensive income (loss) for the period | |
| 11,590,163 | | |
| (130,760 | ) | |
| 8,680,466 | | |
| 5,362,799 | |
| Diluted income (loss) per share | |
| | | |
| | | |
| | | |
| | |
| Weighted average number of common shares - basic | |
| 210,586,156 | | |
| 163,677,564 | | |
| 187,638,287 | | |
| 158,916,637 | |
| Diluted effect: | |
| | | |
| | | |
| | | |
| | |
| Warrants, broker options, and stock options, convertible debentures, and RSUs | |
| 35,719,674 | | |
| 703,569 | | |
| 26,998,311 | | |
| 1,027,400 | |
| Weighted average number of common shares - fully diluted | |
| 245,879,831 | | |
| 164,381,133 | | |
| 214,210,598 | | |
| 159,944,037 | |
| Net income (loss) per share - fully diluted | |
| 0.05 | | |
| (0.00 | ) | |
| 0.04 | | |
| 0.03 | |
Bunker
Hill Mining Corp.
Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)
Three
and Six Months Ended June 30, 2022
(Expressed
in United States Dollars)
11.
Restricted Share Units
Effective
March 25, 2020, the Board of Directors approved a Restricted Share Unit (“RSU”) Plan to grant RSUs to its officers, directors,
key employees, and consultants.
The
following table summarizes the RSU activity during the six months ended June 30, 2022:
Schedule of Restricted Share Units
| | | |
| | |
Weighted | |
| | | |
| | |
average | |
| | | |
| | |
grant date | |
| | | |
| | |
fair value | |
| | | |
Number of | | |
per share | |
| | | |
shares | | |
(C$) | |
| | | |
| | |
| |
| Unvested as at December 31, 2020 | | |
| 988,990 | | |
$ | 0.39 | |
| Granted | | |
| 1,348,434 | | |
| 0.38 | |
| Vested | | |
| (1,516,299 | ) | |
| 0.41 | |
| Forfeited | | |
| (245,125 | ) | |
| 0.52 | |
| Unvested as at December 31, 2021 | | |
| 576,000 | | |
$ | 0.62 | |
| Granted | | |
| 591,750 | | |
| 0.30 | |
| Vested | | |
| (741,750 | ) | |
| 0.37 | |
| Unvested as at June 30, 2022 | | |
| 426,000 | | |
$ | 0.61 | |
(i)
On April 14, 2020, the Company granted 400,000 RSUs to a certain officer of the Company. The RSUs vest in one fourth increments upon
each anniversary of the grant date. The vesting of these RSUs resulted in stock-based compensation of $22,663 and $43,161 for the six
months ended June 30, 2022 and 2021, respectively, which is included in operation and administration expenses on the condensed interim
consolidated statements of income and comprehensive income.
(ii)
On April 20, 2020, the Company granted 200,000 RSUs to a certain director of the Company. The RSUs vest in one fourth increments upon
each anniversary of the grant date. The vesting of these RSUs resulted in stock-based compensation of $7,834 and $14,934 for the six
months ended June 30, 2022 and 2021, respectively, which is included in operation and administration expenses on the condensed interim
consolidated statements of income (loss) and comprehensive income (loss).
(iii)
On November 16, 2020, the Company granted 168,000 RSUs to certain directors of the Company. The RSUs vest in one fourth increments upon
each anniversary of the grant date. The vesting of these RSUs resulted in stock-based compensation of $8,362 and $16,081 for the six
months ended June 30, 2022 and 2021, respectively, which is included in operation and administration expenses on the condensed interim
consolidated statements of income (loss) and comprehensive income (loss).
(iv)
On December 6, 2020, the Company granted 220,990 RSUs to a consultant of the Company. The RSUs vest in one sixth increments per month.
The vesting of these RSUs resulted in stock-based compensation of $nil and $58,740 for the six months ended June 30, 2022 and 2021, respectively,
which is included in operation and administration expenses on the condensed interim consolidated statements of income (loss) and comprehensive
income (loss).
(v)
On January 1, 2021, the Company granted 735,383 RSUs to a consultant of the Company. 245,128 RSUs vested immediately with the remaining
RSUs vesting in one twelfth increments per month. During the year ended 2021, a total of 490,258 RSUs vested, and in July 2021, the consultant
forfeited the remaining 245,125 unvested RSUs, resulting in a reversal of share-based compensation of $64,870. The vesting of these RSUs
resulted in stock-based compensation of $nil and $265,101 for the six months ended June 30, 2022 and 2021, respectively.
(vi)
On July 1, 2021, the Company granted 17,823 RSUs to a consultant of the Company, vesting immediately. The vesting of these RSUs resulted
in stock-based compensation of $nil for the six months ended June 30, 2022 and 2021, respectively.
Bunker
Hill Mining Corp.
Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)
Three
and Six Months Ended June 30, 2022
(Expressed
in United States Dollars)
(vii)
On August 5, 2021, the Company granted 595,228 RSUs to consultants of the Company, vesting immediately. The vesting of these RSUs resulted
in stock-based compensation of $nil for the six months ended June 30, 2022 and 2021, respectively.
(viii)
On January 10, 2022, the Company granted 500,000 RSUs to a consultant of the Company, vesting immediately. The vesting of these RSUs
resulted in stock-based compensation of $122,249 for the six months ended June 30, 2022, which is included in operation and administration
expenses on the condensed interim consolidated statements of income (loss) and comprehensive income (loss).
(ix)
On April 29, 2022, the Company granted 76,750 RSUs to certain consultants of the Company, vesting immediately. The vesting of these RSUs
resulted in stock-based compensation of $16,800 for the six months ended June 30, 2022, which is included in operation and administration
expenses on the condensed interim consolidated statements of income (loss) and comprehensive income (loss).
(x)
On June 30, 2022, the Company granted 15,000 RSUs to a consultant of the Company, vesting immediately. The vesting of these RSUs resulted
in stock-based compensation of $2,328 for the six months ended June 30, 2022, which is included in operation and administration expenses
on the condensed interim consolidated statements of income (loss) and comprehensive income (loss).
12.
Deferred Share Units
Effective
April 21, 2020, the Board of Directors approved a Deferred Share Unit (“DSU”) Plan to grant DSUs to its directors. The DSU
Plan permits the eligible directors to defer receipt of all or a portion of their retainer or compensation until termination of their
services and to receive such fees in the form of cash at that time.
Upon
vesting of the DSUs or termination of service as a director, the director will be able to redeem DSUs based upon the then market price
of the Company’s common share on the date of redemption in exchange for cash.
The
following table summarizes the DSU activity during the six months ended June 30, 2022 and 2021:
Schedule of Deferred Share Units
| | |
| | |
Weighted | |
| | |
| | |
average | |
| | |
| | |
grant date | |
| | |
| | |
fair value | |
| | |
Number of | | |
per share | |
| | |
shares | | |
(C$) | |
| | |
| | |
| |
| Unvested as at December 31, 2020 and March 31, 2021 (i) | |
| 7,500,000 | | |
$ | 1.03 | |
| | |
| | | |
| | |
| Unvested as at December 31, 2021 | |
| 5,625,000 | | |
$ | 1.03 | |
| Vested (ii)(iii) | |
| (3,125,000 | ) | |
| 1.03 | |
| Unvested as at June 30, 2022 | |
| 2,500,000 | | |
$ | 1.03 | |
| (i) | On
April 21, 2020, the Company granted 7,500,000 DSUs. The DSUs vest in one fourth increments
upon each anniversary of the grant date and expire in 5 years. During the six months ended
June 30, 2022, and 2021 the Company recognized $507,398 and $139,721, respectively, recovery
of stock-based compensation related to the DSUs, which is included in operation and administration
expenses on the condensed interim consolidated statements of income (loss) and comprehensive
income (loss). Upon redemption of the 2,500,000 DSUs (see (iii)) the fair value of the remaining
DSU liability at June 30, 2022 was $635,993. |
| (ii) | On
March 31, 2022, the Board approved the early vesting of 625,000 DSUs for one of the Company’s
Directors. |
| (iii) | During
the three months ended June 30, 2022, the director redeemed 2,500,000 DSUs for C$750,000,
and elected to use net proceeds to subscribe for 375,000 units in the Company’s April
2022 special warrant issuance at C$0.30 per unit, with the balance of the redeemed amount
payable in cash after applicable withholding tax deductions. |
Bunker
Hill Mining Corp.
Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)
Three
and Six Months Ended June 30, 2022
(Expressed
in United States Dollars)
13.
Commitments and Contingencies
As
stipulated in the agreement with the EPA and as described in Note 6, the Company is required to make two types of payments to the EPA
and IDEQ, one for historical water treatment cost-recovery to the EPA, and the other for ongoing water treatment. Water treatment costs
incurred through December 2021 are payable to the EPA, and water treatment costs incurred thereafter are payable to the IDEQ. The IDEQ
(formerly the EPA) invoices the Company on an annual basis for the actual water treatment costs, which may exceed the recognized estimated
costs significantly. When the Company receives the water treatment invoices, it records any liability for actual costs over and above
any estimates made and adjusts future estimates as required based on these actual invoices received. The Company is required to pay for
the actual costs regardless of the periodic required estimated accruals and payments made each year.
On
July 28, 2021, a lawsuit was filed in the US District Court for the District of Idaho brought by Crescent Mining, LLC (“Crescent”).
The named defendants include Placer Mining, Robert Hopper Jr., and the Company. The lawsuit alleges that Placer Mining and Robert Hopper
Jr. intentionally flooded the Crescent Mine during the period from 1991 and 1994, and that the Company is jointly and severally liable
with the other defendants for unspecified past and future costs associated with the presence of AMD in the Crescent Mine. The plaintiff
has requested unspecified damages. On September 20, 2021, the Company filed a motion to dismiss Crescent’s claims against it, contending
that such claims are facially deficient. On March 2, 2022, Chief US District Court Judge, David C. Nye granted in part and denied
in part the Company’s motion to dismiss. The court granted the Company’s motion to dismiss Crescent’s Cost Recovery
claim under CERCLA Section 107(a), Declaratory Judgment, Tortious Interference, Trespass, Nuisance and Negligence claims. These claims
were dismissed without prejudice. The court denied the motion to dismiss filed by Placer Mining Corp. for Crescent’s trespass,
nuisance and negligence claims. Crescent later filed an amended complaint on April 1, 2022. Placer Mining Corp. and Bunker Hill Mining
Corp are named as co-defendants. Bunker Hill responded to the amended filing, refuting and denying all allegations made in the complaint
except those that are assertions of fact as a matter of public record. The Company believes the lawsuit against Placer Mining Corp. is
without merit and intends to defend Placer Mining Corp. vigorously pursuant to the Company’s indemnification of Placer Mining Corp
in the Sale and Purchase agreement executed between the companies for the Mine on December 15, 2021. The court is in the process of ruling
with respect to the timeline for next steps in the legal process.
14.
Related party transactions
The
Company’s key management personnel have the authority and responsibility for planning, directing and controlling the activities
of the Company and consists of the Company’s executive management team and management directors.
Schedule of Related Party Transactions
| | |
| | |
| | |
| | |
| |
| | |
Three Months
Ended | | |
Three Months
Ended | | |
Six Months
Ended | | |
Six Months
Ended | |
| | |
June 30, | | |
June 30, | | |
June 30, | | |
June 30, | |
| | |
2022 | | |
2021 | | |
2022 | | |
2021 | |
| Consulting fees | |
$ | 486,241 | | |
$ | 245,936 | | |
$ | 1,583,850 | | |
$ | 570,555 | |
At
June 30, 2022 and June 30, 2021, $1,049,304 and $69,835, respectively is owed to key management personnel with all amounts included in
accounts payable and accrued liabilities.
15.
Subsequent Events
In
July 2022, the Company issued 1,975,482 common shares in connection with its election to satisfy interest payments under the outstanding
convertible debentures for the three months ending June 30, 2022.
On
July 29, 2022, the Company held its Annual General Meeting during which all director nominations and other proposals were approved. This
included the re-appointment of Dr. Mark Cruise, whose initial appointment was announced on June 30, 2022, replacing Mr. Wayne Parsons.
The following notable proposals were approved: (i) an increase in the authorized common share capital of the Company to 1,500,000,000
common shares, (ii) authorization for a share consolidation of up to 50:1 if enacted within the following two years, and (iii) an increase
in the maximum RSUs issuable under the Company’s Restricted Share Unit plan.