Bunker Hill Mining Corp. (Formerly Liberty Silver Corp.)
Amended and Restated
Notes to Consolidated Financial Statements
Years Ended June 30, 2019 and 2018
(Expressed in United States Dollars)
1.Nature and continuance of operations and going concern
Bunker Hill Mining Corp. (formerly Liberty Silver Corp.) (the “Company”) was incorporated under the laws of the state of Nevada, U.S.A on February 20, 2007 under the name Lincoln Mining Corp. Pursuant to a Certificate of Amendment dated February 11, 2010, the Company changed its name to Liberty Silver Corp., and on September 29, 2017 the Company changed its name to Bunker Hill Mining Corp. The Company’s registered office is located at 1802 N. Carson Street, Suite 212, Carson City Nevada 89701, and its head office is located at 401 Bay Street, Suite 2702, Toronto, Ontario, Canada, M5H 2Y4, and its telephone number is 888-749-4916. As of the date of this Form 10-K, the Company had two subsidiaries, Bunker Hill Operating LLC, a Colorado corporation that is currently dormant, and American Zinc Corp., an Idaho corporation created to facilitate the work being conducted at the Bunker Hill Mine in Idaho.
The Company was incorporated for the purpose of engaging in mineral exploration activities. It continues to work at developing its project with a view towards putting it into production.
These consolidated financial statements have been prepared on a going concern basis. The Company has incurred losses since inception resulting in an accumulated deficit of $ 32,602,628 (restated)
and further losses are anticipated in the development of its business. The Company does not have sufficient working capital needed to meet its current fiscal obligations and commitments. In order to continue to meet its fiscal obligations in the current fiscal year and beyond, the Company must seek additional financing. This raises substantial doubt about the Company’s ability to continue as a going concern. Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Management is considering various financing alternatives including, but not limited to, raising capital through the capital markets and debt financing. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
The ability of the Company to emerge from the exploration stage is dependent upon, among other things, obtaining additional financing to continue operations, explore and develop the mineral properties and the discovery, development, and sale of reserves.
These financial statements of the Company for the year ended June 30, 2019 were approved and authorized for issue by the Board of Directors of the Company on December 3, 2020
.
2. Basis of presentation
The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America applicable to exploration stage enterprises. The consolidated financial statements are expressed in U.S. dollars, the functional currency. The Company’s fiscal year end is June 30.
3.Significant accounting policies
The following is a summary of significant account policies used in the preparation of these consolidated financial statements.
Basis of consolidation
These consolidated financial statements include the assets, liabilities and expenses of the Company and its wholly owned subsidiaries, American Zinc Corp. and Bunker Hill Operating LLC. All intercompany transactions and balances have been eliminated on consolidation.
20
Bunker Hill Mining Corp. (Formerly Liberty Silver Corp.)
Amended and Restated
Notes to Consolidated Financial Statements
Years Ended June 30, 2019 and 2018
(Expressed in United States Dollars)
3.Significant accounting policies (continued)
Cash and cash equivalents
Cash and cash equivalents may include highly liquid investments with original maturities of three months or less.
Mineral rights, property and acquisition costs
The Company has been in the exploration stage since its formation on February 20, 2007 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties.
The Company capitalizes acquisition and option costs of mineral rights as intangible assets. Upon commencement of commercial production, the mineral rights will be amortized using the unit-of-production method over the life of the mineral rights. If the Company does not continue with exploration after the completion of the feasibility study, the mineral rights will be expensed at that time.
The costs of acquiring mining properties are capitalized upon acquisition. Mine development costs incurred to develop and expand the capacity of mines, or to develop mine areas in advance of production, are also capitalized once proven and probable reserves exist and the property is a commercially mineable property. Costs incurred to maintain current exploration or to maintain assets on a standby basis are charged to operations. Costs of abandoned projects are charged to operations upon abandonment. The Company evaluates the carrying value of capitalized mining costs and related property and equipment costs, to determine if these costs are in excess of their recoverable amount whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Evaluation of the carrying value of capitalized costs and any related property and equipment costs are based upon expected future cash flows and/or estimated salvage value in accordance with Accounting Standards Codification (FASB ASC) 360-10-35, Impairment or Disposal of Long-Lived Assets.
Equipment
Equipment is stated at cost less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which are generally 5 years. The cost of repairs and maintenance is charged to expense as incurred. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income or gain (expense or loss).
The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful lives of equipment or whether the remaining balance of the equipment should be evaluated for possible impairment. If events and circumstances warrant evaluation, the Company uses an estimate of the related undiscounted cash flows over the remaining life of the equipment in measuring their recoverability.
Impairment of long-lived assets
The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate the related carrying amounts may not be recoverable. The assets are subject to impairment consideration under FASB ASC 360-10-35, Measurement of an Impairment Loss, if events or circumstances indicate that their carrying amount might not be recoverable. When the Company determines that an impairment analysis should be done, the analysis is performed using the rules of FASB ASC 930-360-35, Extractive Activities - Mining, and 360-10-15-3 through 15-5, Impairment or Disposal of Long-Lived Assets.
Various factors could impact the Company’s ability to achieve forecasted production schedules. Additionally, commodity prices, capital expenditure requirements and reclamation costs could differ from the assumptions the Company may use in cash flow models used to assess impairment. The ability to achieve the estimated quantities of recoverable minerals from exploration stage mineral interests involves further risks in addition to those factors applicable to mineral interests where proven and probable reserves have been identified, due to the lower level of confidence that the identified mineralized material can ultimately be mined economically.
21
Bunker Hill Mining Corp. (Formerly Liberty Silver Corp.)
Amended and Restated
Notes to Consolidated Financial Statements
Years Ended June 30, 2019 and 2018
(Expressed in United States Dollars)
3.Significant accounting policies (continued)
Fair value of financial instruments
The Company adopted FASB ASC 820-10-50, Fair Value Measurements. This guidance defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:
*Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
*Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
*Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement.
The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, interest payable, convertible loan payable, and derivative liability, all of which qualify as financial instruments, are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and current market rate of interest.
Environmental expenditures
The operations of the Company have been, and may in the future, be affected from time to time, in varying degrees, by changes in environmental regulations, including those for future reclamation and site restoration costs. Both the likelihood of new regulations and their overall effect upon the Company vary greatly and are not predictable. The Company’s policy is to meet, or if possible, surpass standards set by relevant legislation, by application of technically proven and economically feasible measures.
Environmental expenditures that relate to ongoing environmental and reclamation programs are charged against earnings as incurred or capitalized and amortized depending on their future economic benefits. Estimated future reclamation and site restoration costs, when the ultimate liability is reasonably determinable, are charged against earnings over the estimated remaining life of the related business operation, net of expected recoveries. No costs have been recognized by the Company for environmental expenditures.
Income taxes
The Company accounts for income taxes in accordance with Accounting Standard Codification 740, Income Taxes ("FASB ASC 740"), on a tax jurisdictional basis. The Company files income tax returns in the United States.
Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the tax bases of assets and liabilities and the consolidated financial statements reported amounts using enacted tax rates and laws in effect in the year in which the differences are expected to reverse. A valuation allowance is provided against deferred tax assets when it is determined to be more likely than not that the deferred tax asset will not be realized.
The Company assesses the likelihood of the consolidated financial statements effect of a tax position that should be recognized when it is more likely than not that the position will be sustained upon examination by a taxing authority based on the technical merits of the tax position, circumstances, and information available as of the reporting date. The Company is subject to examination by taxing authorities in jurisdictions such as the United States. Management does not believe that there are any uncertain tax positions that would result in an asset or liability for taxes being recognized in the accompanying consolidated financial statements. The Company recognizes tax-related interest and penalties, if any, as a component of income tax expense.
22
Bunker Hill Mining Corp. (Formerly Liberty Silver Corp.)
Amended and Restated
Notes to Consolidated Financial Statements
Years Ended June 30, 2019 and 2018
(Expressed in United States Dollars)
3.Significant accounting policies (continued)
FSAB ASC 740 prescribes recognition threshold and measurement attributes for the consolidated financial statements recognition and measurement of a tax position taken, or expected to be taken, in a tax return. FASB ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in periods, disclosure and transition. At June 30, 2019
and June 30, 2018
, the Company has not taken any tax positions that would require disclosure under FASB ASC 740.
Basic and diluted net loss per share
The Company computes net loss per share of common stock in accordance with FASB ASC 260, Earnings per Share (“ASC 260”). Under the provisions of FASB ASC 260, basic net income (loss) per share is computed using the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and warrants and the conversion of convertible loan payable. As of June 30, 2019, 287,100 stock options and 13,046,484 warrants were considered in the calculation but not included, as they were anti-dilutive (June 30, 2018 - 287,100 stock options and 663,496 warrants).
Stock-based compensation
In December 2004, the FASB issued FASB ASC 718 “Compensation – Stock Compensation”, which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. FASB ASC 718 focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. FASB ASC 718 requires that the compensation cost relating to share-based payment transactions be recognized in the consolidated financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued.
Use of estimates and assumptions
Many of the amounts included in the consolidated financial statements require management to make judgments and/or estimates. These judgments and estimates are continuously evaluated and are based on management’s experience and knowledge of the relevant facts and circumstances. Actual results may differ from the amounts included in the consolidated financial statements.
Areas of significant judgment and estimates affecting the amounts recognized in the consolidated financial statements include:
Impairment of mining interests
The Company’s fair value measurement with respect to the carrying amount of mining interests is based on numerous assumptions and may differ significantly from actual fair values. The fair values are based, in part, on certain factors that may be partially or totally outside of the Company’s control. This evaluation involves a comparison of the estimated recoverable amount of mining interests to their carrying values. The Company’s fair value estimates are based on numerous assumptions.
Convertible loans and warrants
Estimating the fair value of warrants and conversion feature derivative liability requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the issuance. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the warrants and conversion feature derivative liability, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value of warrants and conversion feature derivative liability are disclosed in notes 8 and 9
.
The fair value estimates may differ from actual fair values and these differences may be significant and could have a material impact on the Company’s balance sheets and the consolidated statements of operations. Assets are reviewed for an indication of impairment at each reporting date. This determination requires significant judgment. Factors that could trigger an impairment review include, but are not limited to, significant negative industry or economic trends, interruptions in exploration activities or a significant drop in precious metal prices
23
Bunker Hill Mining Corp. (Formerly Liberty Silver Corp.)
Amended and Restated
Notes to Consolidated Financial Statements
Years Ended June 30, 2019 and 2018
(Expressed in United States Dollars)
3.Significant accounting policies (continued)
Concentrations of credit risk
The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company’s management also routinely assesses the financial strength and credit worthiness of any parties to which it extends funds and as such, it believes that any associated credit risk exposures are limited.
Risks and uncertainties
The Company operates in the mineralized material exploration industry that is subject to significant risks and uncertainties, including financial, operational, and other risks associated with operating a mineralized material exploration business, including the potential risk of business failure.
Foreign currency transactions
The Company from time to time will receive invoices from service providers that are presenting their invoices using the Canadian dollar. The Company will use its US dollars to settle the Canadian dollar liabilities and any differences resulting from the exchange transaction are reported as gain or loss on foreign exchange. The gain or loss reported by the Company in the consolidated financial statements represents transaction gain or loss.
Segment reporting
FASB ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information”, establishes standards for the way that public business enterprises report information about operating segments in the Company’s consolidated financial statements. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company does not have any reportable segments.
Convertible loan payable
The Company reviews the terms of its convertible loans payable to determine whether there are embedded derivatives, including the embedded conversion option, that are required to be bifurcated and accounted for as individual derivative financial instruments. In circumstances where the convertible debt contains embedded derivatives that are to be separated from the host contracts, the total proceeds received are first allocated to the fair value of the derivative financial instruments determined using the binomial model. The remaining proceeds, if any, are then allocated to the debenture cost contracts, usually resulting in those instruments being recorded at a discount from their principal amount. This discount is accreted over the expected life of the instruments to profit (loss) using the effective interest method.
The debenture host contracts are subsequently recorded at amortized cost at each reporting date, using the effective interest method. The embedded derivatives are subsequently recorded at fair value at each reporting date, with changes in fair value recognized in profit (loss).
The Company presents its embedded derivatives and related debenture host contracts as separate instruments on the consolidated balance sheets.
24
Bunker Hill Mining Corp. (Formerly Liberty Silver Corp.)
Amended and Restated
Notes to Consolidated Financial Statements
Years Ended June 30, 2019 and 2018
(Expressed in United States Dollars)
4. New and recently adopted technical and accounting pronouncements
In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes,” which requires that deferred tax liabilities and assets be classified on our Consolidated Balance Sheets as noncurrent based on an analysis of each taxpaying component within a jurisdiction. ASU No. 2015-17 is effective for the fiscal year commencing after December 15, 2017. The adoption of ASU No. 2015-17 did not have a material effect on the financial position or the results of operations.
In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments”. This ASU provides eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for the fiscal year commencing after December 15, 2017. The adoption of ASU 2016-15 did not have on the consolidated statements of cash flows.
In February 2016, the FASB issued ASU 2016-02, Leases. This update requires organizations to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The new guidance will also require additional disclosure about the amount, timing and uncertainty of cash flows arising from leases. The provisions of this update are effective for annual and interim periods beginning after December 15, 2018. The Company is still assessing the impact that the adoption of ASU 2016-02 will have on the financial position and the results of operations.
5.
Restatement of previously issued financial statements
In November 2020, it was determined that the Company has underaccrued for invoices issued by the United States Environmental Protection Agency ("EPA") for excess water treatment costs relating to years ended June 30, 2018, 2019 and 2020 and interest payable on the outstanding EPA balance, which resulted in an understatement of liabilities for 2018 and 2019, an understatement of opening deficit for 2019 and closing deficit for 2018 and 2019, and an understatement of exploration expenses and net losses for 2018 and 2019.
The following tables present the impact of the restatement adjustments on the Company's previously issued consolidated financial statements for the years ended June 30, 2018 and 2019.
Impact to Consolidated Statements of Loss and Comprehensive Loss
|
As previously
|
|
|
Year ended June 30, 2018
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Exploration
|
$5,094,733
|
$546,732
|
$5,641,465
|
Loss from operations
|
$(9,101,702)
|
$(546,732)
|
$(9,648,434)
|
Loss before income tax and net loss and comprehensive loss for the year
|
$(5,169,874)
|
$(546,732)
|
$(5,716,606)
|
Net loss per common share - basic and fully diluted
|
$(2.40)
|
$(0.25)
|
$(2.65)
|
|
As previously
|
|
|
Year ended June 30, 2019
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Exploration
|
$5,712,238
|
$704,495
|
$6,416,733
|
Loss from operations
|
$(7,409,431)
|
$(704,495)
|
$(8,113,926)
|
Loss before income tax and net loss and comprehensive loss for the year
|
$(7,737,825)
|
$(704,495)
|
$(8,442,320)
|
Net loss per common share - basic and fully diluted
|
$(1.96)
|
$(0.18)
|
$(2.14)
|
25
Bunker Hill Mining Corp. (Formerly Liberty Silver Corp.)
Amended and Restated
Notes to Consolidated Financial Statements
Years Ended June 30, 2019 and 2018
(Expressed in United States Dollars)
5.
Restatement of previously issued financial statements (continued)
Impact to Consolidated Balance Sheets
|
As previously
|
|
|
As at June 30, 2018
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Accounts payable
|
$225,184
|
$546,732
|
$771,916
|
Total current liabilities
|
$1,041,248
|
$546,732
|
$1,587,980
|
Total liabilities
|
$1,724,151
|
$546,732
|
$2,270,883
|
Deficit accumulated during exploration stage
|
$(23,613,576)
|
$(546,732)
|
$(24,160,308)
|
Total shareholders' deficiency
|
$(216,314)
|
$(546,732)
|
$(763,046)
|
|
As previously
|
|
|
As at June 30, 2019
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Accounts payable
|
$2,170,398
|
$1,251,227
|
$3,421,625
|
Total current liabilities
|
$7,069,564
|
$1,251,227
|
$8,320,791
|
Total liabilities
|
$7,186,373
|
$1,251,227
|
$8,437,600
|
Deficit accumulated during exploration stage
|
$(31,351,401)
|
$(1,251,227)
|
$(32,602,628)
|
Total shareholders' deficiency
|
$(6,959,283)
|
$(1,251,227)
|
$(8,210,510)
|
Impact to Consolidated Statements of Cash Flows
|
As previously
|
|
|
For the year ended June 30, 2018
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Net loss for the year
|
$(5,169,874)
|
$(546,732)
|
$(5,716,606)
|
Changes in operating assets and liabilities:
|
|
|
|
Accounts payable
|
$(56,815)
|
$546,732
|
$489,917
|
|
As previously
|
|
|
Year ended June 30, 2019
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Net loss for the year
|
$(7,737,825)
|
$(704,495)
|
$(8,442,320)
|
Changes in operating assets and liabilities:
|
|
|
|
Accounts payable
|
$1,966,144
|
$704,495
|
$2,670,639
|
Impact to Consolidated Statements of Changes in Shareholders' Deficiency
|
As previously
|
|
|
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Net loss for the year ended June 30, 2018
|
$(5,169,874)
|
$(546,732)
|
$(5,716,606)
|
Deficit accumulated during the exploration stage, June 30, 2018
|
$(23,613,576)
|
$(546,732)
|
$(24,160,308)
|
Balance, Total, June 30, 2018
|
$(216,314)
|
$(546,732)
|
$(763,046)
|
Net loss for the year ended June 30, 2019
|
$(7,737,825)
|
$(704,495)
|
$(8,442,320)
|
Deficit accumulated during the exploration stage, June 30, 2019
|
$(31,351,401)
|
$(1,251,227)
|
$(32,602,628)
|
Balance, Total, June 30, 2019
|
$(6,959,283)
|
$(1,251,227)
|
$(8,210,510)
|
26
Bunker Hill Mining Corp. (Formerly Liberty Silver Corp.)
Amended and Restated
Notes to Consolidated Financial Statements
Years Ended June 30, 2019 and 2018
(Expressed in United States Dollars)
5.
Restatement of previously issued financial statements (continued)
The circumstances associated with the adjustments also created errors in each of the previously reported quarters in 2018 and 2019, which have also been restated on a quarterly basis as disclosed in note 14.
In addition, subsequent to the year end, the Company amended its articles of incorporation to change the authorized capital and the par values, which have been retrospectively applied in these amended and restated consolidated financial statements (note 9).
6
. Equipment
Equipment consists of the following:
|
June 30,
|
June 30,
|
|
2019
|
2018
|
Leasehold improvements
|
$59,947
|
53,392
|
Equipment
|
9,050
|
50,910
|
|
68,997
|
104,302
|
Less accumulated depreciation
|
(16,947)
|
(7,050)
|
Equipment, net
|
$52,050
|
$97,252
|
7
.
Mining interests (restated)
Bunker Hill Mine Complex
On November 27, 2016, the Company entered into a non-binding letter of intent with Placer Mining Corp. (“Placer Mining”), which letter of intent was further amended on March 29, 2017, to acquire the Bunker Hill Mine in Idaho and its associated milling facility located in Kellogg, Idaho, in the Coeur d’Alene Basin (the “Letter of Intent”). Pursuant to the terms and conditions of the Letter of Intent, the acquisition, which was subject to due diligence, would include all mining claims, surface rights, fee parcels, mineral interests, existing infrastructure, machinery and buildings at the Kellogg Tunnel portal in Milo Gulch, or anywhere underground at the Bunker Hill Mine Complex. The acquisition would also include all current and historic data relating to the Bunker Hill Mine Complex, such as drill logs, reports, maps, and similar information located at the mine site or any other location.
During the fiscal year ended June 30, 2017, the Company made payments totaling $300,000 as part of this Letter of Intent. These amounts were initially capitalized and subsequently written off during fiscal 2018 and are included in exploration expenses.
On August 28, 2017, the Company announced that it signed a definitive agreement (the “Agreement”) for the lease and option to purchase the Bunker Hill Mine assets (the “Bunker Assets”).
Under the terms of the Agreement, the Company was required to make a $1 million bonus payment to Placer Mining no later than October 31, 2017, which payment was made, along with two additional $500,000 bonus payments in December 2017. The 24-month lease commences November 1, 2017 and continues until October 31, 2019. The lease period can be extended by a further 12 months at the Company’s discretion. During the term of the lease, the Company must make $100,000 monthly mining lease payments, paid quarterly.
The Company has an option to purchase the Bunker Assets at any time before the end of the lease and any extension for a purchase price of $45 million with purchase payments to be made over a ten-year period to Placer Mining. Under terms of the agreement, there is a 3% net smelter return royalty (“NSR”) on sales during the Lease and a 1.5% NSR on the sales after the purchase option is exercised, which post-acquisition NSR is capped at $60 million.
27
Bunker Hill Mining Corp. (Formerly Liberty Silver Corp.)
Amended and Restated
Notes to Consolidated Financial Statements
Years Ended June 30, 2019 and 2018
(Expressed in United States Dollars)
7.Mining interests (restated) (continued)
Bunker Hill Mine Complex (continued)
On
October 2, 2018, the Company announced that it was in default of its Lease with Option to Purchase Agreement with Placer Mining. The default arose as a result of missed lease and operating cost payments, totaling $400,000, which were due at the end of September and on October 1, 2018. As per the Agreement, the Company had 15 days, from the date notice of default was provided (September 28, 2018), to remediate the default by making the outstanding payment. While Management worked with urgency to resolve this matter, Management was ultimately unsuccessful in remedying the default, resulting in the lease being terminated.
On November 13, 2018, the Company announced that it was successful in renewing the lease, effectively with the original Agreement intact, except that monthly payments are reduced to $60,000 per month for 12 months, with the accumulated reduction in payments of $140,000 per month (“deferred payments”) added to the purchase price of the mine should the Company choose to exercise its option. As at June 30, 2019, the Company has accrued for $1,373,000 of the deferred payments and is included in accounts payable.
In addition to the payments to Placer Mining, and
pursuant to an agreement with the United States Environmental Protection Agency (“EPA”) whereby for so long as Bunker leases, owns and/or occupies the Bunker Hill Mine, the Company will make payments to the EPA on behalf of the current owner in satisfaction of the EPA’s claim for cost recovery. These payments, if all are made, will total $20 million. The agreement calls for payments starting with $1 million 30 days after a fully ratified agreement was signed followed by payment schedule detailed below:
Date
|
Amount
|
Action
|
Within 30 days of the effective date
|
$1,000,000
|
Paid
|
November 1, 2018
|
$2,000,000
|
Not paid
|
November 1, 2019
|
$3,000,000
|
|
November 1, 2020
|
$3,000,000
|
|
November 1, 2021
|
$3,000,000
|
|
November 1, 2022
|
$3,000,000
|
|
November 1, 2023
|
$3,000,000
|
|
November 1, 2024
|
$2,000,000
|
|
In addition to these cost recovery payments, the Company is to make semi-annual payments of $480,000 on June 1 and December 1 of each year, to cover the EPA’s costs of operating and maintaining the water treatment facility that treats the water being discharged from the Bunker Hill Mine. Of these, $560,000 is outstanding as at June 30, 2019 (June 30, 2018 - $80,000). The Company also has received invoices from the EPA for water treatment charges for the periods from December 2017 to October 2019. This was for a total of $3,749,388, with $1,209,530 additional accruals required as at June 30, 2019 (June 30, 2018 - $546,125). The Company is having discussions with the EPA to review and, where appropriate, have the additional water treatment charges amended. The unpaid EPA balance is subject to interest at the rate specified for interest on investments of the EPA Hazardous Substance Superfund. As at June 30, 2019, the interest accrued on the unpaid EPA balance is $13,061 (June 30, 2018 - $607).
Trinity Project
On August 31, 2017, the Company and Renaissance Exploration Inc. signed a notice of termination and release of exploration Earn-In Agreement. Upon signing this agreement, the Company has terminated the March 29, 2010 Earn-In Agreement.
28
Bunker Hill Mining Corp. (Formerly Liberty Silver Corp.)
Amended and Restated
Notes to Consolidated Financial Statements
Years Ended June 30, 2019 and 2018
(Expressed in United States Dollars)
8.Convertible loan payable
On June 13, 2018, the Company entered into a loan and warrant agreement with Hummingbird Resources PLC (“Hummingbird”), an arm’s length investor, for an unsecured convertible loan in the aggregate sum of $1,500,000, bearing interest at 10% per annum, maturing in one year. Contemporaneously, the Company agreed to issue 229,464 share purchase warrants, entitling the lender to acquire 229,464 common shares of the Company, at a price of C$8.50 per share, for two years.
Under the terms of the loan agreement, the lender may, at any time prior to maturity, convert any or all of the principal amount of the loan and accrued interest thereon, into common shares of the Company at a price per share equal to C$8.50. In the event that a notice of conversion would result in the lender holding 10% or more of the Company’s issued and outstanding shares, then, in the alternative, and under certain circumstances, the Company would be required to pay cash to the lender in an amount equal C$8.50 multiplied by the number of shares intended to be issued upon conversion. Further, in the event that the lender holds more than 5% of the issued and outstanding shares of the Company subsequent to the exercise of any of its convertible securities held under this placement, it shall have the right to appoint one director to the board of the Company. Lastly, among other things, the loan agreement further provides that for as long as any amount is outstanding under the convertible loan, the investor retains a right of first refusal on any Company financing or joint venture/strategic partnership/disposal of assets.
In August 2018, the amount of the Hummingbird convertible loan payable was increased to $2 million from its original $1.5 million loan, net of $45,824 of debt issue costs, of which $25,750 was incurred in the current period. Under the terms of the Amended and Restated Loan Agreement, Hummingbird may, at any time prior to maturity, convert any or all of the principal amount of the loan and accrued interest thereon, into common shares of Bunker as follows: (i) $1,500,000, being the original principal amount (“Principal Amount”), the Principal Amount may be converted at a price per share equal to C$8.50; (ii) 229,464 common shares may be acquired upon exercise of warrants at a price of C$8.50 per warrant for a period of two years from the date of issuance; (iii) $500,000, being the additional principal amount (“Additional Amount”), the Additional Amount may be converted at a price per share equal to C$4.50; and (iv) 116,714 common shares may be acquired upon exercise of warrants at a price of C$4.50 per warrant for a period of two years from the date issuance. In the event that Hummingbird would acquire common shares in excess of 9.999% through the conversion of the Principal Amount or Additional Amount, including interest accruing thereon, or on exercise of the warrants as disclosed herein, the Company shall pay to Hummingbird a cash amount equal to the common shares exercised in excess of 9.999%, multiplied by the conversion price.
In March 2019, Hummingbird agreed to extend the scheduled maturity date of the loan to June 30, 2020. This was accounted for as a loan extinguishment which resulted in the recording of a net loss on loan extinguishment of $1,195,880.
In June 2019, the Company repaid $100,000 of the Additional Amount, which resulted in the recording of a net loss on loan extinguishment of $8,193.
The Company has accounted for the conversion features and warrants in accordance with ASC Topic 815. The conversion features and warrants are considered derivative financial liabilities as they are convertible into common shares at a conversion price denominated in a currency other than the Company’s functional currency of the US dollar. The estimated fair value of the conversion features and warrants was determined on the date of issuance and marks to market at each financial reporting period.
29
Bunker Hill Mining Corp. (Formerly Liberty Silver Corp.)
Amended and Restated
Notes to Consolidated Financial Statements
Years Ended June 30, 2019 and 2018
(Expressed in United States Dollars)
8.Convertible loan payable (continued)
At June 30, 2019, the fair value of the conversion features was estimated using the Binomial model to determine the fair value of conversion features using the following assumptions:
Principal Amount
|
June 30, 2018
|
June 30, 2019
|
Expected life
|
345 days
|
365 days
|
Volatility
|
100%
|
100%
|
Risk free interest rate
|
2.04%
|
1.75%
|
Dividend yield
|
0%
|
0%
|
Share price
|
$6.46
|
$0.05
|
Fair value
|
$180,353
|
$0
|
Change in derivative liability
|
|
$180,353
|
Additional Amount
|
August 9, 2018
|
June 30, 2019
|
Expected life
|
365 days
|
365 days
|
Volatility
|
100%
|
100%
|
Risk free interest rate
|
2.11%
|
1.75%
|
Dividend yield
|
0%
|
0%
|
Share price
|
$4.70
|
$0.05
|
Fair value
|
$205,444
|
$0
|
Change in derivative liability
|
|
$205,444
|
The fair value of the warrants were estimated using the Binomial model to determine the fair value of the derivative warrant liabilities using the following assumptions:
Principal Amount
|
June 30, 2018
|
June 30, 2019
|
Expected life
|
714 days
|
349 days
|
Volatility
|
100%
|
100%
|
Risk free interest rate
|
2.04%
|
1.95%
|
Dividend yield
|
0%
|
0%
|
Share price
|
$6.46
|
$0.05
|
Fair value
|
$326,909
|
$0
|
Change in derivative liability
|
|
$326,909
|
Additional Amount
|
August 9, 2018
|
June 30, 2019
|
Expected life
|
730 days
|
405 days
|
Volatility
|
100%
|
100%
|
Risk free interest rate
|
2.11%
|
1.84%
|
Dividend yield
|
0%
|
0%
|
Share price
|
$4.70
|
$0.05
|
Fair value
|
$221,256
|
$0
|
Change in derivative liability
|
|
$221,256
|
The residual value of the Principal Amount was deemed to be $61,448, net of $20,074 of expenses, and the residual value of the Additional Amount was deemed to be $34,850, net of $38,449 of expenses. The residual value of the loan after the loan extension was deemed to be $1,800,000, net of $200,000 of expenses.
Accretion expense for the year ended June 30, 2019 were $734,589 (year ended June 30, 2018 - $9,373) based on effective interest rates of 32% for the Principal Amount, 26% for the Additional Amount, and 17% after the loan extension.
Interest expense for the year ended June 30, 2019 were $198,219 (year ended June 30, 2018 - $3,287).
30
Bunker Hill Mining Corp. (Formerly Liberty Silver Corp.)
Amended and Restated
Notes to Consolidated Financial Statements
Years Ended June 30, 2019 and 2018
(Expressed in United States Dollars)
8.Convertible loan payable (continued)
|
Amount
|
Balance, June 30, 2017
|
$-
|
Proceeds on issuance
|
1,500,000
|
Debt issue costs
|
(20,074)
|
Conversion feature valuation
|
(605,118)
|
Warrant valuation
|
(813,361)
|
Accretion expense
|
9,373
|
|
|
Balance, June 30, 2018
|
$70,820
|
Proceeds on issuance
|
500,000
|
Debt issue costs
|
(238,455)
|
Conversion feature valuation
|
(205,444)
|
Warrant valuation
|
(221,256)
|
Accretion expense
|
734,589
|
Loss on loan extinguishment
|
1,204,073
|
Partial extinguishment
|
(100,000)
|
Balance, June 30, 2018
|
$1,744,327
|
9
.
Capital stock, warrants and stock options (restated)
Authorized
The total authorized capital is as follows:
* 750,000,000
common shares 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
On May 23, 2019, the Company affected a consolidation of its issued and outstanding share capital on the basis of one (1) post-consolidation share for each ten (10) pre-consolidation common shares, which has been retrospectively applied in these financial statements.
On July 19, 2019, the Company amended its articles of incorporation to change the total authorized capital and the par values which have been retrospectively applied in these amended and restated consolidated financial statements.
Issued and outstanding
In December 2017, the Company closed a private placement led by Red Cloud Klondike Strike Inc. and including Haywood Securities Inc. (collectively, the “Agents”) to raise gross proceeds of C$10,155,400 (the “Offering”). Pursuant to the Offering, the Company issued 812,432 units (the "Units") at a price of CDN$12.50 per Unit. Each Unit was comprised of one common share of the Company (a "Common Share") and one half of one transferable common share purchase warrant (a "Warrant"), each Warrant having a three-year life and entitling the holder thereof to acquire one Common Share at a price of C$20.00.
In August 2018, the Company closed a private placement, issuing 160,408 Units to Gemstone 102 Ltd. (“Gemstone”) at a price of C$4.50 per Unit, for gross proceeds of C$721,834 ($549,333) and incurring financing costs of $25,750. Each Unit entitles Gemstone to acquire one common share (“Unit Share”) and one common share purchase warrant (“Unit Warrant”), with each Unit Warrant entitling Gemstone to acquire one common share of the Company at a price of C$4.50 for a period of three years. Prior to the issuance of the Units, Gemstone held 400,000 common shares of the Company and 200,000 warrants (“Prior Warrants”) exercisable at a price of C$20.00 per share. Immediately prior to closing, the Prior Warrants were early terminated by mutual agreement of the Company and Gemstone. Upon issuance of the 160,408 Units to Gemstone, Gemstone beneficially owns or exercises control or direction over 560,408 common shares of the Company. Assuming exercise of the Unit Warrants, Gemstone would hold 720,816 of the outstanding common shares of the Company. Gemstone’s participation in the Offering constitutes a "related party transaction" under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101").
31
Bunker Hill Mining Corp. (Formerly Liberty Silver Corp.)
Amended and Restated
Notes to Consolidated Financial Statements
Years Ended June 30, 2019 and 2018
(Expressed in United States Dollars)
9. Capital stock, warrants and stock options (restated) (continued)
Issued and outstanding (continued)
Given the urgent need to secure financing to meet the new lease obligations, Bunker’s Board approved an equity private placement of Units to be sold at C$0.75 per Unit with each Unit consisting of one common share and one common share purchase warrant. On November 28, 2018, the Company closed on a total of 645,866 Units for gross proceeds of C$484,400 ($365,341) and incurring financing costs of $10,062, with each purchase warrant exercisable into a Common Share at C$1.00 per Common Share for a period of thirty-six months.
On June 27, 2019, the Company closed the first tranche ("First Tranche") of a non-brokered private placement, issuing 11,660,000 units ("June 2019 Unit") at a price of C$0.05 per June 2019 Unit for gross proceeds of C$583,000 ($436,608) and incurring financing costs of $19,640. Each June 2019 Unit consists of one common share of the Company and one common share purchase warrant ("June 2019 Warrant"). Each whole June 2019 Warrant entitles the holder to acquire one common share at a price of C$0.25 per common share for a period of two years. As a part of the First Tranche, Hummingbird Resources PLC ("Hummingbird") has acquired 2,660,000 June 2019 Units for C$133,000 ($100,000) which was applied to reduction of the principal amount owing under the convertible loan facility (see note 8)
.
For each financing, the Company has accounted for the warrant liability 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 US 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 consolidated statement of operations and comprehensive loss as a gain or loss and is estimated using the Binomial model.
The fair value of the warrant liabilities related to the various tranches of warrants issued during the year were estimated using the Binomial model to determine the fair value using the following assumptions on the day of issuance and as at June 30, 2019:
|
August 9, 2018
|
June 30, 2019
|
Expected life
|
1,095 days
|
771 days
|
Volatility
|
100%
|
100%
|
Risk free interest rate
|
2.09%
|
1.59%
|
Dividend yield
|
0%
|
0%
|
Share price
|
$4.70
|
$0.05
|
Fair value
|
$355,751
|
$0
|
Change in derivative liability
|
|
$355,751
|
|
November 28, 2018
|
June 30, 2019
|
Expected life
|
1,095 days
|
882 days
|
Volatility
|
100%
|
100%
|
Risk free interest rate
|
1.22%
|
1.47%
|
Dividend yield
|
0%
|
0%
|
Share price
|
$0.90
|
$0.05
|
Fair value
|
$265,105
|
$1,875
|
Change in derivative liability
|
|
$263,250
|
|
June 27, 2019
|
June 30, 2019
|
Expected life
|
730 days
|
727 days
|
Volatility
|
100%
|
100%
|
Risk free interest rate
|
1.80%
|
1.47%
|
Dividend yield
|
0%
|
0%
|
Share price
|
$0.05
|
$0.05
|
Fair value
|
$99,788
|
$114,934
|
Change in derivative liability
|
|
($15,146)
|
32
Bunker Hill Mining Corp. (Formerly Liberty Silver Corp.)
Amended and Restated
Notes to Consolidated Financial Statements
Years Ended June 30, 2019 and 2018
(Expressed in United States Dollars)
9. Capital stock, warrants and stock options (restated) (continued)
Issued and outstanding (continued)
The warrant liability as a result of the December 2017 private placement was revalued as at June 30, 2019 and June 30, 2018 using the Binomial model and the following assumptions:
|
June 30, 2018
|
June 30, 2019
|
Expected life
|
1,095 days
|
532 days
|
Volatility
|
100%
|
100%
|
Risk free interest rate
|
1.97%
|
1.66%
|
Dividend yield
|
0%
|
0%
|
Share price
|
$4.70
|
$0.05
|
Fair value
|
$355,994
|
$0
|
Change in derivative liability
|
|
$355,994
|
At June 30, 2019, there were 15,811,396 common shares issued and outstanding.
Warrants
|
Number of
warrants
|
Weighted
average
exercise price
(C$)
|
Balance, June 30, 2017
|
-
|
$-
|
Issued
|
663,496
|
16.02
|
Balance, June 30, 2018
|
663,496
|
$16.02
|
Issued
|
12,582,988
|
0.38
|
Cancelled
|
(200,000)
|
20.00
|
Balance, June 30, 2019
|
13,046,484
|
$0.88
|
As of June 30, 2019, the Company had 13,046,484 warrants outstanding, with exercise prices from C$0.25 to C$20.00, expiring from June 13, 2020 to November 28, 2021.
Expiry date
|
Exercise
price (C$)
|
|
Number of
warrants
|
Number of
warrants
exercisable
|
December 5, 2020
|
20.00
|
|
227,032
|
227,032
|
December 13, 2020
|
20.00
|
|
7,000
|
7,000
|
June 13, 2020
|
8.50
|
|
229,464
|
229,464
|
August 9, 2021
|
4.50
|
|
116,714
|
116,714
|
August 9, 2021
|
4.50
|
|
160,408
|
160,408
|
November 28, 2021
|
1.00
|
|
645,866
|
645,866
|
June 27, 2021
|
0.25
|
|
11,660,000
|
11,660,000
|
|
|
|
13,046,484
|
13,046,484
|
33
Bunker Hill Mining Corp. (Formerly Liberty Silver Corp.)
Amended and Restated
Notes to Consolidated Financial Statements
Years Ended June 30, 2019 and 2018
(Expressed in United States Dollars)
9. Capital stock, warrants and stock options (restated) (continued)
Stock options
The following table summarizes the stock option activity during the periods ended June 30, 2019 and 2018:
|
Number of
stock options
|
Weighted
average
exercise price
|
Balance, June 30, 2017
|
229,100
|
$7.60
|
Granted (i)(ii)
|
58,000
|
7.50
|
Balance, June 30, 2018
|
287,100
|
$7.50
|
Granted (iii)
|
43,750
|
8.00
|
Exercised
|
(43,750)
|
8.00
|
Balance, June 30, 2019
|
287,100
|
$7.50
|
(i) On December 6, 2017, 10,000 options were granted to a consultant with a five-year life and an exercise price of C$16.50. These options vested immediately and, using the Black-Scholes option pricing method, had a value of $103,815, which is included in operation and administration expenses on the consolidated statements of loss and comprehensive loss.
(ii) On June 19, 2018, the Company granted incentive stock options to purchase up to an aggregate of 48,000 common shares, exercisable for 5 years at a strike price of C$8.50. These options vested immediately and, using the Black-Scholes option pricing method, had a value of $206,489, which is included in operation and administration expenses on the consolidated statements of loss and comprehensive loss.
(iii) On September 27, 2018, 43,750 fully-vested stock options were issued to a consultant to whom C$350,000 was due and payable and reflected in accrued liabilities at September 30, 2018. These options had a 5-year life and were exercisable at C$8.00 per share. On October 3, 2018, these options were exercised in full, with consideration received being the liability already on the Company’s books, extinguishing the liability in full. The vesting of these options resulting in stock-based compensation of $43,893, which is included in operation and administration expenses on the consolidated statements of loss and comprehensive 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:
Year
|
Risk free interest rate
|
Dividend yield
|
Volatility
|
Stock price
|
Weighted average life
|
2017
|
2.30%
|
0%
|
100%
|
C$13.70
|
5 years
|
2018
|
2.77%
|
0%
|
100%
|
C$7.70
|
5 years
|
2019
|
2.32%
|
0%
|
100%
|
C$2.30
|
5 years
|
The following table reflects the actual stock options issued and outstanding as of June 30, 2019:
Exercise
price (C$)
|
Weighted average
remaining
contractual
life (years)
|
Number of
options
outstanding
|
Number of
options
vested
(exercisable)
|
1.875
|
0.64
|
5,600
|
5,600
|
7.60
|
2.84
|
223,500
|
223,500
|
12.80
|
3.46
|
10,000
|
10,000
|
6.40
|
3.97
|
48,000
|
48,000
|
|
|
287,100
|
287,100
|
34
Bunker Hill Mining Corp. (Formerly Liberty Silver Corp.)
Amended and Restated
Notes to Consolidated Financial Statements
Years Ended June 30, 2019 and 2018
(Expressed in United States Dollars)
10
.
Commitments and contingencies (restated)
Effective June 1, 2017, the Company has a lease agreement for office space at 401 Bay Street, Suite 2702, Toronto, Ontario, Canada, M5H 2Y4. The 5-year lease provides for a monthly gross rent of C$29,005 for the first two years, increasing to C$29,545 per month for years three through five. The monthly rental expenses are offset by rental income obtained through a series of subleases held by the Company.
As stipulated by the agreements with Placer Mining as described in note 7, the Company is required to make monthly payment of $60,000 for care and maintenance and a lease extension fee of $60,000. Including the previously accrued payments, a total of $1,373,000 is payable until the Company decides to acquire the mine at which time these payments will be waived.
As stipulated in the agreement with the EPA and as described in note 7, the company is required to make two payments to the EPA, one for cost-recovery, and the other for water treatment. As at June 30, 2019, $3,811,227 payable to the EPA has been included in accounts payable and accrued liabilities. The Company is now engaged with the EPA to amend and defer these payments.
11
.
Income taxes (restated)
As at June 30, 2019 and 2018, the Company had no accrued interest and penalties related to uncertain tax positions. The income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income tax rates of 26.9% (2018 - 26.9%) to pretax loss from operations for the years ended June 30, 2019 and 2018 due to the following:
|
Year Ended
June 30,
2019
|
Year Ended
June 30,
2018
|
|
|
|
Loss before income taxes
|
$ 8,442,320
|
$ 5,716,606
|
Expected income tax recovery
|
(2,271,000)
|
(1,880,800)
|
Tax rate changes and other adjustments
|
-
|
1,653,380
|
True-up
|
-
|
(197,110)
|
Other permanent difference
|
563,070
|
115,400
|
Change in valuation allowance
|
1,707,930
|
309,130
|
Total
|
$ -
|
$ -
|
Deferred tax assets and the valuation account are as follows:
|
Year Ended
June 30,
2019
|
Year Ended
June 30,
2018
|
Deferred tax asset:
|
|
|
Net operating loss carry forward
|
$ 4,285,020
|
$ 4,391,740
|
Other deferred tax assets
|
3,392,290
|
1,587,680
|
Valuation allowance
|
(7,687,200)
|
(5,979,420)
|
Unrealized foreign exchange loss
|
8,870
|
-
|
Equipment
|
1,020
|
-
|
Total
|
$ -
|
$ -
|
35
Bunker Hill Mining Corp. (Formerly Liberty Silver Corp.)
Amended and Restated
Notes to Consolidated Financial Statements
Years Ended June 30, 2019 and 2018
(Expressed in United States Dollars)
11.Income taxes (restated) (continued)
|
Year Ended
June 30,
2019
|
Year Ended
June 30,
2018
|
Deferred tax assets:
|
|
|
Non-capital losses carried forward
|
$1,530,460
|
$1,022,400
|
Deferred tax liabilities:
|
|
|
Convertible debt
|
(1,530,460)
|
(1,022,400)
|
Net deferred tax asset
|
$-
|
$-
|
The potential income tax benefit of these losses has been offset by a full valuation allowance.
As of June 30, 2019, and 2018, the Company has an unused net operating loss carry-forward balance of $ 22,094,056
and $ 19,987,152
, respectively, that is available to offset future taxable income. The US non-capital loss carryforwards generated before 2018 expire between 2031 and 2037. The losses generated after 2018 do not expire.
The Company did not have any tax positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months.
The tax years that remain subject to examination by major taxing jurisdictions are those for the years ended June 30, 2019, 2018, 2017, 2016, 2015, 2014, 2013 and 2012.
12.Related party transactions
During the year ended June 30, 2019, Julio DiGirolamo (Former CFO) billed $70,000, Howard Crosby (Former director and Former Executive Vice President) billed $20,000, and John Ryan (Director and Interim CEO) billed $50,000 for services to the Company. Mr. Julio DiGirolamo resigned his position in May 2019 and Mr. Crosby resigned his positions in November 2018. Through November 2017, each of Messrs. Bruce Reid (Former CEO), Julio DiGirolamo (Former CFO), Howard Crosby (Former Executive Vice President) and John Ryan (Director and current Interim CEO) received $5,000 per month for services to the Company. Commencing December 1, 2017, commensurate with the increased activities in the Company, Messrs. Reid and DiGirolamo’s pay increased to $20,000 and $15,000 per month, respectively. Commencing September 2018, Mr. DiGirolamo agreed to a reduced fee for services. In early December 2017, the Board approved and ratified compensation to Mr. Reid for unaccrued and unpaid salary and bonus, including for risk-capital sums advanced by Mr. Reid to the Company in order that the Company could complete many of its obligations and initiatives during 2017. The payment, totaling $500,000 was accrued at December 31, 2017 and was paid in January 2018. The Company also incurred $200,000 of debt issue costs to Wayne Parsons (CFO) for extension of the Hummingbird loan, which was settled by shares subsequent to year end.
At June 30, 2019, $37,547 is owed to Mr. DiGirolamo, $23,032 to Mr. Crosby, $49,399 to Mr. Ryan, and $200,000 to Mr. Parsons, all amounts included in accounts payable and accrued liabilities. Mr. Bruce Reid (Former CEO) earned $29,287 for consulting services rendered and including reimbursed expenses of $4,287, which amount is included in accounts payable at June 30, 2019.
13
.
Subsequent events
On August 1, 2019, the Company closed the second and final tranche ("Tranche Two") of the non-brokered private placement, issuing 6,042,954 units ("August 2019 Units") at C$0.05 per August 2019 Unit for gross proceeds of C$302,148 ($228,202) and incurring financing costs of $36,468. Each August 2019 Unit consists of one common share of the Company and one common share purchase warrant, which entitles the holder to acquire one common share at a price of C$0.25 per common share for a period of two years. The Company also issued 16,962,846 August 2019 Units to settle $640,556 of debt at a deemed price of C$0.09 based on the fair value of the shares issued.
36
Bunker Hill Mining Corp. (Formerly Liberty Silver Corp.)
Amended and Restated
Notes to Consolidated Financial Statements
Years Ended June 30, 2019 and 2018
(Expressed in United States Dollars)
13.
Subsequent events (continued)
On August 23, 2019, the Company closed the first tranche (the "First Tranche") of the non-brokered private placement, issuing 27,966,002 common shares of the Company at C$0.05 per share for gross proceeds of C$1,398,300 ($1,049,974) and incurring financing costs of $28,847. The Company also issued 2,033,998 common shares to settle $77,117 of debt at a deemed price of C$0.18 based on the fair value of the shares issued.
On August 30, 2019, the Company closed the second and final tranche (the "Second Tranche") of the non-brokered private placement, issuing 1,000,000 common shares at C$0.05 per share for gross proceeds of C$50,000 ($37,550).
14.
Quarterly financial data (unaudited)
The Company restated its consolidated financial statements as of and for the quarterly periods ended September 30, 2018, December 31, 2018 and 2017, and March 31, 2019 and 2018 to correct misstatements, as discussed in note 5 describing the restatement of annual periods. The misstatements did not impact the quarterly period ended September 30, 2017.
The following tables summarize the impact of the restatement on the Company's unaudited condensed interim consolidated financial statements.
Impact to Condensed Interim Consolidated Statements of Loss and Comprehensive Loss
|
As previously
|
|
|
Three months ended December 31, 2017
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Lease payments and exploration
|
$2,168,676
|
$42,387
|
$2,211,063
|
Total operating expenses and loss from operations
|
$(3,467,459)
|
$(42,387)
|
$(3,509,846)
|
Loss before income tax and net loss and comprehensive loss for the period
|
$(2,991,909)
|
$(42,387)
|
$(3,034,296)
|
Net loss per common share - basic and fully diluted (*)
|
$(1.10)
|
$(0.02)
|
$(1.12)
|
(*) Adjusted for 10-to-1 share consolidation on May 23, 2019.
|
As previously
|
|
|
Six months ended December 31, 2017
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Lease payments and exploration
|
$2,174,892
|
$42,387
|
$2,217,279
|
Total operating expenses and loss from operations
|
$(3,875,739)
|
$(42,387)
|
$(3,918,126)
|
Loss before income tax and net loss and comprehensive loss for the period
|
$(3,394,196)
|
$(42,387)
|
$(3,436,583)
|
Net loss per common share - basic and fully diluted (*)
|
$(1.30)
|
$(0.02)
|
$(1.32)
|
(*) Adjusted for 10-to-1 share consolidation on May 23, 2019.
|
As previously
|
|
|
Three months ended March 31, 2018
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Lease payments and exploration
|
$674,554
|
$151,437
|
$825,991
|
Loss from operations
|
$(1,618,052)
|
$(151,437)
|
$(1,769,489)
|
Loss before income tax and net loss and comprehensive loss for the period
|
$(1,583,056)
|
$(151,437)
|
$(1,734,493)
|
Net income (loss) per common share - basic and fully diluted (*)
|
$(0.48)
|
$(0.05)
|
$(0.53)
|
(*) Adjusted for 10-to-1 share consolidation on May 23, 2019.
37
Bunker Hill Mining Corp. (Formerly Liberty Silver Corp.)
Amended and Restated
Notes to Consolidated Financial Statements
Years Ended June 30, 2019 and 2018
(Expressed in United States Dollars)
14.
Quarterly financial data (unaudited) (continued)
|
As previously
|
|
|
Nine months ended March 31, 2018
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Lease payments and exploration
|
$2,849,446
|
$193,824
|
$3,043,270
|
Loss from operations
|
$(5,493,791)
|
$(193,824)
|
$(5,687,615)
|
Loss before income tax and net loss and comprehensive loss
for the period
|
$(4,977,252)
|
$(193,824)
|
$(5,171,076)
|
Net loss per common share - basic and fully diluted (*)
|
$(1.76)
|
$(0.07)
|
$(1.83)
|
(*) Adjusted for 10-to-1 share consolidation on May 23, 2019.
|
As previously
|
|
|
Three months ended September 30, 2018
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Exploration
|
$810,265
|
$216,622
|
$1,026,887
|
Total operating expense and loss from operations
|
$(1,611,333)
|
$(216,622)
|
$(1,827,955)
|
Loss before income tax and net loss and comprehensive loss
for the period
|
$(636,490)
|
$(216,622)
|
$(853,112)
|
Net loss per common share - basic and fully diluted (*)
|
$(0.19)
|
$(0.06)
|
$(0.25)
|
(*) Adjusted for 10-to-1 share consolidation on May 23, 2019.
|
As previously
|
|
|
Three months ended December 31, 2018
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Exploration
|
$3,003,911
|
$184,947
|
$3,188,858
|
Total operating expense and loss from operations
|
$(3,393,071)
|
$(184,947)
|
$(3,578,018)
|
Loss before income tax and net loss and comprehensive loss
for the period
|
$(3,290,293)
|
$(184,947)
|
$(3,475,240)
|
Net loss per common share - basic and fully diluted (*)
|
$(0.88)
|
$(0.05)
|
$(0.93)
|
(*) Adjusted for 10-to-1 share consolidation on May 23, 2019.
|
As previously
|
|
|
Six months ended December 31, 2018
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Exploration
|
$3,814,176
|
$401,569
|
$4,215,745
|
Total operating expense and loss from operations
|
$(5,004,404)
|
$(401,569)
|
$(5,405,973)
|
Loss before income tax and net loss and comprehensive loss
for the period
|
$(3,926,783)
|
$(401,569)
|
$(4,328,352)
|
Net loss per common share - basic and fully diluted (*)
|
$(1.10)
|
$(0.11)
|
$(1.21)
|
(*) Adjusted for 10-to-1 share consolidation on May 23, 2019.
38
Bunker Hill Mining Corp. (Formerly Liberty Silver Corp.)
Amended and Restated
Notes to Consolidated Financial Statements
Years Ended June 30, 2019 and 2018
(Expressed in United States Dollars)
14.
Quarterly financial data (unaudited) (continued)
|
As previously
|
|
|
Three months ended March 31, 2019
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Exploration
|
$999,602
|
$151,018
|
$1,150,620
|
Total operating expense and loss from operations
|
$(1,239,839)
|
$(151,018)
|
$(1,390,857)
|
Loss before income tax and net loss and comprehensive loss for the period
|
$(1,826,405)
|
$(151,018)
|
$(1,977,423)
|
Net loss per common share - basic and fully diluted (*)
|
$(0.44)
|
$(0.04)
|
$(0.48)
|
(*) Adjusted for 10-to-1 share consolidation on May 23, 2019.
|
As previously
|
|
|
Nine months ended March 31, 2019
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Exploration
|
$4,813,778
|
$552,587
|
$5,366,365
|
Total operating expense and loss from operations
|
$(6,244,243)
|
$(552,587)
|
$(6,796,830)
|
Loss before income tax and net loss and comprehensive loss for the period
|
$(5,753,188)
|
$(552,587)
|
$(6,305,775)
|
Net loss per common share - basic and fully diluted (*)
|
$(1.53)
|
$(0.15)
|
$(1.68)
|
(*) Adjusted for 10-to-1 share consolidation on May 23, 2019.
Impact to Condensed Interim Consolidated Balance Sheets
|
As previously
|
|
|
As at December 31, 2017
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Accounts payable
|
$213,436
|
$42,387
|
$255,823
|
Total current liabilities
|
$822,569
|
$42,387
|
$864,956
|
Total liabilities
|
$3,626,582
|
$42,387
|
$3,668,969
|
Deficit accumulated during exploration stage
|
$(21,837,898)
|
$(42,387)
|
$(21,880,285)
|
Total shareholders' equity
|
$1,353,359
|
$(42,387)
|
$1,310,972
|
|
As previously
|
|
|
As at March 31, 2018
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Accounts payable
|
$65,108
|
$193,824
|
$258,932
|
Total current liabilities
|
$228,435
|
$193,824
|
$422,259
|
Total liabilities
|
$3,004,653
|
$193,824
|
$3,198,477
|
Deficit accumulated during exploration stage
|
$(23,420,954)
|
$(193,824)
|
$(23,614,778)
|
Total shareholders' deficiency
|
$(229,697)
|
$(193,824)
|
$(423,521)
|
39
Bunker Hill Mining Corp. (Formerly Liberty Silver Corp.)
Amended and Restated
Notes to Consolidated Financial Statements
Years Ended June 30, 2019 and 2018
(Expressed in United States Dollars)
14.
Quarterly financial data (unaudited) (continued)
|
As previously
|
|
|
As at September 30, 2018
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Accounts payable
|
$237,781
|
$763,354
|
$1,001,135
|
Total current liabilities
|
$1,170,752
|
$763,354
|
$1,934,106
|
Total liabilities
|
$1,430,374
|
$763,354
|
$2,193,728
|
Deficit accumulated during exploration stage
|
$(24,250,066)
|
$(763,354)
|
$(25,013,420)
|
Total shareholders' equity (deficiency)
|
$(641,462)
|
$(763,354)
|
$(1,404,816)
|
|
As previously
|
|
|
As at December 31, 2018
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Accounts payable
|
$975,401
|
$948,301
|
$1,923,702
|
Total current liabilities
|
$3,975,689
|
$948,301
|
$4,923,990
|
Total liabilities
|
$4,101,195
|
$948,301
|
$5,049,496
|
Deficit accumulated during exploration stage
|
$(27,540,359)
|
$(948,301)
|
$(28,488,660)
|
Total shareholders' deficiency
|
$(3,572,758)
|
$(948,301)
|
$(4,521,059)
|
|
As previously
|
|
|
As at March 31, 2019
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Accounts payable
|
$1,785,489
|
$1,099,319
|
$2,884,808
|
Total current liabilities
|
$5,618,921
|
$1,099,319
|
$6,718,240
|
Total liabilities
|
$5,744,427
|
$1,099,319
|
$6,843,746
|
Deficit accumulated during exploration stage
|
$(29,366,764)
|
$(1,099,319)
|
$(30,466,083)
|
Total shareholders' deficiency
|
$(5,399,163)
|
$(1,099,319)
|
$(6,498,482)
|
Impact to Condensed Interim Consolidated Statements of Cash Flows
|
As previously
|
|
|
Six months ended December 31, 2017
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Net loss for the period
|
$(3,394,196)
|
$(42,387)
|
$(3,436,583)
|
Changes in operating assets and liabilities:
|
|
|
|
Accounts payable
|
$(48,489)
|
$42,387
|
$(6,102)
|
|
As previously
|
|
|
Nine months ended March 31, 2018
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Net loss for the period
|
$(4,977,252)
|
$(193,824)
|
$(5,171,076)
|
Changes in operating assets and liabilities:
|
|
|
|
Accounts payable
|
$(196,817)
|
$193,824
|
$(2,993)
|
40
Bunker Hill Mining Corp. (Formerly Liberty Silver Corp.)
Amended and Restated
Notes to Consolidated Financial Statements
Years Ended June 30, 2019 and 2018
(Expressed in United States Dollars)
14.
Quarterly financial data (unaudited) (continued)
|
As previously
|
|
|
Three months ended September 30, 2018
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Net loss for the period
|
$(636,490)
|
$(216,622)
|
$(853,112)
|
Changes in operating assets and liabilities:
|
|
|
|
Accounts payable
|
$12,597
|
$216,622
|
$229,219
|
|
As previously
|
|
|
Six months ended December 31, 2018
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Net loss for the period
|
$(3,926,783)
|
$(401,569)
|
$(4,328,352)
|
Changes in operating assets and liabilities:
|
|
|
|
Accounts payable
|
$770,563
|
$401,569
|
$1,172,132
|
|
As previously
|
|
|
Nine months ended March 31, 2019
|
reported
|
Adjustment
|
As restated
|
|
|
|
|
Net loss for the period
|
$(5,753,188)
|
$(552,587)
|
$(6,305,775)
|
Changes in operating assets and liabilities:
|
|
|
|
Accounts payable
|
$1,581,235
|
$552,587
|
$
2,133,822
|
41
ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Effective September 2, 2014, the Company appointed the firm of MNP, LLP, Chartered Professional Accountants, as the Company’s principal independent accountant to audit the Company’s financial statements. The Company has had no disagreements with its accountants, that would require disclosure pursuant to Item 304 of Regulation S-K.
ITEM 9A. CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a company's controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to principal executive and principal financial officers to allow timely decisions regarding disclosure.
As of the end of the period covered by this report, and the restatement of previously filed financial statements, the Company made an evaluation of the effectiveness of the design and operation of the disclosure controls and procedures over financial reporting for the timely alert to material information required to be included in the Company’s periodic SEC reports and of ensuring that such information is recorded, processed, summarized and reported within the time periods specified. This evaluation resulted in the identification of significant deficiencies that led to the restatement of its previously filed financial statements. Based on the context in which the individual deficiencies occurred and the resulting restatement of its previously filed financial statements, management has concluded that these significant deficiencies, in combination, represent a material weakness. The Company’s Chief Executive Officer and Chief Financial Officer also concluded that updates to the disclosure controls and procedures should be made to improve the effectiveness of the controls and procedures to provide reasonable assurance of the assurance of these objectives.
Internal Control Over Financial Reporting
The management of the Company is responsible for the preparation of the financial statements and related financial information appearing in this Annual Report on Form 10-K. The financial statements and notes have been prepared in conformity with accounting principles generally accepted in the United States of America. The management of the Company also is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. A company's internal control over financial reporting is defined as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.
Management, including the Chief Executive Officer and Chief Financial Officer, does not expect that the Company's disclosure controls and internal controls will prevent all error and all fraud. Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable, not absolute, assurance that the objectives of the control system are met and may not prevent or detect misstatements. Further, over time, control may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving
42
its stated goals under all potential future conditions.
With the participation of the Chief Executive Officer and Chief Financial Officer, the Company’s management evaluated the effectiveness of the Company's internal control over financial reporting as of June 30, 2019 to ensure that information required to be disclosed by the Company in the reports filed or submitted by the Company under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities Exchange Commission’s rules and forms, including to ensure that information required to be disclosed by the Company in the reports filed or submitted by the Company under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that significant deficiencies exist over the Company’s internal control over financial reporting that led to the restatement of its previously filed financial statements, as follows:
The Company does not have an ideal amount of segregation of duties within accounting functions, which is a basic internal control. Due to the Company’s size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions are performed by separate individuals. Based on the current magnitude of the Company’s operations, it is impractical to employ sufficient staff to fully address the separation of duties issue. As the Company’s business plan is implemented and additional staff is added, including a new Chief Financial Officer, management will be able to address this identified weakness.
On December 1, 2017, a Consent Decree with the Company and the United States Environmental Protection Agency (“EPA”) was put in place. From December 1, 2017, the Company is to pay EPA semi-annual payments for the treatment of water discharged from the Bunker Hill Mine. In addition, annually, EPA is to send written notification to Bunker to reconcile costs paid with actual costs incurred. As part of this reconciliation process, the Consent Decree has dispute resolution procedures. As a result of these dispute resolution procedures, both parties have the right to reconcile and dispute the calculation of the actual costs incurred and can informally resolve any disagreements. The Company received the annual invoices from the EPA for the period from December 1, 2017 to December 31, 2019 and having requested and subsequently received supporting detail from the EPA began, in late September 2020, the process of reconciling and reviewing these complete invoices. Following this examination, the Company, supported by its technical advisors, is to start a formal process to dispute these invoices. The Company’s current management team is the first to receive a complete invoice from the EPA and will be the first to start the process of dispute and cost recovery. However, the Company did not address accounting for these invoices in a timely manner.
As a result, in November 2020, it was determined that the Company had under accrued for invoices issued by the EPA for excess water treatment costs relating to years ended June 30, 2018, 2019 and 2020 and interest payable on the outstanding EPA balance, which resulted in an understatement of liabilities for 2018 and 2019, an understatement of opening deficit for 2019 and closing deficit for 2018 and 2019, and an understatement of exploration expenses and net losses for 2018 and 2019.
Based on the context in which the individual deficiencies occurred and the resulting restatement of its previously filed financial statements, management has concluded that these significant deficiencies, in combination, represent a material weakness.
Mitigating these significant deficiencies, however, is that, commencing in 2020, the Company has a new management team and new members of the Board of Directors, including a new Chair of the Audit Committee, which are focused on transitioning the Company to a new management approach, modern thinking, new systems and practices, modern approaches to engagement and a system of internal controls and procedures. Management’s daily involvement in the business provides it with more than adequate knowledge to identify the areas of financial reporting risks and related controls. In addition, the procedures followed are integrated within the daily responsibilities of the Company’s employees, allowing management to rely on their own intimate knowledge and supervision of controls. As the Company’s business plan is implemented and additional staff is added, including a new Chief Financial Officer, management will be able to address these significant deficiencies.
Management also plans to engage a third-party firm to assist in developing Disclosure Controls and Procedures and Internal Controls Over Financial Reporting. The Company intends to remedy these significant deficiencies dependent on having the financial resources available to complete them.
This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report is not subject to attestation by the Company's registered public accounting firm.
ITEM 9B. OTHER INFORMATION.
None.
43
PART III
ITEM 10.DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.
Directors and Executive Officers
The following table sets forth the directors, executive officers, their ages, and all offices and positions held within the Company as of June 30, 2019. Directors are elected for a period of one year and thereafter serve until their successor is duly elected by the stockholders and qualified. Officers and other employees serve at the will of the board of directors.
Name
|
Age
|
Position with the Company
|
Since
|
Dickson Hall
|
67
|
Director
|
January 5, 2018
|
John Ryan
|
56
|
Director and CEO
|
October 6, 2016
|
Wayne Parsons
|
50
|
Director and CFO
|
May 22, 2019
|
Jian Liu
|
|
Director
|
November 9, 2018
|
Hugh Aird
|
|
Director
|
July 19, 2019
|
Biographical Information
Dickson Hall. Mr. Hall currently serves as a Director. Dickson Hall is a partner in Valuestone Advisory Limited, manager of Valuestone Global Resources Fund 1, a mining fund associated with Jiangxi Copper Corporation and China Construction Bank International. Mr. Hall has more than 40 years’ experience in the resource field, much of it in Asia. From 2005 to 2016 he directed corporate development efforts in Asia for Hunter Dickinson Inc. raising capital, establishing strategic partnerships and broadening the Asian shareholder base for HDI public companies. He was Senior Vice President of Continental Minerals Corporation which developed the Xietongmen copper-gold project in Tibet, China before selling to China’s Jinchuan Group in 2011 for $446 million. Mr. Hall is also a director and Investment Committee member of Can-China Global Resources Fund, an energy and mining fund backed by the Export-Import Bank of China. He is or has been a director of various resource and non-resource companies.
Mr. Hall is a graduate of the University of British Columbia (BA, MA) and has diplomas from Beijing University and Beijing Language Institute.
John Ryan is a Director and Interim CEO of the Company. Mr. Ryan has been an active entrepreneur in the resources sector for over twenty years. He has extensive experience in the natural resource sector having served as an officer and/or director of companies such as Cadence Resources, High Plains Uranium, U.S. Silver Corporation (now Americas Silver Corporation), and Western Goldfields, Inc. Mr. Ryan has extensive executive experience, and provides the Board of Directors with valuable insights regarding mining operations as well as public company expertise. Mr. Ryan obtained a B.S. in Mining Engineering from the University of Idaho in 1985 and a Juris Doctor from Boston College in 1992.
Hugh Aird is a highly respected investment banker with a 35-year career that included more than 150 completed debt and equity financings and several merger and acquisition assignments with some of Canada’s top investment firms. After attending Harvard University, Mr. Aird went on to work as vice-president of Dominion Securities from 1978 to 1985. Subsequently Mr. Aird founded and served as CEO of Great Lakes Capital Markets before becoming Chairman of Trilon Financial Corp. Mr. Aird served as Vice-Chairman of Midland Walwyn (later Merrill Lynch Canada) from 1995 to 2000, after which he left to take over as President and CEO of Berenson Minella (Canada) in 2001.Mr. Aird also held several public and private board positions from 1990 to the present day, including among others Trilon Financial, Royal LePage Real Estate, Edelman Canada, Delta 9 Cannabis Inc., Envoy Capital Group Inc., Invesprint Corporation, and currently acts as Chair at Balnagowan Investments Canada.
Family Relationships
There are no family relationships between any of the current directors or officers of the Company.
44
Involvement in Certain Legal Proceedings
Neither the Company nor its property is the subject of any other pending legal proceedings, and no other such proceeding is known to be contemplated by any governmental authority. The Company is not aware of any other legal proceedings in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of the Company’s voting securities, or any associate of any such director, officer, affiliate or security holder of the Company, is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries.
Directorships
None of the Company’s executive officers or directors is a director of any company with a class of equity securities registered pursuant to Section 12 of the Securities exchange Act of 1934 (the “Exchange Act”) or subject to the requirements of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.
Code of Ethics
The Company’s board of directors has adopted a code of ethics that will apply to its principal executive officer, principal financial officer and principal accounting officer or controller and to persons performing similar functions. The code of ethics is designed to deter wrongdoing and to promote honest and ethical conduct, full, fair, accurate, timely and understandable disclosure, compliance with applicable laws, rules and regulations, prompt internal reporting of violations of the code and accountability for adherence to the code. The Company will provide a copy of its code of ethics, without charge, to any person upon receipt of written request for such, delivered to our corporate headquarters. All such requests should be sent care of Bunker Hill Mining Corp., Attn: Corporate Secretary, 401 Bay Street, Suite 2702, Toronto, Ontario, Canada, M5H 2Y4.
ITEM 11. EXECUTIVE COMPENSATION.
Summary Compensation Table
The following table sets forth, for the years indicated, all compensation paid, distributed or accrued for services, including salary and bonus amounts, rendered in all capacities by the Company’s principal executive officer, chief financial officer and all other executive officers; the information contained below represents compensation paid, distributed or accrued to the Company’s officers for their work related to the Company.
Name and
Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards (1)
($)
|
Non-Equity
Incentive
Plan
Compensation
(#)
|
Non-qualified
Deferred
Compensation
Earnings
($)
|
All other
Compensation
($)
|
Total
($)
|
Manish Kshatriya (2) (3)
CEO and CFO
|
2019
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
2018
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
2017
|
114,000
|
--
|
--
|
--
|
--
|
--
|
118,750
|
232,750
|
|
|
|
|
|
|
|
|
|
|
Howard Crosby (4)
CEO and CFO
|
2019
|
20,000
|
--
|
--
|
--
|
--
|
--
|
--
|
20,000
|
2018
|
60,000
|
--
|
--
|
--
|
--
|
--
|
--
|
60,000
|
2017
|
5,000
|
--
|
--
|
217,274
|
--
|
--
|
--
|
222,274
|
|
|
|
|
|
|
|
|
|
|
Bruce Reid (5)
CEO
|
2019
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
2018
|
165,000
|
505,000
|
--
|
--
|
--
|
--
|
--
|
670,000
|
2017
|
--
|
--
|
--
|
271,593
|
--
|
--
|
--
|
271,593
|
|
|
|
|
|
|
|
|
|
|
Julio DiGirolamo (6)
CFO
|
2019
|
70,150
|
--
|
--
|
--
|
--
|
--
|
--
|
70,150
|
2018
|
130,000
|
--
|
--
|
22,843
|
--
|
--
|
--
|
157,843
|
2017
|
--
|
--
|
--
|
86,710
|
--
|
--
|
--
|
86,710
|
|
|
|
|
|
|
|
|
|
|
Dan Hrushewsky (7)
Executive VP
|
2019
|
39,264
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
2018
|
112,800
|
--
|
--
|
160,992
|
--
|
--
|
--
|
273,722
|
2017
|
--
|
--
|
--
|
86,710
|
--
|
--
|
--
|
86,710
|
|
|
|
|
|
|
|
|
|
|
John Ryan
CEO
|
2019
|
50,000
|
--
|
--
|
--
|
--
|
--
|
--
|
50,000
|
2018
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
2017
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
|
|
|
|
|
|
|
|
|
|
Wayne Parsons
CFO
|
2019
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
2018
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
2017
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
45
(1)Option awards reflect the aggregate grant date fair value computed using the Black-Scholes model; for a discussion please refer to Note 6 in the Notes to the Financial Statements herein.
(2)Manish Kshatriya was the Company’s CEO and CFO to October 6, 2016. He received a salary of $26,500 for the months of July and August 2016. From November 2016 to May 2017 Mr. Kshatriya provided consulting services to the Company, though not officially CFO any longer, for which he was paid $87,500. Included in other compensation was a $100,000 settlement payment (see note 4 below) as well as $18,750 related to an option exercise paid on his behalf by Mr. Bruce Reid.
(3)Due to the lack of financial resources available to the Company, the base salary, and any associated benefits have been accrued but not paid since January 1, 2016. As at June 30, 2016, the unpaid base salary obligation is $75,000, and effective the date of filing of this Form 10-K, the unpaid salary obligation has increased to approximately $112,500. This was settled on March 31, 2017 by paying Mr. Kshatriya $100,000 included above in other compensation.
(4)Howard Crosby was the Company’s CEO and CFO from October 6, 2016 to April 18, 2017, after which he became Executive Vice President until November 2018.
(5)Bruce Reid was the Company’s CEO from April 18, 2017 to October 12, 2018.
(6)Julio DiGirolamo was the Company’s CFO from April 18, 2017 to May 22, 2019.
(7)Dan Hrushewsky was the Company’s Executive Vice President from December 1, 2017 to October 15, 2018.
(8)John Ryan became the Company’s CEO on October 12, 2018.
(9)Wayne Parsons became the Company’s CFO on May 22, 2019.
Grant of Plan Based Awards
In December 2017, 10,000 options were granted to a consultant with a five-year life and an exercise price of CDN$16.50. these options vested immediately.
On June 19, 2018 The Company granted incentive stock options to purchase up to an aggregate of 48,000 common shares, exercisable for 5 years at a strike price of C$8.50 and vested immediately.
In September 2018, 43,750 fully-vested stock options were issued to a consultant with a five-year life and an exercise price of $8.00 per share.
Outstanding Stock Options Awards At Fiscal Year End
The following table provides a summary of equity awards outstanding at June 30, 2018, for each of the named executive officers.
|
Option Awards
_____________________________________________________
|
Stock Awards
_______________________________________
|
Name
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
|
Option
Exercise
Price
($) (1)
|
Option
Expiration
Date
|
Number
of
Shares or
Units of
Stock
That
Have Not
Vested
(#)
|
Market
Value of
Shares or
Units of
Stock
That
Have Not
Vested
($)
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($)
|
John Ryan
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
Wayne Parsons
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
Long-Term Incentive Plans
The Company does not have any long-term incentive plans, pension plans, or similar compensatory plans for its directors or executive officers.
Change of Control Agreements
There are no change of control agreements in place at this time.
Employment Agreements
There are no employment agreements in place at this time.
46
Equity Compensation Plan Information
On April 19, 2011, subject to shareholder approval, which was obtained at the Company’s annual and special meetings of shareholders held on December 21, 2012, the Board of Directors of the Company approved the adoption of the Liberty Silver Corp. Incentive Share Plan (the “Plan”) under which common shares of the Company’s common stock have been reserved for purposes of possible future issuance of incentive stock options, non-qualified stock options, and stock grants to employees, directors and certain key individuals. Under the Plan, the maximum number of common shares reserved for issuance shall not exceed 10% of the common shares of the Company outstanding from time to time. The purpose of the Plan shall be to advance the interests of the Company by encouraging equity participation in the Company through the acquisition of common shares of the Company. In order to maintain flexibility in the award of stock benefits, the Plan constitutes a single plan, but is composed of two parts. The first part is the Share Option Plan which provides grants of both incentive stock options under Section 422A of the Internal Revenue Code of 1986, as amended, and nonqualified stock options. The second part is the Share Bonus Plan which provides grants of shares of Company common stock. The following is intended to be a summary of some of the material terms of the Plan, and is subject to, and qualified in its entirety, by the full text of the Plan.
The Plan
The Plan is a rolling plan, under which the maximum number of Shares reserved for issuance under the Share Option Plan, together with the Share Bonus Plan, shall not exceed 10% of the Shares outstanding (on a non-diluted basis) at any given time. The purpose of the Plan is to advance the interests of the Corporation by (i) providing certain employees, senior officers, directors, or consultants of the Corporation (collectively, the “Optionees”) with additional performance incentives; (ii) encouraging Share ownership by the Optionees; (iii) increasing the proprietary interest of the Optionees in the success of the Corporation; (iv) encouraging the Optionees to remain with the Corporation; and (v) attracting new employees, officers, directors and consultants to the Corporation.
Share Option Plan
The following information is intended to be a brief description and summary of the material features of the Share Option Plan:
(a)The aggregate maximum number of Shares available for issuance from treasury under the Share Option Plan, together with the Share Bonus Plan, at any given time is 10% of the outstanding Shares as at the date of grant of an option under the Plan, subject to adjustment or increase of such number pursuant to the terms of the Plan. Any Shares subject to an option which has been granted under the Share Option Plan and which has been surrendered, terminated, or expired without being exercised, in whole or in part, will again be available under the Plan.
(b)The exercise price of an option shall be determined by the Board at the time each option is granted, provided that such price shall not be less than the closing price of the Shares on the principal stock exchange(s) upon which the Shares are listed and posted for trading on the trading day immediately preceding the day of the grant of the option.
(c)Options granted to persons conducting Investor Relations Activities (as defined in the Plan) for the Corporation must vest in stages over twelve months with no more than ¼ of the options vesting in any three-month period.
(d)In the event an Optionee ceases to be eligible for the grant of options under the Share Option Plan, options previously granted to such person will cease to be exercisable within a period of 12 months following the date such person ceases to be eligible under the Plan.
(e)In the event that a take-over bid or issuer bid is made for all or any of the issued and outstanding Shares, then the Board may, by resolution, permit all options outstanding to become immediately exercisable in order to permit Shares issuable under such options to be tendered to such bid.
Share Bonus Plan
The following information is intended to be a brief description and summary of the material features of the Share Bonus Plan:
(a)Participants in the Share Bonus Plan shall be directors, officers, employees, or consultants of the Corporation who, by the nature of their positions are, in the opinion of the Board and upon the recommendation of the President of the Corporation, in a position to contribute to the success of the Corporation.
(b)The determination regarding the amount of bonus Shares issued pursuant to the Share Bonus Plan will take into consideration the Optionee’s present and potential contribution to the success of the Corporation and shall be determined from time to time by the Board. However, in no event shall the number of bonus Shares pursuant to the Share Bonus Plan, together with the Share Option Plan, exceed 10% of the issued and outstanding Shares in the aggregate.
47
General Features of the Plan
In addition to the above summaries of the Share Option Plan and the Share Bonus Plan, the following is intended to be a brief description and summary of some of the general features of the Plan:
(a)The aggregate number of Shares reserved pursuant to the Plan for issuance to insiders of the Corporation within any twelve-month period, under all security-based compensation arrangements of the Corporation, shall not exceed 10% of the total number of Shares then outstanding.
(b)The aggregate number of Share reserved for issuance pursuant to the Plan to any one person in any twelve-month period shall not exceed 5% of the total number of Shares outstanding from time to time, unless disinterested shareholder approval is obtained pursuant to the policies of the Corporation’s principal stock exchange(s) upon which the Shares are listed and posted for trading or any stock exchange or regulatory authority having jurisdiction over the securities of the Corporation. No more than 2% of the outstanding Shares may be granted to any one Consultant (as defined in the Plan) in any twelve-month period, or to persons conducting Investor Relations Activities (as defined in the Plan) in any twelve-month period.
Director Compensation
The general policy of the Board is that compensation for independent directors should be a fair mix between cash and equity-based compensation. Additionally, the Company reimburses directors for reasonable expenses incurred during the course of their performance. There are no long-term incentive or medical reimbursement plans. The Company does not pay directors, who are part of management, for Board service in addition to their regular employee compensation. The Board determines the amount of director compensation. The board may appoint a compensation committee to take on this role. The following table provides a summary of compensation paid to directors during the fiscal year ended June 30, 2019.
Director
|
|
Fees
Earned
or Paid
in Cash
($)
|
|
Stock
Awards
($)
|
Option
Awards
($) (1)
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
Nonqualified
Deferred
Compensation
Earnings
|
All Other
Compensation
($)
|
Total
($)
|
Dickson Hall
|
|
--
|
|
--
|
--
|
|
--
|
--
|
--
|
--
|
John Ryan
|
|
50,000
|
|
--
|
--
|
|
---
|
---
|
--
|
50,000
|
Wayne Parsons
|
|
--
|
|
--
|
--
|
|
--
|
--
|
--
|
--
|
Jian Liu
|
|
--
|
|
--
|
--
|
|
--
|
--
|
--
|
--
|
Hugh Aird
|
|
--
|
|
--
|
--
|
|
--
|
--
|
--
|
--
|
(1)
|
Option awards reflect the aggregate grant date fair value computed using the Black-Scholes model; for a discussion please refer to Note 7 in the Notes to the Financial Statements herein.
|
48
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Equity Compensation Plan
The following table gives information about the Company’s Equity Compensation Plan as of June 30, 2019:
|
|
Number of securities to be issued upon exercise of outstanding options, warrants
|
|
Weighted average exercise price of outstanding options, warrants
|
|
Number of securities remaining available for future issuances under equity compensation plans, excluding securities reflected in column (a)
|
Plan category
|
|
|
|
|
|
|
|
|
(a)
|
|
(b)
|
|
(c)
|
Equity compensation plans approved by security holders
|
|
287,100
|
|
$7.50
|
|
1,294,040
|
|
|
|
|
|
|
|
Equity compensation plans not approved by security holders
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
Total
|
|
287,100
|
|
$7.50
|
|
1,294,040
|
Security Ownership of Certain Beneficial Owners
The following table sets forth as of June 30, 2019, the name and the number of shares of the Company’s common stock, par value $0.01 per share, held of record or beneficially by each person who held of record, or was known by the Company to own beneficially, more than 5% of the issued and outstanding shares of the Company’s common stock, and the name and shareholdings of each director and significant employee, and of all executive officers and directors and significant employees as a group.
Title and Class
|
Name and Address
of Beneficial Owner
|
Amount and Nature
of Beneficial Ownership
|
Percent of class
|
Common
|
Hummingbird Resources PLC
26 Mount Row
London, W1K 3SQ, United Kingdom
|
Common Shares 2,660,000
|
16.82%
|
Common
|
Dickson Hall (1)
1890 Waterloo St.
Vancouver, BC V6R 3G4
Canada
|
Common Shares NIL
|
0.00%
|
Common
|
Jian Liu (1)
|
Common Shares NIL
|
0.00%
|
Common
|
Hugh Aird (1)
|
Common Shares NIL
|
0.00%
|
Common
|
Wayne Parsons (1)
|
Common Shares 100,000
|
0.63%
|
Common
|
John Ryan (1)
888C – 8th Avenue, #503
New York, NY 10019 USA
|
Option Common Shares 100,000 (2)
|
0.63%
|
Common
|
Robert Genovese
BG Capital Croup Ltd.
1250 South Pine Island Rd., Suite 500
Plantation, Florida 33324 USA
|
Common Shares 930,842 (4)
|
5.89%
|
Common
|
Sebastian Marr
|
Common Shares 8,000,000 (2)
|
50.60%
|
(1) Director, Officer or Significant Employee of Company
(2) Included in this number are 100,000 common shares owned by Mr. Robert Genovese which entitle the holder to exercise the option to acquire common shares from Mr. Robert Genovese in conjunction with the occurrence of a Change of Control Event or after May 1, 2023 without the occurrence of a
49
Change of Control Event. An escrow agreement has been signed whereby these shares may not be sold until the occurrence of a Change of Control Event or after May 1, 2023 without the occurrence of a Change of Control Event. Mr. Bruce Reid has voting control over these shares.
(3) Included in this number are (a) 200,000 common shares owned by Mr. Robert Genovese which entitle the holder to exercise the option to acquire common shares in conjunction with the occurrence of a Change of Control Event or after May 1, 2023 without the occurrence of a Change of Control Event and (b) direct ownership of 1,060,712 common shares. An escrow agreement has been signed whereby these shares may not be sold until the occurrence of a Change of Control Event or after May 1, 2023 without the occurrence of a Change of Control Event. Mr. Bruce Reid has voting control over these shares.
(4) Robert Genovese, holds these shares directly or indirectly though other entities. An escrow agreement has been signed whereby these shares may not be sold until the occurrence of a Change of Control Event or after May 1, 2023 without the occurrence of a Change of Control Event. Mr. Genovese beneficially owns a total of 1,330,842 common shares reduced by 400,000 common shares that have been optioned to Howard Crosby (100,000 option common shares, Bruce Reid (200,000 option common shares) and John Ryan (100,000 option common shares). Mr. Bruce Reid has voting control over these shares.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Certain Relationships and Related Transactions
There were no material transactions, or series of similar transactions, during the Company’s last fiscal year, or any currently proposed transactions, or series of similar transactions, to which the Company was or is to be a party, in which the amount involved exceeded the lesser of $120,000 or one percent of the average of the small business issuer’s total assets at year-end for the last three completed fiscal years and in which any director, executive officer or any security holder who is known to the Company to own of record or beneficially more than five percent of any class of the Company’s common stock, or any member of the immediate family of any of the foregoing persons, had an interest.
Director Independence
The Company’s common stock is currently traded on the Canadian Stock Exchange, under the symbol BNKR, and on the Grey Market in the United States, and as such, is not subject to the rules of any national securities exchange which requires that a majority of a listed company’s directors and specified committees of its board of directors meet independence standards prescribed by such rules. For the purpose of preparing the disclosures in this document with respect to director independence, the Company has used the definition of “independent director” within the meaning of National Instrument 52-110 – Audit Committees adopted by the Canadian Securities Administration and as set forth in the Marketplace Rules of the NASDAQ, which defines an “independent director” generally as being a person, other than an executive officer or employee of the company or any other individual having a relationship which, in the opinion of the company’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
Ms. Jennifer Boyle and Mr. Harold Shipes resigned as directors on September 19 and September 27, 2018, respectively. Messrs. John Ryan and, Dickson Hall are currently the only “independent” directors of the Company.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Audit Fees
Effective September 2, 2014, the Company appointed the firm of MNP, LLP, Chartered Professional Accountants, as the Company’s independent audit firm.
MNP, LLP, Chartered Professional Accountants, 50 Burnhamthorpe Road West, Mississauga, ON L5B 3C2, served as the Company’s independent registered public accounting firm for the years ended June 30, 2018 and 2017, and is expected to serve in that capacity for the ensuing year. Principal accounting fees for professional services rendered for the Company by MNP, LLP for the years ended June 30, 2019 and June 30, 2018 are summarized in the following table:
|
2019
|
|
2018
|
Audit
|
$
|
40,000
|
|
$30,000
|
Audit related
|
|
40,000
|
|
22,500
|
Tax
|
|
--
|
|
--
|
All other
|
|
--
|
|
--
|
Total
|
$
|
80,000
|
|
$52,500
|
Audit Related Fees
The aggregate fees billed by MNP, LLP for assurance and related services that were related to its review of the Company’s financial statements during the fiscal years ended June 30, 2019 and 2018 are $80,000 and $52,500, respectively.
50
Tax Fees
MNP, LLP did not bill the Company for tax compliance, advice and planning during the fiscal years ended June 30, 2019 and 2018.
All Other Fees
MNP, LLP did not bill the Company for any products and services other than the foregoing during the fiscal years ended June 30, 2019 and 2018.
Audit Committee’s Pre-approval Policies and Procedures
At the Company’s regularly scheduled and special meetings, the Board, or the Board-appointed audit committee, considers and pre-approves any audit and non-audit services to be performed by the Company’s independent registered public accounting firm. The audit committee has the authority to grant pre-approvals of non-audit services.
51
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
(a)(1)(2) Financial Statements and Financial Statement Schedule.
The financial statements and financial statement schedules identified in Item 8 are filed as part of this annual report.
(a)(3) Exhibits.
The exhibits required by this item are set forth on the Exhibit Index below.
3.1Articles of Incorporation (included as exhibit to Form S-1 filed with the Securities and Exchange Commission on April 1, 2008).
3.2Bylaws (included as exhibit to Form S-1 filed with the Securities and Exchange Commission on April 1, 2008).
3.3Articles of Amendment (included as exhibit to Form 8-K filed with the Securities and Exchange Commission on February 12, 2010).
3.3Amended Bylaws (included as exhibit to Form 8-K filed with the Securities and Exchange Commission on October 25, 2010).
3.4Amended and Restated Bylaws of Liberty Silver Corp., December 14, 2011 (included as exhibit to Form 8-K filed with the Securities and Exchange Commission on December 14, 2011).
3.5Amended and Restated Articles of Incorporation of Liberty Silver Corp, (included as exhibit to Form 8-K filed with the Securities and Exchange Commission on December 28, 2012)
3.6Amended and Restated Bylaws of Liberty Silver Corp., dated December 21, 2012. (included as exhibit to Form 8-K filed with the Securities and Exchange Commission on December 28, 2012)
3.7Certificate of Amendment to Articles of Incorporation for Nevada Profit Corporations, effective September 29, 2017 (included as an exhibit to the Form 8-K filed with the Securities and Exchange Commission on September 18, 2017).
10.1Mineral Property Purchase Agreement corporation (included as exhibit to Form S-1 filed with the Securities and Exchange Commission on April 1, 2008).
10.2Exploration Earn-In Agreement dated March 29, 2010, by and between Liberty Silver Corp, a Nevada corporation, and AuEx Ventures, Inc., a Nevada corporation (included as exhibit to Form S-1/A filed with the Securities and Exchange Commission on February 19, 2013).
10.3Purchase Agreement Hi Ho Silver Mining Claims dated October 15, 2012 (included as exhibit to Form S-1/A filed with the Securities and Exchange Commission on January 24, 2013).
10.4Registration Rights Agreement dated October 15, 2012 (included as exhibit to Form 8-K filed with the Securities and Exchange Commission on October 16, 2012).
10.5Memorandum of Exploration Earn-In Agreement, effective March 29, 2010 (included as exhibit to Form S-1/A filed with the Securities and Exchange Commission on January 24, 2013).
10.6Letter Agreement re Assignment of Exploration Earn-In Agreement, effective July 1, 2010 (included as exhibit to Form S-1/A filed with the Securities and Exchange Commission on January 24, 2013).
10.7Mining Lease with Option to Purchase, by and between Liberty Silver Corp. and Placer Mining Corporation, dated August 17, 2017 (included as exhibits to Form 8-K filed with the Securities and Exchange Commission on August 23, 2017).
10.8Standstill Agreement dated May 16, 2017 (included as an exhibit to Form 8-K filed with the Securities and Exchange Commission on May 25, 2017).
10.9First Amendment to the Amended and Restated Loan Agreement and Notice, dated January 20, 2017 (included as exhibits to the Form 8-K filed with the Securities and Exchange Commission on January 24, 2017).
31.1*Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2*Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1*Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2*Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101*SCH XBRL Schema Document *
101*INS XBRL Instance Document *
101*CAL XBRL Taxonomy Extension Calculation Linkbase Document*
101*LAB XBRL Taxonomy Extension Label Linkbase Document *
101*PRE XBRL Taxonomy Extension Presentation Linkbase Document *
101*DEF XBRL Taxonomy Extension Definition Linkbase Document*
* Filed Herewith
52
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
By: /s/ Wayne Parsons
Wayne Parsons, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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Date:
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December 4, 2020
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By:
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/s/ Sam Ash
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Name:
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Sam Ash
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Title:
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Chief Executive Officer, Principal Executive Officer, Director
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Date:
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December 4, 2020
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By:
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/s/ Wayne Parsons
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Name:
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Wayne Parsons
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Title:
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Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer
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Date:
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December 4, 2020
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By:
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/s/ Hugh Aird
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Name:
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Hugh Aird
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Title:
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Director
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Date:
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December 4, 2020
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By:
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/s/ Dickson Hall
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Name:
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Dickson Hall
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Title:
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Director
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53