Bunker Hill Mining Secures $10M Prepayment Facility; $1M Teck Draw

What Happened
Bunker Hill Mining Corp. (and its subsidiary Silver Valley Metals Corp.) entered a Prepayment Agreement with Ocean Partners UK Limited on August 20, 2026 to establish a concentrate prepayment facility of up to US$10.0 million. The facility allows one or more draws during a three-month availability period in minimum US$1.0M increments, with interest at 7.0% per annum plus the three‑month secured overnight financing rate (SOFR). Repayment is due the earlier of six months after the first draw or termination; after a three‑month grace period principal is scheduled as 20% in month 4, 20% in month 5 and 60% in month 6. The borrower may repay in cash or by delivering concentrates under the amended lead concentrate offtake agreement (originally with Teck and assigned to Ocean Partners). The Prepayment Agreement was filed as Exhibit 10.1 to the 8‑K.

Key Details

• Facility size: up to US$10.0 million from Ocean Partners; minimum draw US$1.0M; availability period = 3 months from first draw.
• Pricing & payments: interest = 7.0% p.a. + 3‑month SOFR, accrues daily, payable monthly; default interest = +3.0% p.a.; voluntary prepayment allowed with 5 days’ notice.
• Repayment mechanics: 3‑month grace period, then 20%/20%/60% installments in months 4–6; repayment via concentrates under the assigned Teck offtake agreement or cash; amounts repaid may not be reborrowed.
• Conditions & risks: funding requires corporate approvals and, before first draw, a public announcement of a merger agreement with Silver47 Exploration Corp.; numerous events of default (including change of control, sale of the mine, insolvency events, and public announcement that the merger has closed) permit Ocean Partners to demand immediate repayment.
• Separate draw: on August 20, 2026 the company also drew US$1.0M under its Teck standby prepayment facility, bringing total outstanding under that Teck facility to US$6.0M (facility capacity US$10.0M). Teck facility interest = 13.5% p.a. until June 30, 2027, then 15.0% p.a.; obligations are secured by a first‑ranking security interest.

Why It Matters
These transactions provide near‑term liquidity to support working capital and operations at the Bunker Hill Mine as the company advances toward commercial production. However, both facilities are short‑term and relatively expensive (notably high interest on the Teck draw and SOFR‑linked pricing on the Ocean Partners facility). The Ocean Partners facility ties repayment to concentrate deliveries under the assigned Teck offtake, which could affect future concentrate flows and cash receipts. Also note the funding and default provisions connected to the announced merger with Silver47 — the agreement requires a public announcement of a merger agreement before draw, while a public announcement that the merger has closed is an event of default — a timing and structuring detail investors should monitor.