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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): August 8, 2024
BUNKER
HILL MINING CORP.
(Exact
Name of Registrant as Specified in Charter)
Nevada |
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333-150028 |
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32-0196442 |
(State
or Other Jurisdiction |
|
(Commission |
|
(IRS
Employer |
of
Incorporation) |
|
File
Number) |
|
Identification
No.) |
1055
West Hastings Street, Suite 300, Vancouver, British Columbia, Canada V6E 2E9
(Address
of Principal Executive Offices) (Zip Code)
604-417-7952
(Registrant’s
Telephone Number, Including Area Code)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2. below):
☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e 4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
none |
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|
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01 |
Entry
Into a Material Definitive Agreement. |
Note
Purchase Agreement, Note, and Warrants
On
August 8, 2024, Bunker Hill Mining Corp. (the “Company”) and its subsidiary Silver Valley Metals Corp. (“Silver
Valley”) entered into a secured promissory note purchase agreement (the “Note Purchase Agreement”) with
Monetary Metals Bond III LLC (“Monetary Metals”), a Delaware limited liability company established by Monetary Metals
& Co., pursuant to which Monetary Metals agreed to purchase, and Silver Valley agreed to issue and sell to Monetary Metals, a secured
promissory note (the “Note”) in a private placement (the “Private Placement”). The first tranche
of the Private Placement closed on August 8, 2024.
Pursuant
to the Note Purchase Agreement, Silver Valley paid Monetary Metals an underwriting fee in the amount of US$410,551.
The
Note Purchase Agreement contains customary representations, warranties, and covenants, and indemnity provisions. The representations,
warranties and covenants contained in the Note Purchase Agreement were made solely for purposes of the Note Purchase Agreement, were
solely for the benefit of the parties to the Note Purchase Agreement and may be subject to standards of materiality applicable to the
contracting parties that differ from those applicable to security holders. Security holders should not rely on the representations, warranties,
and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company. Moreover, information
concerning the subject matter of the representations and warranties may change after the date of the Note Purchase Agreement, which subsequent
information may or may not be fully reflected in the Company’s public disclosures.
Pursuant
to the Note, Monetary Metals will loan to Silver Valley, in one or more tranches, up to an aggregate principal amount of U.S. dollars
equal to 1.2 million ounces of silver (the “Silver Loan”), of which US$16,422,039, being the amount of U.S. dollars
equal to, as of August 8, 2024, 609,805 ounces of silver, was loaned in the first tranche on August 8, 2024 (the “First Tranche”).
The Silver Loan is for a term of three years, is secured by a pledge of the Company’s equity interests in Silver Valley and by
all of the Company’s and Silver Valley’s properties and assets, and is repayable in cash or silver ounces. The Note bears
interest at a rate of 15% per annum, payable in cash or silver ounces on the last day of each quarterly interest period. The Silver Loan
remains subject to TSX Venture Exchange (the “TSX-V”) approval.
As
consideration for advancing the Silver Loan, the Company will issue to Monetary Metals, subject to prior TSX-V approval, non-transferable
bonus share purchase warrants (the “Warrants”) in one or more tranches. The number of Warrants issued in each tranche
will be equal to (a) in connection with the First Tranche, two times the number of ounces of silver advanced by Monetary Metals under
the First Tranche (the “Base Warrants”) and a bonus ratchet of (i) 2.5% of the Base Warrants if at least 500,000 and
up to 599,999 silver ounces are advanced, (ii) 5.0% of the Base Warrants if up at least 600,000 and up to 699,999 silver ounces are advanced,
(iii) 10.0% of the Base Warrants if at least 700,000 and up to 799,999 silver ounces are advanced, and (iv) 15.0% of the Base Warrants
if at least 800,000 silver ounces are advanced; and (b) in connection with any additional tranches, two times the number of ounces of
silver advanced under such tranche. In any event, the number of Warrants issuable to Monetary Metals is subject to a cap of 3,000,000
Warrants.
Each
Warrant will be exercisable into one share of Company common stock (the “Warrant Shares”) at the exercise price, in
Canadian dollars, that is set at the last closing price of the Company’s common stock prior to the date such Warrant is issued
(the “Exercise Price”). The Warrants will be exercisable until the earlier of (i) three years from their issuance
date and (ii) the maturity date of the Silver Loan, subject to acceleration in accordance with the policies of the TSX-V. The issuance
of the Warrant Shares is subject to the terms and conditions of the Warrants as well as the receipt of all regulatory approvals, including,
without limitation, the approval of the TSX-V.
In
connection with the First Tranche, the Company will, subject to TSXV approval, issue to Monetary Metals 1,280,591 Warrants (the “Tranche
1 Warrants”). The Tranche 1 Warrants will be exercisable until August 8, 2027 at an Exercise Price of C$0.16.
All
securities issued in the Private Placement are restricted securities under U.S. securities laws. The Company relied on the exemption
from registration under Section 4(a)(2) of the U.S. Securities Act of 1933, as amended (the “Securities Act”), or
Rule 506 of Regulation D, and in reliance on similar exemptions under applicable state laws, for purposes of the Private Placement. This
Current Report on Form 8-K is not, and shall not be deemed to be, an offer to sell or the solicitation of an offer to buy any of the
securities.
The
foregoing descriptions of the Note Purchase Agreement, the Note, and the Warrants do not purport to be complete and are qualified in
their entirety by reference to the Note Purchase Agreement, the form of Note, and the form of Warrant Certificate filed herewith as Exhibits
10.1, 10.2 and 4.1, respectively, to this Current Report on Form 8-K, which are incorporated herein by reference.
Amendments
to Convertible Debentures, Loan Agreement, and Royalty Put Option Agreement
On
August 8, 2024, (i) the Company, (ii) Silver Valley, and (iii) Sprott Private Resource Streaming and Royalty (US), LP, Sprott Private
Resource Streaming and Royalty (International), LP, Sprott Private Resource Streaming and Royalty (Canada), LP, Ninepoint Alternative
Credit Opportunities Fund and Ninepoint Credit Income Opportunities Fund (collectively, the “Debentureholders”) entered
into a fifth omnibus Amendment Agreement (the “Fifth Omnibus Amendment Agreement”) pursuant to which the terms of
the six series 1 convertible debentures in the aggregate principal amount of US$6 million (collectively, the “Series 1 Convertible
Debentures”) and the three series 2 convertible debentures in the aggregate principal amount of US$15 million (collectively,
the “Series 2 Convertible Debentures,” and together with the Series 1 Convertible Debentures, the “Convertible
Debentures”) previously issued by the Company were amended to, among other things (A) extend the maturity date of the Series
1 Convertible Debentures from March 31, 2026 to March 31, 2028; (B) extend the maturity date of the Series 2 Convertible Debentures from
March 31, 2026 to March 31, 2029; and (C) provide that, upon the occurrence and during the continuance of an Event of Default (as defined
in the Series 2 Convertible Debentures), the Company will not be allowed to pay the interest in shares of Company common stock except
with the prior written consent of the Debentureholders, as applicable.
On
August 8, 2024, (i) the Company, (ii) Silver Valley, and (iii) Sprott Private Resource Streaming and Royalty (US Collector), LP and Sprott
Private Resources Streaming and Royalty Annex (US Collector), LP (collectively, the “Sprott Lenders”) agreed to amend
certain terms of the existing loan agreement dated as of June 23, 2023, by and among the Company, Silver Valley, and the Sprott Lenders
to, among other things, (A) extend the maturity date thereunder from June 30, 2027 to June 30, 2030 and (B) increase the interest, from
June 30, 2027 onwards, from 10% to 15% (the “First Amendment to Loan Agreement”).
On
August 8, 2024, the Company, Silver Valley, and Sprott Private Resource Streaming and Royalty (US Collector), LP agreed to amend and
restate the existing royalty put option agreement dated as of July 22, 2022, by and among such parties, to extend the termination date
of such agreement from the later of the payment in full of the Convertible Debentures and the exercise of the royalty put option, to
the later of the payment in full of the Convertible Debentures and March 31, 2029 (the “A&R Royalty Put Option Agreement”).
The
foregoing descriptions of the Fifth Omnibus Amendment Agreement, the First Amendment to Loan Agreement, and the A&R Royalty Put Option
Agreement do not purport to be complete and are qualified in their entirety by reference to the Fifth Omnibus Amendment Agreement, the
First Amendment to Loan Agreement, and the A&R Royalty Put Option Agreement filed herewith as Exhibits 10.3, 10.4 and 10.5, respectively,
to this Current Report on Form 8-K, which are incorporated herein by reference.
Item
2.03 |
Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
Reference
is made to the disclosure set forth in Item 1.01 of this Current Report on Form 8-K, which disclosure is incorporated by reference into
this Item 2.03.
Item
3.02 |
Unregistered
Sales of Equity Securities. |
Reference
is made to the disclosure set forth in Item 1.01 of this Current Report on Form 8-K, which disclosure is incorporated by reference into
this Item 3.02.
Item
3.03 |
Material
Modification of Rights of Security Holders. |
Reference
is made to the disclosure set forth under “Amendments to Convertible Debentures, Loan Agreement, and Royalty Put Option Agreement”
in Item 1.01 of this Current Report on Form 8-K, which disclosure is incorporated by reference into this Item 3.03.
Item
7.01 |
Regulation
FD Disclosure. |
On
August 8, 2024, the Company issued a press release regarding the Private Placement. A copy of the press release is furnished as Exhibit
99.1 hereto and is incorporated herein by reference.
The
information set forth in this Item 7.01, including the information set forth in Exhibit 99.1, is being furnished and shall not be deemed
“filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly
set forth by specific reference in such a filing.
Item
9.01 |
Financial
Statements and Exhibits. |
Exhibit
No. |
|
Description |
4.1 |
|
Form of Bunker Hill Mining Corp. Non-Transferable Common Stock Purchase Warrant |
10.1‡ |
|
Secured Promissory Note Purchase Agreement, dated as of August 8, 2024, by and among Bunker Hill Mining Corp., Silver Valley Metals Corp., as borrower, and Monetary Metals Bond III LLC, as purchaser |
10.2 |
|
Form of Secured Promissory Note, dated as of August 8, 2024, issued by Silver Valley Metals Corp., as borrower, for the benefit of Monetary Metals Bond III LLC, as holder |
10.3 |
|
Fifth Omnibus Amendment Agreement, dated as of August 8, 2024, by and among Silver Valley Metals Corp. and Bunker Hill Mining Corp., as obligors, and the other parties named therein |
10.4 |
|
First Amendment to Loan Agreement, dated as of August 8, 2024, by and among Bunker Hill Mining Corp., as borrower, Silver Valley Metals Corp., as guarantor, and the lenders and agent named therein |
10.5‡ |
|
Amended and Restated Royalty Put Option Agreement, dated as of August 8, 2024, by and among Bunker Hill Mining Corp., Silver Valley Metals Corp. and Sprott Private Resource Streaming and Royalty (US Collector), LP |
99.1 |
|
Press Release, dated as of August 8, 2024 |
104 |
|
Cover
Page Interactive Data File (embedded within the Inline XBRL document) |
‡ | Certain
schedules or similar attachments to this exhibit have been omitted in accordance with Item
601(a)(5) of Regulation S-K. The registrant hereby agrees to furnish supplementally to the
Securities and Exchange Commission upon request a copy of any omitted schedule or attachment
to this exhibit. |
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
|
BUNKER
HILL MINING CORP. |
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|
Dated:
August 14, 2024 |
By: |
/s/
Sam Ash |
|
Name: |
Sam
Ash |
|
Title: |
President
and CEO |
Exhibit
4.1
UNLESS
PERMITTED UNDER CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY AND THE SECURITIES UNDERLYING
THIS SECURITY BEFORE [DATE THAT IS FOUR MONTHS AND A DAY FROM ISSUANCE].
THE
SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF BUNKER HILL MINING CORP. (THE “CORPORATION”)
THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) OUTSIDE THE UNITED STATES
IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH ALL LOCAL LAWS AND REGULATIONS, (C)
PURSUANT TO THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE,
AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN ANOTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S.
SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND IN THE CASE OF (B), (C) OR (D), THE HOLDER HAS PRIOR TO SUCH SALE FURNISHED
TO THE CORPORATION AN OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE CORPORATION.
THIS
WARRANT MAY NOT BE EXERCISED IN THE UNITED STATES OR BY OR ON BEHALF OF A U.S. PERSON OR A PERSON IN THE UNITED STATES UNLESS THE SHARES
OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT AND THE APPLICABLE SECURITIES
LEGISLATION OF ANY SUCH STATE OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE AND AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE CORPORATION IS PROVIDED TO SUCH EFFECT. THE TERMS “UNITED STATES” AND “U.S.
PERSON” ARE AS DEFINED IN REGULATION S UNDER THE U.S. SECURITIES ACT.
THIS
WARRANT CERTIFICATE, AND THE WARRANTS EVIDENCED HEREBY, WILL BE VOID AND OF NO VALUE UNLESS EXERCISED ON OR BEFORE THE TIME OF EXPIRY
(AS DEFINED BELOW).
BUNKER
HILL MINING CORP.
(the
“Corporation”)
NON-TRANSFERABLE
COMMON STOCK PURCHASE WARRANT
Certificate
No: 202[●]-W-[●] |
|
Number
of Warrants: [●] |
Date:
[●], 202[●] |
1.
Warrants to Purchase Common Stock. For value received by the undersigned, [NAME], [ADDRESS] (the “Holder”),
is the registered holder of [●] common stock purchase warrants (the “Warrants”). Each Warrant will entitle the
Holder to subscribe for and purchase one fully paid and non-assessable share of common stock of the Corporation (a “Warrant
Share”) in lawful money of Canada at any time up to the Time of Expiry (as such term is defined in Section 13) at a purchase
price of $[●] per Warrant Share (the “Exercise Price”) for each Warrant represented hereby, after which time
such Warrants shall expire, all subject to adjustment as hereinafter provided in this Warrant certificate. The Warrants may be exercised
by surrendering this Warrant certificate, together with a subscription form in the form attached as Schedule “A” hereto duly
completed and executed and a wire transfer, certified cheque, bank draft or money order in the lawful money of Canada payable to or to
the order of the Corporation, at the Vancouver office of the Corporation, 300 – 1055 West Hastings Street, Vancouver, British Columbia,
Canada, V6E 2E9, Attention: Brenda Dayton, Vice President – Investor Relations. The Corporation will then issue that number of
Warrant Shares specified in the subscription form as fully paid and non-assessable Warrant Shares. In no event may the Holder exercise
these Warrants in whole or in part unless the exercise is exempt from registration under the Securities Act of 1933, as amended (the
“U.S. Securities Act”).
2.
Partial Exercise. The Holder may subscribe for and purchase less than the full number of Warrant Shares entitled to be subscribed
for and purchased hereunder. In the event that the Holder subscribes for and purchases less than the full number of Warrant Shares entitled
to be subscribed for and purchased under this Warrant certificate prior to the Time of Expiry, the Corporation shall issue a new Warrant
certificate to the Holder in the same form as this Warrant certificate with appropriate changes.
3.
Delivery of Warrant Shares. Within five (5) business days of receipt of this Warrant certificate together with a subscription form
duly completed and executed in the form attached as Schedule “A” hereto and a wire transfer, certified cheque, bank draft
or money order in lawful money of Canada payable to or to the order of the Corporation, the Corporation shall deliver or cause to be
delivered to the Holder certificates representing the Warrant Shares subscribed for and purchased by the Holder hereunder, and a replacement
Warrant certificate, if any.
4.
No Rights of Shareholders. Nothing contained in this Warrant certificate (or in the Warrants evidenced hereby) shall be construed
as conferring upon the Holder any right or interest whatsoever as a holder of common stock of the Corporation or any other right or interest
except as herein expressly provided.
5.
Adjustment of Subscription and Purchase Rights. From and after the date hereof, the Exercise Price and the number of Warrant Shares
deliverable upon the exercise of the Warrants will be subject to adjustment as set forth below:
|
(a) |
In
case of any reclassification of the Warrant Shares or change of the Warrant Shares into other shares, or in case of the consolidation,
arrangement, merger, reorganization or amalgamation of the Corporation with or into any other corporation or entity which results
in any reclassification of the Warrant Shares or a change of the Warrant Shares into other shares, or in case of any transfer of
the undertaking or assets of the Corporation as an entirety or substantially as an entirety to another person (any such event being
hereinafter referred to as a “Reclassification of Warrant Shares”), at any time prior to the Time of Expiry, the
Holder shall, after the effective date of such Reclassification of Warrant Shares and upon exercise of the right to purchase Warrant
Shares hereunder, be entitled to receive, and shall accept, in lieu of the number of Warrant Shares to which the Holder was theretofore
entitled upon such exercise, the kind and amount of shares and other securities or property which the Holder would have been entitled
to receive as a result of such Reclassification of Warrant Shares if, on the effective date thereof, the Holder had been the registered
holder of the number of Warrant Shares to which the Holder was theretofore entitled upon such exercise. If necessary, appropriate
adjustments shall be made in the application of the provisions set forth in this Section 5 with respect to the rights and interests
thereafter of the Holder of this Warrant certificate to the end that the provisions set forth in this Section 5 shall thereafter
correspondingly be made applicable as nearly as may be reasonable in relation to any shares or other securities or property thereafter
deliverable upon the exercise of the Warrants evidenced hereby. |
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(b) |
If
and whenever at any time prior to the Time of Expiry the Corporation shall: |
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(i) |
subdivide
the Warrant Shares into a greater number of shares; |
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(ii) |
consolidate
the Warrant Shares into a lesser number of shares; or |
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(iii) |
fix
a record date for the issue of, or distribution to, or issue Warrant Shares, Participating Shares or Convertible Securities (as such
terms are defined in Section 13) to all or substantially all of the holders of Warrant Shares by way of a stock dividend or other
distribution on the Warrant Shares payable in Warrant Shares, Participating Shares or Convertible Securities, |
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(any
such event being hereinafter referred to as “Capital Reorganization”) and any such event results in an adjustment
in the Exercise Price pursuant to paragraph (c) below, the number of Warrant Shares purchasable pursuant to the Warrants evidenced
hereby shall be adjusted contemporaneously with the adjustment of the Exercise Price by multiplying the number of Warrant Shares
theretofore purchasable on the exercise thereof by a fraction the numerator of which shall be the Exercise Price in effect immediately
prior to such adjustment and the denominator of which shall be the Exercise Price resulting from such adjustment. |
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(c) |
If
and whenever at any time prior to the Time of Expiry, the Corporation shall engage in a Capital Reorganization, the Exercise Price
shall, on the effective date, in the case of a subdivision or consolidation, or on the record date, in the case of a stock dividend,
be adjusted by multiplying the Exercise Price in effect on such effective date or record date by a fraction: (A) the numerator of
which shall be the number of Warrant Shares and Participating Shares outstanding before giving effect to such Capital Reorganization;
and (B) the denominator of which is the number of Warrant Shares and Participating Shares outstanding after giving effect to such
Capital Reorganization. The number of Warrant Shares and Participating Shares outstanding shall include the deemed conversion into
or exchange for Warrant Shares or Participating Shares of any Convertible Securities distributed by way of stock dividend or other
such distribution. Such adjustment shall be made successively whenever any event referred to in this paragraph shall occur. |
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(d) |
Any
issue of Warrant Shares, Participating Shares or Convertible Securities by way of a stock dividend or other such distribution shall
be deemed to have been made on the record date thereof for the purpose of calculating the number of outstanding Warrant Shares under
paragraphs (e) and (f) below. |
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(e) |
If
and whenever at any time prior to the Time of Expiry, the Corporation shall fix a record date for the issuance or distribution of
rights, options or warrants to all or substantially all the holders of Warrant Shares entitling them, for a period expiring not more
than forty-five (45) days after such record date, to subscribe for or purchase Warrant Shares, Participating Shares or Convertible
Securities at a price per share (or having a conversion or exchange price per share) of less than 95% of the Current Market Price
(as such term is defined in Section 13) of the Warrant Shares on such record date (any such event being hereinafter referred to as
a “Rights Offering”), the Exercise Price shall be adjusted immediately after such record date so that it shall
equal the price determined by multiplying the Exercise Price in effect on such record date by a fraction: |
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(i) |
the
numerator of which shall be the aggregate of: (A) the number of Warrant Shares outstanding on such record date; and (B) a number
determined by dividing whichever of the following is applicable by the Current Market Price of the Warrant Shares on the record date:
(1) the amount obtained by multiplying the number of Warrant Shares or Participating Shares which the Holders of Warrant Shares are
entitled to subscribe for or purchase by the subscription or purchase price; or (2) the amount obtained by multiplying the maximum
number of Warrant Shares or Participating Shares which the holders of Warrant Shares are entitled to receive on the conversion or
exchange of the Convertible Securities by the conversion or exchange price per share; and |
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(ii) |
the
denominator of which shall be the aggregate of: (A) the number of Warrant Shares outstanding on such record date; and (B) whichever
of the following is applicable: (1) the number of Warrant Shares or Participating Shares which the holders of Warrant Shares are
entitled to subscribe for or purchase; or (2) the maximum number of Warrant Shares or Participating Shares which the holders of Warrant
Shares are entitled to receive on the conversion or exchange of the Convertible Securities, |
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and
if any such event results in an adjustment in the Exercise Price, the number of Warrant Shares purchasable pursuant to the Warrants
evidenced hereby shall be adjusted contemporaneously with the adjustment of the Exercise Price by multiplying the number of Warrant
Shares theretofore purchasable on the exercise thereof by a fraction the numerator of which shall be the Exercise Price in effect
immediately prior to such adjustment and the denominator of which shall be the Exercise Price resulting from such adjustment. |
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Any
Warrant Shares owned by or held for the account of the Corporation shall be deemed not to be outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record date is fixed. |
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To
the extent that such Rights Offering is not so made or any such rights, options or warrants are not exercised prior to the expiration
thereof, the Exercise Price and the number of Warrant Shares purchasable pursuant to the Warrants evidenced hereby shall then be
readjusted to the Exercise Price and number of Warrant Shares which would then be in effect if such record date had not been fixed
or if such expired rights, options or warrants had not been issued. |
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(f) |
If
and whenever at any time prior to the Time of Expiry, the Corporation shall fix a record date for the issue or distribution to all
or substantially all the holders of Warrant Shares of: |
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(i) |
shares
of any class, whether of the Corporation or any other corporation; |
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(ii) |
rights,
options or warrants; |
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(iii) |
evidences
of indebtedness; or |
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(iv) |
other
assets or property; |
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and
if such issue or distribution does not constitute a Capital Reorganization or a Rights Offering or does not consist of rights, options
or warrants entitling the holders of Warrant Shares to subscribe for or purchase Warrant Shares, Participating Shares or Convertible
Securities for a period expiring not more than forty-five (45) days after such record date and at a price per share (or having a
conversion or exchange price per share) of at least 95% of the Current Market Price of the Warrant Shares on such record date (any
such non-excluded event being hereinafter referred to as a “Special Distribution”) the Exercise Price shall be
adjusted immediately after such record date so that it shall equal the price determined by multiplying the Exercise Price in effect
on such record date by a fraction: (I) the numerator of which shall be the amount by which (A) the amount obtained by multiplying
the number of Warrant Shares outstanding on such record date by the Current Market Price of the Warrant Shares on such record date,
exceeds (B) the fair market value (as determined by the directors of the Corporation, which determination shall be conclusive) to
the holders of such Warrant Shares of such Special Distribution; and (II) the denominator of which shall be the total number of Warrant
Shares outstanding on such record date multiplied by such Current Market Price, and if any such event results in an adjustment in
the Exercise Price, the number of Warrant Shares purchasable pursuant to the Warrants evidenced hereby shall be adjusted contemporaneously
with the adjustment of the Exercise Price by multiplying the number of Warrant Shares theretofore purchasable on the exercise thereof
by a fraction the numerator of which shall be the Exercise Price in effect immediately prior to such adjustment and the denominator
of which shall be the Exercise Price resulting from such adjustment. |
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Any
Warrant Shares owned by or held for the account of the Corporation shall be deemed not to be outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record date is fixed. |
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To
the extent that such Special Distribution is not so made or any such rights, options or warrants are not exercised prior to the expiration
thereof, the Exercise Price and the number of Warrant Shares purchasable pursuant to the Warrants evidenced hereby shall then be
readjusted to the Exercise Price and number of Warrant Shares which would then be in effect if such record date had not been fixed
or if such expired rights, options or warrants had not been issued. |
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(g) |
No
adjustment in the Exercise Price will be made pursuant to this Section 5 in respect of the issue from time to time of Warrant Shares
issuable from time to time as dividends paid in the ordinary course to holders of Warrant Shares who exercise an option or election
to receive substantially equivalent dividends in Warrant Shares in lieu of receiving a cash dividend, and any such issue will be
deemed not to be a Capital Reorganization. |
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(h) |
In
any case in which this Section 5 shall require that an adjustment shall become effective immediately after a record date for an event
referred to herein, the Corporation may defer, until the occurrence of such event, issuing to the Holder, upon the exercise of the
Warrants evidenced hereby after such record date and before the occurrence of such event, the additional Warrant Shares issuable
upon such exercise by reason of the adjustment required by such event; provided, however, that the Corporation shall deliver to the
Holder an appropriate instrument evidencing the Holder’s right to receive such additional Warrant Shares upon the occurrence
of the event requiring such adjustment and the right to receive any distributions made on such additional Warrant Shares on and after
such exercise. |
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(i) |
The
adjustments provided for in this Section 5 are cumulative, shall, in the case of adjustments to the Exercise Price, be computed to
the nearest one-tenth of one cent and shall apply (without duplication) to successive Reclassifications of Warrant Shares, Capital
Reorganizations, Rights Offerings and Special Distributions; provided that, notwithstanding any other provision of this Section 5,
no adjustment of the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least 1%
of the Exercise Price then in effect (except upon a consolidation of the outstanding Warrant Shares) (provided, however, that any
adjustments which by reason of this paragraph are not required to be made shall be carried forward and taken into account in any
subsequent adjustment). |
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(j) |
No
adjustment in the number of Warrant Shares which may be purchased upon exercise of the Warrants evidenced hereby or in the Exercise
Price shall be made pursuant to this Warrant certificate if the Holder is entitled to participate in such event on the same terms
mutatis mutandis as if the Holder had exercised the Warrants evidenced hereby for Warrant Shares prior to the effective date
or record date of such event. |
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(k) |
If,
at any time prior to the Time of Expiry, the Corporation will take any action affecting the Warrant Shares, other than an action
or an event described above in this Section 5, which in the opinion of the directors of the Corporation would have a material adverse
effect upon the rights of the Holder under this Warrant certificate, the Exercise Price and/or the number of Warrant Shares purchasable
under this Warrant certificate will be adjusted in such manner and at such time as the directors may determine to be equitable in
the circumstances. |
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(l) |
In
the event of any question arising with respect to the adjustments provided in this Section 5, such question shall conclusively be
determined by the Corporation’s auditors and such determination, absent manifest error, shall be binding upon the Corporation
and the Holder. |
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(m) |
As
a condition precedent to the taking of any action which would require an adjustment in the subscription rights pursuant to the Warrants,
including the Exercise Price and the number of such classes of shares or other securities or property which are to be received upon
the exercise thereof, the Corporation shall take all corporate action which may, in the opinion of counsel, be necessary in order
that the Corporation has reserved and there will remain unissued out of its authorized capital a sufficient number of Warrant Shares
for issuance upon the exercise of the Warrants evidenced hereby, and that the Corporation may validly and legally issue as fully
paid and non-assessable of all the shares of such classes or other securities or may validly and legally distribute the property
which the Holder is entitled to receive on the full exercise thereof in accordance with the provisions hereof. |
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(n) |
At
least twenty-one (21) days prior to the effective date or record date, as the case may be, of any event which requires an adjustment
in the subscription rights pursuant to this Warrant certificate, including the Exercise Price and the number and classes of shares
or other securities or property which are to be received upon the exercise thereof, the Corporation shall give notice to the Holder
of the particulars of such event and the required adjustment. If it is not reasonably practicable for the Corporation to give twenty-one
(21) days’ notice as aforesaid, the Corporation will give as much notice as is reasonably practicable in the circumstances. |
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(o) |
Subject
to requisite TSX Venture Exchange approval, the Corporation may, at its option, at any time during the term of the Warrants, reduce
the then current Exercise Price to any amount deemed appropriate by the board of directors of the Corporation. |
6.
Representations and Warranties of the Corporation. The Corporation hereby represents and warrants that it is authorized to create
and issue the Warrants and covenants and agrees that it will cause the Warrant Shares from time to time subscribed for and purchased
in the manner provided in this Warrant certificate and the certificate representing such Warrant Shares to be issued. All Warrant Shares
which are issued upon the exercise of the right of purchase provided in this Warrant certificate, upon payment therefor of the amount
at which such Warrant Shares may be purchased pursuant to the provisions of this Warrant certificate, shall be and be deemed to be fully
paid and non-assessable shares and free from all taxes, liens and charges with respect to the issue thereof. The Corporation hereby represents
and warrants that this Warrant certificate is a valid and enforceable obligation of the Corporation, enforceable in accordance with the
provisions of this Warrant certificate.
7.
Representations and Warranties of the Holder. The Holder hereby represents and warrants as follows:
|
(a) |
The
Holder is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the U.S. Securities Act.
The Holder is acquiring this Warrant certificate and the Warrant Shares to be issued upon exercise hereof for investment for its
own account and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant certificate
or the Warrant Shares, except pursuant to sales registered or exempted under the U.S. Securities Act. |
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(b) |
The
Holder understands and acknowledges that this Warrant certificate and the Warrant Shares to be issued upon exercise hereof are “restricted
securities” under the federal securities laws inasmuch as they are being acquired from the Corporation in a transaction not
involving a public offering and that, under such laws and applicable regulations, such securities may be resold without registration
under the U.S. Securities Act only in certain limited circumstances. In addition, the Holder represents that it is familiar with
Rule 144 under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the U.S.
Securities Act. |
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(c) |
The
Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, and has such knowledge
and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in this Warrant
certificate and the Warrant Shares. The Holder has had an opportunity to ask questions and receive answers from the Corporation regarding
the terms and conditions of the offering of this Warrant certificate and the business, properties, prospects, and financial condition
of the Corporation. |
8.
No Fractional Warrant Shares. The Corporation shall not be required to issue fractional Warrant Shares upon the exercise of the Warrants
evidenced hereby. If any fractional interest in a Warrant Share would, except for the provisions of this Section 8, be deliverable upon
the exercise of the Warrants evidenced hereby, the Corporation shall, in lieu of delivering any certificate for such fractional interest,
round such fractional interest down to the nearest whole Warrant Share.
9.
Non-Transferability. The Warrants evidenced hereby shall not be assignable or transferable by the Holder.
10.
Covenants.
|
(a) |
The
Corporation shall use its reasonable best efforts to maintain its status as a “reporting issuer” (or the equivalent thereof)
not in default of the requirements of the applicable securities laws the Canadian jurisdictions in which the Corporation is currently
a reporting issuer. |
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(b) |
If
the issuance of the Warrant Shares upon the exercise of the Warrants requires any filing or registration with or approval of any
securities regulatory authority or other governmental authority or compliance with any other requirement under any law before such
Warrant Shares may be validly issued, the Corporation agrees to use reasonable best efforts to take such actions as may be necessary
to secure such filing, registration, approval or compliance, as the case may be. |
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(c) |
The
Corporation will do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, all other acts,
deeds and assurances in law as may be reasonably required for effecting the intentions and provisions of this Warrant certificate. |
11.
Replacement Certificate. Upon receipt of evidence satisfactory to the Corporation of the loss, theft, destruction or mutilation of
this Warrant certificate and, if requested by the Corporation, upon delivery of a bond of indemnity satisfactory to the Corporation (or,
in the case of mutilation, upon surrender of this Warrant certificate), the Corporation will issue to the Holder a replacement certificate
(containing the same terms and conditions as this Warrant certificate).
12.
Legending of Warrant Shares.
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(a) |
Each
certificate representing the Warrant Shares issued upon the exercise of this Warrant prior to the date which is four months and one
day after the date hereof will bear the following legend: |
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“UNLESS
PERMITTED UNDER CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THIS SECURITY BEFORE [DATE THAT IS
FOUR MONTHS AND A DAY FROM ISSUANCE].” |
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provided
that at any time subsequent to the date which is four months and one day after the date hereof, any certificate representing such
Warrant Shares may be exchanged for a certificate bearing no such legend. |
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(b) |
Each
certificate representing the Warrant Shares originally issued to or for the account or benefit of a U.S. Person or a person in the
United States may bear the following legend: |
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“THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “U.S.
SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES,
AGREES FOR THE BENEFIT OF THE CORPORATION (AS DEFINED BELOW) THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY (A) TO THE CORPORATION, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES
ACT AND IN COMPLIANCE WITH ALL LOCAL LAWS AND REGULATIONS, (C) PURSUANT TO THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D)
IN ANOTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS,
AND IN THE CASE OF (B), (C) OR (D), THE HOLDER HAS PRIOR TO SUCH SALE FURNISHED TO THE CORPORATION AN OPINION OF COUNSEL OR OTHER
EVIDENCE OF EXEMPTION IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE CORPORATION.” |
13.
Definitions.
|
(a) |
“Convertible
Securities” means securities convertible into or exchangeable for Warrant Shares or Participating Shares or both; |
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(b) |
“Current
Market Price”. For the purpose of any computation under this Warrant certificate, the “Current Market Price”
at any date shall be the weighted average price per share for the twenty (20) consecutive trading days before such date on the TSX
Venture Exchange (or, if the Warrant Shares are not listed on such stock exchange, on such other stock exchange on which the Warrant
Shares are listed as may be selected for such purpose by the directors of the Corporation or, if the Warrant Shares are not listed
on any stock exchange, then on the over-the-counter market), except that if any stock exchange on which the Warrant Shares are then
trading requires that the Current Market Price be calculated in a different manner, then the Current Market Price shall be calculated
in such different manner. The weighted average price shall be determined by dividing the aggregate sale price of all such shares
sold on the said exchange or market, as applicable, during the said twenty (20) consecutive trading days by the total number of such
shares so sold; |
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(c) |
“Loan
Agreement” means the secured promissory note purchase agreement dated as of August 8, 2024, by and between the Corporation,
Silver Valley Metals Corp., and Monetary Metals Bond III LLC. |
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(d) |
“Participating
Share” means a share (other than a Warrant Share) that carries the right to participate in earnings to an unlimited degree; |
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(e) |
“Time
of Expiry” means 5:00 p.m. Vancouver time on or before August 8, 2027, provided that, in the event that the Loan (as defined
in the Loan Agreement) is reduced or repaid before [DATE THAT IS ONE YEAR FROM ISSUANCE], the Expiry Date shall mean, for
such pro rata number of Warrants as is equal to the amount of such reduction or repayment, the later of (i) [DATE THAT IS ONE
YEAR FROM ISSUANCE], and (ii) 30 days from such reduction or repayment of the Loan; and |
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(f) |
“U.S.
Person” means a “U.S. person” as such term is defined in Regulation S promulgated under the U.S. Securities
Act. |
14.
Successor. The Corporation shall not enter into any transaction whereby all or substantially all of its undertaking, property and
assets would become the property of any other corporation (herein called a “successor corporation”) whether by way
of reorganization, reconstruction, consolidation, amalgamation, merger, transfer, sale, disposition or otherwise, unless prior to or
contemporaneously with the consummation of such transaction the Corporation and the successor corporation shall have executed such instruments
and done such things as the Corporation, acting reasonably, considers are necessary or advisable to establish that upon the consummation
of such transaction:
|
(a) |
the
successor corporation will have assumed all the covenants and obligations of the Corporation under this Warrant certificate, and |
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(b) |
the
Warrants will be a valid and binding obligation of the successor corporation entitling the Holder, as against the successor corporation,
to all the rights of the Holder under this Warrant certificate. |
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Whenever
the conditions of this Section 14 shall have been duly observed and performed, the successor corporation shall possess, and from
time to time may exercise, each and every right and power of the Corporation under this Warrant certificate in the name of the Corporation
or otherwise and any act or proceeding by any provision hereof required to be done or performed by any director or officer of the
Corporation may be done and performed with like force and effect by the like directors or officers of the successor corporation. |
15.
General.
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(a) |
The
headings in this certificate are for reference only and do not constitute terms of the Warrant certificate. |
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(b) |
Whenever
the singular or masculine is used in this Warrant certificate the same shall be deemed to include the plural or the feminine or the
body corporate as the context may require. |
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(c) |
This
Warrant certificate shall enure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. |
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(d) |
This
Warrant certificate shall be subject to, governed by and construed in accordance with the laws of the Province of British Columbia
and the federal laws of Canada applicable therein. The parties hereto irrevocably attorn and submit to the exclusive jurisdiction
of the courts of the Province of British Columbia with respect to any dispute related to or arising from this Warrant. |
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(e) |
All
references herein to monetary amounts are references to lawful money of Canada. |
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(f) |
Any
notice which the Corporation is required to give to the Holder hereunder shall be deemed to be properly given if sent by ordinary
prepaid mail to the address for the Holder shown on cover page of this Warrant certificate (unless the Holder subsequently notifies
the Corporation of a change of such address), and such notice will be deemed to be given at the time of mailing. |
[Signature
page follows.]
IN
WITNESS WHEREOF the Corporation has caused this Warrant certificate to be executed this _____ day of
_________________,
202[●].
|
BUNKER
HILL MINING CORP. |
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By: |
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Authorized Signatory |
THIS
WARRANT CERTIFICATE MAY BE DELIVERED BY E-MAIL IN PDF OR OTHER LEGALLY PERMISSIBLE ELECTRONIC SIGNATURE, WHICH SHALL BE DEEMED TO BE
AN ORIGINAL SIGNATURE.
Bunker Hill – Signature Page to Warrant Certificate
SCHEDULE
“A”
SHARE
PURCHASE WARRANT
SUBSCRIPTION
FORM
(To
be signed only upon exercise of such Warrant)
BUNKER
HILL MINING CORP.
300
– 1055 West Hastings Street
Vancouver,
British Columbia, Canada V6E 2E9
Attention:
Brenda Dayton, Vice President – Investor Relations
Dear
Sirs/Mesdames:
The
undersigned holder of the attached Warrant certificate hereby subscribes for _______________ shares of common stock (the “Shares”)
of Bunker Hill Mining Corp. (the “Corporation”) pursuant to the terms of the Warrant certificate at the Exercise Price
on the terms specified in the Warrant certificate and contemporaneously with the execution and delivery hereof makes payment therefor
on the terms specified in the Warrant certificate. Terms used but not otherwise defined herein have the meanings attributed to them in
the Warrant certificate.
The
undersigned holder represents, warrants and certifies as follows (only one of the following must be checked):
☐ |
A. |
The
undersigned holder at the time of exercise of the Warrants (i) is not in the United States; (ii) is not a U.S. person and is not
exercising the Warrants on behalf or for the account of a U.S. person or a person in the United States; (iii) did not execute or
deliver this Subscription Form in the United States, and (iv) delivery of the underlying Shares will not be to an address in the
United States; or |
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☐ |
B. |
The
undersigned holder (i) is the U.S. person that acquired the Warrants in connection with extending the Loan (as defined in the Loan
Agreement); (ii) is exercising the Warrants for its own account or for the account of a principal that was disclosed when it acquired
the Warrants; (iii) is, and such disclosed principal, if any, is, an “accredited investor” as defined in Rule 501(a)
of Regulation D under the U.S. Securities Act at the time of exercise of the Warrants; and (iv) the representations and warranties
of such holder made in the Warrant certificate remain true and correct as of the date of exercise of the Warrants. |
Note:
The terms “U.S. person” and “United States” have the meaning ascribed thereto in Regulation S under the U.S.
Securities Act.
It
is understood that the Corporation and the Corporation’s transfer agent may require evidence to verify the foregoing representations.
The
undersigned irrevocably hereby directs that __________ Shares be issued and delivered as follows:
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Name
in Full |
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Address |
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Number
of Shares |
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DATED
this ________day of __________________, __________________.
Schedule
“A” – Subscription Agreement for Warrant Shares
Exhibit
10.1
Execution
Copy
SECURED
PROMISSORY
NOTE
PURCHASE AGREEMENT
DATED
AS OF AUGUST 8, 2024
TABLE
OF CONTENTS
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Page |
1. |
Definitions. |
1 |
2. |
Issuance of Note. |
7 |
3. |
Closing. |
7 |
|
3.1 |
Effective Date |
7 |
|
3.2 |
Closing Conditions |
8 |
|
3.3 |
Subsequent Closing Dates. |
9 |
|
3.4 |
No Material Adverse Effect |
9 |
|
3.5 |
Additional Delivery |
9 |
4. |
Representations and Warranties of the Purchaser |
9 |
|
4.1 |
Purchaser Organization, Purpose, Good Standing and Qualification |
9 |
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4.2 |
Authorization |
10 |
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4.3 |
Legends |
10 |
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4.4 |
Accredited Investor Status |
10 |
|
4.5 |
Disclosure of Information |
11 |
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4.6 |
Investment Experience |
11 |
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4.7 |
No Public Market |
11 |
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4.8 |
Restricted Securities |
11 |
|
4.9 |
Purchase Entirely for Own Account |
12 |
|
4.10 |
No General Solicitation |
12 |
|
4.11 |
Purchaser Exculpation |
12 |
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4.12 |
Compliance with Securities Laws |
12 |
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4.13 |
Status of Purchaser |
13 |
|
4.14 |
Survival of Representations |
13 |
5. |
Representations and Warranties of the Borrower |
13 |
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5.1 |
Organization, Good Standing and Qualification |
13 |
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5.2 |
Authorization |
13 |
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5.3 |
Litigation; Labor Disputes and Acts of God |
14 |
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5.4 |
Absence of Required Consents; No Violations |
14 |
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5.5 |
Financial Statements |
15 |
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5.6 |
Changes |
15 |
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5.7 |
Capitalization |
16 |
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5.8 |
Title to Properties and Assets; Liens, Condition of Assets |
17 |
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5.9 |
Further Representations and Warranties Regarding the Collateral |
17 |
|
5.10 |
No Material Adverse Effect |
17 |
|
5.11 |
Subsidiaries |
17 |
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5.12 |
Disclosure |
18 |
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5.13 |
Offering |
18 |
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5.14 |
Environmental and Other Laws |
18 |
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5.15 |
Insurance |
19 |
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5.16 |
Use of Proceeds |
19 |
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5.17 |
Equipment |
19 |
6. |
Security Interest. |
20 |
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6.1 |
Security |
20 |
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6.2 |
Perfection |
20 |
7. |
Additional Covenants of the Borrower |
21 |
8. |
Default. |
28 |
|
8.1 |
Events
of Default |
28 |
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8.2 |
Consequences
of Events of Default |
29 |
9. |
Miscellaneous. |
30 |
|
9.1 |
Survival
of Representations, Warranties and Covenants |
30 |
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9.2 |
Successors
and Assigns |
30 |
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9.3 |
Governing
Law; Arbitration |
30 |
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9.4 |
Counterparts |
31 |
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9.5 |
Titles
and Subtitles |
31 |
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9.6 |
Notices |
31 |
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9.7 |
Amendments
and Waivers |
31 |
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9.8 |
Severability |
32 |
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9.9 |
Expenses
and Fees |
32 |
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9.10 |
Finder’s
Fee |
33 |
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9.11 |
Indemnity |
33 |
|
9.12 |
Further
Assurances |
34 |
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9.13 |
Entire
Agreement |
34 |
|
9.14 |
Attorney’s
Fees |
34 |
SECURED
PROMISSORY NOTE PURCHASE AGREEMENT
This
Secured Promissory Note Purchase Agreement (this
“Agreement”) is made as of August 8, 2024, by and between Monetary Metals Bond III LLC, a Delaware limited
liability company, or its permitted assigns (the “Purchaser”), Silver Valley Metals Corp. (with its business
address at 1 Mine Road, Kellogg, ID 83837), an Idaho corporation (the “Borrower”) and Bunker Hill Mining
Corp. (the “Parent”).
RECITAL
WHEREAS,
the Borrower and the Purchaser wish to enter into that certain secured promissory Note (as defined below), whereby the Purchaser will
loan to the Borrower an aggregate principal amount of U.S. Dollars equal to, on the original date of the Note, the U.S. Dollar equivalent
to of up to 1,200,000 Ounces of Silver, subject to the terms and conditions specified herein (the “Loan”);
NOW,
THEREFORE, in consideration of the foregoing, and the representations, warranties,
covenants and conditions set forth below, the Borrower and the Purchaser, intending to be legally bound, hereby agree as follows:
1.
Definitions.
As
used in this Agreement, the following terms have the following meanings:
“Business
Day” means any day other than (i) a Saturday, (ii) a Sunday, (iii) a day on which the New York Stock Exchange or TSX Venture
Exchange is closed, or (iv) a day on which banking institutions or silver depositories/warehouses are authorized or obligated by Law
or executive order to remain closed in New York City, United States.
“Collateral”
has the collective same meaning as defined in each of the Security Documents and shall also include the security collateral set forth
in Section 6 (as defined below).
“Contingent
Obligation” is, for any Person, any direct or indirect liability, contingent or not, of that Person for (A) any indebtedness,
lease, dividend, letter of credit or other obligation of another, such as an obligation, in each case, directly or indirectly guaranteed,
endorsed, co-made, discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (B) any
obligations for undrawn letters of credit for the account of that Person; and (C) all obligations from any interest rate, currency or
commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against
fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent Obligation” does
not include endorsements in the ordinary course of business. The amount of a Contingent Obligation is the stated or determined amount
of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability
for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under any guarantee or other
support arrangement.
“Debt”
means all liabilities, obligations and indebtedness of every kind and nature of any Person, including, without limitation: (A) indebtedness
or liability for borrowed money, or for the deferred purchase price of property or services (including trade obligations); (B) obligations
secured by any Lien on property owned by such Person, whether or not the obligations have been assumed, (C) obligations evidenced by
notes, bonds, debentures or similar instruments, (D) capital lease obligations, and (E) Contingent Obligations.
“Default”
means any of the events specified in Section 8.1 which constitutes an Event of Default or which, upon the giving of notice, the
lapse of time, or both pursuant to Section 8.1 would, unless cured or waived, become an Event of Default.
“Environmental
Laws” means any and all Laws relating to the environment or to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes into the environment including ambient air,
surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes.
“EPA
Settlement Agreement” means the Consent Decree between the United States of America and Placer Mining Company, Inc., filed
with the United States District Court District of Idaho on March 3, 2018 and approved on June 19, 2018 and the Settlement Agreement And
Order On Consent For Response Action By Bunker Hill Mining Corp. between the EPA and Bunker Hill Mining Corp, dated as effective May
15, 2018 (EPA Region 10 CERCLA Docket No. 10-2017-0123), as amended by the First Amendment To The Settlement Agreement And Order On Consent
For Response Action By Bunker Hill Mining Corp. between the EPA and Bunker Hill Mining Corp, dated as effective December 19, 2021, and
any other amendments thereto.
“Equity
Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests
in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock
of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital
stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from
such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership,
member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests
are outstanding on any date of determination.
“Guarantee”
means the Guarantee, dated as of the Closing Date, issued by the Parent for the benefit of the Purchaser.
“Hazardous
Materials” means any substances regulated under any Environmental Law, whether as pollutants, contaminants, or chemicals,
or as industrial, toxic or hazardous substances or wastes, or otherwise.
“Intercompany
Subordination and Postponement Agreement” dated as of August 8, 2024 between the Parent, Borrower and Purchaser.
“Intercreditor
Agreement” means the Intercreditor and Subordination Agreement, dated as of the date hereof by and between the Purchaser,
Sprott Private Resources Streaming and Royalty (US Collector), LP, Sprott Private Resource Streaming and Royalty (Collector), LP, MineWater
Finance LLC, MineWater LLC, MW HH LLC, the Borrower and the Parent, and all other documents, agreements, exhibits, schedules or instruments
contemplated thereby or executed in connection therewith.
“Law”
means any applicable statute, law, regulation, ordinance, rule, treaty, judgment, order, decree, permit, concession, franchise, license,
agreement or other governmental restriction of any nation, province or state or department or other political subdivision thereof. Any
reference to a Law includes any amendment or modification to such Law, and all regulations, rulings, and other Laws promulgated under
such Law.
“LBMA”
means the London Bullion Market Association.
“Lien”
means any security interest, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other),
charge, claim or other priority or preferential arrangement of any kind or nature whatsoever (other than a financing statement filed
by a lessor in respect of an operating lease not intended as security).
“Loan
Maturity Date” means August 8, 2027.
“Mortgage,
Assignment of Production, Assignment of Leases and Rents, Security Agreement, Financing Statement and Fixture Filing” dated
as of August 8, 2024, made by and between the Purchaser and the Borrower.
“Ounce”
means a fine troy ounce.
“Permitted
Debt” means: (i) trade accounts payable incurred in the ordinary course which are either not overdue or, if disputed and
in that case whether or not due, are being contested in good faith by appropriate proceedings, (ii) obligations under long-term real
property leases incurred in the ordinary course of business, (iii) finance or capital lease obligations in respect of office buildings,
vehicles, equipment, computers, production, storage and export facilities, including any Debt in respect of capital or finance leases
or purchase money Liens permitted by paragraph (xvi) of the definition of Permitted Liens, or other relevant assets incurred in the ordinary
course of business, and (iv) letters of credit, surety or performance bonds and/or similar guarantees that are required during the ordinary
course of business or required under applicable Law; (v) Debt in respect of taxes or other governmental charges which is not yet due
or which is being contested in good faith by appropriate proceedings and which, if determined adversely would not have a Material Adverse
Effect; (vi) the existing Debt and any refinancing, extension or renewal of any existing Debt listed on Schedule 1 attached hereto
and not involving an increase in the principal amount thereof; (vii) subject to the prior written consent of the Purchaser, such consent
not to be unreasonably withheld or delayed, obligations in respect of surety or performance bonds and/or letters of credit required to
be provided to the EPA in respect of Financial Assurance (under and as defined in the EPA Settlement Agreement) of up to US$17,000,000,
which obligations, in the case of surety or performance bonds, are permitted to be partially secured by letters of credit (in amounts
satisfactory to the Purchaser) and otherwise secured by security ranking subordinate to the security and subject to a subordination agreement
with the Purchaser, in form and substance satisfactory to the Purchaser, and which obligations, in the case of letters of credit, are
permitted to be fully secured by cash collateral that is not subject to the security (and the Purchaser will execute and deliver a no
interest letter in respect of the security with respect to such cash collateral, in form and substance satisfactory to the Purchaser,
acting reasonably); (viii) subject to prior written consent of the Purchaser, such consent not to be unreasonably withheld or delayed,
(A) any reclamation bonds relating to any mining property owned by the Parent or Borrower, required in connection with the construction,
development or operation of such mining property and (B) offtake financing on terms and conditions satisfactory to the Purchaser, (ix)
unsecured hedging obligations pursuant to hedging contracts permitted under the terms of this Agreement and (x) any intercompany indebtedness
incurred by any member of the Borrower Group with the Parent; provided, however, that such indebtedness shall be on an
unsecured basis, subordinated in right of repayment and remedies to all of the obligations of the Borrower Group under this Agreement,
the Note or any other Transaction Document (as applicable) and to all of Purchaser’s rights pursuant to a subordination agreement
in form and substance satisfactory to Purchaser.
“Permitted
Liens” means, as of any particular time: (i) statutory Liens for taxes, assessments or other governmental charges or levies
that are not yet delinquent or that are being contested in good faith by appropriate action and for which adequate reserves have been
maintained in accordance with applicable U.S. GAAP; (ii) landlords’, operators’, carriers’, warehousemen’s, repairmen’s,
mechanics’, materialmen’s, or other like Liens and contractual Liens granted to operators and non-operators under silver
exploration and mining agreements or incident to the exploration, development, operation and maintenance of the Project, in each case
only to the extent arising in the ordinary course of business and only to the extent securing obligations which are not delinquent or
which are being contested in good faith by appropriate proceedings and for which adequate reserves have been maintained in accordance
with applicable U.S. GAAP; (iii) minor defects and irregularities in title to any property, so long as such defects and irregularities
neither secure indebtedness nor materially impair the value of such property or the use of such property for the purposes for which such
property is held; (iv) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business; (v) pledges and deposits
made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security
Laws; (vi) judgment liens in respect of judgments that do not constitute an Event of Default (as defined below); (vii) royalties, streams,
overriding royalties, reversionary interests, production payments, sales contracts, and similar burdens with respect to the Project owned
by the Borrower or any Subsidiary that do not secure indebtedness for borrowed money; (viii) Liens arising from financing statement filings
and real property record filings regarding operating leases entered into by the Borrower or any Subsidiary in the ordinary course of
business covering the property under the lease; (ix) routine operational agreements, preferential rights to purchase, and provisions
requiring a third party’s consent prior to assignment and similar restraints on alienation, in each case, granted pursuant to a
silver exploration or mining agreement or lease and arising in the ordinary course of business or incident to the exploration, development,
operation and maintenance of the Project; (x) Liens burdening only deposit accounts, securities accounts or other funds maintained with
a financial institution in favor of such depository or securities intermediary that arise solely by virtue of any statutory or common
law provisions relating to bankers’ liens, rights of set-off or similar rights and remedies as to such deposit accounts, securities
accounts or funds or under any deposit account agreement or securities account agreement entered into in the ordinary course of business;
provided, that (A) no such deposit account or securities account is a dedicated cash collateral account or is subject to restrictions
against access by the Borrower or any Subsidiary, and (B) no such deposit account or securities account is intended by the Borrower or
any Subsidiary to provide cash collateral to the applicable financial institution; (xi) easements (including easements for pipelines,
alleys, telephone lines, power lines and railways), rights-of-way, restrictions (including zoning restrictions), covenants, terms, conditions,
exceptions, servitudes, permits, licenses, surface leases and other similar rights in respect of surface operations, encroachments, protrusions
and other similar encumbrances and minor title deficiencies on or with respect to any real property that (A) in each case are customarily
accepted in the silver exploration and mining industry, (B) in the aggregate, are not substantial in amount, and (C) do not in any case
materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of
the Borrower and its Subsidiaries; (xii) the right reserved to or vested in any municipality or governmental or other public authority
by the terms of any lease, licence, franchise, grant or permit acquired by any Borrower Group member or by any statutory provision, to
terminate any such lease, licence, franchise, grant or permit, or to require annual or other payments as a condition to the continuance
thereof; (xiii) any Lien on cash deposits or term deposits in favour of issuers of surety or performance bonds and/or letters of credit
referred to in the definition of “Permitted Debt”; (xiv) security given by an any Borrower Group member to a public utility
or any municipality or governmental or other public authority when required by such utility or municipality or other authority in connection
with the operations of the Borrower Group, all in the ordinary course of its business; (xv) the reservation in any original grants from
the Crown of any land or interests therein and statutory exceptions and reservations to title; (xvi) Liens securing capital or finance
leases or purchase money Liens relating solely to the acquisition of equipment necessary for the development, construction or operation
of any mining project owned by a Borrower Group member, provided that such Liens extend only to the property clearly and individually
identified as acquired or financed thereby (including the proceeds of such property) and do not extend to any other assets of a Borrower
Group member; (xvii) Liens securing capital or finance leases obligations which constitute Permitted Debt, provided that such Liens extend
only to the property clearly and individually identified as acquired or financed thereby (including the proceeds of such property) and
do not extend to any other assets of the Borrower Group; (xviii) any operating lease entered into in the ordinary course of business,
provided that the same is not a sale-leaseback; and (xix) Liens created pursuant to and in accordance with Section 5.4 below and
the Security Documents, and any other Liens set forth on the date hereof on Schedule 1 attached hereto.
“Person”
means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.
“Security
Agreement” means the Security Agreement dated as of the Closing Date, made by and between the Purchaser, Parent and the
Borrower.
“Security
Documents” means the (i) Share Pledge Agreement (as defined in the Note),
dated
as of the Closing Date, made by and between the Purchaser and the Parent; (ii) Security Agreement (as defined in the Note), dated as
of the Closing Date, made by and between the Purchaser and the Borrower; (iii) Mortgage, Assignment of Production, Assignment of Leases
and Rents, Security Agreement, Financing Statement and Fixture Filing (as defined in the Note) dated as of August 8, 2024; and (iv) Intercompany
Subordination and Postponement Agreement (as defined in the Note) dated as of August 8, 2024; and in all cases, all other documents,
agreements, exhibits, schedules or instruments contemplated thereby or executed in connection therewith.
“Share
Pledge Agreement” means the Share Pledge Agreement dated as of the Closing
Date,
made by and between the Purchaser and the Parent.
“Silver”
means silver of minimum .999 fineness in silver bars, conforming in all respects with the specification for “Good Delivery Silver
Bars” under the “Good Delivery Rules”, as published by the LBMA from time to time.
“Spot
Rate” means, for purposes of calculation of principal and interest payment amounts by the Borrower in connection with this
Agreement on any date of determination, the spot rate of exchange for the purchase of Silver against payment of U.S. Dollars being reasonably
quoted by the Calculation Agent (as defined in the Note) based on the LBMA Silver price (12:00 p.m. UTC) price on the applicable date
on such date (or, in the case of regularly scheduled payment of principal and interest on a Payment Date (as defined in the Note), then
the last day in the related Determination Period (as defined in the Note)); provided, that, in the event of a Spot Rate Cessation, the
“Spot Rate” as of any such date of determination will be the LBMA Silver price (10:30 a.m. 12:00 p.m. UTC) on the last published
date prior to the occurrence of such Spot Rate Cessation. Broker charges incurred in funding the Loan, or repayment of principal and
interest are to the account of the Parent.
In
the case of the Borrower receiving the initial Loan proceeds, the Spot Rate means, for purposes of calculation of principal and interest
payment amounts by the Borrower in connection with this Agreement on any date of determination, the spot rate of exchange for the purchase
of Silver against payment of U.S. Dollars being reasonably quoted by the Calculation Agent based on the LBMA Silver price (12:00 p.m.
UTC) price on the applicable date on such date (or, in the case of regularly scheduled payment of principal and interest on a Payment
Date, then the last day in the related Determination Period); provided, that, in the event of a Spot Rate Cessation, the “Spot
Rate” as of any such date of determination will be the LBMA Silver price (10:30 a.m. 12:00 p.m. UTC) on the last published date
prior to the occurrence of such Spot Rate Cessation.
“Transaction
Documents” means collectively, this Agreement, the Note, the Security Documents, the Guarantee, the Intercreditor Agreement,
and all other agreements, documents, certificates, and instruments executed and delivered by the Parent, the Borrower, and each Subsidiary
of the Borrower that is or becomes a party to a Transaction Document as well as any third party that is a party thereto, in accordance
herewith or therewith.
“U.S.
GAAP” means United States generally accepted accounting principles in effect from time to time.
2.
Issuance of Note.
Subject
to the terms and conditions of this Agreement, following the satisfaction of the conditions set forth in Section 3.2 hereof, on the Closing
Date the Borrower shall issue and sell to the Purchaser a secured promissory note (the “Note”) in the principal
amount equal to the amount set forth opposite the Purchaser’s name on Schedule A hereto under the heading “Closing
Amount” against payment by the Purchaser to the Borrower of such principal amount. The Note shall be in the form of Exhibit
A hereto. Capitalized but otherwise undefined terms used herein have the meanings provided therefore in the Note.
3.
Closing.
3.1
Effective Date. This Agreement shall become effective via the electronic exchange of documents on the date of this Agreement (the
“Effective Date”) or at such other place and date as is mutually agreeable to the Borrower and the Purchaser.
The Parties agree that in the sole discretion of the Purchaser, at any time until the principal amount reaches the U.S. Dollar equivalent
of up to 1,200,000 troy ounces of silver, calculated using the Spot Rate effective as of the date hereof, additional closings may occur
on multiple dates (each such date, a “Subsequent Closing Date”), with the total value of the Loan being all
of the proceeds from each closing in aggregate, and each Parties’ obligations hereunder apply equally with respect to all closings.
The Parties will, acting reasonably, take all steps required to give effect to more than one closing, if any. The Purchaser will provide
the Borrower with seven (7) days written advance notice of a Subsequent Closing Date and its intention to complete any additional closing
and the Borrower and the Purchaser will cooperate, both acting reasonably, to coordinate and complete such additional closings. In the
event of any Subsequent Closing Dates, the principal amount set forth opposite the Purchaser’s name on Schedule A hereto
under the heading “Closing Amount” will be amended to reflect the new total principal amount of the Loan.
3.2
Closing Conditions. The obligations of the Purchaser to conduct the transactions set forth herein on or following the Effective
Date shall be subject to the prior or concurrent satisfaction of each of the conditions precedent set forth in this Section 3.2,
any of which may be waived in whole or in part by the Purchaser (such date upon which all such conditions shall have been waived or satisfied,
the “Closing Date”).
(a)
Security Interest Grant. The Borrower and the Parent have entered into the Security Documents in favor of the Purchaser, whereby
the Borrower and the Parent have granted to the Purchaser a security interest in the Collateral.
(b)
Representations and Warranties. The representations and warranties made by the Borrower in Section 5 hereof shall be true
and correct as of the Closing Date.
(c)
Conditions. All agreements and conditions contained in this Agreement to be performed by the Borrower on or prior to the Closing
Date shall have been performed or complied with in all material respects unless waived in whole or in part by the Purchaser.
(d)
Governmental Approvals and Filings. The Borrower shall have obtained all governmental, regulatory and stock exchange approvals
required, if any, in connection with the lawful sale and issuance of the Note on the Closing Date and the consummation of the transactions
contemplated hereunder as of the Closing Date.
(e)
Due Diligence. The Purchaser shall have completed such review and examination of the Borrower as it deems necessary to satisfy
itself as to the Borrower’s ability to repay the Loan, including but not limited to the receipt of an onsite due diligence report
by DRA Global setting forth conclusions to the satisfaction of Purchaser.
(f)
Legal Requirements. The sale and issuance by the Borrower, and the purchase by the Purchaser, of the Note shall be legally permitted
by all applicable Laws and regulations to which the Purchaser or the Borrower is subject.
(g)
Intercreditor Agreement. On or before the Closing Date, the Intercreditor Agreement shall have been submitted by the Borrower
for the review, approval and direction of the counterparties to it.
(h)
Legal Opinions. The Purchaser shall have received a satisfactory legal opinion from the Borrower’s legal counsel substantially
in the form and with the same conclusions as the Opinion (as defined in Schedule 1).
3.3
Subsequent Closing Dates.
(a)
In the event of more than one closing, all of the conditions set out in 3.2(b) through 3.2(h) shall apply to the initial closing on the
Closing Date and only conditions, 3.2(c), 3.2(d), 3.2(d) and 3.2(f) shall apply to any subsequent closing on a Subsequent Closing Date.
(b)
In no event shall a Subsequent Closing Date occur beyond November 8, 2024.
3.4
No Material Adverse Effect. On or before the Effective Date and the Closing Date, no event shall have occurred or condition exist
with respect to the Borrower Group (as defined below) that has resulted in, or could reasonably be expected to result in, any event,
matter, condition or circumstance which: (i) has or would reasonably be expected to have a material adverse effect on the business, properties,
results of operations or condition (financial or otherwise) of the Borrower; (ii) would materially impair the ability of the Borrower
to perform or observe its obligations under or in respect of this Agreement; or (iii) affects the legality, validity, binding effect
or enforceability of this Agreement or the perfection or priority of any Lien (as defined below) granted to the Purchaser in the Collateral
(the occurrence of any of clause (i) through (iii), a “Material Adverse Effect”).
3.5
Additional Delivery. At least two (2) Business Days following the Closing Date, subject to the discretion and mutual agreement
of each of the parties hereto, the Purchaser may sell an agreed upon amount of Ounces of Silver at the Spot Rate and deliver to the Borrower
U.S. Dollars by wire transfer of immediately available funds as the principal amount being loaned hereunder, and as of the date thereof
the Borrower shall duly execute and deliver to the Purchaser an additional, original Note reflecting the name of the Purchaser, a principal
amount equal to such principal amount.
4.
Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Borrower, that the statements
contained in this Section 4 are true and correct as of the Closing Date and the Effective Date:
4.1
Purchaser Organization, Purpose, Good Standing and Qualification. The Purchaser is a limited liability company, duly organized,
validly existing and in good standing under the Laws of its jurisdiction of incorporation and the Purchaser is a newly formed entity
that has no assets, liabilities or business other than those solely incidental to the transactions described herein.
4.2
Authorization. The Purchaser has full power and authority to enter into this Agreement. The Agreement, when executed and delivered
by the Purchaser, will constitute valid and legally binding obligations of the Purchaser, enforceable in accordance with its terms, except
as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other Laws of general application
affecting enforcement of creditors’ rights generally and as limited by Laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.
4.3
Legends. The Purchaser understands that the Note and the warrants issued in connection herewith may bear one or all of the following
legends:
(a)
for the warrants and the securities to be issued upon its exercise: this security has not been registered under the U.S. Securities Act
of 1933, as amended, or qualified under any state securities Laws. This security may not be sold, [for the warrants, exercised] or transferred
in the absence of such registration or qualification or an exemption therefrom under said act and any applicable U.S. state securities
Laws or an opinion of counsel for the Purchaser satisfactory to the Borrower that such registration is not required under said act;
(b)
for the warrants issued in connection herewith: unless permitted under securities legislation, the holder of this security must not trade
the security before the date that is 4 months and a day after the date the security was first issued;
(c)
for the Note: this security is subject to restrictions on transfer contained in that certain Secured Promissory Note Purchase Agreement
dated August 8, 2024, which restrictions on transfer are incorporated herein by reference.
4.4
Accredited Investor Status. The Purchaser is an “accredited investor,” as such term is defined in Rule 501 promulgated
under the Securities Act of 1933, as amended (the “Securities Act”) and the Purchaser falls within the definition
of “accredited investor” as such term is defined in section 1.1 of National Instrument 45-106 – Prospectus Exemptions
of the Canadian Securities Administrators or section 73.3 of the Securities Act (Ontario).
4.5
Disclosure of Information. The Purchaser has received all materials from the Borrower that it has requested; and the Purchaser
has had a reasonable opportunity to ask questions of the Borrower and its representatives and the Borrower has answered all inquiries
that the Purchaser’s or its representatives have put to it. The Purchaser understands and acknowledges that any financial projections
provided to it are forward-looking statements based on the Borrower Group’s current views and various assumptions and predictions
that involve inherent risks and uncertainties and that there can be no assurance that the projections or their underlying assumptions
will prove to be accurate, and is cautioned not to place undue reliance on the projections or any other forward-looking statements made
by the Borrower, including about the operations of the Borrower Group. The Borrower Group’s actual results may differ materially
from such statements. The Purchaser should not regard the provision of such forward-looking information as a representation by the Borrower
or any other person that the future events, plans or expectations contemplated by the Borrower will be achieved. The Purchaser acknowledges
that the Borrower undertakes no obligation to update, review or revise any forward-looking statements to reflect any change in its expectations
or any change in events, conditions, circumstances or assumptions on which any such statements are based. The Purchaser has had access
to all additional information necessary to verify the accuracy of the information set forth in this Agreement and any other materials
furnished herewith and has taken all the steps necessary to evaluate the merits and risks of an investment as proposed hereunder.
4.6
Investment Experience. The Purchaser is a special purpose vehicle formed solely to make an investment in the Note and a subscription
for the warrants issued in connection herewith and has required each of its investors to represent that it has such knowledge and experience
in finance, securities, investments and other business matters, including experience in investing in securities of companies in the development
stage, so as to be able to protect its interests concerning this transaction, and if not, it has consulted with a qualified representative
for assistance in evaluating the risks and merits of an investment in the Note and the subscription for the warrants. The Purchaser further
has required that each investor represent that it understands the various risks of an investment in the Note and the subscription for
the warrants and can afford to bear such risks, including, without limitation, the risks of losing its entire investment.
4.7
No Public Market. The Purchaser acknowledges that no market for the Note or the warrants presently exists and it is unlikely that
one will develop in the future, and that it may find it impossible to liquidate the investment at a time when it may be desirable to
do so, or at any other time prior to maturity.
4.8
Restricted Securities. The Purchaser is aware that the Note and the warrants have not been registered under the Securities Act;
that the Note and the warrants will be issued on the basis of the statutory exemption provided by Section 4(a)(2) of the Securities Act
or Regulation D promulgated thereunder, or both, relating to transactions by an issuer not involving any public offering and under similar
exemptions under certain state securities Laws; that this transaction has not been reviewed by, passed on or submitted to any federal
or state agency or self-regulatory organization where an exemption is being relied upon, and that the Borrower’s reliance thereon
is based in part upon the representations made by the Purchaser in this Agreement. The Purchaser acknowledges that it has been informed
by the Borrower, or is otherwise familiar with, the nature of the limitations imposed by the Securities Act (and applicable state securities
Laws) and the rules and regulations thereunder on the transfer of securities. In particular, the Purchaser agrees that no sale, assignment
or transfer of the Note or the warrants shall be valid or effective, and the Borrower shall not be required to give any effect to such
sale, assignment or transfer, unless (i) such sale, assignment or transfer is registered under the Securities Act (and applicable state
securities Laws), it being understood that the Note and the warrants are not currently registered for sale and that the Borrower has
no obligation or intention to so register the Note or the warrants, or (ii) the Note or the warrants are sold, assigned or transferred
in accordance with all the requirements and limitations of Rule 144 under the Securities Act, it being understood that Rule 144 prescribes
certain waiting periods before the Note or the warrants (or any portion thereof) may be sold, or (iii) such sale, assignment or transfer
is otherwise exempt from the registration under the Securities Act (and applicable state securities Laws). The Purchaser further understands
that an opinion of counsel and other documents may be required to transfer the Note or the warrants (or any portion thereof). The Purchaser
is also aware the warrants are being issued pursuant to an exemption from the prospectus requirements under Canadian securities Laws.
4.9
Purchase Entirely for Own Account. The Purchaser has acquired the Note and the warrants for its own account for investment and
not with a view to the sale or distribution thereof or the granting of any participation therein in violation of the Securities Act or
any applicable securities Laws, including Canadian securities Laws, and it has no present intention of distributing or selling to others
any of such interest or granting participations therein in violation of the Securities Act or any applicable securities Laws, including
Canadian securities Laws.
4.10
No General Solicitation. The Purchaser has not purchased the Note or the warrants because of or following any advertisement, article,
notice or other communication published in any newspaper, magazine or internet site or similar media or broadcast over television or
radio, or presented at any seminar or meeting, or any solicitation or a subscription by a Person other than a representative of the Borrower.
4.11
Purchaser Exculpation. The Purchaser acknowledges that it is not relying upon statements, warranties or representations by any
person, firm or corporation, other than those of the Borrower set forth in this Agreement and of the Borrower and the Borrower Group
(as applicable) set forth in the other Transaction Documents or that is otherwise Posted Information (as defined in the MM Bond
III PPM, as defined below) in making its decision to invest in the Note and the Borrower. In formulating a decision to enter
into this Agreement, the Purchaser has relied solely upon (i) the provisions of this Agreement and the terms and provisions of the Transaction
Documents, (ii) an independent investigation of the Borrower’s business, including an analysis of the reports included as Posted
Information, and (iii) consultations with its legal and financial advisors with respect to this Agreement and the Note and the nature
of its investment; and that in entering into this Agreement no reliance was placed by the Purchaser upon any representations or warranties
other than those contained in this Agreement.
4.12
Compliance with Securities Laws. The Purchaser agrees that it will comply with all securities Laws applicable to it concerning
the purchase of the Note and the subscription for the warrants and the Purchaser consents to the filings by the Parent of all documents
required by U.S. and Canadian securities Laws in connection with the purchase of the Note and the subscription for the warrants.
4.13
Status of Purchaser. The Purchaser is not an “affiliate” (as defined in Rule 405 under the Securities Act) or “insider”
of the Parent or a “registrant” (in each case, as defined under applicable British Columbia securities Laws) and has not
identified itself to the Borrower as an “affiliate,” “insider” or “registrant”.
4.14
Survival of Representations. The Purchaser acknowledges that the representations, warranties and agreements made by it herein
shall survive the execution and delivery of this Agreement.
5.
Representations and Warranties of the Borrower. The Borrower hereby represents and warrants to the Purchaser (and, for the purposes
of this Section 5, reference to the term “Borrower” shall mean and include the Parent and all Subsidiaries with respect
to each representation and warranty) that the statements contained in this Section 5 are true and correct as of the Closing Date
and the Effective Date:
5.1
Organization, Good Standing and Qualification. The Borrower is a corporation, duly organized, validly existing and in good standing
under the Laws of its jurisdiction of incorporation (as set forth above) and has all requisite corporate power and authority pursuant
to its articles or incorporation and bylaws, or their equivalent, as the case may be, to own and operate its properties and assets and
carry on its business as now conducted and as proposed to be conducted. The Borrower is duly qualified to transact business and is in
good standing in each jurisdiction in which the nature of its activities and of its properties (both owned and leased) makes such qualification
necessary, except for those jurisdictions in which the failure to so qualify would not result in a Material Adverse Effect.
5.2
Authorization. All action on the part of the Borrower necessary for the authorization, execution and delivery of this Agreement,
the performance of all obligations of the Borrower hereunder, the authorization, issuance, sale and delivery of the Note, and the granting
of the Lien to the Purchaser in the Collateral has been taken or will be taken prior to the Closing. Each of this Agreement and the Note,
when executed and delivered by the Borrower, will constitute the valid and legally binding obligation of the Borrower, enforceable against
the Borrower in accordance with its respective terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium
and other Laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by Laws relating
to the availability of specific performance, injunctive relief or other equitable remedies.
5.3
Litigation; Labor Disputes and Acts of God.
(a)
Other than as set out in Schedule 5.3 attached hereto, there is no action, suit, proceeding or investigation pending or, to the
Borrower’s knowledge, currently threatened against the Borrower that questions the validity of this Agreement, the right of the
Borrower to enter into this Agreement, or to consummate the transactions contemplated hereby, or that could reasonably be expected to
result, either individually or in the aggregate, in any Material Adverse Effect. The Borrower is not a party or subject to the provisions
of any order, writ, injunction, judgment or decree of any (i) court or (ii) federal, state, local or other governmental department, commission,
board, bureau, agency or other instrumentality or authority, domestic or foreign, exercising executive, legislative, judicial, regulatory
or administrative authority or functions of or pertaining to government (collectively, “Governmental Authority”).
There is no action, suit, proceeding or investigation by the Borrower currently pending or that the Borrower intends to initiate.
In
addition, except as otherwise disclosed herein, neither the Borrower, the Project (as defined below) nor the properties of the Borrower
has been affected by any war, civil strife, currency restriction, political restriction, pandemic, epidemic, fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance), which could reasonably be expected to cause a Material Adverse Effect.
5.4
Absence of Required Consents; No Violations. No consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any Governmental Authority on the part of the Borrower Group is required in connection with
this Agreement or the issuance of the Note or the consummation of the transactions contemplated hereunder, except for such filing(s)
pursuant to applicable state securities Laws or Canadian securities Laws as may be necessary, which filings will be timely effected after
the Closing, and except for recordings or filings in connection with the perfection of the Liens on the Collateral in favor of the Purchaser
as required by the Security Documents. The Borrower Group is not in violation or default (i) of any provision of its articles of incorporation,
bylaws, or organizational documents, or any agreements applicable to any of its Equity Interests, or (ii) of any instrument, judgment,
order, writ, decree, agreement, arrangement or contract to which it is a party or by which it or its properties are bound, or, to its
knowledge, of any provision of any national, federal, provincial, state or local statute, rule or regulation that is, to each of the
Borrower Group’s knowledge, as applicable. Other than as set out in Schedule 5.4 attached hereto, the execution, delivery
and performance of this Agreement, the Note and the other Transaction Documents will not result in any such violation or be in conflict
with or constitute, with or without the passage of time and giving of notice, either a default under any such provision, instrument,
judgment, order, writ, decree, agreement, arrangement or contract or an event that results in the creation of any Lien upon any assets
of the Borrower Group (other than the Lien granted to the Purchaser in the Collateral pursuant to the Security Documents) or the suspension,
revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to the Borrower Group,
its business or operations or any of its assets or properties, except for such results which could not reasonably be expected to result
in a Material Adverse Effect. Without limiting the foregoing, the Borrower Group has obtained all waivers necessary with respect to any
preemptive rights, rights of first refusal or similar rights, including any notice or offering periods provided for as part of any such
rights, in order for the Borrower Group to consummate the transactions contemplated hereunder without any third party obtaining any rights
to cause the Borrower Group to offer or issue any securities of the Borrower Group as a result of the consummation of the transactions
contemplated hereunder.
5.5
Financial Statements.
(a)
The Borrower has made available to the Purchaser the publicly available consolidated audited balance sheet and consolidated audited statement
of income and cash flows of the Borrower and the Parent (together with the Borrower, the “Borrower Group”)
for the twelve (12) months ending December 31, 2023 (the “Statement Date”) (together, the “Audited
Financial Statements”) as well as the draft consolidated unaudited balance sheet as of June 30, 2024 (collectively, with
all Audited Financial Statements, the “Financial Statements”). The Financial Statements, together with the
notes thereto, have been prepared from the Parent’s books of account in accordance with U.S. GAAP, throughout the periods indicated,
except as disclosed therein, and the Audited Financial Statements present fairly in all material respects the financial condition and
position of the Borrower Group as of December 31, 2023.
(b)
The Borrower has no liability or obligation, absolute or contingent (individually or in the aggregate) not disclosed in the Financial
Statements, except: (i) current liabilities and obligations of the Borrower incurred in the ordinary course of business subsequent to
the Statement Date that do not, individually or in aggregate, have a Material Adverse Effect on the Borrower; (ii) obligations under
contracts and commitments incurred in the ordinary course of business of the Borrower; and (iii) liabilities and obligations of a type
or nature not required under U.S. GAAP to be reflected in the Financial Statements, which, in all such cases, individually and in the
aggregate would not have a Material Adverse Effect.
5.6
Changes. Since the Statement Date, there has not been, with respect to the Borrower:
(a)
other than as set out in Schedule 5.6(a) attached hereto, any change in the assets, liabilities, financial condition, prospects
or operations of the Borrower from that reflected in the Financial Statements, other than changes in the ordinary course of business,
none of which individually or in the aggregate has had or could reasonably be expected to result in a Material Adverse Effect;
(b)
any resignation or termination of Sam Ash, Richard Williams or Gerbrand Van Heerden, without the prior written consent of the Purchaser;
(c)
any material change, except in the ordinary course of business, in the Contingent Obligations of the Borrower by way of guaranty, surety,
endorsement, indemnity, warranty or otherwise;
(d)
any damage, destruction or loss, whether or not covered by insurance, that has had or could be reasonably expected to result in a Material
Adverse Effect;
(e)
any waiver by the Borrower of a valuable right or of a material Debt owed to it;
(f)
other than as set out in Schedule 5.6(f), any material change in any compensation arrangement or agreement with any employee, officer,
director or stockholder;
(g)
any labor organization activity related to the Borrower;
(h)
except as otherwise expressly permitted herein, any Debt, obligation or liability incurred, assumed or guaranteed by the Borrower, except
those for immaterial amounts and for current liabilities incurred in the ordinary course of business;
(i)
any change in any material agreement to which the Borrower and/or its properties are a party or by which the Borrower and/or its properties
are bound which has had or could reasonably be expected to result in a Material Adverse Effect; or
(j)
any other event or condition of any character that, either individually or cumulatively, has had or could reasonably be expected to result
in a Material Adverse Effect; or
(k)
any agreement, arrangement or commitment by the Borrower to do any of the acts described in subsection (a) through (k) above, other than
as disclosed pursuant to forementioned schedules.
5.7
Capitalization
(a)
The authorized capital stock of the Borrower, on and as of the Effective Date, is set forth in Schedule 5.7 attached hereto, and
the authorized capital stock of the Borrower, immediately prior to the Closing Date and the Effective Date, shall consist of 100 shares
of common stock (the “Common Stock”), of which 100 shares are issued and outstanding on and as of the date
hereof.
(b)
The Borrower has not made any representations regarding equity incentives to any officer, employee, director or consultant that are inconsistent
with the share amounts and terms set forth on Schedule 5.7 attached hereto. In addition, other than as set forth on Schedule
5.7 hereto, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal),
proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Borrower of any of its securities.
(c)
All issued and outstanding shares of Common Stock: (i) have been duly authorized and validly issued to the persons listed on Schedule
5.7 attached hereto and are fully paid and nonassessable; and (ii) were issued in compliance with all applicable national, federal,
provincial and state Laws concerning the issuance of shares.
(d)
The rights, preferences, privileges and restrictions of the Common Stock are as stated in the Borrower’s articles of incorporation,
or its equivalent, in effect as of the date hereof, a copy of which has been provided to the Purchaser. The sale of the Note is not and
will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with.
(e)
All warrants issued by the Parent in connection with this Agreement shall fully vest from the day they are issued. These warrants shall
be exercisable for common stock of the Parent until the earlier of: (i) three years from the date of issue and (ii) the Loan Maturity
Date.
5.8
Title to Properties and Assets; Liens, Condition of Assets. The Borrower is the sole legal and equitable owner of and has good
and marketable title to its properties and assets (including the properties and assets reflected in the most recent balance sheet included
in the Financial Statements, and good title to its leasehold estates) and has not heretofore transferred, assigned, pledged, charged,
hypothecated, granted any security interest in, or encumbered any of its assets, other than Permitted Liens (as defined below).
5.9
Further Representations and Warranties Regarding the Collateral. Subject to the terms of the Intercreditor Agreement and the Permitted
Liens, the Lien granted by the Borrower in the Collateral represents a valid first priority Lien on and security interest in the Collateral
in favor of the Purchaser, superior and prior to the rights of all third Persons.
5.10
No Material Adverse Effect. On and as of the date hereof, no event has occurred or condition exists with respect to the Borrower
Group that has resulted in, or could reasonably be expected to result in, a Material Adverse Effect.
5.11
Subsidiaries. Other than the entities listed on Schedule 5.11 attached hereto (such entities, each a “Subsidiary”
and collectively, the “Subsidiaries”), the Borrower does not own or control any Person or any Equity Interests
in or of any Person (except with respect to the shares in the Parent held by the Borrower as nominee on behalf of certain shareholders).
The Borrower is not a participant in any joint venture, partnership, limited liability company or similar arrangement.
5.12
Disclosure. The Borrower has provided the Purchaser with all information requested by the Purchaser in connection with its decision
to purchase the Note and undertake the transactions contemplated herein, and as of the date of that certain Monetary Metals Bond III,
LLC Preliminary Private Placement Memorandum, dated as of July 19, 2024 (in each case, excluding, for the purposes of this representation
and warranty, any pricing information omitted in this offering document and any information derived from such pricing information), and
of that certain Monetary Metals Bond III, LLC Final Private Placement Memorandum, expected to be dated on or about the week of August
6, 2024 (together with all Posted Information (as defined therein), the “MM Bond III PPM”), the MM Bond III
PPM (as may be amended or supplemented as of any such time), does not and will not contain any untrue statement of a material fact and
does not and will not omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. None of the representations or warranties made by the Borrower herein as of the date of such
representations and warranties, and the statements contained in any other information, certificates, exhibits or reports, furnished by
or on behalf of the Borrower to the Purchaser in connection herewith, when taken as a whole, does not contain any untrue statement of
a material fact or omit any material fact required to be stated therein or necessary to make the statements made therein, in the light
of the circumstances under which they are made, not materially misleading.
5.13
Offering. Subject in part to the truth and accuracy of the Purchaser’s representations set forth in Section 4, the
offer, sale and issuance of the Note as contemplated by this Agreement are exempt from the registration requirements of the Securities
Act and will not result in a violation of the qualification or registration requirements of any applicable state securities Laws.
5.14
Environmental and Other Laws. Except as otherwise may be disclosed in Schedule 5.14 attached hereto: (a) the Borrower is
conducting its business in material compliance with all applicable Laws, including applicable Environmental Laws (as defined below),
and has and is in compliance with all licenses and permits required under any such Laws; (b) none of the operations or properties of
the Borrower is the subject of national, federal, provincial, state or local investigation evaluating whether any material remedial action
is needed to respond to a release of any Hazardous Materials (as defined below) into the environment or to the improper storage or disposal
(including storage or disposal at offsite locations) of any Hazardous Materials; (c) the Borrower has not filed any notice under any
Law indicating that the Borrower is responsible for the improper release into the environment, or the improper storage or disposal, of
any material amount of any Hazardous Materials or that any Hazardous Materials have been improperly released, or are improperly stored
or disposed of; (d) the Borrower has not transported or arranged for the transportation of any Hazardous Material to any location which
is the subject of national, federal, provincial, state or local enforcement actions or other investigations which may lead to claims
against the Borrower for clean-up costs, remedial work, damages to natural resources or for personal injury claims (whether under Environmental
Laws or otherwise); and (e) the Borrower otherwise does not have any known material contingent liability under any applicable Environmental
Laws or in connection with the release into the environment, or the storage or disposal, of any Hazardous Materials.
5.15
Insurance. Schedule 5.15 attached hereto contains a substantially accurate and complete description of all material policies
of property and casualty, liability, workmen’s compensation and other forms of insurance owned or held by or on behalf of the Borrower.
Such policies constitute all policies of insurance required to be maintained under this Agreement. All such policies are in full force
and effect, all premiums due with respect thereto have been paid, and no notice of cancellation or termination in all material respects
has been received with respect to any such policy. Such policies are sufficient for compliance in all material respects with all requirements
of applicable Law and of all agreements to which the Borrower is a party; are valid, outstanding and enforceable policies; provide adequate
insurance coverage in at least such amounts and against at least such risks as are otherwise usually insured against in the same general
area by companies engaged in the same or a similar business for the assets and operations of the Borrower; will remain in full force
and effect through the respective dates set forth in Schedule 5.15 attached hereto without the payment of additional premiums;
and will not in any way be adversely affected by, or terminate or lapse by reason of, the transactions contemplated by this Agreement,
the Note, and the other Transaction Documents.
5.16
Use of Proceeds. Subject to Article II hereof, the proceeds of the Loan shall be used solely by the Borrower for the development,
funding and operation of the Project, as applicable, and not by the Borrower for future exploration activities or mining operations not
related to the operation of the Project (as described in Annex A attached hereto) or for any general corporate purposes or by
any other entity or for any personal, family or household purpose. “Project” shall have the meaning set forth
in Annex A attached hereto.
5.17
Equipment. All facilities, machinery, equipment, fixtures, vehicles and other properties owned, leased or used by the Borrower
are in good operating condition and repair (ordinary wear and tear excepted) and are reasonably fit and usable for the purposes for which
they are being used.
6.
Security Interest.
6.1
Security.(a) In consideration for the indebtedness evidenced by the Note and to ensure and secure the Borrower’s full and
timely performance of all of its obligations under this Agreement and the Note (including, without limitation, the Obligations (as defined
in the Note)), the Borrower will, pursuant to the terms of the Security Documents and subject to the Intercreditor Agreement, grant to
the Purchaser a first priority continuing security interest in favor of the Purchaser as security for the payment and discharge of all
Obligations in all the Borrower’s right, title and interest from time to time in all of the Borrower’s right, title and interest
in, to and under (in each case, whether now owned or existing, or hereafter acquired or arising) its silver, lead, zinc and other mineral
holdings and mineral rights, cash and cash equivalents, intellectual property, real property, accounts, inventory, equipment, receivables,
payment intangibles and other general intangibles and accounts, financial assets and investment property, investment property, securities,
deposit accounts, furniture, trade fixtures, chattel paper, electronic chattel paper, instruments, letter-of-credit rights and any and
all other property of any type or nature owned by it in each case whether now existing or hereafter acquired or arising and wherever
located, and all proceeds of all of the foregoing (all of the property described in this clause being collectively referred to herein
as “Collateral”), including, without limitation, all proceeds thereof, all accessions to and substitutions and replacements
for, any of the foregoing, and all rents, profits and products of any thereof.
(b)
In addition to the foregoing, upon the creation of any Subsidiary, subject to the terms of the Intercreditor Agreement, the Borrower
shall grant to the Purchaser a continuing security interest in favor of the Purchaser as security for the payment and discharge of all
Obligations in all the Borrower’s right, title and interest from time to time in the Equity Interests related to such Subsidiary
(including but not limited to any and all economic rights associated with such Equity Interests and any and all voting rights and other
rights to participate in the management of the issuer of such Equity Interests) and shall execute, deliver, file and record all additional
collateral security documents, notices, financing statement, instruments and documents which are reasonably requested by Purchaser to
create, preserve, continue, perfect or validate any security interest granted hereunder or to enable the Purchaser to exercise or enforce
its rights hereunder with respect to such security interest.
In
addition to the foregoing, the Borrower shall cause the Parent to execute, deliver, file and record all security documents, notices,
financing statement, instruments and documents that are reasonably requested by Purchaser to create, preserve, continue, perfect or validate
any security interest granted hereunder or to enable the Purchaser to exercise or enforce its rights hereunder with respect to any and
all collateral pledged under the Security Documents.
6.2
Perfection. At any time, and from time to time upon the reasonable request of the Purchaser, while the Note is outstanding, the
Borrower will give, execute, file and record any notice, financing statement, amendment to or reaffirmation of any financing statement,
instrument, document or agreement which is reasonably necessary to create, preserve, continue, perfect or validate any security interest
granted hereunder or to enable the Purchaser to exercise or enforce its rights hereunder with respect to such security interest. The
Borrower irrevocably constitutes and appoints the Purchaser as the Borrower’s attorney to execute on behalf of the Borrower or
its Subsidiary, or in the name of the Borrower or Subsidiary, as applicable, financing statements, amendments to financing statements
or other documents under any applicable Law so as to preserve the Purchaser’s security interest (and the priority thereof) in the
Collateral hereunder or under any other security agreement or instrument.
7.
Additional Covenants of the Borrower. So long as any indebtedness under the Note remains outstanding:
7.1
The Borrower will maintain its principal office at the location set forth on the signature page hereto, or such other location of its
principal office, provided that the Borrower shall notify the Purchaser, in writing, within 10 days of any change to its principal office,
in order for notices, presentations and demands (including, without limitation, a demand for payment) to or upon the Borrower in respect
of this Agreement and the Note may be given or made.
7.2
The Borrower shall: (i) do or cause to be done all things reasonably necessary to preserve and keep in full force and effect its corporate
or organizational existence (as applicable), material rights, material permits and material franchises; (ii) continue to conduct its
business substantially as now conducted; and (iii) maintain, preserve and protect all of its assets and properties used in the conduct
of its business in good repair, working order and condition as is reasonably necessary to permit its business to be properly conducted.
7.3
The Borrower will permit, upon reasonable prior written notice, representatives appointed by the Purchaser (including independent accountants,
auditors, agents, attorneys, and appraisers) to visit and inspect during normal business hours any of the Borrower’s or Subsidiary’s
property, including its books of account, other books and records, and any facilities or other business assets, and to make extra copies
therefrom and photocopies and photographs thereof, and to write down and record any information such representatives obtain; provided,
that so long as no Event of Default has occurred and is continuing, the Borrower shall not be required to reimburse the Purchaser for
such visits, examinations and inspections more frequently than once during any calendar year. The Borrower shall permit the Purchaser
and its representatives to investigate and verify the accuracy of the information furnished to the Purchaser in connection with the Note,
this Agreement and all other agreements set forth herein and to discuss all such matters with its officers, employees and representatives.
7.4
The Borrower will
(a)
Promptly, and in no case later than within forty-eight hours, notify the Purchaser in writing, stating that such notice is being given
pursuant to this Agreement, of:
a.
the occurrence of any Default or Event of Default in accordance with Section 8.1 or any Material Adverse Effect;
b.
(i) the acceleration of the maturity of any Permitted Debt owed by the Borrower in an amount in excess of US $250,000 or (ii) any unremedied
default (taking into account any applicable cure period) by the Borrower under any material contract valued in excess of US $250,000;
c.
any claim of US$250,000 (or its equivalent in any foreign currency) or more, any notice of potential liability under any applicable Environmental
Laws which might exceed such amount, or any other material adverse claim asserted against the Borrower or with respect to the Borrower’s
properties which might exceed such amount;
d.
the filing of any suit or proceeding against the Borrower in which (i) any Person seeks an award of US$250,000 or more (or its equivalent
in any foreign currency), on an individual basis or in the aggregate, of damages or other amounts from the Borrower or (ii) an adverse
decision could reasonably be expected to constitute a Material Adverse Effect; and
e.
the creation or acquisition of any Subsidiary by the Borrower; and
(b)
The Borrower will also notify the Purchaser in writing within (10) Business Days of the date the Borrower changes its name, the location
of its chief executive office, or its location under the NY UCC.
7.5
The Borrower will at all times maintain full and accurate books of account and records. The Borrower will maintain a standard system
of accounting, will maintain its fiscal year, and will furnish the following statements and reports to the Purchaser at the Borrower’s
expense:
(i)
within one hundred twenty (120) days after the end of each fiscal year of the Parent, commencing at the end of the fiscal year 2024,
procure the completion of consolidated financial statements of the Borrower Group together with all notes thereto, prepared in reasonable
detail in accordance with U.S. GAAP, together with an unqualified opinion, based on an audit using generally accepted auditing standards,
by an independent certified public accounting firm selected by the Borrower and acceptable to the Purchaser, stating that such consolidated
financial statements have been so prepared.
(ii)
As soon as available, and in any event within sixty (60) days after the end of each fiscal quarter, the Borrower Group’s consolidated
balance sheet as of the end of such fiscal quarter and consolidated statements of the Borrower Group’s earnings and cash flows
for the period from the beginning of the then current fiscal year to the end of such fiscal quarter, all in reasonable detail and prepared
in accordance with U.S. GAAP, subject to changes resulting from normal year-end adjustments.
(iii)
In addition, the Borrower will, together with each such set of financial statements and each set of financial statements furnished under
this Section 7.5, furnish a certificate in the form of Exhibit B signed by the Chief Financial Officer (or an officer holding
an equivalent position) of the Borrower, stating that such financial statements are accurate and complete in all material respects (subject
to normal year-end adjustments), stating that he has reviewed the Transaction Documents, and stating that no Event of Default exists
at the end of such fiscal quarter or at the time of such certificate or specifying the nature and period of existence of any such Event
of Default.
7.6
Following written request by the Purchaser, such other information that the Purchaser may from time to time reasonably request concerning
the Note, this Agreement, any Collateral, or any matter in connection with the Borrower’s businesses, properties, prospects, financial
condition and operations; including monthly reporting on silver extraction results and inventory, monthly and quarterly financial reports
within the deadlines for financial reporting. Such reports shall include audit (if available), consolidated annual financial statements
(accompanied by an unqualified audit report) certified by independent certified public accountants and prepared in U.S. GAAP, unaudited
consolidated monthly and quarterly financial statements and copies of annual tax returns.
7.7
Upon written request of the Purchaser, the Borrower shall duly execute and deliver, or cause to be duly executed and delivered, at its
own cost and expense, such further instruments and documents and shall take all such action, in each case as may be reasonably necessary
in the reasonable judgment of the Purchaser to carry out the provisions and purposes of this Agreement, the Note and any other Transaction
Documents to which it is a party.
7.8
Until the Project has reached commercial production, the Borrower shall not engage in or permit any of its subsidiaries to engage in
any business other than the Project and such other businesses currently engaged in by the Borrower and any such subsidiary as of the
Effective Date, in each case, as set forth in this Agreement and businesses similar, ancillary or related thereto. In addition, the Borrower
will not engage in any transaction with any of its affiliates on terms that are less favorable to it than those that would have been
obtainable at the time in arm’s-length dealing with Persons other than such affiliates.
7.9
Other than dividends or distributions made to the Parent, the Borrower shall not, at any point prior to the full repayment and satisfaction
of the Note, declare or make or cause to be declared and made any dividends or distributions on or in respect of any Equity Interest
in the Borrower or any payment made by the Borrower to purchase, redeem, acquire or retire any Equity Interest in the Borrower (including
any such option or warrant), other than the purchase or redemption of Equity Interests of the Borrower held by then present or former
directors, consultants, officers or employees in connection with such person’s death, disability, retirement or termination of
employment or under the terms of any agreement under which such Equity Interest were issued.
Notwithstanding
anything to the contrary herein, the Parent may provide equity funding by way of capital contributions to the Borrower and its Subsidiaries,
subject to the following conditions: the Borrower Group or any affiliate of the Borrower that becomes a party to the Transaction Documents
is not in breach of the Transaction Documents to which it is a party at the time of such equity funding or will be in breach of a Transaction
Document to which it is a party as a result of the provision of such equity funding.
7.10
Other than with the consent of the Purchaser, the Borrower will not enter into or permit any modification of, or waive any material right
or obligation of any Person under its, as the case may be, certificate or articles of incorporation, articles of organization, bylaws,
regulations, operating agreement or other organizational documents other than amendments, modifications and waivers which could not,
individually or in the aggregate, have a Material Adverse Effect. Without limiting the foregoing, the Borrower will not grant or otherwise
agree to any preemptive right or similar provision, or any anti-dilution or similar provision, whether set forth in a binding agreement
or as part of or in connection with the terms of any Equity Interest of the Borrower or any Subsidiary, in each case that would be violated
by, or that would be triggered, invoked or otherwise implicated by the terms of the Note.
7.11
The Borrower will maintain insurance over its business and Subsidiaries, the Project and any portion of the Collateral consisting of
tangible personal property for risks and in amounts standard for companies in the Borrower’s industry and location. Insurance policies
shall be in a form, with financially sound and reputable insurance companies that are not affiliates of the Borrower, and in amounts
that are customary for businesses of similar size in the same line of business. At the Purchaser’s request, the Borrower shall
deliver certified copies of such insurance policies and evidence of all premium payments. Each provider of any such insurance required
under this Section shall agree, by endorsement upon the policy or policies issued by it or by independent instruments furnished to the
Purchaser, that it will give the Purchaser twenty (20) days’ prior written notice (ten (10) days’ prior written notice for
cancellation due to non-payment of premium) before any such policy or policies shall be materially altered or canceled. If the Borrower
fails to obtain insurance as required under this Section 7.11 or to pay any amount or furnish any required proof of payment to
third Persons, the Purchaser may make all or part of such payment or obtain such insurance policies required in this Section 7.11,
and take any action under the policies the Purchaser deems prudent.
7.12
Other than with the consent of the Purchaser, the Borrower shall not enter into, and shall not cause the Parent or any Subsidiary to
enter into, any agreement regarding: (i) any consolidation or merger of the Borrower or Subsidiary with or into any other corporation
or other entity or Person, or any other corporate or organizational reorganization, other than any such consolidation, merger or reorganization
in which the holders of the Equity Interests of the Borrower or any Subsidiary of the Borrower immediately prior to such consolidation,
merger or reorganization, continue to hold Equity Interests that represents a majority of the voting power of the surviving entity (or,
if the surviving entity is a wholly owned subsidiary, its parent) immediately after such consolidation, merger or reorganization (provided
that, for the purpose of this Section 7.12, all Equity Interests issuable upon exercise of options outstanding immediately prior
to such consolidation or merger or upon conversion of convertible stock or other securities convertible into Equity Interests outstanding
immediately prior to such merger or consolidation shall be deemed to be outstanding immediately prior to such merger or consolidation
and, if applicable, converted or exchanged in such merger or consolidation on the same terms as the actual outstanding Equity Interests
are converted or exchanged); (ii) any transaction or series of related transactions to which the Borrower is a party in which in excess
of fifty percent (50%) of the Borrower’s voting power is transferred; or (iii) the sale, lease, conveyance, exclusive license or
other disposition of a majority of the assets of the Borrower and its Subsidiaries, taken together.
7.13
Other than with the consent of the Purchaser, the Borrower shall not, directly or indirectly, sell, transfer, lease, exchange, alienate
or dispose of any of its material assets or properties or any material interest therein, to a third party not being a member of the Borrower
Group, except the Borrower may sell, transfer, lease, exchange, alienate, or dispose of: equipment or other property which is surplus,
worn out or obsolete or which is no longer used or useful in the business of the Borrower, or the proceeds of which are or are to be
used to purchase equipment or other property of comparable suitability and value; inventory (including silver sold as produced and seismic
and geological data) which is sold in the ordinary course of business; the sale or discount without recourse of accounts receivable arising
in the ordinary course of business in connection with the compromise or collection thereof and not in connection with any financing transaction;
and other sales, transfers or dispositions; provided that both before and after giving effect to any such sale, transfer or disposition,
no Default or Event of Default has occurred and is continuing.
7.14
Other than with the consent of the Purchaser, the Borrower will not
(a)
owe or be liable for any indebtedness except the Obligations, any intercompany loan between members of the Borrower Group who have granted
security to the Purchaser, and any Permitted Debt;
(b)
make prepayments on any existing or future indebtedness to any Person other than to Purchaser or to the extent specifically permitted
by this Agreement or any subsequent agreement between Borrower and Purchaser; and
(c)
create or suffer to exist any Lien on any assets of the Borrower except Permitted Liens. In addition, the Borrower will at all times
maintain, good and defensible title to the fee interests in real property and all silver and other minerals, mineral rights and related
leasehold interests comprising the Collateral, free and clear of all Liens, except for Permitted Liens.
7.15
The Borrower will (a) timely file all required tax returns including any extensions; (b) timely pay all taxes, assessments, and other
governmental charges or levies imposed upon it or upon its income, profits or property before the same become delinquent; (c) pay and
discharge when due all other liabilities now or hereafter owed by it, other than royalty payments suspended in the ordinary course of
business; and (d) maintain appropriate accruals and reserves for all of the foregoing in accordance with U.S. GAAP. The Borrower may,
however, delay paying or discharging any of the foregoing so long as it is in good faith contesting the validity thereof by appropriate
proceedings, if necessary, has set aside on its books adequate reserves therefore that are required by U.S. GAAP, and the failure to
make payment pending such contest could not reasonably be expected to constitute a Material Adverse Effect or result in the seizure or
forfeiture of any silver or other minerals or related leaseholds or properties of the Borrower.
7.16
The Borrower will perform all material obligations it is required to perform under the terms of each indenture, mortgage, deed of trust,
security agreement, lease, franchise, agreement, contract or other instrument or obligation to which it is a party or by which it or
any of its properties is bound except where the failure to do so, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect. The Borrower will conduct its business and affairs in compliance with all Laws applicable thereto
except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse
Effect. The Borrower will cause all licenses and permits necessary for the conduct of its business and the ownership and operation of
its property used in the conduct of its business to be at all times maintained in good standing and in full force and effect except where
the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
7.17
The Borrower will comply with all Environmental Laws now or hereafter applicable to the Borrower, as well as all applicable contractual
obligations and agreements with respect to environmental re-mediation or other environmental matters, and shall obtain, at or prior to
the time required by applicable Environmental Laws, all environmental, health and safety permits, licenses and other authorizations necessary
for its operations and will maintain such authorizations in full force and effect, except to the extent that failure so to comply could
not reasonably be expected to cause a Material Adverse Effect. The Borrower will do anything or permit anything to be done which will
subject any of its properties to any remedial obligations under, or result in noncompliance with applicable permits and licenses issued
under, any applicable Environmental Laws, assuming disclosure to the applicable Governmental Authorities of all relevant facts, conditions
and circumstances, except as could not reasonably be expected to cause a Material Adverse Effect.
7.18
The Borrower will promptly furnish to the Purchaser all material written notices of violation, orders, claims, citations, complaints,
penalty assessments, suits or other proceedings received by the Borrower, or of which the Borrower otherwise has written notice, pending
or threatened against the Borrower or a Subsidiary by any Governmental Authority with respect to any alleged violation of or non-compliance
with any applicable Environmental Laws or any permits, licenses or authorizations in connection with the Borrower’s or such Subsidiary’s
ownership or use of its properties or the operation of its business.
7.19
Following an Event of Default which is continuing beyond any applicable cure period, the Purchaser shall be entitled to appoint one (1)
individual by written notice to the Borrower from time to time (the “Board Observer”), who shall be permitted
to attend and participate in all meetings of the board of directors of the Parent (the “Board”). The Board
Observer shall have no right to vote on any matter presented to the Board. The Borrower shall give the Board Observer written notice
of each meeting thereof at the same time and in the same manner as the other members of the Board receive notice of such meetings (but
in any event no later than three (3) Business Days prior to any such meeting). The Borrower shall permit the Board Observer to attend
and participate in all meetings thereof. The Board Observer shall be entitled to receive all written materials and other information
given to other members of the Board in connection with such meeting or otherwise, at the same time such materials and information are
given to the other members of the Board. The Board Observer shall be subject to the same confidentiality and other restrictions as imposed
on the other members of the Board by Law or otherwise. If the Borrower proposes to take any action by written consent in lieu of a meeting
of the Board, then the Borrower shall give written notice thereof to the Board Observer describing the nature and substance of such action
and including the text of such written consents. The Borrower shall pay the reasonable and documented out-of-pocket costs and expenses
of the Board Observer incurred in connection with attending such meetings of the Board, on the same basis as for other members of the
Board. The Purchaser’s right to appoint a Board Observer pursuant to this Section shall end upon full repayment and satisfaction
of all indebtedness under the Note. The Purchaser hereby appoints Saad Zein as the current Board Observer.
7.20
The Borrower will promptly furnish to the Purchaser all material requests for information, notices of claim, demand letters, and other
notifications, received by the Borrower in connection with the Borrower’s ownership or use of its properties or the conduct of
its business, relating to potential responsibility with respect to any investigation or clean-up of Hazardous Material at any location.
7.21
The Borrower agrees that it will, or will cause Bunker Hill Mining Corp. to:
(a)
commencing on August 8, 2025, maintain a long term cash reserve in excess of [Redacted – Commercial Information], provided
that any failure to maintain such cash reserve amount shall be subject to a thirty (30) calendar day cure period;
(b)
not conduct any exploration activity (not related to the Bunker Hill silver mine in Idaho) unless the cash balance exceeds [Redacted
– Commercial Information], excluding the first year interest reserve amount; and
(c)
provide the same reports regarding the Company’s financial position (income statement, balance sheet and cash flow statement) as
will be provided as will be provided to Sprott Private Resources Streaming and Royalty Corp.
7.22
The Borrower agrees to the Purchaser retaining an amount equal to the number of Ounces of Silver payable to the Purchaser in interest
during the first year and hold such amount in an escrow account, with such amount to be used by the Purchaser to pay any interest as
it becomes due during the first year and provided that, in the event that such amount held by the Purchaser pursuant to this Section
7.22 is in excess of the amount of interest actually due and payable during the first year, such excess shall be applied towards the
principal amount owing under the Note.
7.23
The Borrower agrees not to, without the consent of the Purchaser, repay any other Debt or Loan obligations until the Loan is repaid in
full, other than any payments required in connection with any Permitted Debt.
7.24
On or before August 31, 2024, the Borrower will deliver to the Purchaser the final version of the consolidated unaudited balance sheet
for the Borrower Group as of June 30, 2024 previously provided to the Purchaser.
8.
Default.
8.1
Events of Default. For purposes of this Agreement and the Note, any of the following events which shall occur shall constitute
an “Event of Default”:
(a)
the Borrower fails to pay (i) any principal in respect of any indebtedness under the Note when due and payable pursuant to the terms
of this Agreement and the Note or (ii) any interest in respect of any indebtedness under the Note, or any fee or other amount payable
under the Transaction Documents when due and payable and such failure remains unremedied for a period of three (3) Business Days; provided,
that, notwithstanding the foregoing, solely with respect to the Payment Date on November 8, 2024, the Borrower fails to pay any such
interest in respect of the indebtedness under the Note (if such unpaid interest amount and such failure remains unremedied for a period
of fourteen (14) calendar days);
(b)
the Borrower or Parent fails in the observance or performance (as applicable) of (i) any covenant, term, obligation or agreement under
the Transaction Documents and such failure remains unremedied for a period of fifteen (15) Business Days;
(c)
any representation, warranty or certification made by the Borrower or on behalf of the Borrower or Parent herein or in any other Transaction
Document or in any additional security or finance agreements or documents entered into accordance with the terms hereof or in the Note
or in any certificate, report, document, agreement or instrument delivered pursuant to any provision hereof or thereof shall prove to
have been false or incorrect in any material respect on or as of the date made or deemed made and such inaccuracy is not remedied within
fifteen (15) Business Days, other than with respect to any false or incorrect representation, warranty or certification that cannot be
cured due to its nature;
(d)
the Borrower or any of its Subsidiaries shall (i) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator
of itself or any part of its property, (ii) become subject to the appointment of a receiver, trustee, custodian or liquidator for itself
or any part of its property if such appointment is not terminated or dismissed within sixty (60) days, (iii) make an assignment for the
benefit of creditors, (iv) fail generally or admit in writing to its inability to pay its Debts as they become due, (v) institute any
proceedings under any applicable bankruptcy, reorganization, receivership, insolvency or other similar Law affecting the rights of creditors
generally, or file a petition or answer seeking reorganization or an arrangement with creditors to take advantage of any insolvency Law,
or file an answer admitting the material allegations of a bankruptcy, reorganization or insolvency petition filed against it, or (vi)
become subject to any involuntary proceedings under any applicable bankruptcy, reorganization, receivership, insolvency or other similar
Law affecting the rights of creditors generally, which proceeding is not dismissed within sixty (60) days of filing, or have an order
for relief entered against it in any proceeding under any applicable bankruptcy, reorganization, receivership, insolvency or other similar
Law affecting the rights of creditors generally;
(e)
the Borrower or any of its Subsidiaries shall (i) liquidate, wind up or dissolve (or suffer any liquidation, wind-up or dissolution),
(ii) suspend its operations other than in the ordinary course of business, or (iii) take any action to authorize any of the actions or
events set forth above in Section 8.1(d) or Section 8.1(e);
(f)
one or more judgments, orders, decrees or awards for the payment of money in an amount in excess of US$250,000 (provided, however, that
if the Borrower’s cumulative Cash Flow (as defined in the Note), as evidenced by the Borrower’s latest updated financial
statements available at such time, is equal to or greater than US$2,000,000, then US$500,000) or its equivalent in any foreign currency
(except to the extent fully covered (other than to the extent of customary deductibles) by insurance pursuant to which the insurer has
not denied coverage) is entered or filed against the Borrower or any of its Subsidiaries, or with respect to any of its assets and the
same are not, within sixty (60) days after the entry thereof, discharged, satisfied, or paid, or after execution thereof stayed or bonded
pending appeal, or such judgments are not discharged prior to the expiration of any such stay;
(g)
the occurrence of a Senior Event of Default (as defined in the Intercreditor Agreement); or
(h)
the security interest grant to the Purchaser is held to be invalid or unenforceable, in whole or in part, or the Purchaser shall cease
to have a perfected priority Lien (subject to Permitted Liens) in any of the Collateral.
8.2
Consequences of Events of Default.
(a)
If any Event of Default shall occur for any reason, whether voluntary or involuntary, the Purchaser may, upon written notice or demand
to the Borrower, declare the outstanding Obligations due and payable, whereupon the outstanding Obligations shall be and become immediately
due and payable, and the Borrower shall immediately pay to the Purchaser all such indebtedness. Upon the occurrence of an Event of Default
under Section 7.1(d), then all indebtedness under the Note and any other Transaction Document shall automatically be due immediately
without notice of any kind.
(b)
The Purchaser shall also have any other rights which the Purchaser may have been afforded under any contract or agreement at any time
and any other rights which the Purchaser may have pursuant to applicable Law. The Purchaser may exercise any and all of its remedies
under this Agreement or any other Transaction Document contemporaneously or separately from the exercise of any other remedies hereunder
or under applicable Law.
9.
Miscellaneous.
9.1
Survival of Representations, Warranties and Covenants. The warranties, representations and covenants of the Borrower and the Purchaser
contained in or made pursuant to the Note and this Agreement shall survive the Closing and shall in no way be affected by any investigation
of the subject matter thereof made by or on behalf of any Purchaser or the Borrower, and shall further survive until all of the Obligations
are paid in full to the Purchaser.
9.2
Successors and Assigns. Except as otherwise provided herein or therein, the terms and conditions of this Agreement and the Note
shall inure to the benefit of and be binding upon the respective successors and permitted assigns of the parties (including permitted
transferees of the Note); provided, that neither party may assign or transfer its rights or obligations hereunder or under the Note without
the prior written consent of the other party, unless an Event of Default has occurred and is continuing, in which case Purchaser may
assign or transfer its rights or obligations hereunder or under the Note without the prior written consent of the Borrower. Nothing in
this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors
and permitted assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
9.3
Governing Law; Arbitration. This Agreement and all other Transaction Documents (unless otherwise specified therein) are to be
construed in accordance with and governed by the laws of the State of New York without giving effect to any conflicts of law principles
that would result in the application of the laws of any other nation or state. Any dispute, controversy, or claim arising out of, relating
to, or in connection with this Agreement and all other Transaction Documents (unless otherwise specified therein), including with respect
to the formation, applicability, breach, termination, validity or enforceability thereof, shall be resolved by arbitration. The arbitration
shall be conducted by three arbitrators, in accordance with the rules the International Centre for Dispute Resolution of the American
Arbitration Association, in effect at the time of the arbitration. The arbitrators shall be appointed as provided for in said rules.
The seat of the arbitration shall be New York City, New York, United States, and it shall be conducted in the English language. The arbitration
award shall be final and binding on the parties, and the parties undertake to carry out any award without delay. Judgment upon the award
may be entered by any court having jurisdiction of the award or having jurisdiction over the relevant party or its assets.
9.4
Counterparts. This Agreement may be executed in several counterparts and by facsimile or electronic means, each of which shall
be deemed an original, but all of which together shall constitute one and the same instrument.
9.5
Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered
in construing or interpreting this Agreement.
9.6
Notices. All notices, requests, waivers and other communications made pursuant to this Agreement shall be in writing and shall
be conclusively deemed to have been duly given: (i) when hand delivered to the other parties; (ii) when sent by confirmed facsimile or
electronic mail to the number or email address, as applicable, set forth on the signature page or Schedule A hereto if sent between
8:00 a.m. and 5:00 p.m. recipient’s local time on a Business Day, or on the next Business Day if sent other than between 8:00 a.m.
and 5:00 p.m. recipient’s local time on a Business Day; (iii) three (3) Business Days after deposit with a national mail service
(first class or certified mail, receipt requested, postage prepaid and addressed to the other parties at the addresses set forth on the
signature page or Schedule A hereto); or (iv) the next Business Day after deposit with a national overnight delivery service,
postage prepaid, addressed to the parties as set forth on the signature page or Schedule A hereto with next Business Day delivery
guaranteed, provided that the sending party receives a confirmation of delivery from the delivery service provider. Each Person making
a communication hereunder by facsimile shall promptly confirm by telephone to the Person(s) to whom such communication was addressed
each communication made by it by facsimile pursuant hereto but the absence of such confirmation shall not affect the validity of any
such communication. A party may change or supplement the addresses given above, or designate additional addresses, for purposes of this
Section 9.6 by giving the other parties written notice of the new address in the manner set forth above. In the event of any conflict
between the Borrower’s books and records and this Agreement or any notice delivered hereunder, the Borrower’s books and records
will control absent fraud or error.
9.7
Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or prospectively), only if such amendment, modification or waiver
is in writing executed by the Borrower and the Purchaser. Any amendment or waiver effected in accordance with this section shall be binding
upon each holder of the Note acquired under this Agreement at the time outstanding, each future holder of the Note and the Borrower.
9.8
Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable Law, such provision shall
be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall
be enforceable in accordance with its terms.
9.9
Expenses and Fees. In addition to interest calculated pursuant to the Note:
(a)
The Borrower shall pay the Purchaser’s costs, up to a maximum amount of [Redacted – Commercial Information], plus
[Redacted – Commercial Information] of the excess amount above this threshold, regardless of whether the Borrower and the
Purchaser ultimately enter into the proposed Loan, relating to due diligence expenses (including travel and lodging expenses and technical
consultants’ expenses), legal and issuances expenses and other, unanticipated costs incurred in relation to the issuance of this
Loan. Such expenses will be deducted from the Loan proceeds advanced by the Purchaser to the Borrower on the Effective Date.
(b)
Each party shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of this
Agreement, unless otherwise specified in this Agreement.
(c)
In addition, on or prior to the Closing Date, the Borrower shall pay to the Purchaser the “Underwriting Fee” which means
the amount equivalent to 2.5% of the US$ amount of the Loan payable by the Borrower to the Purchaser in U.S. Dollars. This Underwriting
Fee will be paid on a net settlement basis against the issuance proceeds.
(d)
An additional break free of 2.5% of the Loan amount shall be payable by the Borrower to the Purchaser, if the Purchaser secures commitments
for the needed funding and provides a definitive set of legal documents matching the terms set for herein or further negotiated, but
the Borrower does not go forward with the Loan within the period contemplated herein.
(e)
The Borrower shall also cause the issue to the Purchaser of warrants issued by the Parent within five Business Days of each advance of
the Loan proceeds. The warrants are subject to approval of the TSX Venture Exchange, and will be issued in one or more tranches in an
amount up to, in the aggregate, a maximum of 3,000,000 warrants calculated as follows:
a.
in connection with the first tranche, such number of warrants that is equal to two times the number of Ounces of Silver advanced by the
Purchaser under the first tranche (the “Base Warrants”) and a bonus ratchet of: (i) 2.5% of the Base Warrants
if at least 500,000 and up to 599,999 Ounces of Silver are advanced, (ii) 5.0% of the Base Warrants if at least 600,000 and up to 699,999
Ounces of Silver are advanced, (iii) 10.0% of the Base Warrants if at least 700,000 and up to 799,999 Ounces of Silver are advanced,
and (iv) 15.0% of the Base Warrants if at least 800,000 Ounces of Silver are advanced; and
b.
in connection with any additional tranches, such number of warrants that is equal to two times the number of Ounces of Silver advanced
by the Purchaser under such tranche.
The
exercise price of each warrant shall be set at the last closing price of the Parent’s common stock prior to the date such warrants
are issued and each warrant shall vest immediately on issuance. The warrants will be exercisable at any time, in whole or in part, until
the earlier of (i) three years from their issuance date and (ii) the Loan Maturity Date. The terms of any warrants are subject to applicable
TSX Venture Exchange rules and requirements.
9.10
Finder’s Fee. Each party represents that it neither is nor will be obligated for any finders’ fee or commission in
connection with this transaction. The Purchaser agrees to indemnify and to hold harmless the Borrower from any liability for any commission
or compensation in the nature of a finders’ fee (and the costs and expenses of defending against such liability or asserted liability)
for which the Purchaser or any of its officers, partners, employees or representatives is responsible. The Borrower agrees to indemnify
and hold harmless the Purchaser from any liability for any commission or compensation in the nature of a finder’s fee (and the
costs and expenses of defending against such liability or asserted liability) for which the Borrower or any of its officers, employees
or representatives are responsible.
9.11
Indemnity. The Borrower agrees to indemnify the Purchaser, upon demand, from and against any and all liabilities, obligations,
broker’s fees, claims, losses, damages, penalties, fines, actions, judgments, suits, settlements, costs, expenses or disbursements
(including reasonable fees of attorneys, accountants, experts and advisors) of any kind or nature whatsoever (in this section collectively
called “liabilities and costs”) which to any extent (in whole or in part) may be imposed on, incurred by, or asserted against
the Purchaser growing out of, resulting from or in any other way associated with any of the Collateral, the Note, this Agreement and
the transactions and events (including the enforcement or defense thereof) at any time associated therewith or contemplated therein (whether
arising in contract or in tort or otherwise). Among other things, the foregoing indemnification covers all liabilities and costs (i)
arising from, related to or in connection with any untrue statement or alleged untrue statement of a material fact contained in the MM
Bond III PPM or any revision or amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material
fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, (ii)
incurred by the Purchaser related to any breach by the Borrower of the Note, this Agreement or any other Transaction Document, (iii)
arising from, related to or in connection with any bodily injury to any Person or damage to any Person’s property, or (iv) arising
from, related to or in connection with any violation or noncompliance with any Environmental Laws by the Purchaser or any other Person
or any liabilities or duties of the Purchaser or any other Person with respect to Hazardous Materials found in or released into the environment.
THE
FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN
PART, UNDER ANY CLAIM OR THEORY OF STRICT LIABILITY OR CAUSED, IN WHOLE OR IN PART BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY THE
PURCHASER (IN EACH CASE WHETHER ALLEGED, ARISING OR IMPOSED IN A LEGAL PROCEEDING BROUGHT BY OR AGAINST THE BORROWER, THE PURCHASER,
OR ANY OTHER PERSON); provided, that the Purchaser shall not be entitled under this Section 9.11 to receive indemnification for
that portion, if any, of any liabilities and costs that is caused by its gross negligence, bad faith or willful misconduct, as determined
in a final judgment or ruling by an arbitrator. If any Person (including the Borrower or any of its affiliates) ever alleges such gross
negligence, bad faith or willful misconduct by the Purchaser, the indemnification provided for in this Section shall nonetheless be paid
upon demand, subject to later adjustment or reimbursement, until such time as a court of competent jurisdiction or arbitrator enters
a final judgment as to the extent and effect of the alleged gross negligence, bad faith or willful misconduct. As used in this Section
the term “Purchaser” shall refer not only to the Purchaser but also to each director, officer, agent, trustee, attorney,
employee, representative and affiliate of or for the Purchaser.
IN
ADDITION, THE BORROWER AND THE PURCHASER HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY: (A) WAIVE, TO THE MAXIMUM EXTENT
NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR DIRECTLY OR INDIRECTLY
AT ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH THE NOTE, THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED THEREBY OR ASSOCIATED
THEREWITH, BEFORE OR AFTER MATURITY; (B) WAIVE, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER
IN ANY SUCH LITIGATION ANY “SPECIAL DAMAGES” AS DEFINED BELOW; (C) CERTIFY THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR
AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (D) ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE NOTE
AND OTHER DOCUMENTS DESCRIBED IN THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION. AS USED IN THIS SECTION, “SPECIAL DAMAGES” INCLUDES ALL SPECIAL, CONSEQUENTIAL,
EXEMPLARY, OR PUNITIVE DAMAGES (REGARDLESS OF HOW NAMED), BUT DOES NOT INCLUDE ANY PAYMENTS OR FUNDS WHICH ANY PARTY HERETO HAS EXPRESSLY
PROMISED TO PAY OR DELIVER TO ANY OTHER PARTY HERETO.
9.12
Further Assurances. The Purchaser and the Borrower shall from time to time and at all times hereafter make, do, execute, or cause
or procure to be made, done and executed such further acts, deeds, conveyances, consents and assurances without further consideration,
which may reasonably be required to effect the transactions contemplated by this Agreement and the Note.
9.13
Entire Agreement. This Agreement and the Note constitute the entire agreement among the parties with respect to the subject matter
hereof and no party shall be liable or bound to any other party in any manner by any warranties, representations or covenants except
as specifically set forth herein or therein.
9.14
Attorney’s Fees. If, in any action at law or in equity (including arbitration), it is necessary to enforce or interpret
the terms of either this Agreement, the Note or any other Transaction Document the prevailing party in a final, non-appealable judgment
shall be entitled to reasonable attorney’s fees, costs and necessary disbursements in addition to any other relief that such party
may be entitled.
[Signature
Page Follows]
In
Witness Whereof, the parties have executed this
Agreement as of the date first written above.
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BORROWER: |
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SILVER
VALLEY METALS CORP. |
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By: |
/s/
Sam Ash |
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Name:
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Sam
Ash |
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Title:
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President |
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Address:
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[Redacted
– Personal Information] |
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Facsimile:
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E-mail:
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[Redacted
– Personal Information] |
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PARENT: |
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BUNKER
HILL MINING CORP. |
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By: |
/s/
Sam Ash |
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Name:
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Sam
Ash |
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Title:
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President,
Chief Executive Officer and Director |
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Address:
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[Redacted
– Personal Information] |
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Facsimile:
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E-mail:
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[Redacted
– Personal Information] |
[Signature
Page to Amended and Restated Secured Promissory Note Purchase Agreement]
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PURCHASER: |
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Monetary
Metals Bond III LLC |
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By:
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/s/
Saad Zein |
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Name:
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Saad
Zein |
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Title:
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Chief
Portfolio Officer |
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Address:
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[Redacted
– Personal Information] |
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Facsimile: |
[Redacted
– Personal Information] |
|
E-mail: |
|
|
Saad
Zein |
|
[Redacted
– Personal Information] |
|
|
|
Anatoly
Burman |
|
[Redacted
– Personal Information] |
|
|
|
Global
email |
|
[Redacted
– Personal Information] |
|
|
|
With
copies to |
|
|
|
Nathan
Lucas |
|
[Redacted
– Personal Information] |
|
Tel:
[Redacted – Personal Information] |
|
|
|
John
Flaherty |
|
[Redacted
– Personal Information] |
|
Tel:
[Redacted – Personal Information] |
[Signature
Page to Amended and Restated Secured Promissory Note Purchase Agreement]
SCHEDULE
A
SCHEDULE
OF PURCHASERS AND NOTE AMOUNT
Name
and Address |
|
Closing
Amount |
|
|
|
Monetary
Metals Bond III LLC
[Redacted
– Personal Information]
Facsimile:
[Redacted – Personal Information]
E-mail:
Saad
Zein
[Redacted
– Personal Information]
Anatoly
Burman
[Redacted
– Personal Information]
Global
email
[Redacted
– Personal Information]
With
copies to:
Nathan
Lucas
[Redacted
– Personal Information]
[Redacted
– Personal Information]
John
Flaherty
[Redacted
– Personal Information]
[Redacted
– Personal Information]
|
|
US$
equivalent of up to 1,200,000 Ounces of Silver on date of Note |
Total |
|
US$
equivalent of up to 1,200,000 Ounces of Silver on date of Note |
SCHEDULE
1
PERMITTED
DEBT
PERMITTED
LIENS
SCHEDULE
5.3
LITIGATION;
LABOR DISPUTES AND ACTS OF GOD
[___________]
SCHEDULE
5.4
ABSENCE
OF REQUIRED CONSENTS; NO VIOLATIONS
[___________]
SCHEDULE
5.6(a)
CHANGES
[___________]
SCHEDULE
5.7
CAPITALIZATION
The
authorized capital stock of the Borrower’s consists of 100 shares of common stock.
SCHEDULE
5.11
SUBSIDIARIES
[________]
SCHEDULE
5.14
ENVIRONMENTAL
AND OTHER LAWS
[________]
SCHEDULE
5.15
INSURANCE
[________]
SCHEDULE
6
EXCLUDED
COLLATERAL
[________]
EXHIBIT
A
FORM
OF NOTE
[To
be attached.]
EXHIBIT
B
CFO
CERTIFICATE
●,
2024
Reference
is made to that certain Secured Promissory Note Purchase Agreement dated as of [●], 2024 (together with all schedules, exhibits
and annexes attached thereto and contemplated therein, as amended, restated, amended and restated, supplemented or otherwise modified
from time to time, the “Note Purchase Agreement”), by and between Monetary Metals Bond III LLC (the “Purchaser”)
and Silver Valley Metals Corp. (the “Company”). This certificate is being delivered pursuant to Section 7.5(iii) of
the Note Purchase Agreement. Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Note
Purchase Agreement.
The
undersigned hereby certifies, on behalf of the Company and solely in his capacity as Chief Financial Officer of the Company and not in
his personal capacity, as follows:
1. |
I
am the duly qualified and acting Chief Financial Officer of the Company, and in such capacity, I am (a) responsible for the Company’s
financial and accounting matters, and (b) familiar with the Company’s operations, accounting records, internal controls, internal
business reporting and recording system. |
|
|
2. |
I
have reviewed the (a) financial statements attached hereto as Annex A (the “Financial Statements”), a copy
of which has been provided to the Purchaser pursuant to Section 5.5(a) of the Note Purchase Agreement and (b) the Transaction Documents. |
|
|
3. |
The
Financial Statements are accurate and complete in all material respects (subject to normal year-end adjustments). |
|
|
4. |
As
of (a) the date hereof and (b) the end of the fiscal quarter last covered by the Financial Statements, no Event of Default exists
or is continuing. |
[Signature
Page Follows]
IN
WITNESS WHEREOF, the undersigned has executed this certificate as of the date first set forth above.
|
By:
|
|
|
Name:
|
[●] |
|
Title:
|
Chief
Financial Officer |
ANNEX
A
DESCRIPTION
OF THE PROJECT
The
“Project” involves the development and restart of the Guarantor’s 100% owned flagship asset, the Bunker Hill zinc-lead-silver
mine (the “Bunker Hill Mine” or the “Mine”) in Idaho, USA. The Mine includes all mining rights and claims, surface
rights, fee parcels, mineral interests, easements, existing infrastructure at Milo Gulch, and the majority of machinery and buildings
at the Kellogg Tunnel portal level, as well as all equipment and infrastructure anywhere underground at the Bunker Hill Mine. It also
includes all current and historic data relating to the Bunker Hill Mine, such as drill logs, reports, maps, and similar information located
at the Mine site or any other location.
Exhibit
10.2
Execution
Copy
THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. THIS
SECURITY MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR QUALIFICATION OR AN EXEMPTION THEREFROM UNDER SAID ACT
AND ANY APPLICABLE U.S. STATE SECURITIES LAWS OR AN OPINION OF COUNSEL FOR THE HOLDER SATISFACTORY TO THE BORROWER THAT SUCH REGISTRATION
IS NOT REQUIRED UNDER SAID ACT. THIS SECURITY IS SUBJECT TO RESTRICTIONS ON TRANSFER CONTAINED IN THAT CERTAIN SECURED PROMISSORY NOTE
PURCHASE AGREEMENT, DATED AUGUST 8, 2024, WHICH RESTRICTIONS ON TRANSFER ARE INCORPORATED HEREIN BY REFERENCE.
SECURED
PROMISSORY NOTE
No.
A-1
US$
equivalent of up to 1,200,000 Ounces of Silver as of August 8, 2024.
Dated
as of: August 8, 2024
New
York, NY
TABLE
OF CONTENTS
|
|
Page |
1. |
Definitions |
1 |
2. |
Note
Purchase Agreement |
3 |
3. |
Maturity |
4 |
4. |
Payments |
4 |
|
4.1 |
Form
of Payment |
4 |
|
4.2 |
Interest
and Principal |
4 |
|
4.3 |
Taxes |
8 |
5. |
Security |
9 |
6. |
Waivers |
9 |
7. |
Repayment
of Principal and Interest Upon Maturity; Default and Acceleration |
9 |
8. |
Prepayments |
10 |
9. |
Payment
Currency |
12 |
10. |
Lost,
Stolen, Destroyed or Mutilated Note |
12 |
11. |
Governing
Law; Arbitration |
12 |
12. |
Amendment
and Waiver |
12 |
13. |
Notices |
13 |
14. |
Severability |
13 |
15. |
Assignment;
Successors |
13 |
16. |
Remedies
Cumulative; Failure or Indulgence Not a Waiver |
13 |
17. |
Payments |
13 |
18. |
Excessive
Interest |
14 |
19. |
Disgorgement |
14 |
20. |
Waiver
of Notice |
14 |
For
Value Received, SILVER VALLEY METALS CORP.
(with its business address at 1 Mine Road, Kellogg, ID 83837), an Idaho corporation (the “Borrower”), hereby
promises to pay to the order of Monetary Metals Bond III LLC, a Delaware limited liability company, or its permitted assigns (the
“Holder”), the principal sum owing from time to time of the U.S. Dollar equivalent of up to 1,200,000 troy
ounces of silver on the dates specified in Schedule A of this Note (such amount, collectively, the “Silver Loan Amount”)
with simple interest on the outstanding Silver Loan Amount at the Interest Rate (computed on an actual/360 day basis) or, if less, at
the highest rate of interest then permitted under applicable law. Interest shall commence with the date hereof and shall continue to
accrue on the outstanding Silver Loan Amount of this Note until paid in full in accordance with the provisions hereof.
1.
Definitions
For
purposes of this Note:
1.1
“Agreement” has the meaning ascribed to it in Section 2 of this Note.
1.2
“Borrower” has the meaning ascribed to it in the recitals to this Note.
1.3
“Borrower Group” means Bunker Hill Mining Corp., the Borrower and any subsidiary of either entity incorporated
or established after the date hereof.
1.4
“Business Day” means any day other than (i) a Saturday, (ii) a Sunday, (iii) a day on which the New York Stock
Exchange or TSX Venture Exchange is closed, or (iv) a day on which banking institutions or silver depositories/warehouses are authorized
or obligated by law or executive order to remain closed in New York City, United States.
1.5
“Calculation Agent” shall have the meaning set forth in Section 4.2(e).
1.6
“Cash Flow” means, for any period, calculated as of the conclusion of each immediately preceding Financial
Month, the sum (without duplication) of [Calculation Redacted – Confidential Information.] For purposes of this definition,
“Financial Month” means each month of the calendar year.
1.7
“Cash Flow Available for Debt Service” means, for any period, an amount equal to the amount of Cash Flow received
by the Borrower Group during such period plus principal and interest and other debt service charges paid during such period.
1.8
“Determination Period” means the period from and including the immediately preceding Payment Date to but excluding
the related Payment Date; provided, that the initial Determination Period shall mean the period from and including the date of this Note
to but excluding the initial Payment Date.
1.9
“Early Termination Date” shall have the meaning set forth in Section 8.
1.10
“Early Termination Fee” shall have the meaning set forth in Section 8.
1.11
“Final Scheduled Payment Date” means 5:00 p.m. New York time on August 8, 2027.
1.12
“Holder” has the meaning ascribed to it in the recitals to this Note.
1.13
“Interest Rate” means a simple rate of interest per annum (Annual Percentage Rate) equal to 15%.
1.14
“LBMA” means the London Bullion Market Association.
1.14
“Mandatory Prepayment” shall have the meaning set forth in Section 8(v).
1.15
“Maturity Date” has the meaning ascribed to it in Section 3 of this Note.
1.16
“Note” means this Secured Promissory Note (as the same may be amended, restated, supplemented, or otherwise
modified from time to time in accordance with its terms).
1.17
“Obligations” means all obligations of the Borrower to the Holder howsoever created, arising or evidenced,
whether direct or indirect, joint or several, absolute or contingent, or now or hereafter existing, or due or to become due, which arise
out of or in connection with this Note, the Security Documents and each other related document, including, without limitation, the entire
unpaid Silver Loan Amount, all unpaid accrued interest, if applicable pursuant to Section 7 hereof, and all other costs and expenses
incurred by the Holder in connection with the enforcement of this Note or otherwise payable by the Borrower pursuant to the terms hereof
or under the Agreement.
1.18
“Ounce” means a fine troy ounce.
1.19
“Payment Date” shall have the meaning set forth in Section 4.2(b).
1.20
“Prepayment” shall have the meaning set forth in Section 8.
1.21
[Intentionally deleted].
1.22
“Principal Payment Amount” shall have the meaning set forth in Section 4.2(b).
1.23
“Silver” means silver of minimum .999 fineness in silver bars, conforming in all respects with the specification
for “Good Delivery Silver Bars” under the “Good Delivery Rules”, as published by the LBMA from time to time.
1.24
“Silver Loan Amount” has the meaning ascribed to it in the recitals to this Note.
1.25
“Spot Rate” means, for purposes of calculation of principal and interest payment amounts in connection with
this Note on any date of determination, the spot rate of exchange for the purchase of Silver against payment of U.S. Dollars being reasonably
quoted by the Calculation Agent based on the LBMA Silver price (12:00 p.m. UTC) on the applicable date on such date (or, in the case
of regularly scheduled payment of principal and interest on a Payment Date, then the last day in the related Determination Period); provided,
that, in the event of a Spot Rate Cessation, the “Spot Rate” as of any such date of determination will be the LBMA Silver
price (12:00 p.m. UTC) on the last published date prior to the occurrence of such Spot Rate Cessation. Broker charges incurred in funding
the Loan, or repayment of principal and interest are to the account of the Parent.
1.26
“Spot Rate Cessation” shall have the meaning set forth in Section 4.2(c).
1.27
“Tax” or “Taxes” means any present or future taxes (including income, gross receipts,
license, payroll, employment, excise, severance, stamp, documentary, occupation, premium, windfall profits, environmental, capital stock,
franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use,
transfer, registration, value-added, ad valorem, alternative or add-on minimum, estimated or other tax of any kind whatsoever), levies,
imposts, duties, assessments, fees or charges (including any interest, penalty or addition thereof) imposed by any applicable Governmental
Authority.
Capitalized
but otherwise undefined terms used herein have the meanings provided therefor in the Agreement.
2.
Note Purchase Agreement. This Note is issued
pursuant to, and is subject to, the terms of that certain Secured Promissory Note Purchase Agreement (as the same may be amended, restated,
supplemented, or otherwise modified from time to time in accordance with its terms, the “Agreement”), dated
as of the date hereof, by and between the Borrower and the Holder. All of the terms, covenants and conditions contained in the Agreement
are hereby made part of this Note to the same extent and with the same force as if they were fully set forth herein. In the event of
a conflict or inconsistency between the terms of this Note and the Agreement, the terms and provisions of the Agreement shall govern.
The Holder is unconditionally and absolutely authorized and directed by the Borrower to record on the attached Schedule A (i) the date
and amount of each advance made by the Holder and the resulting increase in the Silver Loan Amount, and (ii) the date and amount of each
repayment on account of outstanding Obligations paid to the Holder and the resulting decrease in the Silver Loan Amount. Such notations,
in the absence of manifest mathematical error, is prima facie evidence of such advances, repayments and the outstanding Silver Loan Amount,
as adjusted from time to time. The failure to record the date and amount of any advance on the attached Schedule A shall not limit or
otherwise affect the obligation of the Borrower to repay the Silver Loan Amount of the advances actually made by the Holder together
with all interest accruing on such principal amount.
3.
Maturity. Unless sooner paid in full in accordance
with the terms hereof, all Obligations shall become fully due and payable on the earlier of (i) the Final Scheduled Payment Date, or
(ii) the acceleration of the maturity of this Note by the Holder pursuant to the terms of the Agreement (such earlier date, the “Maturity
Date”).
4.
Payments.
4.1
Form of Payment. All calculations made with respect to and payments in connection with the Obligations shall be denominated in
Ounces of Silver, and wired in U.S. Dollar equivalents in an amount reasonably determined by the Calculation Agent at the Spot Rate immediately
prior to the date of such note payment that is equal to the amount of Ounces of Silver due and owing under the then-outstanding Obligations
to the Holder, pursuant to the wire instructions set forth herein or otherwise at the address specified in the Agreement, or in Ounces
of Silver to the designated Silver account of the Holder set forth below or at such other address as may be specified from time to time
by the Holder in a written notice delivered to the Borrower. All payments shall be applied first to any costs and expenses of the Holder
required to be paid by the Borrower pursuant to the terms hereunder and under the Agreement. All payments made to the Holder by the Borrower
Group to reflect Ounces of Silver will be adjusted to reflect the brokerage cost of converting the cash to Silver which shall be for
the Borrower Group’s account.
Cash
payments shall be made to the Holder by wire transfer of U.S. Dollars in immediately available funds in accordance with the following
wire instructions:
[Redacted
– Personal Information]
Distributions
made in Silver shall be made to the following designated Silver account of the Holder:
[Redacted
– Personal Information]
4.2
Interest and Principal.
(a)
Without limiting the right of the Holder to, at any time after the occurrence and continuance of an Event of Default (as defined in the
Agreement), demand repayment thereof, simple interest amounts using the Interest Rate and a day count convention of actual/360 days,
shall accrue, on a quarterly basis, commencing on November 8, February 8, May 8 and August 8 of each year, on the outstanding Silver
Loan Amount of the Note (and on the Initial Payment Date Interest Amount (as defined in the Agreement)) and shall be payable on each
Payment Date (collectively, such interest accrual amounts, “Interest Amounts”).
(b)
On November 8, February 8, May 8 and August 8 of each year and on the Final Scheduled Payment Date (or if any such date is not a Business
Day, the immediately succeeding Business Day) (each such day, a “Payment Date”), commencing on the date hereof
and prior to the occurrence and continuance of an Event of Default, following payments of fees, expenses and other amounts owed by the
Borrower in connection with the Agreement and this Note (including the payment of all interest payment amounts as set forth immediately
above), the Borrower will pay, and the Holder will be entitled to receive, a principal payment denominated in Silver Ounces, and wired
in U.S. Dollars, reasonably determined by the Calculation Agent at the Spot Rate immediately prior to the date of such Payment Date,
subject to, starting on August 8, 2025, at an amount equal to [Amount Redacted – Confidential Information] of all Cash Flow
of the Borrower Group in excess of [Amount Redacted – Confidential Information] as such calculation shall be determined
by the Calculation Agent on the last day of the previous calendar month of the Payment Date and otherwise subject to the terms and provisions
of this Note and the Agreement (the “Principal Payment Amount”).
(c)
The Borrower shall pay and discharge all applicable Principal Payment Amounts as set forth in Section 4.2(b) by either (i) the
payment of cash in accordance with Section 4.1 or (ii) the provision of the equivalent amount in Ounces of Silver bars (the terms
and procedures of which shall be mutually agreed upon by the parties prior to the initial delivery of such Ounces of Silver bars), to
be delivered to the account of the Holder on such Payment Date to a vault designated by the Holder; provided, that, in the event that
(1) the LBMA Silver price (12:00 p.m. UTC) reporting system permanently, temporarily or indefinitely ceases to quote, publish or provide
applicable spot rates of exchange for the purchase of Silver against payment of U.S. Dollars (a “Spot Rate Cessation”),
the Spot Rate shall apply, or (2) upon the occurrence and continuance of any material and adverse change in Silver/U.S. Dollar exchange
rates, the imposition of restrictions on conversions of currency to Ounces of Silver or the transfer of silver, application of tariffs
to silver or to any other material and adverse disruption in the spot market for silver, in each case as determined in the Calculation
Agent’s sole and absolute discretion in accordance with the terms and provisions of the Agreement, then in any such case set forth
in this clause (2), all interest and principal amounts to be paid on this Note shall be paid and discharged by the Borrower solely by
provision of the equivalent in Ounces of Silver bars as set forth in clause (ii) immediately above.
(d)
The Holder shall hold the first year interest amounts in reserve on its balance sheet. The Borrower has no Obligation to make any interest
payment during the same period.
(e)
The Holder and the Borrower hereby appoint Monetary Metals & Co., or its assignee, as the calculation agent (the “Calculation
Agent”), and authorize the Calculation Agent to take such actions and to exercise such powers and perform such duties as
are expressly delegated to the Calculation Agent by the terms hereof, together with such other powers as are reasonably incidental thereto
and Monetary Metals & Co. hereby accepts such appointment. The duties of the Calculation Agent hereunder shall be limited to those
duties expressly set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Calculation
Agent. The Calculation Agent shall not be responsible for verifying any calculations pursuant to this Note or the Agreement to the extent
information necessary to make such verifications is not provided to it by the Holder or the Borrower. In the event of a discrepancy between
the calculations received by the Calculation Agent from the Borrower and the results of the reviews thereof conducted by the Calculation
Agent as reflected in any reports provided by the Calculation Agent, the Calculation Agent shall work with such parties to resolve such
discrepancy.
(f)
The Borrower and the Holder agree that so long as the Calculation Agent complies with the terms of clause (e) above, the Calculation
Agent shall have no liability with respect to any calculations that are verified by the Calculation Agent that are subsequently determined
to be incorrect in the absence of its own gross negligence, willful misconduct, bad faith or fraud. For the avoidance of doubt, such
exculpation from liability shall include, without limitation, any loss, liability or expense of the Holder incurred as a result of lending
to the Borrower based on any such erroneous calculations.
(g)
The Calculation Agent shall be entitled to indemnification by the Borrower and the Holder from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever (including litigation
costs and reasonable attorneys’ fees and expenses) which may at any time (including at any time following the payment of the Obligations
under this Note or the Agreement) be imposed on, incurred by or asserted against the Calculation Agent in any way relating to or arising
out of this Note or the Agreement, or any agreements, documents or certificates contemplated by or referred to herein or the transactions
contemplated hereby or any action taken or omitted by the Calculation Agent under or in connection with any of the foregoing; provided,
that the Calculation Agent shall not be entitled to the payment of any such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from its own gross negligence, willful misconduct, bad faith (in each case,
as determined by a court of competent jurisdiction or as otherwise agreed to by the parties) or fraud. The provisions of this Section
4.2(g) shall survive the payment of the Obligations, the termination of this Note and the Agreement, and any resignation or removal
of the Calculation Agent.
(h)
The Calculation Agent shall not be liable for: (i) an error of judgment made in good faith by one of its officers; or (ii) any action
taken, suffered or omitted to be taken in good faith in accordance with or reasonably believed by it to be authorized or within the discretion
or rights or powers conferred by this Note or the Agreement or at the direction of the Holder relating to the exercise of any power conferred
upon the Calculation Agent under this Note or the Agreement, in each case, unless it shall have been determined by a court of competent
jurisdiction that the Calculation Agent shall have been grossly negligent or acted in bad faith or with willful misconduct in ascertaining
the pertinent facts. In addition, the Calculation Agent may rely and shall be protected in acting or refraining from acting upon any
resolution, certificate of a responsible officer thereof, any report, certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other paper or document reasonably believed by it to be genuine
and to have been signed or presented by the proper party or parties.
(i)
The Calculation Agent shall not be bound to make any investigation into the facts of matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing
so to do by the Holder; provided, that if the payment within a reasonable time to the Calculation Agent of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation shall be, in the reasonable opinion of the Calculation Agent, not reasonably
assured by the Borrower, the Calculation Agent may require reasonable indemnity against such cost, expense or liability as a condition
to so proceeding. The reasonable expense of every such investigation shall be paid by the Borrower.
(j)
If the Calculation Agent shall at any time receive conflicting instructions from the Holder and the Borrower or any other party to this
Note or the Agreement and the conflict between such instructions cannot be resolved by reference to the terms of this Note or the Agreement,
the Calculation Agent shall be entitled to rely on the instructions of the Holder. In the absence of bad faith, gross negligence or willful
misconduct on the part of the Calculation Agent, the Calculation Agent may rely and shall be protected in acting or refraining from acting
upon any resolution, officer’s certificate, any monthly report, certificate of auditors, or any other certificate, statement, instrument,
opinion, report, notice request, consent, order, appraisal, bond or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties. The Calculation Agent may rely upon the validity of documents delivered to it
by the Holder or the Borrower, without investigation as to their authenticity or legal effectiveness, and the parties to this Note and
the Agreement will hold the Calculation Agent harmless from any claims that may arise or be asserted against the Calculation Agent because
of the invalidity of any such documents or their failure to fulfill their intended purpose.
(k)
The Calculation Agent is authorized, in its sole good faith discretion, to disregard any and all notices or instructions given by any
other party hereto or by any other person, firm or corporation, except only such notices or instructions as are herein provided for and
orders or process of any court entered or issued with or without jurisdiction. If any property subject hereto is at any time attached,
garnished or levied upon under any court order or in case the payment, assignment, transfer, conveyance or delivery of any such property
shall be stayed or enjoined by any court order, or in case any order, judgment or decree shall be made or entered by any court affecting
such property or any part hereof, then and in any of such events the Calculation Agent is authorized, in its sole good faith discretion,
to rely upon and comply with any such order, writ, judgment or decree with which it is advised by legal counsel of its own choosing is
binding upon it, and if it complies with any such order, writ, judgment or decree it shall not be liable to any other party hereto or
to any other person, firm or corporation by reason of such compliance even though such order, writ, judgment or decree maybe subsequently
reversed, modified, annulled, set aside or vacated.
(l)
The principal amount owing under this Note may be increased, in the sole discretion of the Holder, at any time until the principal amount
reaches the U.S. Dollar equivalent of up to 1,200,000 troy ounces of silver, calculated using the Spot Rate effective as of the date
hereof.
4.3
Taxes. Any and all payments to Holder by or on account of any Obligations shall be made free and clear of, and without deduction
for, any Taxes; provided, that if the Borrower shall be required by law to deduct any Taxes from any such payment, then (i) so long as
the Holder (and any assignees, if applicable) has provided the Borrower with a duly completed, valid, executed copy of U.S. Internal
Revenue Service Form W-9 (or successor form) certifying that the Holder is exempt from United States Federal backup withholding Tax,
the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional
sums payable under this Section) the Holder receives an amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions, and (iii) the Borrower shall pay the full amount deducted to the relevant governmental
authority in accordance with applicable law. If any change in law shall subject any recipient to any Taxes (other than Taxes imposed
as a result of a present or former connection between the recipient and the jurisdiction imposing such Tax that are imposed on or measured
by net income (however denominated) or that are franchise Taxes or branch profits Taxes) on its obligations, or its deposits, reserves,
other liabilities or capital attributable thereto and the result of any of the foregoing shall be to increase the cost to such recipient
of making, converting to, continuing or maintaining its obligations, or to reduce the amount of any sum received or receivable by such
recipient hereunder (whether of principal, interest or any other amount) then, upon request of such recipient, the Borrower will pay
to such recipient, such additional amount or amounts as will compensate such recipient, for such additional costs incurred or reduction
suffered.
5.
Security. As security for the payment of its
Obligations hereunder, subject to the Intercreditor Agreement (as defined in the Agreement) the Borrower has granted to the Holder a
lien against certain of the Borrower’s assets in accordance with the terms of the Security Documents and all related collateral
and security instruments executed and/or filed in connection therewith as set forth in Section 6 (Security Interest) of the Agreement.
The existence of such security interest shall not limit any other rights or remedies which the Holder may have upon the occurrence and
continuation of any Event of Default. Upon the transfer of this Note in accordance with the terms of Section 15 hereof, the Holder
may deliver all the collateral mortgaged, granted, pledged or assigned pursuant to this Note and the Agreement, or any part thereof,
to the transferee, if applicable, who shall thereupon become vested with all the rights herein or under applicable law given to the Holder
with respect thereto, and the Holder shall thereafter forever be relieved and fully discharged from any liability or responsibility in
the matter; but the Holder shall retain all rights hereby given to it with respect to any liabilities and the collateral not so transferred.
6.
Waivers. The Borrower and all others who may
become liable for the payment of all or any part of this Note or any other Obligations do hereby severally waive presentment and demand
for payment, notice of dishonor, notice of intention to accelerate, notice of acceleration, protest and notice of protest and non-payment
and all other notices of any kind. No release of any security for this Note or under the Agreement or extension of time for payment of
this Note or any installment hereof or any other Obligations herein or under the Agreement, and no alteration, amendment or waiver of
any provision of this Note, the Agreement or any other transaction document made by agreement between the Holder or any other Person
shall release, modify, amend, waive, extend, change, discharge, terminate or affect the liability of the Borrower or any other Person
who may become liable for the payment of all or any part of the Obligations under this Note, the Agreement or any other related transaction
document. No notice to or demand on the Borrower shall be deemed to be a waiver of the Obligation of the Borrower or of the right of
the Holder to take further action without further notice or demand as provided for in this Note, the Agreement or the other Transaction
Documents.
7.
Repayment of Principal and Interest Upon Maturity;
Default and Acceleration. This Note shall without further notice become immediately due and payable at the option of the Holder if
all such Obligations are not paid on the Maturity Date or on the occurrence and continuance of any Event of Default in accordance with
the terms and provisions of the Agreement.
Notwithstanding
the foregoing, to the extent the Holder has not received payment of at least [Redacted – Commercial Information] of the
interest owed under the Note on and when the Silver Loan Amount is repaid in full hereunder, the Borrower shall pay a fee (the “Make
Whole Fee”) equal to such amount that will enable the Holder to receive [Redacted – Commercial Information]
of the interest owed hereunder. The Make Whole Fee shall be an amount equal to:
[Redacted
– Commercial Information] x the initial Silver Loan Amount being repaid x [Redacted – Commercial Information]
(the original life of the loan), less all previously paid interest payments, including any Early Termination Fee and the first-year interest
reserve held by the Holder.
The
Make Whole Fee shall be due and payable on the date on which the Silver Loan Amount is repaid in full.
8.
Prepayments. Optional prepayment of the Silver
Loan Amount under this Note is permitted at any time if paid in full in accordance with the terms of this Section and the Borrower provides
the Holder with at least twenty (20) Business Days’ clear written notice; in addition, in the event that prior to the Maturity
Date:
(i)
any Person acquires or enters into a binding agreement to acquire, directly or indirectly, 50% or more of the stock or other applicable
equity interests of any member of the Borrower Group (other than another Borrower Group member) or of the ordinary voting power for the
election of directors of such member of the Borrower Group (determined on a fully-diluted basis); or
(ii)
any sale, lease, conveyance, exclusive license or other disposition, of all or substantially all of the Project (as defined in the Agreement);
or
(iii)
any consolidation, merger or acquisition of the Parent (as defined in the Agreement) with, into, or of any other corporation or other
entity or Person, other than a transaction or series of transactions in which the current owners of the Parent (as of the date hereof)
own more than 50% of the outstanding stock or other applicable equity interests and of the ordinary voting power for the election of
directors of such new entity (determined on a fully-diluted basis) and maintain, directly or indirectly, the power to direct or cause
the direction of the management or policies of such new entity, whether through the ability to exercise voting power, by contract or
otherwise; or
(iv)
the Borrower or any of its Subsidiaries is enjoined, restrained, or in any way prevented by court or administrative order or any regulatory
action from continuing to conduct all or any material part of the business affairs of the Borrower and its Subsidiaries, taken as a whole
or any authorization of any Governmental Authority necessary for the Borrower or any of its Subsidiaries to perform and observe its Obligations
under any Transaction Document, or to carry out the Project, is not obtained when required or is rescinded, terminated, lapses or otherwise
ceases to be in full force and effect, including with respect to the remittance to the Holder or its assignees, in U.S. Dollars, of any
amounts payable under any of the Transaction Documents, and is not restored or reinstated within thirty (30) days’ written notice
by the Holder to the Borrower requiring that restoration or reinstatement; or
(v)
any Governmental Authority condemns, nationalizes, seizes, or otherwise expropriates all or any substantial part of the property or other
assets of the Borrower or any of its Subsidiaries or of the capital stock of the Borrower or any such Subsidiary, or assumes custody
or control of that property or other assets or of the business or operations of the Borrower or any of its Subsidiaries or of the capital
stock of the Borrower or any such Subsidiary, or takes any action for the dissolution or disestablishment of the Borrower or any of its
Subsidiaries or any action that would prevent the Borrower or any of its Subsidiaries or any officers of the Borrower or any such Subsidiary
from carrying on all or a substantial part of its business or operations (in the case of each of clauses (i) through (v) above, a “Mandatory
Prepayment”),
then
in any such case, at the Holder’s written election (in its sole and absolute discretion), the Borrower shall prepay this Note in
part or in full as directed by the Holder within no later than sixty (60) days after receipt of the written notice requiring such Mandatory
Prepayment from the Holder, but in every case of each of clauses (i) through (v) above, before the date of closing or legal effect of
such event.
If
the Note is prepaid in full or partially in accordance with any and all of the provisions set forth herein, including pursuant to Section
7 hereof, by voluntary prepayment or in the event of a prepayment for any other reason, including (a) acceleration of the Obligations
as a result of the occurrence and continuation of an Event of Default, (b) foreclosure and sale of, or collection of, the Collateral,
(c) sale of the Collateral in any insolvency proceeding or (d) the restructure, reorganization, or compromise of any of the Borrower
Group and/or of the Obligations by the confirmation of a plan of reorganization or any other plan of compromise, restructure, or arrangement
in any insolvency proceeding, but excluding in all cases any payments of Cash Flow Available for Debt Service made pursuant to Section
4.2(b) (in each case, a “Prepayment”), then, in view of the impracticability and extreme difficulty of ascertaining
the actual amount of damages to the Holder or profits lost by the Holder as a result of such Prepayment, the Borrower shall immediately
pay to the Holder an Early Termination Fee in cash, which such fee which shall be due and payable within five (5) Business Days of the
date such Prepayment is made (such date, the “Early Termination Date”).
With
respect to each Prepayment, the “Early Termination Fee” shall be an amount equal to:
[Redacted
– Commercial Information] x such Silver Loan Amount being prepaid x [Redacted – Commercial Information] (the original
life of the loan), less all previously paid interest payments, including the first-year interest reserve held by the Holder.
9.
Payment Currency. The tender or payment of any
amount payable under this Note (whether or not by recovery under a judgment) in any currency or medium of exchange other than Silver
(or U.S. Dollars in accordance with the terms and provisions hereof and of the Agreement) shall not novate, discharge or satisfy the
Obligation of the Borrower to pay in Silver (or U.S. Dollars, if applicable) all amounts payable under this Note except to the extent
that (and as of the date when) the Holder actually receives amounts in Silver (or U.S. Dollars, if applicable) in the designated Silver
account of the Holder as set forth in Section 4.1 of this Note. The Borrower shall indemnify the Holder against any losses resulting
from a payment being received or an order or judgment being given under this Note in any currency or medium of exchange other than Silver
(or U.S. Dollars, in accordance with the terms and provisions hereof and of the Agreement) or any place other than the account specified
in, or pursuant to, this Note. In the event that payment is made in any currency or medium of exchange other than Silver (or U.S. Dollars
in accordance with the terms and provisions hereof and of the Agreement), the Borrower shall, as a separate Obligation, pay such additional
amount as is necessary to enable the Holder to receive, after conversion to Silver (or U.S. Dollars, if applicable) at a market rate
and transfer to that account, the full amount due to the Holder under this Note in Silver (or U.S. Dollars, if applicable) and in the
designated Silver account of the Holder as set forth in Section 4.1 of this Note. Notwithstanding any provision to the contrary
in this Note, the Holder may require the Borrower to pay (or reimburse Holder) for any Taxes, fees, costs, expenses and other amounts
payable under this Note in the currency in which they are payable, if other than Silver or U.S. Dollars.
10.
Lost, Stolen, Destroyed or Mutilated Note. In
case this Note shall be mutilated, lost, stolen or destroyed, the Borrower shall promptly issue a new Note of like date, tenor and denomination
and deliver the same in exchange and substitution for and upon surrender and cancellation of any mutilated Note, or in lieu of any Note
lost, stolen or destroyed, upon request by the Holder and receipt of evidence satisfactory to the Borrower of the loss, theft or destruction
of such Note.
11.
Governing Law; Arbitration. This Note is to be
construed in accordance with and governed by the internal laws of the State of New York without giving effect to any choice of law rule
that would result in the application of the laws of any other state or nation or instrumentality of subdivision thereof. Any dispute,
controversy, or claim arising out of, relating to, or in connection with this Note, including with respect to the formation, applicability,
breach, termination, validity or enforceability thereof, shall be resolved by arbitration. The arbitration shall be conducted by three
(3) arbitrators, in accordance with the rules the International Centre for Dispute Resolution of the American Arbitration Association,
in effect at the time of the arbitration. The arbitrators shall be appointed as provided for in said rules. The seat of the arbitration
shall be New York, New York, U.S.A., and it shall be conducted in the English language. The arbitration award shall be final and binding
on the parties, and the parties undertake to carry out any award without delay. Judgment upon the award may be entered by any court having
jurisdiction of the award or having jurisdiction over the relevant party or its assets.
12.
Amendment and Waiver. The terms of this Note
may be amended and the observance of the terms of this Note may be waived (either generally or in a particular instance) only with the
written consent of the Borrower and the Holder.
13.
Notices. Except as may be otherwise provided
herein, all notices, requests, waivers and other communications made pursuant to this Note shall be made in accordance with Section 9.6
(Notices) of the Agreement.
14.
Severability. If one or more provisions of this
Note are held to be unenforceable under applicable law, such provision shall be excluded from this Note and the balance of this Note
shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.
15.
Assignment; Successors. Other than following
the occurrence and continuance of an Event of Default, this Note may not be assigned, transferred, or negotiated by the Holder or the
Borrower to any individual or entity at any time, without the written consent of the other party. This Note is subject to restrictions
on transfer contained in that certain Secured Promissory Note Purchase Agreement dated as of the date hereof, which restrictions on transfer
are incorporated herein by reference. The Borrower may not assign its rights and Obligations hereunder or any interest herein. Nothing
in this Note, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations or liabilities under or by reason of this Note, except as expressly provided in this Note.
16.
Remedies Cumulative; Failure or Indulgence Not a
Waiver. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note and
the Agreement. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise
thereof or of any other right, power or privilege.
17.
Payments. All interest and fees shall be calculated
on the basis of a year consisting of 360 days in such year, as applicable, for the actual number of days elapsed, including the first
date of the applicable period to, but not including, the date of repayment. Principal payments submitted in funds not immediately available
shall continue to bear interest as provided herein until collected. If any payment to be made by the Borrower hereunder or under the
Agreement shall become due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in computing any interest in respect of such payment. Notwithstanding anything to the contrary contained
herein, the final payment due under this Note and the Agreement must be made by wire transfer or other immediately available funds. All
payments made by the Borrower hereunder or under the Agreement shall be made without setoff, counterclaim or other defense.
All
payment of cash is to be made by the Borrower to any Person pursuant to this Note, such payment shall be made by wire transfer of immediately
available funds at the wire instructions set forth herein other that as set out herein. Whenever any payment to be made shall otherwise
be due on a day which is not a Business Day, such payment shall be made on the immediately succeeding Business Day and such extension
of time shall be included in the computation of accrued interest.
18.
Excessive Interest. Notwithstanding any other
provision herein to the contrary, this Note is hereby expressly limited so that the interest rate charged hereunder shall at no time
exceed the maximum rate permitted by applicable law. If, for any circumstance whatsoever, the interest rate charged exceeds the maximum
rate permitted by applicable law, the interest rate shall be reduced to the maximum rate permitted, and if the Holder shall have received
an amount that would cause the interest rate charged to be in excess of the maximum rate permitted, such amount that would be excessive
interest shall be applied to the reduction of the Silver Loan Amount owing hereunder (without charge for prepayment) and not to the payment
of interest, or if such excessive interest exceeds the unpaid balance of the Silver Loan Amount, such excess shall be promptly refunded
to the Borrower (and in any event, refunded within ten (10) Business Days of the earlier of the Holder’s actual knowledge of such
excess amount to be refunded or receipt of written notice thereof).
19.
Disgorgement. If the Holder is required to disgorge
any proceeds of the Collateral, payment or other amount received by it pursuant to a bankruptcy or insolvency proceeding or otherwise
(whether because such proceeds, payment or other amount is invalidated, declared to be fraudulent or preferential or otherwise) or turn
over or otherwise pay any amount (a “Recovery”) to any Person or entity, or to the estate or to any creditor
or representative of such Person or entity, then this Note and the Agreement shall be reinstated (to the extent of such Recovery) as
if this Note and the Agreement had never been paid.
20.
Waiver of Notice. To the fullest extent permitted
by applicable law, the Borrower hereby waives demand, notice, protest and all other demands and notices in connection with the delivery,
acceptance, performance, default or enforcement of this Note and the Agreement.
[Remainder
of Page Intentionally Left Blank]
IN
WITNESS WHEREOF, the Borrower has caused this Note to be duly executed by its officers, thereunto duly authorized as of the date first
above written.
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SILVER
VALLEY METALS CORP. |
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By: |
/s/
Sam Ash |
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Name: |
Sam
Ash |
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Title: |
CEO |
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Acknowledged
& Consented to by: |
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MONETARY
METALS BOND III LLC, |
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as
Holder |
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By: |
/s/
Saad Zein |
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Name: |
Saad
Zein |
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Title: |
Chief
Portfolio Officer |
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MONETARY
METALS & CO., |
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as
Calculation Agent |
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By: |
/s/
Saad Zein |
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Name: |
Saad
Zein |
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Title: |
Chief
Portfolio Officer |
SCHEDULE
A
ADVANCES
AND PAYMENTS OF PRINCIPAL AND INTEREST
Date |
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Amount
of Advance |
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Amount
of Principal Paid |
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Aggregate
Unpaid Principal Balance |
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Notation
made by |
August
8, 2024 |
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US$16,422,039.00/
609,805
silver ounces |
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US$16,422,039.00/
609,805
silver ounces |
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Saad
Zein, Monetary Metals Bond III LLC |
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Exhibit
10.3
Execution
Copy
FIFTH
OMNIBUS AMENDment AGREEMENT
THIS
FIFTH OMNIBUS AMENDMENT AGREEMENT (this “Agreement”) dated as of August 8, 2024 by and among Silver Valley Metals
Corp. (“Mine Owner”) and Bunker Hill Mining Corp. (“BHMC” and together with Mine Owner, the “Obligors”),
Sprott Private Resource Streaming and Royalty (Collector), LP in its own capacity (“SPRSR”) and in its capacity as
security agent for and on behalf of the Sprott Entities (the “Security Agent”), Sprott Private Resource Streaming
and Royalty (US Collector), LP (“SPRSR US”), Sprott Private Resource Streaming and Royalty Annex (US Collector), LP
(“SPRSR Annex”), Sprott Private Resource Streaming and Royalty (US), LP, Sprott Private Resource Streaming and Royalty
(International), LP, Sprott Private Resource Streaming and Royalty (Canada), LP, Ninepoint Alternative Credit Opportunities Fund and
Ninepoint Credit Income Opportunities Fund.
RECITALS:
A. | BHMC,
as debtor, and Mine Owner, as guarantor, issued on January 28, 2022 to and in favour of the
Series 1 CD Holders convertible debentures in the aggregate principal amount of US$6,000,000
(as amended by the Second Omnibus Amendment, the Third Omnibus Amendment and the Fourth Omnibus
Amendment, the “Series 1 Convertible Debentures”); |
B. | BHMC,
as debtor, and Mine Owner, as guarantor, issued on June 17, 2022 to and in favour of the
Series 2 CD Holders series 2 convertible debentures in the aggregate principal amount of
US$15,000,000 (as amended by the Third Omnibus Amendment and the Fourth Omnibus Amendment,
the “Series 2 Convertible Debentures” and together with the Series 1 Convertible
Debentures, the “Convertible Debentures”); |
C. | SPRSR
and the Series 1 CD Holders have agreed to (i) extend the maturity date of the Series 1 Convertible
Debentures to March 31, 2028, and (ii) amend the terms upon which BHMC may pay accrued interest
payable thereunder through the issuance of its common shares; and |
D. | SPRSR
and the Series 2 CD Holders have agreed to (i) extend the maturity date of the Series 2 Convertible
Debentures to March 31, 2029 and (ii) amend the terms upon which BHMC may pay accrued interest
payable thereunder through the issuance of its common shares. |
NOW
THEREFORE in consideration of the foregoing premises and for other good and valuable consideration (the receipt and sufficiency of which
are hereby acknowledged by the Parties), the Parties mutually agree as follows:
(1) | As
used in this Agreement and the recitals hereto, the following terms have the following meanings: |
“Amended
Loan Agreement” means the loan agreement dated as of June 23, 2023 between the Obligors, SPRSR US and Sprott Private Resource
Streaming and Royalty Annex (US Collector), LP, as lenders (collectively, the “Sprott Lenders”), and SPRSR US, as
agent for the Sprott Lenders, as amended by the first amendment to loan agreement dated as of the date hereof.
“Amended
and Restated Royalty Put Option Agreement” means the amended and restated royalty put option agreement dated as of the date
hereof between SPRSR US and the Obligors.
“Fourth
Omnibus Amendment” means the fourth omnibus amendment dated as of June 23, 2023 among, inter alios, SPRSR, the Security
Agent, the Series 1 CD Holders, the Series 2 CD Holders, the Mine Owner and BHMC and their respective successors and assigns.
“Guarantees”
means, collectively, the guarantees made by Mine Owner contained in each of the Convertible Debentures, as each may be amended, amended
and restated, modified, supplemented or replaced from time to time.
“Parties”
means the Sprott Parties, the Obligors and their respective successors and assigns.
“Second
Omnibus Amendment” means the second omnibus amendment agreement dated as of June 17, 2022 among SPRSR, the Security Agent,
the Series 1 CD Holders, the Series 2 CD Holders, the Mine Owner and BHMC and their respective successors and assigns.
“Series
1 CD Holders” means Sprott Private Resource Streaming and Royalty (US), LP, Sprott Private Resource Streaming and Royalty (International),
LP, Sprott Private Resource Streaming and Royalty (Canada), LP, Ninepoint Alternative Credit Opportunities Fund and Ninepoint Credit
Income Opportunities Fund as holders of Series 1 Convertible Debentures and their respective successors and assigns.
“Series
2 CD Holders” means Sprott Private Resource Streaming and Royalty (US), LP, Sprott Private Resource Streaming and Royalty (International),
LP, and Sprott Private Resource Streaming and Royalty (Canada), LP, as holders of the Series 2 Convertible Debentures and their respective
successors and assigns.
“Sprott
Parties” means, collectively, the Series 1 CD Holders, the Series 2 CD Holders, SPRSR, the Security Agent, SPRSR US, SPRSR
Annex and their respective successors and assigns.
“Third
Omnibus Amendment” means the third omnibus amendment dated as of December 5, 2022 among SPRSR, the Security Agent, the Series
1 CD Holders, the Series 2 CD Holders, the Mine Owner and BHMC and their respective successors and assigns.
(2) | Unless
otherwise described herein, capitalized terms used in this Agreement that are not defined
in it have the meanings given to them in the Series 2 Convertible Debentures. |
Section
2 |
Amendments
to the Series 1 Convertible Debentures. |
Each
Series 1 CD Holder and each Obligor agree to amend the Series 1 Convertible Debenture to which such Series 1 CD Holder is a party as
follows:
(a) | The
first paragraph of Section 1 of such Series 1 Convertible Debenture is hereby amended by
deleting the second sentence thereof and replacing it with the following |
“Subject
to the provisions of this debenture (the “Debenture”), the Principal Amount together with all accrued and unpaid interest
and all other monies owing hereunder, shall become due and payable on March 31, 2028 (the “Maturity Date”).”;
and
(b) | Section
10.1 of such Series 1 Convertible Debenture is hereby amended by adding new paragraph (e)
immediately after paragraph (d) thereof: |
| “(e) | Notwithstanding
any other provision of this Debenture at any time when an Event of Default has occurred and
is continuing, the Debtor shall pay in cash any and all accrued and unpaid interest owing
hereunder on each Quarter End, upon a prepayment or at any other time when due and the Debtor
shall not have the option to pay any such interest through the issuance of common shares
in the capital of the Debtor.”. |
Section
3 |
Amendments
to the Series 2 Convertible Debentures. |
Each
Series 2 CD Holder and each Obligor agree to amend the Series 2 Convertible Debenture to which such Series 2 CD Holder is a party as
follows:
(a) | The
first paragraph of Section 1 of such Series 2 Convertible Debenture is hereby amended by
deleting the second sentence thereof and replacing it with the following |
“Subject
to the provisions of this debenture (the “Debenture”), the Principal Amount together with all accrued and unpaid interest
and all other monies owing hereunder, shall become due and payable on March 31, 2029 (the “Maturity Date”).”;
and
(b) | Section
10.1 of such Series 2 Convertible Debenture is hereby amended by adding new paragraph (e)
immediately after paragraph (d) thereof: |
| “(e) | Notwithstanding
any other provision of this Debenture at any time when an Event of Default has occurred and
is continuing, the Debtor shall pay in cash any and all accrued and unpaid interest owing
hereunder on Quarter End, upon a prepayment or at any other time when due and the Debtor
shall not have the option to pay any such interest through the issuance of common shares
in the capital of the Debtor.”. |
Each
Obligor hereby acknowledges, confirms and agrees that:
(a) | each
Convertible Debenture remains in full force and effect, and, except as amended by this Agreement,
unamended and constitutes legal, valid and binding obligations of it enforceable against
it in accordance with its respective terms; |
(b) | each
Guarantee to which it is a party remains in full force and effect, and except as amended
by this Agreement, unamended, and continues to guarantee the payment and performance of all
Obligations, as applicable, and constitutes legal, valid and binding obligations of it enforceable
against it in accordance with its respective terms; |
(c) | each
Security Document and each security interest, assignment, mortgage, charge, lien, hypothecation
and pledge granted by it in favour of the Security Agent for and the benefit of the Sprott
Entities pursuant to the Security Documents constitutes legal, valid and binding obligations
of it enforceable against it in accordance with its respective terms and continues to secure
the PF Obligations. |
Section
5 |
Conditions
of Effectiveness of this Agreement |
This
Agreement shall become effective (the “Effective Date”) immediately when the following conditions shall have been
satisfied:
(a) | The
Obligors and the Sprott Parties shall have signed a counterpart of this Agreement; |
(b) | SPRSR
shall have received (i) a certificate of good standing with respect to each Obligor from
the Secretary of State (or other similar official) of the jurisdiction of its incorporation;
(ii) a certificate of a senior officer of each Obligor, dated the Effective Date, addressed
to each Sprott Party, in form and substance reasonably acceptable to SPRSR, certifying as
to the incumbency and specimen signature of each officer of such Obligor executing this Agreement
or any other document delivered in connection with this Agreement on its behalf and attaching
(x) a true and complete copy of articles, by-laws and any other charter documents of such
Obligor, including all amendments thereto, as in effect on the Effective Date, and (y) a
true and complete copy of resolutions duly adopted by its board of directors or shareholders,
as the case may be, of such Obligor authorizing the execution, delivery and performance of
this Agreement and the Amended and Restated Royalty Put Option Agreement and approving all
matters contemplated by this Agreement and the Amended and Restated Royalty Put Option Agreement,
and (iii) an opinion of legal counsel to each Obligor addressed to each Sprott Party, in
form and substance reasonably acceptable to the Agent, relating to the status and capacity
of such Obligor, the due authorization, execution and delivery and validity and enforceability
of this Agreement, the Convertible Debentures, as amended by this Agreement, and the Amended
and Restated Royalty Put Option Agreement and such other matters as SPRSR may reasonably
request; |
(c) | The
intercreditor agreement (the “Intercreditor Agreement”) among SPRSR US,
as agent for the Sprott Entities, the Security Agent, Monetary Metals Bond III LLC, Minewater
Finance LLC, Minewater LLC, MW HH LLC and the Obligors shall have been executed and delivered
by the parties; |
(d) | The
initial tranche of the financing contemplated under the secured promissory note purchase
agreement dated August 8, 2024 between Monetary Metals Bond III LLC as purchaser, the Mine
Owner, as borrower, and BHMC, as parent, has closed or will close concurrently with delivery
of the conditions set forth in Sections 5(b) and (c) on the Effective Date; and |
(e) | All
costs and expenses of the Sprott Entities relating to this Agreement, the Amended Loan Agreement,
the Amended and Restated Royalty Put Option Agreement and the Intercreditor Agreement and
the transactions contemplated thereunder (including reasonable fees and expenses of their
legal counsel) have been paid in full. |
Section
6 |
Reference
to the Convertible Debentures. |
On
and after the Effective Date, any reference to “this Agreement”, “hereof”, “hereunder” and words
of like effect in any Convertible Debenture, and any reference to any Convertible Debenture in any other agreements will mean
and be a reference to such Convertible Debenture, as amended by this Agreement, as applicable.
Section
7 |
Further
Assurances. |
Each
Obligor will execute and deliver to any other Party hereto all such documents, instruments and agreements, and do all such other acts
and things, as may be reasonably required, in the opinion of such other Party, to carry out the amendments and other transactions contemplated
under this Agreement.
Section
8 |
Project
Finance Document. |
The
Parties hereby acknowledge, confirm and agree that:
(a) | any
failure of the Obligors to perform their obligations under this Agreement shall constitute
an event of default under the Convertible Debentures; and |
(b) | each
of this Agreement, the Convertible Debentures, as amended hereby, the Amended and Restated
Royalty Put Option Agreement, the Amended Loan Agreement, the ROFR Agreement and the metals
purchase agreement dated as of June 23, 2023 between the Obligors and SPRSR US as agent for
the Sprott Stream Parties (as defined therein) constitutes a “Project Finance Document”
and the obligations hereunder and under each other Project Finance Document constitute “PF
Obligations” and “Obligations”, as applicable, for the purposes of the
Security, the Security Documents and the Security Sharing Agreement. |
Section
9 |
Successors
and Assigns. |
This
Agreement shall be binding upon and enure to the benefit of and be enforceable by each Party and its respective successors and permitted
assigns.
If
any provision of this Agreement is determined to be illegal, invalid or unenforceable, by an arbitrator or any court of competent jurisdiction
from which no appeal exists or is taken, that provision will be severed from this Agreement and the remaining provisions will remain
in full force and effect.
Section
11 |
Governing
Law. |
(1) | This
Agreement shall be governed by, and construed in accordance with, the laws of the Province
of Ontario and the federal laws of Canada applicable therein (other than the conflict of
laws rules). |
(2) | Each
Party agrees that any legal proceeding with respect to this Agreement or to enforce any judgment
obtained against the other Parties, or any of them, may be brought in the courts of the Province
of Ontario, Canada or in the courts of any jurisdiction where a Party may have assets or
carries on business, and each Party hereby irrevocably submits to the non-exclusive jurisdiction
of each such court and acknowledges its competence. |
This
Agreement may be executed in any number of counterparts, each of which is deemed to be an original, and such counterparts together constitute
one and the same instrument. Transmission of an executed signature page by facsimile, email or other electronic means is as effective
as a manually executed counterpart of this Agreement.
[Remainder
of this page left intentionally blank. Signature page follows.]
The
parties have executed this Agreement as of the date first written above.
|
SILVER
VALLEY METALS CORP. |
|
|
|
By: |
/s/
Sam Ash |
|
Name: |
Sam
Ash |
|
Title: |
President |
|
|
|
|
By: |
/s/
Gerbrand van Heerdan |
|
Name: |
Gerbrand
van Heerdan |
|
Title: |
Treasurer |
|
BUNKER
HILL MINING CORP. |
|
|
|
By: |
/s/
Sam Ash |
|
Name: |
Sam
Ash |
|
Title: |
President,
Chief Executive Officer and Director |
|
|
|
|
By: |
/s/
Gerbrand van Heerdan |
|
Name: |
Gerbrand
van Heerdan |
|
Title: |
Chief
Financial Officer and Corporate Secretary |
Fifth
Omnibus Amendment Agreement
|
sprott
private resource streaming and royalty (collector), lp, by its general partner, SPROTT RESOURCE
STREAMING AND ROYALTY CORP. |
|
|
|
By: |
[Redacted
– Personal Information] |
|
Name: |
[Redacted
– Personal Information] |
|
Title: |
[Redacted
– Personal Information] |
|
sprott
private resource streaming and royalty (collector), lp, by
its general partner, SPROTT RESOURCE STREAMING AND ROYALTY CORP., in its capacity as Security Agent |
|
|
|
|
By: |
[Redacted – Personal
Information] |
|
Name: |
[Redacted – Personal Information] |
|
Title: |
[Redacted – Personal Information] |
Fifth
Omnibus Amendment Agreement
|
sprott
private resource streaming and royalty (US), lp, by its general partner, SPROTT RESOURCE STREAMING
AND ROYALTY CORP., in its capacities as a Series 1 CD Holder and a Series 2 CD Holder |
|
|
|
By: |
[Redacted
– Personal Information] |
|
Name: |
[Redacted
– Personal Information] |
|
Title: |
[Redacted
– Personal Information] |
|
sprott
private resource streaming and royalty (INTERNATIONAL), lp, by its general partner, SPROTT
RESOURCE STREAMING AND ROYALTY CORP., in its capacities as a Series 1 CD Holder and a Series 2 CD Holder |
|
|
|
By: |
[Redacted
– Personal Information] |
|
Name: |
[Redacted
– Personal Information] |
|
Title: |
[Redacted
– Personal Information] |
|
sprott
private resource streaming and royalty (CANADA), lp, by its general partner, SPROTT RESOURCE
STREAMING AND ROYALTY CORP., in its capacities as a Series 1 CD Holder and a Series 2 CD Holder |
|
|
|
By: |
[Redacted
– Personal Information] |
|
Name: |
[Redacted
– Personal Information] |
|
Title: |
[Redacted
– Personal Information] |
Fifth
Omnibus Amendment Agreement
|
sprott
private resource streaming and royalty (US COLLECTOR), lp, by its general partner, SPROTT
PRIVATE RESOURCE STREAMING AND ROYALTY (US GP), LLC |
|
|
|
By: |
[Redacted
– Personal Information] |
|
Name: |
[Redacted
– Personal Information] |
|
Title: |
[Redacted
– Personal Information] |
|
sprott
private resource streaming and royalty (US COLLECTOR), lp, by its general partner, SPROTT
PRIVATE RESOURCE STREAMING AND ROYALTY (US GP), LLC, in its capacities as Royalty Holder, agent for the Sprott Stream Parties and
the Sprott Lenders, Sprott Stream Party and Sprott Lender |
|
|
|
By: |
[Redacted
– Personal Information] |
|
Name: |
[Redacted
– Personal Information] |
|
Title: |
[Redacted
– Personal Information] |
|
sprott
private resource streaming and royalty annex (us collector), lp, by its general partner, ,
SPROTT PRIVATE RESOURCE STREAMING AND ROYALTY (US GP), LLC in its capacities as Sprott Stream Party and Sprott Lender |
|
|
|
By: |
[Redacted
– Personal Information] |
|
Name: |
[Redacted
– Personal Information] |
|
Title: |
[Redacted
– Personal Information] |
Fifth
Omnibus Amendment Agreement
|
NINEPOINT
ALTERNATIVE CREDIT OPPORTUNITIES FUND, by its Manager, ninepoint partners lp, in
its capacity as a Series 1 CD Holder |
|
|
|
By: |
[Redacted
– Personal Information] |
|
Name: |
[Redacted
– Personal Information] |
|
Title: |
[Redacted
– Personal Information] |
|
NINEPOINT
CREDIT income opportunities FUND, by its Manager, ninepoint partners lp, in
its capacity as a Series 1 CD Holder |
|
|
|
By: |
[Redacted
– Personal Information] |
|
Name: |
[Redacted
– Personal Information] |
|
Title: |
[Redacted
– Personal Information] |
Fifth
Omnibus Amendment Agreement
Exhibit
10.4
Execution
Copy
FIRST
AMENDMENT TO lOAN AGREEMENT
THIS
FIRST AMENDMENT (this “Agreement”) dated as of August 8, 2024 between BUNKER HILL MINING CORP., a corporation incorporated
under the laws of Nevada (together with its successors and assigns, “Borrower”), SILVER VALLEY METALS CORP., a corporation
incorporated under the laws of Idaho (together with its successors and assigns, “Guarantor” and together with Borrower,
the “Obligors”), SPROTT PRIVATE RESOURCE STREAMING AND ROYALTY (US COLLECTOR), LP and SPROTT PRIVATE RESOURCE STREAMING
AND ROYALTY ANNEX (US COLLECTOR), LP (each, together with its successors and assigns, a “Lender” and, collectively,
the “Lenders”) and SPROTT PRIVATE RESOURCE STREAMING AND ROYALTY (US COLLECTOR), LP., as agent for the Lenders (in
such capacity and together with any successor agent, the “Agent”).
RECITALS:
A. | The
Obligors, the Agent and the Lenders entered into a loan agreement (the “Existing
Loan Agreement”) dated as of June 23, 2023 pursuant to which the Lenders agreed
to make available to Borrower a term loan facility to finance, in part, the construction
and development of the Mine; and |
B. | The
Obligors and the Sprott Lender Parties have agreed to amend the Existing Loan Agreement on
the terms and conditions of this Agreement; |
NOW
THEREFORE in consideration of the foregoing premises and for other good and valuable consideration (the receipt and sufficiency of which
are hereby acknowledged by the Parties), the Parties mutually agree as follows:
(1) | As
used in this Agreement and the recitals hereto, the following terms have the following meanings: |
“Parties”
means the Obligors and the Sprott Lender Parties; and
“Sprott
Lender Parties” means, collectively, the Agent and the Lenders.
(2) | Unless
otherwise described herein, capitalized terms used in this Agreement that are not defined
in it have the meanings given to them in the Existing Loan Agreement. |
Section
2 |
Amendments
to the Existing Loan Agreement. |
Each
of the Obligors and the Sprott Lender Parties agree to amend the Existing Loan Agreement as follows:
(a) | Section
2(f) of the Existing Loan Agreement is hereby amended by deleting the first sentence thereof
and replacing it with the following: |
“Subject
to Section 2(g), each Advance shall bear interest from the Funding Date of such Advance (if before June 30, 2027) to June 30, 2027, at
the rate of TEN per cent (10.0%) per annum and from the later of the Funding Date and June 30, 2027 to the date of repayment in full,
at the rate of FIFTEEN per cent (15.0%) per annum, in each case, calculated and payable annually in arrears as set out in this Section
2(f).”
(b) | Section
2(h) of the Existing Loan Agreement is hereby deleted in its entirety and replaced with the
following: |
“(h)
Default Interest. Borrower shall pay to the Lenders interest on overdue amounts (including overdue interest), both before and after maturity,
default or judgment, and on the Principal Amount upon the occurrence and during the continuance of an Event of Default, in each case,
at the interest rate then applicable to Advances as set forth in Section 2(f) plus 3 per cent (3.0%) per annum, calculated daily and
on the basis of the actual number of days elapsed, and a year of 360 days and compounded monthly, and payable upon demand by the Agent
on behalf of the Lenders.”
(c) | Section
4 of the Existing Loan Agreement is hereby amended by adding the following new paragraph
(c) after paragraph (b) thereof: |
| “(c) | Borrower
shall prepay on the tenth Business Day of each calendar quarter following payment in full
of the Note Purchase Obligations, the outstanding Principal Amount in an amount equal to
[Percentage Redacted – Confidential Information] of all Cash Flow of the Obligors
in excess of [Amount Redacted – Confidential Information], calculated by the
Agent on the last day of each such calendar quarter, together with all accrued and unpaid
interest on such portion of the Principal Amount and all other amounts owing and due hereunder.” |
(d) | Exhibit
“A” to the Existing Loan Agreement is hereby amended as follows: |
| (i) | by
adding the following definition after the definition of “Buy Back Option” and
before the definition of “Cash Interest Commencement Date”: |
“Cash
Flow” means, for any period, calculated as of the conclusion of each immediately preceding calendar month, the sum (without
duplication) of [Calculation Redacted – Confidential Information].
| (ii) | by
deleting the definition of Maturity Date and replacing it with the following: |
“Maturity
Date” means June 30, 2030.
| (iii) | by
adding the following three definitions after the definition of “Mortgage” and
before the definition of “Obligations”: |
“Note
Purchase Agreement” means the secured promissory note purchase agreement dated August 8, 2024 between the Note Purchaser, as
purchaser, the Guarantor, as borrower, and Borrower parent pursuant to which an aggregate principal amount of U.S. Dollars equal to 1,200,000
ounces of silver, equivalent to approximately US$28 million, (or such other amounts as the parties thereto may agree to during the note
offering period expiring November 8, 2024), will be advanced to the Guarantor.
“Note
Purchase Obligations” means all indebtedness, liabilities and other obligations, present and future, direct or indirect, absolute
or contingent, matured or unmatured due and owing or otherwise payable by an Obligor to Note Purchaser under the Note Purchase Agreement.
“Note
Purchaser” means Monetary Metals Bond III LLC, a Delaware limited liability company, and its successors and permitted assigns.
Each
Obligor hereby acknowledges, confirms and agrees that:
(a) | except
as amended by this Agreement, the Existing Loan Agreement remains in full force and effect,
unamended and the Existing Loan Agreement, as amended by this Agreement, constitutes legal,
valid and binding obligations of it enforceable against it in accordance with its respective
terms; and |
(b) | each
of the Security Documents and each security interest, assignment, mortgages charge, lien,
hypothecation and pledge granted by it in favour of the Security Agent for and the benefit
of the Sprott Entities pursuant to the Security constitutes legal, valid and binding obligations
of it enforceable against it in accordance with its respective terms and continues to secure
the PF Obligations. |
Section
4 |
Conditions
of Effectiveness of this Agreement |
This
Agreement shall become effective (the “Effective Date”) immediately when the following conditions shall have been
satisfied:
(a) | The
Obligors and the Sprott Lender Parties shall have signed a counterpart of this Agreement; |
(b) | The
Agent shall have received (i) a certificate of good standing with respect to each Obligor
from the Secretary of State (or other similar official) of the jurisdiction of its incorporation;
(ii) a certificate of a senior officer of each Obligor, dated the Effective Date, addressed
to each Sprott Lender Party, in form and substance reasonably acceptable to the Agent, certifying
as to the incumbency and specimen signature of each officer of such Obligor executing this
Agreement or any other document delivered in connection with this Agreement on its behalf
and attaching (x) a true and complete copy of articles, by-laws and any other charter documents
of such Obligor, including all amendments thereto, as in effect on the Effective Date, and
(y) a true and complete copy of resolutions duly adopted by its board of directors or shareholders,
as the case may be, of such Obligor authorizing the execution, delivery and performance of
this Agreement and approving all matters contemplated by this Agreement; and (iii) an opinion
of legal counsel to each Obligor addressed to each Sprott Lender Party, in form and substance
reasonably acceptable to the Agent, relating to the status and capacity of such Obligor,
the due authorization, execution and delivery and validity and enforceability of this Agreement
and the Existing Loan Agreement, as amended by this Agreement, and such other matters as
the Agent may reasonably request; |
(c) | The
intercreditor agreement (the “Intercreditor Agreement”) among Sprott Private
Resource Streaming and Royalty (US Collector), LP as agent for the Sprott Entities, the Security
Agent, Monetary Metals Bond III LLC, Minewater Finance LLC, Minewater LLC, MW HH LLC and
the Obligors shall have been executed and delivered by the parties; |
(d) | The
initial tranche of the financing contemplated under the Note Purchase Agreement has closed
or will close concurrently with delivery of the conditions set forth in Sections 4(b) and
4(c) on the Effective Date; and |
(e) | All
costs and expenses of the Sprott Entities relating to this Agreement, the other Project Finance
Documents and the Intercreditor Agreement and the transactions contemplated thereunder (including
reasonable fees and expenses of their legal counsel) have been paid in full. |
Section
5 |
Reference
to the Amended Loan Agreement |
On
and after the Effective Date, any reference to “this Agreement”,
“hereof”, “hereunder”
and words of like effect in the Existing Loan Agreement, and any reference to the Loan Agreement in any other Project
Finance Document will mean and be a reference to the Existing Loan Agreement, as amended by this Agreement.
Section
6 |
Further
Assurances. |
Each
Obligor will execute and deliver to any other Party hereto all such documents, instruments and agreements, and do all such other acts
and things, as may be reasonably required, in the opinion of such other Party, to carry out the amendments and other transactions contemplated
under this Agreement.
Section
7 |
Project
Finance Document. |
The
Parties acknowledge and agree that each of this Agreement and the Existing Loan Agreement, as amended by this Agreement, constitutes
a “Project Finance Document” and that the Obligations constitute “PF Obligations” and “Obligations”,
as applicable, for the purposes of the Security Documents, the Security and the Security Sharing Agreement.
Section
8 |
Successors
and Assigns. |
This
Agreement shall be binding upon and enure to the benefit of and be enforceable by each Party and its respective successors and permitted
assigns.
If
any provision of this Agreement is determined to be illegal, invalid or unenforceable, by an arbitrator or any court of competent jurisdiction
from which no appeal exists or is taken, that provision will be severed from this Agreement and the remaining provisions will remain
in full force and effect.
Section
10 |
Governing
Law. |
(1) | This
Agreement shall be governed by, and construed in accordance with, the laws of the State of
Idaho. |
(2) | Each
Obligor agrees that any legal proceeding with respect to this Agreement or the Existing Loan
Agreement, as amended by this Agreement, or to enforce any judgment obtained against the
Obligor may be brought by a Sprott Lender Party in the courts of the State of Idaho or in
the courts of any jurisdiction where an Obligor may have assets or carries on business, and
each Obligor hereby irrevocably submits to the non-exclusive jurisdiction of each such court
and acknowledges its competence. Each Obligor agrees that a final judgment against it in
any such legal proceeding will be conclusive and may be enforced in any other jurisdiction
by suit on the judgment (a certified or exemplified copy of which judgment will be conclusive
evidence of the fact and of the amount of the Obligations under the Existing Loan Agreement,
as amended by this Agreement) or by such other means provided by law. |
This
Agreement may be executed in any number of counterparts, each of which is deemed to be an original, and such counterparts together constitute
one and the same instrument. Transmission of an executed signature page by facsimile, email or other electronic means is as effective
as a manually executed counterpart of this Agreement.
[Remainder
of this page left intentionally blank. Signature page follows.]
The
Parties have executed this Agreement as of the date first written above.
|
BUNKER
HILL MINING COMPANY |
|
|
|
By: |
/s/
Sam Ash |
|
Name: |
Sam
Ash |
|
Title: |
President,
Chief Executive Officer and Director |
|
|
|
|
By: |
/s/
Gerbrand van Heerdan |
|
Name: |
Gerbrand
van Heerden |
|
Title: |
Chief
Financial Officer and Corporate Secretary |
|
SILVER
VALLEY METALS CORP. |
|
|
|
By: |
/s/
Sam Ash |
|
Name: |
Sam
Ash |
|
Title: |
President |
|
|
|
|
By: |
/s/
Gerbrand van Heerdan |
|
Name: |
Gerbrand
van Heerdan |
|
Title: |
Treasurer |
First
Amendment to Loan Agreement
|
sprott
private resource streaming and royalty (US Collector), lp, by its general partner, SPROTT
PRIVATE RESOURCE STREAMING AND ROYALTY (US GP), LLC, in its capacities as a Lender and as Agent |
|
|
|
By: |
[Redacted
– Personal Information] |
|
Name:
|
[Redacted
– Personal Information] |
|
Title: |
[Redacted
– Personal Information] |
|
sprott
private resource streaming and royalty annex (us collector), lp, by its general partner, ,
SPROTT PRIVATE RESOURCE STREAMING AND ROYALTY (US GP), LLC, in its capacity as Lender |
|
|
|
By: |
[Redacted
– Personal Information] |
|
Name: |
[Redacted
– Personal Information] |
|
Title: |
[Redacted
– Personal Information] |
First
Amendment to Loan Agreement
The
undersigned acknowledges that Amendment to Loan Agreement constitutes a “Project Finance Document” and that the Obligations
constitute “PF Obligations” and “Obligations”, as applicable, for purposes of the Security, the Security Documents
and the Security Sharing Agreement
|
sprott
private resource streaming and royalty (collector), lp, by its general partner, SPROTT RESOURCE
STREAMING AND ROYALTY CORP., as Security Agent |
|
|
|
By: |
[Redacted
– Personal Information] |
|
Name:
|
[Redacted
– Personal Information] |
|
Title:
|
[Redacted
– Personal Information] |
First
Amendment to Loan Agreement
Exhibit
10.5
Execution
Copy
AMENDED
AND RESTATED ROYALTY PUT OPTION AGREEMENT
THIS
AGREEMENT dated as of August 8, 2024 between SPROTT
PRIVATE RESOURCE STREAMING AND ROYALTY (US COLLECTOR), LP, a limited partnership existing under the laws of Delaware, BUNKER HILL MINING
CORP., a corporation incorporated and existing under the laws of Nevada, and SILVER VALLEY METALS CORP., a corporation incorporated and
existing under the laws of Idaho.
Recitals:
A. |
Mine
Owner, as grantor, and BHMC, as guarantor, issued on June 23, 2023 in favour of Royalty Holder, as holder, the Royalty upon the Royalty
Holder’s election to receive the Royalty in lieu of cash payment of the outstanding principal under the royalty convertible
debenture in the principal amount of US$8,000,000 dated as of January 7, 2022 (as amended by an omnibus amendment agreement dated
as of January 28, 2022, a second omnibus amendment agreement dated as of June 17, 2022 and a third omnibus amendment agreement dated
as of December 5, 2022, and as assigned to the Royalty Holder by the transfer agreement dated October 7, 2022 between SPRSR and the
Royalty Holder, as amended by the amending agreement dated June 21, 2023, the “Royalty Convertible Debenture”); |
|
|
B. |
The
Royalty Holder’s election to receive the Royalty in lieu of cash payment of the outstanding Principal Amount owing under the
Royalty Convertible Debenture was conditional on the Obligors entering into the Existing Royalty Put Option Agreement pursuant to
which upon the occurrence of an Event of Default under any Convertible Debenture, the Royalty Holder may require the Obligors to
purchase the Royalty for US$8,000,000; |
|
|
C. |
The
Obligors, the holders of the Convertible Debentures and others have entered into the Fifth Omnibus Amendment pursuant to which, among
other things, the maturity date of the principal amount owing thereunder has been extended to March 31, 2028 and March 31, 2029 under
the Series 1 Convertible Debentures and the Series 2 Convertible Debentures, respectively; and |
|
|
D. |
The
Obligors and the Royalty Holder have agreed to amend and restate the terms of the Existing Royalty Put Option Agreement, upon the
terms and conditions of this Agreement; |
NOW
THEREFORE THIS AGREEMENT WITNESSES that in consideration of the foregoing premises, the covenants and agreements herein contained
and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Parties, the Parties agree
as follows:
Section
1 |
Defined
Terms and Interpretation. |
(1) |
As
used in this Agreement and the recitals hereto, the following terms have the following meanings: |
“Agreement”
means this amended and restated royalty put option agreement and all attached schedules.
“BHMC”
means Bunker Hill Mining Corp., a corporation incorporated under the laws of Nevada, and its successors and permitted assigns.
“Business
Day” means any day, other than a Saturday, a Sunday, a statutory holiday or any day on which major banks are closed for business
in Kellogg, Idaho or Toronto, Ontario.
“Convertible
Debentures” means, collectively, the Series 1 Convertible Debentures and the Series 2 Convertible Debentures.
“Event
of Default” means any event of default under and within the meaning of any Series 1 Convertible Debentures or any Series 2
Convertible Debentures.
“Exercise
Notice” has the meaning specified in the Section 3(2).
“Existing
Royalty Put Option Agreement” means the royalty put option agreement dated as of July 22, 2022 pursuant to which upon the occurrence
of an event of default under any Convertible Debenture, the holder may require the Obligors to purchase the Royalty for US$8,000,000,
as assigned to the Royalty Holder pursuant to the transfer agreement dated October 7, 2022 between SPRSR and the Royalty Holder, as amended
by the amending agreement dated June 21, 2023, and as amended by the Fourth Omnibus Amendment.
“Fifth
Omnibus Amendment” means the fifth omnibus amendment agreement dated as of date hereof among the Obligors, the holders of the
Convertible Debentures and others.
“Fourth
Omnibus Amendment” means the omnibus amendment agreement dated as of June 23, 2023 among the Obligors, the Royalty Holder,
the holders of the Convertible Debentures and others.
“Mine
Owner” means Silver Valley Metals Corp., a corporation incorporated under the laws of Idaho, and its successors and permitted
assigns.
“Obligations”
means all indebtedness, liabilities and other obligations of each Obligor to the Royalty Holder under or in connection with this Agreement.
“Obligors”
means, collectively, BHMC and Mine Owner and “Obligor” means any one of them.
“Parties”
means the Royalty Holder, BHMC and Mine Owner and their respective successors and assigns and “Party” means any one
of them.
“Pending
Event of Default” means an event which, but for the requirement for the giving of notice, lapse of time, or both, or, but for
the satisfaction of any other condition subsequent to that event, would constitute an Event of Default.
“Person”
shall be broadly interpreted and includes an individual, body corporate, partnership, joint venture, trust, association, unincorporated
organization, any governmental authority or any other entity recognized by law.
“Principal
Amount” means US$8,000,000.
“Royalty”
means the gross revenue royalty on all minerals produced and sold from the Property granted by the Obligors to the Royalty Holder pursuant
to the Royalty Agreement.
“Royalty
Agreement” means the royalty agreement dated as of June 23, 2023 between the Royalty Holder and the Obligors, as may be amended,
restated, modified or supplemented from time to time.
“Royalty
Holder” means Sprott Private Resource Streaming and Royalty (US Collector), LP, a limited partnership formed under the laws
of Delaware and any assignee or transferee of the rights and obligations of Sprott Private Resource Streaming and Royalty (US Collector),
LP under the Royalty Agreement.
“Royalty
Put Option” has the meaning specified in Section 3.
“Second
Omnibus Amendment” means the second omnibus amendment agreement dated as of June 17, 2022 among the Obligors, the holders of
the Series 1 Convertible Debentures and others.
“Series
1 Convertible Debentures” means, collectively, the secured convertible debentures in the aggregate principal amount of $6,000,000.00
bearing interest at 7.5% per annum payable quarterly in arrears, issued on January 28, 2022 by the Obligors and convertible at the option
of the holder into common shares of BHMC, as amended by the Second Omnibus Amendment, the Third Omnibus Amendment, the Fourth Omnibus
Amendment, the Fifth Omnibus Amendment and as the same may be further amended, restated, amended and restated, modified or supplemented
from time to time.
“Series
2 Convertible Debentures” means, collectively, the series 2 secured convertible debentures, in the aggregate principal amount
of US$15,000,000.00, that bear interest at 10.5% per annum payable quarterly in arrears, issued on June 17, 2022 and convertible at the
option of the holder into common shares of BHMC, as amended by the Third Omnibus Amendment, the Fourth Omnibus Amendment, the Fifth Omnibus
Amendment and as the same may be amended, restated, amended and restated, modified or supplemented from time to time.
“SPRSR”
means Sprott Private Resource Streaming and Royalty (Collector), LP, a limited partnership formed under the laws of the Province
of Ontario, and its successors and assigns.
“Third
Omnibus Amendment” means the third omnibus amendment agreement dated as of December 5, 2022 among the Obligors, the holders
of the Convertible Debentures and others.
(2) |
Capitalized
terms used in this Agreement that are not defined in it have the meanings given to them in the Series 2 Convertible Debentures. |
|
|
(3) |
Headings
of the articles and sections hereof are inserted for convenient reference only and shall not affect the construction and interpretation
of this Agreement. |
|
|
(4) |
Words
importing the singular number include the plural and vice versa. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. All forms of “include” shall be deemed to be followed by the phrase
“without limitation”. The word “will” shall have the same meaning and effect as “shall”. |
|
|
(5) |
Unless
the context requires otherwise (i) reference to any Person shall be construed to include such Person’s successors and assigns;
and (ii) “herein”, “hereof” and “hereunder”, and similar words shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof; |
Section
2 |
Joint
and Several Obligations |
(1) |
All
obligations designated as being obligations of BHMC or Mine Owner, or either one of them, including all representations and warranties,
covenants and payment obligations of BHMC and Mine Owner are joint and several obligations of each of them, as such obligations may
be modified, released, diminished or otherwise derogated from in any manner by any reason of any actions or omissions of, any instruments
or agreements entered into by, or any rights granted by the Royalty Holder, including any settlement, discharge, compromise, modification,
amendment, extension, indulgence, waiver, release or other similar change to the obligations. Each Obligor will, as a separate and
independent obligation, perform each such obligation as primary obligor. |
|
|
(2) |
Each
Obligor irrevocably waives any claim, remedy or other right which it may now have or hereafter acquire against the other that arises
from the existence, payment, performance or enforcement of their respective obligations under this Agreement, including any right
of subrogation, reimbursement, exoneration, indemnification or any right to participate in any claim or remedy of the Royalty Holder
(or any other Sprott Entity) against Mine Owner or BHMC, as applicable, or its property and assets, whether or not such claim, remedy
or other right is reduced to judgment or is liquidated, unliquidated, fixed, contingent, matured, unmatured, deposited, undisputed,
secured or unsecured and whether or not such claim, remedy or other right arises in equity or under contract, statute or common law. |
Section
3 |
Grant
of Option to Purchase the Royalty. |
(1) |
Each
Obligor hereby grants to and in favour of the Royalty Holder, in its capacity as holder of the Royalty, the irrevocable right (but
not the obligation) to require BHMC to purchase the Royalty for the Royalty Purchase Price, upon the terms and conditions of this
Agreement (the “Royalty Put Option”). Upon the exercise of such right in accordance with the terms of this Agreement,
BHMC shall purchase the Royalty from the Royalty Holder, for the Royalty Purchase Price. |
|
|
(2) |
Upon
occurrence of an Event of Default, the Royalty Holder shall have the irrevocable right (but not the obligation) to elect to require
BHMC to purchase the Royalty from the Royalty Holder for US$8,000,000 (the “Royalty Purchase Price”) by giving
a written notice (the “Exercise Notice”) to the Obligors substantially in the form of the notice attached as Schedule
A. |
|
|
(3) |
BHMC
shall pay the Royalty Purchase Price to the Royalty Holder in cash in immediately available funds within five (5) Business Days following
the delivery by the Royalty Holder of any such Exercise Notice at the place and to the account designated by the Royalty Holder in
the Exercise Notice and the Royalty Purchase Price shall become immediately due and payable at such time. |
|
|
(4) |
Upon
receipt of the Royalty Purchase Price and any other amounts owing hereunder, the Royalty Holder will transfer the Royalty to BHMC
on an “as is where is” basis and without any representation and warranty except as provided in Section 4, by execution
of a transfer substantially in the form attached as Schedule B. |
Section
4 |
Representations,
Warranties and Covenants of Royalty Holder. |
(1) |
The
Royalty Holder represents and warrants to the Obligors, and acknowledges that the Obligors are relying upon the following representations
and warranties in connection with the transactions which are the subject of this Agreement, that at the time of the transfer of the
Royalty in accordance with the Exercise Notice: |
|
(a) |
the
Royalty Holder has not granted any charges, liens or security interests in or to its rights and interests under the Royalty; and |
|
|
|
|
(b) |
the
Royalty Holder will have good right, full power, and authority to transfer all of its right, title and interest in and to the Royalty
to BHMC. |
|
|
|
(2) |
The
representations and warranties set forth above shall survive the execution and delivery of this Agreement. |
Section
5 |
Representations
and Warranties of the Obligors. |
(1) |
The
Obligors represent and warrant to the Royalty Holder as follows and acknowledge that the Royalty Holder is relying upon the following
representations and warranties in connection with the transactions which are the subject of this Agreement: |
|
|
|
(a) |
the
Obligors have the corporate power and capacity to enter into, and to perform each of its obligations under this Agreement; |
|
|
|
|
(b)
|
the
execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on by each of the
Obligors; and |
|
|
|
|
(c) |
this
Agreement has been duly executed and delivered by the Obligors and is a valid and binding obligation of the Obligors, enforceable
against each of them in accordance with its terms, subject to the usual exceptions as to bankruptcy, insolvency and the availability
of equitable remedies. |
|
|
|
(2)
|
The
representations and warranties set forth above shall survive the execution and delivery of this Agreement. |
Each
Obligor covenants and agrees with the Royalty Holder that:
|
(a) |
upon
either Obligor becoming aware of the occurrence of either an Event of Default or Pending Event of Default, the Obligors shall promptly
deliver to the Royalty Holder a notice specifying the nature and date of occurrence of such Event of Default or Pending Event of
Default, the Obligors’ assessment of the duration and effect thereof and the action which the Obligors propose to take with
respect thereto; and |
|
|
|
|
(b) |
upon
exercise of the Royalty Put Option and the transfer of the Royalty by the Royalty Holder to BHMC hereunder, the Royalty shall be
immediately terminated and cancelled by Mine Owner, released and discharged from title to the Property and may not be re-issued,
transferred or assigned to any other Person. |
Section
7 |
Overdue
Payments |
Any
payment not made by an Obligor when due shall incur interest from the due date until such payment is made in full at a per annum rate
equal to ELEVEN percent (11.0%) per annum calculated daily and on the basis of the actual number of days elapsed, and a year of 356 or
366 days, as applicable, and compounded monthly and payable on demand by the Royalty Holder.
The
Obligors will reimburse the Royalty Holder within thirty (30) days of the Royalty Holder providing, or causing to provide, a written
invoice and supporting documentation in respect thereof, all of Royalty Holder’s reasonable out-of-pocket costs and expenses incurred
in respect of the negotiation, registration, enforcement of, or the preservation of rights under the Royalty and this Agreement, including
the reasonable fees and expenses of legal counsel for the Royalty Holder in connection herewith.
Any
notice or written communication given pursuant to or in connection with this Agreement shall be in writing and shall be given by delivering
the same personally or by prepaid courier or email, addressed to the party to be notified at the following address of such party or at
such other address of which such party has given notice to the other party hereto:
(1) |
if
to the Royalty Holder |
|
|
|
Sprott
Private Resource Streaming and Royalty (US Collector), LP |
|
320
Post Road, Suite 230 |
|
Darien,
CT 06820-3600 |
|
|
|
Attention:
|
[Redacted
– personal information] |
|
Email:
|
[Redacted
– personal information] |
|
|
(2) |
if
to an Obligor: |
|
|
|
Bunker
Hill Mining Corp. |
|
300-1055
West Hastings Street |
|
Vancouver,
British Columbia |
|
V6E
2E9 |
|
|
|
Attention:
|
Gerbrand
Van Heerden |
|
Email:
|
[Redacted
– personal information] |
|
|
|
|
Any
such notice will be deemed to have been given and received:
|
(a) |
if
delivered by hand or courier in accordance with Section 9(1), then on the day of delivery to the recipient Party if such date is
a Business Day and such delivery is received before 5:00 pm at the place of delivery; otherwise such notice will be deemed to have
been given and received on the first Business Day following the date of delivery; and |
|
|
|
|
(b) |
if
sent by email transmission in accordance with Section 9(1) and successfully transmitted prior to 5:00 pm on a Business Day (recipient
Party time), then on that Business Day, and if successfully transmitted after 5:00 pm or if transmitted on a day that is not a Business
Day then such notice will be deemed to be given and received on the first Business Day immediately following the date of transmission. |
Section
10 |
Further
Assurances. |
Each
of the Parties shall promptly do, make, execute or deliver, or cause to be done, made, executed or delivered, all such further acts,
documents and things as the other may require from time to time for the purpose of giving effect to this Agreement and shall use all
reasonable efforts and take all such steps as may be reasonably within its power to implement to their full extent the provisions of
this Agreement.
Section
11 |
Entire
Agreement, Project Finance Document. |
This
Agreement constitutes the entire agreement between the Parties hereto with respect to the subject matter hereof and supersede any and
all prior agreements or understandings, written or oral, with respect thereto. The Parties confirm, agree and designate that this Agreement
constitutes a “Project Finance Document” and all Obligations constitute “PF Obligations” and “Obligations”,
as applicable, in each case, for the purposes of the Security Documents, the Security and the Security Sharing Agreement.
Time
is and will be of the essence of each and every provision of this Agreement.
Section
13 |
Governing
Law and Jurisdiction. |
This
Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable
therein (other than the conflict of laws rules). Each Obligor agrees that any legal proceeding with respect to this Agreement or to enforce
any judgment obtained against the Obligor may be brought by the Royalty Holder in the courts of the Province of Ontario, Canada or in
the courts of any jurisdiction where an Obligor may have assets or carries on business, and each Obligor hereby irrevocably submits to
the non-exclusive jurisdiction of each such court and acknowledges its competence. Each Obligor agrees that a final judgment against
it in any such legal proceeding will be conclusive and may be enforced in any other jurisdiction by suit on the judgment (a certified
or exemplified copy of which judgment will be conclusive evidence of the fact and of the amount of the Obligations hereunder) or by such
other means provided by law.
No
amendment of this Agreement shall be binding unless in writing and signed by all of the Parties hereto.
Section
15 |
Successors
And Assigns. |
(1) |
Neither
Obligor may transfer, assign or convey any of its rights or obligations under this Agreement to any Person without the prior written
consent of the Royalty Holder. |
|
|
(2) |
Royalty
Holder may transfer all or any of its rights under this Agreement, without any prior consent, to any transferee or assignee of the
Royalty and any such transferee or assignee shall have the same rights and to the same extent as though such transferee was an original
party hereto as the Royalty Holder in the first instance. Upon any such transfer and the request of the Royalty Holder, the Obligors
will confirm in writing in favour of the transferee or assignee the rights of the transferee and assignee as Royalty Holder hereunder. |
|
|
(3) |
This
Agreement shall be binding upon each Obligor and its successors and permitted assigns and shall enure to the benefit of the Royalty
Holder and its successors and assigns. Any reference herein to the Royalty Holder shall include its successors and assigns as if
specifically named. |
This
Agreement shall terminate upon the later of:
|
(a) |
the
indefeasible payment in full of all indebtedness, liabilities and other obligations of the Obligors under all of the Series 1 Convertible
Debentures and Series 2 Convertible Debentures (except for certain contingent obligations which by their terms are intended to survive
such indefeasible payment in full and in respect of which no amounts are due or owing); and |
|
|
|
|
(b) |
March
31, 2029. |
All
references to dollars in this Agreement shall be to US dollars.
This
Agreement and any schedules, certificates or other writing delivered in connection herewith, may be executed in any number of counterparts
and by facsimile or electronic means, with the same effect as if all parties had all signed the same document, and all such counterparts
and adopting instruments will be construed together and will constitute one and the same instrument. The execution of this Agreement
and any other writing by any Party hereto or thereto will not become effective until counterparts hereof or thereof, as the case may
be, have been executed by all the parties hereto or thereto.
Section
19 |
Amendment
and Restatement. |
(1) |
Each
of the Parties hereby agree that the Existing Royalty Put Option Agreement shall be and is hereby amended and restated in its entirety
by this Agreement. This Agreement incorporates amendments to the Existing Royalty Put Option Agreement and has been restated solely
for the purposes of incorporating those amendments to the Existing Royalty Put Option Agreement that the Parties have agreed upon.
This Agreement will not discharge, result in a waiver of, or constitute a novation or termination of any obligation, covenant or
agreement contained in the Existing Royalty Put Option Agreement or in any agreements, guarantees, security certificates or other
document executed and delivered by or on behalf of any Obligor in respect thereof or in connection therewith, which shall continue
and remain in full force and effect except to the extent modified by this Agreement. |
|
|
(2) |
On
and after the date of this Agreement, any reference to “this Agreement”, “hereof”, “hereunder”
and words of like effect in the Existing Royalty Put Option Agreement and any reference to the Royalty Put Option Agreement in any
other Transaction Document will mean and be a reference to the Existing Royalty Put Option Agreement, as amended and restated by
this Agreement. |
[Signature
pages immediately follow]
The
Parties have executed this Agreement as of the date first above written.
|
SPROTT
PRIVATE RESOURCE STREAMING AND ROYALTY (US COLLECTOR), LP, by its general partner, SPROTT PRIVATE RESOURCE STREAMING AND ROYALTY
(US GP), LLC |
|
|
|
|
Per: |
[Redacted
– Personal Information] |
|
|
|
|
|
Name:
[Redacted – Personal Information] |
|
|
Title:
[Redacted – Personal Information] |
Amended
and Restated Royalty Put Option Signature Page
|
bunker
hill mining corp. |
|
|
|
Per: |
/s/
Sam Ash |
|
|
Name:
Sam Ash |
|
|
Title:
President, Chief Executive Officer and Director |
|
|
|
|
Per: |
/s/
Gerbrand van Heerden |
|
|
Name:
Gerbrand van Heerden |
|
|
Title:
Chief Financial Officer and Corporate Secretary |
|
|
|
|
SILVER
VALLEY METALS corp. |
|
|
|
Per: |
/s/
Sam Ash |
|
|
Name:
Sam Ash |
|
|
Title:
President |
|
|
|
|
Per: |
/s/
Gerbrand van Heerden |
|
|
Name:
Gerbrand van Heerden |
|
|
Title:
Treasurer |
Amended
and Restated Royalty Put Option Signature Page
Schedule
A
Royalty
Put Option Exercise Notice
Bunker
Hill Mining Corp.
82
Richmond St East
Toronto,
ON M5C 1P1
Re: |
Exercise
of Royalty Put Option |
Reference
is made to the following:
|
(a) |
the
royalty agreement dated as of June 23, 2023 between [Sprott Private Resource Streaming and Royalty (US Collector), LP], as grantee
and royalty holder, and Silver Valley Metals Corp., as grantor, and Bunker Hill Mining Corp. (as amended, the “Royalty”);
and |
|
|
|
|
(b) |
the
amended and restated royalty put option agreement dated as of August ●, 2024 between Sprott Private Resource Streaming and Royalty
(US Collector), LP, Bunker Hill Mining Corp. and Silver Valley Metals Corp. (as further amended from time to time, the “Put
Option Agreement”); and |
|
|
|
|
(c) |
the
occurrence of the event of default referred to in section [●] of Series [●] Convertible Debenture. |
Capitalized
terms used in this notice and not defined have the same meaning as in the Put Option Agreement.
The
undersigned, Royalty Holder, hereby exercises the Royalty Put Option in accordance with the Put Option Agreement and demands payment
of US$______________, being the Royalty Purchase Price, to be transferred and paid to it on ___________ by wire transfer to its account
with the following details:
Upon
receipt of such amount together with all other amounts owing under the Put Option Agreement, the undersigned will execute and deliver
the transfer form in the form appended as Schedule B to the Put Option Agreement.
Dated
this ____ day of _______________.
SPROTT
PRIVATE RESOURCE STREAMING AND ROYALTY (US COLLECTOR), LP, by its general partner, SPROTT PRIVATE RESOURCE STREAMING AND ROYALTY
(US GP), LLC |
|
Schedule
B
Royalty
Transfer Form
RECORDING
REQUESTED BY AND
WHEN
RECORDED RETURN TO:
_________________
_________________
_________________
_________________
(Space
Above For Recorder’s Use)
MINERAL
ROYALTY TRANSFER DEED
FOR
GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby acknowledged, SPROTT PRIVATE RESOURCE STREAMING AND ROYALTY
(US COLLECTOR), LP, a partnership existing under the laws of Delaware [or successor or assignee entity] (“Royalty Holder”),
hereby transfers unto BUNKER HILL MINING CORP., a corporation incorporated and existing under the laws of the state of Nevada (“BHMC”),
all of the Royalty Holder’s right, title, and interest in and to that certain Royalty described in that certain Royalty Agreement
dated June 23, 2023, recorded or notice of which was recorded as Instrument # ________________ on ______________ in ______________ County,
Idaho, burdening and appurtenant to the Property and Mining Rights described in Exhibits A and B attached hereto and incorporated herein
by this reference.
Royalty
Holder hereby transfers, grants, conveys and quitclaims all of the Royalty Holder’s right, title and interest in the Royalty to
BHMC, ‘as-is-where-is’ and without any representation and warranty of any kind except as follows:
|
(a) |
The
Royalty Holder has not granted any charges, liens or security interest in or to its rights and interests under the Royalty; and |
|
|
|
|
(b) |
The
Royalty Holder will have good right, full power, and authority to transfer all of its right, title and interest in and to the Royalty
to BHMC. |
All
capitalized terms herein shall have the meaning set out in the Royalty Agreement, unless otherwise specified in this Deed.
**SIGNATURE
ON FOLLOWING PAGE**
//
MINERAL
ROYALTY TRANSFER DEED
IN
WITNESS WHEREOF, the Royalty Holder has executed this instrument on this_____ day of ____________, 20___.
|
SPROTT
PRIVATE RESOURCE STREAMING AND ROYALTY (US COLLECTOR), LP, by its general partner, SPROTT PRIVATE RESOURCE STREAMING AND ROYALTY
(US GP), LLC [or successor or assignee entity] |
|
|
|
By:
|
|
|
Print
Name: |
|
|
Title:
|
|
STATE
OF_________________)
)
ss.
County
of _________________)
This
record was acknowledged before me on _____________________, 2022 by ___________________________, as the _____________________ of SPROTT
PRIVATE RESOURCE STREAMING AND ROYALTY (US GP), LLC [or successee or assignee entity]
|
|
|
NOTARY
PUBLIC FOR _____________________________ |
|
Residing
at ______________________________________ |
|
My
Commission Expires _____________________________ |
MINERAL
ROYALTY TRANSFER DEED
EXHIBIT
A
Property
MINERAL
ROYALTY TRANSFER DEED
EXHIBIT
B
Mining
Rights
MINERAL
ROYALTY TRANSFER DEED
Exhibit
99.1
![](https://www.sec.gov/Archives/edgar/data/1407583/000149315224032162/ex99-1_001.jpg)
Bunker
Hill Announces Entry Into Silver Loan Facility,
Closing
of the First Tranche and Amendments to
Sprott
Streaming Financing Package
TORONTO,
Aug. 08, 2024 — Bunker Hill Mining Corp. (“Bunker Hill”
or the “Company”) (TSX-V:BNKR; OTCQB:BHILL)
announces that it has entered into definitive agreements with Monetary Metals Bond III LLC, an entity established by Monetary Metals
& Co., for the previously announced silver loan in an amount of US dollars equal to up to 1.2 million ounces of silver, to be advanced
in one or more tranches, in support of the re-start and ongoing development of the Bunker Hill Mine (the “Silver Loan”).
The Company has closed the first tranche of the Silver Loan in the principal amount of US$16,422,039, being the amount of US dollars
equal to, as of August 8, 2024, 609,805 ounces of silver (the “First Tranche”).
Sam
Ash, President and CEO of Bunker Hill Mining, states, “By combining the solid support of our existing finance partner, Sprott Streaming,
with our new and innovative Monetary Metals solution, our fully funded project is advancing on track and budget.”
Silver
Loan
As
described in the news release dated June 7, 2024, the Silver Loan will be for a term of three years, secured against the Company’s
assets and repayable in cash or silver ounces. The Silver Loan will bear interest at the rate of 15% per annum, payable in cash or silver
ounces on the last day of each quarterly interest period. This financing remains subject to TSX Venture Exchange (the “TSX-V”)
approval.
As
consideration for advancing the Silver Loan, the Company will issue to Monetary Metals & Co., subject to prior TSX-V approval, non-transferable
bonus share purchase warrants (the “Warrants”)
in one or more tranches. The number of Warrants issued in each tranche will be equal to: (a) in connection with the First Tranche, two
times the number of silver ounces advanced under the First Tranche (the “Base Warrants”)
and a bonus ratchet of: (i) 2.5% of the Base Warrants if at least 500,000 and up to 599,999 silver ounces are advanced, (ii) 5.0% of
the Base Warrants if at least 600,000 and up to 699,999 silver ounces are advanced, (iii) 10.0% of the Base Warrants if at least 700,000
and up to 799,999 silver ounces are advanced, and (iv) 15.0% of the Base Warrants if at least 800,000 silver ounces are advanced; and
(b) in connection with any additional tranches, two times the number of silver ounces advanced under such tranche. In any event, the
number of Warrants issuable to Monetary Metals & Co. will not exceed 3,000,000.
Each
Warrant will entitle the holder to acquire one share of common stock of the Company (the “Warrant
Shares”) at an exercise price that is set at the last closing price of the Company’s common
stock prior to the date such Warrant is issued (the “Exercise Price”). The Warrants
will be exercisable until the earlier of (i) three years from their issuance date and (ii) the maturity date of the Silver Loan, subject
to acceleration in accordance with the policies of the TSX-V. The issuance of the Warrant Shares is subject to the terms and conditions
of the Warrants as well as the receipt of all regulatory approvals, including, without limitation, the approval of the TSX-V. The Warrants
and Warrant Shares will be subject to a hold period of four months and a day from the date of issuance, in accordance with applicable
securities laws.
In
connection with closing of the First Tranche, the Company will, subject to TSX-V approval, issue a total of 1,280,591 Warrants to Monetary
Metals & Co. (the “Tranche 1 Warrants”).
The Tranche 1 Warrants will be exercisable until August 8, 2027, subject to acceleration in accordance with the policies of the TSX-V,
and the Exercise Price of the Tranche 1 Warrants will be C$0.16.
The
securities referenced herein or any securities underlying or derived from the financial instruments referenced herein, including but
not limited to the Warrants, the Warrant Shares, and the Silver Loan, have not been and will not be registered under the U.S. Securities
Act of 1933, as amended (the “Securities Act”). This news release does not constitute an offer to sell or the solicitation
of an offer to buy such securities, nor shall there be any sale of such securities in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Amendments
to Existing Sprott Streaming Financing Package
A
series of related transactions also took place concurrently with closing of the Silver Loan to amend certain terms of the existing financing
package with Sprott Private Resource Streaming & Royalty Corp (“Sprott Streaming”). Firstly, the maturity dates
of the series 1 convertible debentures and series 2 convertible debentures (together, the “Debentures”) previously
issued by the Company to Sprott Streaming were extended from March 31, 2026 to March 31, 2028 and March 31, 2029, respectively. Additionally,
the termination date of the royalty put option (the “Royalty Put Option”) previously granted by the Company to Sprott
Streaming was amended from the later of the payment in full of the Debentures and the exercise of the Royalty Put Option, to the later
of the payment in full of the Debentures and March 31, 2029. The Company also amended the existing loan facility with Sprott Streaming
(the “Sprott Streaming Loan”) to extend the maturity date of the Sprott Streaming Loan from June 30, 2027 to June
30, 2030 and increase the interest payable from June 30, 2027 onwards from 10% to 15%.
The
amendments to the Debentures, Royalty Put Option and Sprott Streaming Loan (collectively, the “Transactions”) each
constitute a “related party transaction” pursuant to Multilateral Instrument 61-101 – Protection of Minority Security
Holders in Special Transactions (“MI 61-101”). The directors of the Company, all of whom are considered independent
pursuant to Part 7 of MI 61-101, have unanimously determined that the Transactions are advisable and in the best interests of the Company,
and that the Transactions are exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to
the “financial hardship” exemptions provided under Section 5.5(g) and 5.7(1)(e), respectively, of MI 61-101.
ABOUT
BUNKER HILL MINING CORP.
Under
Idaho-based leadership, Bunker Hill intends to sustainably restart and develop the Bunker Hill Mine as the first step in consolidating
and then optimizing a number of mining assets into a high-value portfolio of operations, centered initially in North America. Information
about the Company is available on its website, www.bunkerhillmining.com, or within the SEDAR+ and EDGAR databases.
On
behalf of Bunker Hill Mining Corp.
Sam
Ash
President
and Chief Executive Officer
For
additional information, please contact:
Brenda
Dayton
Vice
President, Investor Relations
T:
604.417.7952
E:
brenda.dayton@bunkerhillmining.com
Cautionary
Statements
Neither
the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the
adequacy or accuracy of this news release.
Certain
statements in this news release are forward-looking and involve a number of risks and uncertainties. Such forward-looking statements
are within the meaning of that term in Section 27A of the Securities Act and Section 21E of the U.S. Securities Exchange Act of 1934,
as amended, as well as within the meaning of the phrase ‘forward-looking information’ in the Canadian Securities Administrators’
National Instrument 51-102 – Continuous Disclosure Obligations (collectively, “forward-looking statements”).
Forward-looking statements are not comprised of historical facts. Forward-looking statements include estimates and statements that describe
the Company’s future plans, objectives or goals, including words to the effect that the Company or management expects a stated
condition or result to occur. Forward-looking statements may be identified by such terms as “believes”, “anticipates”,
“expects”, “estimates”, “may”, “could”, “would”, “will”, “plan”
or variations of such words and phrases.
Forward-looking
statements in this news release include, but are not limited to, statements regarding: the Company’s objectives, goals or future
plans, including the restart and development of the Bunker Hill Mine; the achievement of future short-term, medium-term and long-term
operational strategies; the Silver Loan; the Company receiving TSX-V approval for the Silver Loan and the issuance of the Warrants and
the Warrant Shares; and the timing and advancement of additional tranches of the Silver Loan and additional Warrants. Factors that could
cause actual results to differ materially from such forward-looking statements include, but are not limited to, those risks and uncertainties
identified in public filings made by Bunker Hill with the U.S. Securities and Exchange Commission (the “SEC”) and
with applicable Canadian securities regulatory authorities, and the following: the Company not receiving the approval of the TSX-V for
the issuance of the Warrants and the Warrant Shares; the Company’s inability to raise additional capital for project activities,
including through equity financings, concentrate offtake financings or otherwise; the fluctuating price of commodities; capital market
conditions; restrictions on labor and its effects on international travel and supply chains; failure to identify mineral resources; failure
to convert estimated mineral resources to reserves; the preliminary nature of metallurgical test results; the Company’s ability
to restart and develop the Bunker Hill Mine and the risks of not basing a production decision on a feasibility study of mineral reserves
demonstrating economic and technical viability, resulting in increased uncertainty due to multiple technical and economic risks of failure
which are associated with this production decision including, among others, areas that are analyzed in more detail in a feasibility study,
such as applying economic analysis to resources and reserves, more detailed metallurgy and a number of specialized studies in areas such
as mining and recovery methods, market analysis, and environmental and community impacts and, as a result, there may be an increased
uncertainty of achieving any particular level of recovery of minerals or the cost of such recovery, including increased risks associated
with developing a commercially mineable deposit, with no guarantee that production will begin as anticipated or at all or that anticipated
production costs will be achieved; failure to commence production would have a material adverse impact on the Company’s ability
to generate revenue and cash flow to fund operations; failure to achieve the anticipated production costs would have a material adverse
impact on the Company’s cash flow and future profitability; delays in obtaining or failures to obtain required governmental, environmental
or other project approvals; political risks; changes in equity markets; uncertainties relating to the availability and costs of financing
needed in the future; the inability of the Company to budget and manage its liquidity in light of the failure to obtain additional financing,
including the ability of the Company to complete the payments pursuant to the terms of the agreement to acquire the Bunker Hill Mine
complex; inflation; changes in exchange rates; fluctuations in commodity prices; delays in the development of projects; and capital,
operating and reclamation costs varying significantly from estimates and the other risks involved in the mineral exploration and development
industry. Although the Company believes that the assumptions and factors used in preparing the forward-looking statements in this news
release are reasonable, undue reliance should not be placed on such statements or information, which only applies as of the date of this
news release, and no assurance can be given that such events will occur in the disclosed time frames or at all, including
as to whether or when the Company will achieve its project finance initiatives, or as to the actual size or terms of those financing
initiatives. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as
a result of new information, future events or otherwise, other than as required by law. No stock exchange, securities commission or other
regulatory authority has approved or disapproved the information contained herein.
Readers
are cautioned that the foregoing risks and uncertainties are not exhaustive. Additional information on these and other risk factors that
could affect the Company’s operations or financial results are included in the Company’s annual report and may be accessed
through the SEDAR+ website (www.sedarplus.ca) or through EDGAR on the SEC website (www.sec.gov).
A
photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/f00bd5f7-b7e7-474d-bb80-f8078f23696b
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Bunker Hill Mining (QB) (USOTC:BHLL)
過去 株価チャート
から 7 2024 まで 8 2024
Bunker Hill Mining (QB) (USOTC:BHLL)
過去 株価チャート
から 8 2023 まで 8 2024