Bunker Hill Delays Restart of Historic Idaho Mine
The restart of the historic Bunker Hill silver-lead-zinc mine in Idaho, once a crown jewel of American mining, has been delayed as its operator, Bunker Hill Mining Corp. (TSXV: BNKR), grapples with a surge in costs that has nearly doubled initial projections.
Bunker Hill Mining announced that the estimated restart cost has swelled to $103 million, a sharp increase from the $67 million forecast earlier this year and nearly double the $56 million projected in its 2022 pre-feasibility study. The restart, initially planned for late 2024, has been pushed back to at least the second quarter of 2025.
“Input cost inflation across the U.S. mining sector has significantly impacted our restart plan,” said Sam Ash, CEO of Bunker Hill Mining, in a statement. “Our team has worked tirelessly to mitigate these challenges, but inflationary pressures and unavoidable scope changes have forced us to revise our timeline and financial plan.”
The 53% rise in labor costs for construction, combined with a 40% increase in structural steel and copper prices, have been particularly burdensome. The cost of concrete has also risen by 20%, adding to the financial strain.
Adding to the complexity, a specialist contractor working on the tailings filter press unexpectedly left the project, further delaying progress. Despite considering a phased approach to the tailings management system, the company ultimately determined that completing the entire system upfront would be more prudent.
As of mid-December, the project is 64% complete, with 98% of procurement finalized. Progress across critical areas includes:
- Processing Plant: Currently 66% complete, with phased commissioning scheduled for late December 2024.
- Tailings Filter Press: Progress at 38%, with construction slowed by contractor turnover and inflation-related cost increases.
- Underground Development: 80% complete and on budget, with access to several mining stopes already prepared for extraction.
Despite these advances, the increased costs and timeline delays have required substantial revisions to the company’s financing and operational strategies.
To address the growing financial demands, Bunker Hill Mining plans to draw $21 million from a standby facility provided by Sprott Private Resource Streaming and Royalty Corp. The company is also in advanced discussions to secure an additional $30 million from strategic partners.
These short-term financing efforts are part of a broader plan to unlock a $150 million facility from the U.S. Export-Import Bank by late 2025. This larger funding package is intended to refinance existing debt and expand the mine’s production capacity to 2,500 tons per day.
The Bunker Hill mine, located in Idaho’s Coeur d’Alene mining district, is an enduring symbol of American mining history. Since its discovery in 1885, the mine has produced over 42.77 million tons of ore, yielding 165 million ounces of silver and significant quantities of lead and zinc. The mine ceased operations in 1991 amid environmental and financial challenges but remains a source of pride and economic potential in the region.
A 2022 PFS outlined a vision for a high-grade operation with an after-tax net present value of $52 million and an internal rate of return of 36%.
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