IKN

Win us with honest trifles

Dear Bunker Hill Mining (BNKR.cse): Here’s the deal

Want to be taken seriously? Don’t pretend you’re a silver project. It’s that easy.

Come back zinc! Come back!

16 Comments

    CAPEX is massive. It is a superfund site with tens of millions still owed to EPA for cleanup and water treatment plant. BNKR only leasing mine, buying out lease is another tens of million dollar cost factor.it is an old school mine with shaft and host vs modern ramp system some areas inaccessable to modern wheeled equipment. Concentrate have to be shipped to Quebec and zinc treatment charges are all over the map so long term cost planning impossible.

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      Bizarrely, i’m going to try a defence. I did some early Excelling on it last night and there’s plenty of comfort in the numbers. TCRC 20% is ok for this stage & U$1.15/lb Zn is the right place to pitch today. The EPA payments are agreed & clear, the model shows when the cash comes out.

      But 1)Sprott is guaranteed success and the equity comes 2nd 2)it needs to re-start inside the capex limit 3) it’s not an Ag mine, period. Pretending otherwise smells off and won’t win friends

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    I love Silver Valley Idaho, tier 1 jurisdiction. Bunker hill next to Sunshine mine and Sunshine biggest historical U.S. silver producer so potentially may be bonanza silver in Bunker. Monetizing zinc silver con big issue. Old Bunker had zinc and lead smelters on site now got to ship con 2000 miles to cezinc in Montreal. Transportation cost alone eat 5% to 10% of revenue imo. Treatment costs another negative factor. Zinc treatment cost opaque.

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    Right now zinc treatment charges are lower but excessive zinc con treatment charges big factor in CDE putting Silvertip on care and maintenance recently. Refined zinc price high now but with many smelters shutting down due to high electricty cost we could see a glut of zinc con and treatment charges ramp up. Just my thoughts on Bunker Hill. I hope she can be restarted good for the valley.

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      The story of how Glencore shafted Trevali (or maybe TV let GLEN shaft it?) is enough to know how trappy the Zn conc mkt is for smaller players. Not denying that and the devil will be in the details for sure. However, the new team at BNKR deserves a chance and i’m not writing this off per se. And they got rid of Bobby G and raised capital in a tough mkt, if only for that they get my applause. I’ll be on the 6ix webinar mañana.

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        And Glencore control cezinc mgmt. Cezinc is an asset that should be valued at $1bn by market which is its replacement value but have a $50mm market cap because of Glencore mgmt control and all decisions benefit Glencore and not noranda income fund shareholders. For lead con Bunker Hill can ship to either Glencore horne smelter which is also 2000km transport distance or Teck Trail which is close by.

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          I am avoiding BNKR for now. Silver Valley mines, Bunker Hill, Sunshine, Galena, Lucky Friday, need to be consolidated under one operator for cost savings and efficiency. Phil dream is such consolidation. Hecla hold huge uneconomic NSR on Sunshine main hoist so Kaplan wont be able to get her producing silver again. Phil tried to buy Galena but Sprott blocked him to keep Darrin in there and Darrin return favor sold Sprott personally 40% of Galena for almost nothing.

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            The best deal Coeur ever did was sell the Galena mine. The elephant in the room in that district is the EPA and the superfund clean-up.
            Hecla can never close the Lucky Friday mine as they’ll be on the hook to clean-up >100 years of mine waste around the Lucky Friday which will probably brankrupt them.

            The Bunkerhill mine has no processing facilities, no tailings facilities, and compared to all the other mines in the district is very wet. The dewatering costs to access the lower mineralization will be high, and they’ll need to build a water treatment facility as I doubt the EPA will let them use theirs.
            For the mine to start, they need to find some ore above the Kellogg tunnel and see if they can process it at the Sunshine mill (if it still works).

    Just watched the webinar and I’ve seen plenty worse than that. A serious team and they don’t duck issues.

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      TAG dewater issue is major. dewatering Bunker Hill imo is worse than you outline in your post TAG. Bunker Hill is connected to Crescent mine by a drift underground so if you dewater Bunker you necesarily have to dewater Crescent too and Crescent mine belong to a different operator, some New York sharks who siezed mine from previous operator. Crescent is a pure silver mine and historically part of Bunker Hill mine complex.

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        I know the district very well, and the wetness of the Bunkerhill is legendry, but the BH is ~20 times larger than the Crescent, but the reason SNS silver was looking for mineralization above the Crescent level (rumor has it that this level has collapsed, which would be a shame)on the Sunshine-side of the property.

        That was a (very bad) plan to connect the Crescent to the Sunshine, which would simply flood all of the mines from the BH to the Galena and beyond.

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    QP = Scott Wilson so resource highly suspect. Mining cost, experienced labor availability, processing and tailings storage/handling costs, logistics, combined probably make project uneconomic anywhere near current metal prices. Mine water not near-term issue but huge L/T. Pay for Ag explore costs w/ “mine profits”? Please GMAFB.

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      The mine water is an issue now and will be forever. Huge amounts of acid mine water are flowing out of the Kellogg Tunnel everyday, and I’m sure that the EPA will love to go after any money to pay for its treatment.

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    BTW thanks a bazijillion for all you’ve done Otto for me personally and so many others. Much respect that you have been able to keep both blog and service going with invaluable content and info that is often not available from any other source.

    Reply

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