Canadian company offers $30M for Bunker Hill

TORONTO, Ontario — Liberty Silver Corp. announced this week it has entered into a non-binding letter of intent to acquire the Bunker Hill Mine Complex, located in Kellogg, from Placer Mining Corp.

The acquisition price, as described in Liberty’s letter of intent, is U.S. $30 million.

Pursuant to the terms and conditions of the letter of intent, dated Nov. 27, 2016 and amended on March 29, 2017, the acquisition is subject to due diligence, regulatory approval and definitive documentation, which Liberty is required to complete by the close of business on June 29.

The acquisition would include all mining rights and claims, surface rights, 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 Complex.

The acquisition would also include all current and historic data relating to the Bunker Hill Mine Complex, such as drill logs, reports, maps, and similar information located at the mine site or any other location.

The Bunker Hill Mine is one of the most storied base metal and silver mines in American history, Liberty Silver Corp. officials said in a news release. Initial discovery and development of the property began in 1885, and from that time until the mine closed in 1981 it produced over 35.8 million tons of ore at an average mined grade of 8.76 percent lead, 4.52 ounces per ton silver, and 3.67 percent zinc.

Throughout its long history, more than 40 different orebodies were discovered and mined at the Bunker Hill, primarily consisting of zinc-lead-silver mineralization.

The Bunker Hill and Sullivan Mining Company had a strong history of regular dividend payments to shareholders from the time the company went public in 1905 until it was acquired in a hostile takeover by Gulf Resources in 1968.

When the mine closed in 1981, it was estimated to still contain significant resources, Liberty Silver Corp. officials said.

The mine and smelter complex were closed in 1981 after the then-owner, Gulf Resources, was not able to continue to comply with the new regulatory structures brought on by the passage of environmental statutes as then enforced by the Environmental Protection Agency.

In summary, the reasons for the mine and smelter complex closures were primarily a result of compliance with stringent smelter emissions standards, not regulatory issues with the mine itself, Liberty Silver Corp. officials said.

The Bunker Hill lead smelter, electrolytic zinc plant and historic milling facilities were demolished about 25 years ago, and the area became part of the “National Priority List” for cleanup under EPA regulations, thereby pausing development of the Bunker Hill Mine for more than 30 years.

All of the cleanup of the old smelter, zinc plant, and associated sites has now been completed and the mine is now poised for further development and an eventual return to production, Liberty Silver Corp. officials said.

Liberty Silver officials have been in contact with government officials who have expressed strong support and cooperation for the Canadian company’s efforts to return the mine to being a productive mining asset.

The initial U.S. $15 million of the total acquisition price shall be paid annually over the course of five years from the June 29 closing date, of which, U.S. $150,000 has been paid upon execution of the letter of intent. U.S. $3.35 million will become due on the closing date, and U.S. $3,5 million on the first anniversary, U.S. $3 million on the second anniversary, U.S. $2 million on the third and fourth anniversaries and U.S. $1 million on the fifth anniversary.

The balance of U.S. $15 million shall become due in 15 equal installments beginning on June 29, 2023 and on each anniversary of the closing date thereafter.

Liberty Silver Corp. has also made payments totaling U.S. $280,000 with respect to certain property carrying costs and, for up to two years after closing, the company shall hire certain local managerial staff.

In addition to the letter of intent to purchase Bunker Hill, Liberty has the right to earn a joint venture interest in the 10,020-acre Trinity Silver Project in Pershing County, Nevada, pursuant to the terms of an earn-in agreement with Renaissance Exploration Inc.