7. Environmental Protection Agency (“EPA”) Settlement Agreement and Water Treatment Liabilities

Effective December 19, 2021, the Company entered into an amended Settlement Agreement between the Company, Idaho Department of Environmental Quality (“IDEQ”), U.S. Department of Justice, and the EPA (the “Amended Settlement”). Upon the effectiveness of the Amended Settlement, the Company would become fully compliant with its payment obligations to these parties. The Amended Settlement modified the payment schedule and payment terms for recovery of the historical environmental response costs. Pursuant to the terms of the Amended Settlement, upon purchase of the Bunker Hill Mine and the satisfaction of financial assurance commitments (as described below), the $19,000,000 of cost recovery liabilities were to be paid by the Company to the EPA on the following dates:

 Schedule of Amended Settlement Environmental Protection Agency Agreement

In addition to the changes in payment terms and schedule, the Amended Settlement includes a commitment by the Company to secure financial assurance for the principle outstanding in the form of performance bonds or letters of credit deemed acceptable to the EPA. The financial assurance can be drawn on by the EPA in the event of non-performance by the Company of its payment obligations under the Amended Settlement (the “Financial Assurance”). The amount of the bonds will decrease over time as individual payments are made.

During the year ended December 31, 2024, the Company made a $3,000,000 payment to the EPA bringing the principal of the cost recovery liability to $14,000,000 as of June 30, 2026 and December 31, 2025.

As of June 30, 2026, and December 31, 2025, the Company had two payment bonds of $9,999,000 and $4,001,000 in place to secure this liability. The collateral for the payment bonds is comprised of restricted cash of $2,975,000 for June 30, 2026 and December 31, 2025 shown within current assets and land pledged by third parties, with whom the Company has entered into an agreement that contemplates a monthly fee of $20,000 (payable in cash or common stock of the Company, at the Company’s election) the “Financing Cooperation Agreement”.

In the fourth quarter of 2025 the EPA agreed to forebear enforcement of any late payments pursuant to the first amendment of the Amended Settlement Agreement to facilitate ongoing discussion of a potential second amendment to the Amended Settlement Agreement, including the payment due in November 2025. The EPA reserved all rights to resume collection of late payments in the event a Second Amendment of the 2021 Amended Settlement Agreement is not finalized. As of June 30, 2026, the Company is engaged in ongoing discussions with the EPA regarding the potential for, and terms of, a second amendment to the Settlement Agreement.

The Company recorded accretion expense on the liability of $364,719 and $708,882 for the three and six months ended June 30, 2026, respectively, (three and six months ended June 30, 2025 – $427,849 and $835,862, respectively) bringing the net liability to $11,023,426 (previously accrued interest of $156,743) as of June 30, 2026.

Water Treatment Charges – IDEQ

Separate to the cost recovery liability pursuant to the EPA Settlement Agreement, the Company has agreed to pay ongoing water treatment charges. The Company is currently charged a monthly amount of $100,000 by the IDEQ as instalments toward the cost of treating water at the Central Treatment Plant (the “CTP”). Upon receipt of an invoice from the IDEQ for actual CTP costs incurred, a reconciliation is performed relative to payments made, with an additional amount due or refund received as applicable.