Private & Confidential Execution Version

 

DATED 9 AUGUST 2018

 

 

 

BUNKER HILL MINING CORPORATION (1)     and       HUMMINGBIRD RESOURCES PLC (2)

 

 

 

DEED OF WARRANT GRANT

 

relating to warrants in registered form to

subscribe for Common Shares of US$0.001

each in

BUNKER HILL MINING CORPORATION

 

 

 

[ex10-3_001.jpg] 

 

Tel +44 (0)370 903 1000 Fax +44 (0)370 904 1099 mail@gowlingwlg.com
www.gowlingwlg.com

 

 

 

 

CONTENTS

 

Clause   Heading   Page           1   definitions and Interpretation   1        
  2   Grant of the Warrants   3           3    Exercise of Warrants   4        
  4   Anti-Dilution Provisions   5           5   Supplementary Protection   6  
        6     Assignment of Warrants and Warrant Register   8           7  
Modification of Rights   8           8   Information and Representation Rights
of Warrant Holder   8           9     REPLACEMENT CERTIFICATES   8           10
  Notice   9           11    ENTIRE AGREEMENT   9           12   Governing Law  
9           SCHEDULE ONE - FORM OF WARRANT CERTIFICATE   11       SCHEDULE TWO -
NOTICE OF EXERCISE   12

 

 

 

 

THIS DEED OF WARRANT GRANT is executed on the 2nd day of August 2018

 

BETWEEN:

 

1 BUNKER HILL MINING CORPORATION a company incorporated under the laws of the
state of Nevada USA whose registered office is at 1802 N. Carson Street, Suite
212, Carson City, Nevada 89701 (the “Company”); and     2 HUMMINGBIRD RESOURCES
PLC, a company incorporated and registered in England and Wales whose registered
office is at 49-63 Spencer Street, Hockley, Birmingham, B18 6DE (the “Warrant
Holder”).

 

Agreed terms

 

1 definitions and Interpretation

 

1.1 The definitions and rules of interpretation set out in this clause apply to
this Deed of.

 

  Act   the Companies Act 2006 as amended;           Amendment and Restatement
Agreement   the agreement made between the Company and the Warrant Holder dated
on or about the date of this Deed;           Auditors   the auditors of the
Company from time to time;           Business Day   a day (not being a Saturday
or Sunday) on which clearing banks are open for normal business in London;      
    Common Shares   the common shares in the capital of the Company;          
Constitution   the documents that form the constitution of the Company current
at the date of this Deed or as amended from time to time;           CSE   the
Canadian Securities Exchange;           Directors   the directors of the Company
from time to time;           Equity Shares   has the definition as set out in
Section 744 of the Act;

 

1

 

 

  Notice of Exercise   the duly completed notice set out as Schedule 1;        
  Second Loan   means the sum of US$500,000 (Five Hundred Thousand United States
Dollars) agreed to be advanced by the Warrant Holder to the Company in
accordance with the Amendment and Restatement Agreement;           Share
Register   the register of members of the Company;           Subscription
Consideration   in respect of any Warrant Shares to be issued pursuant to a
Notice of Exercise the number of Warrant Shares the subject of such Notice of
Exercise multiplied by the Subscription Price;           Subscription Period  
the period commencing on the date of this Deed and ending onthe date which is 24
months from the date that the Warrant Holder advances the Second Loan to the
Company in accordance with the Amendment and Restatement Agreement ;          
Subscription Price   Can$0.45 or as otherwise adjusted in accordance with the
provisions of Clause 5;           Subscription Rights   the rights for the time
being conferred by the Warrants to subscribe, in the case of each Warrant, for
one Common Share which are constituted by virtue of the provisions of clause 3.1
of this Deed;           Trading Day   any day during which trading of securities
takes place on CSE;           VWAP   for any Trading Day, the volume weighted
average price of the Common Shares on CSE as reported by Bloomberg under the
symbol “BNKR.CN”;           Warrant and Warrants   a warrant to subscribe for
one Common Share at any time during the Subscription Period, at the Subscription
Price granted pursuant to clause 3.1 of this Deed and Warrants shall have a
commensurate meaning;

 

2

 

 

  Warrant Holder   in relation to a Warrant, the person in whose name such
Warrant is registered in the register referred to in clause 7.2;          
Warrant Shares   Common Shares to be issued pursuant to any exercise of the
Warrants.

 

1.2 Headings are inserted for convenience only and shall be ignored in the
interpretation of this Deed.     1.3 In this Deed, unless the context otherwise
requires:

 

  (a) references to clauses, paragraphs and schedules are to be construed as
references to the clauses and paragraphs of, and schedules to, this Deed and
references to this Deed include its schedules;         (b) reference to (or to
any specified provision of) this Deed or any other document or instrument shall
be construed as a reference to this Deed, that provision or that document or
instrument as in force for the time being and as amended in accordance with the
terms thereof;         (c) references to a person shall be construed as
including references to an individual, firm, company, corporation or
unincorporated body of persons;         (d) references to the singular shall
include the plural and vice versa;         (e) references to any English legal
term for any action, remedy, method or judicial proceeding, legal document,
legal status, court, official, or any legal concept or thing shall, in respect
of any jurisdiction other than England, be deemed to include that which most
nearly approximates in that jurisdiction to the English legal term; and        
(f) references to statutory provisions shall be construed as references to those
provisions as replaced, amended or re-enacted from time to time.

 

2 Grant of the Warrants

 

The Company hereby grants to the Warrant Holder 1,167,143 Warrants conditional
upon the completion of an investment from Gemstone 102 Ltd. (“Gemstone”) on the
following terms:

 

  (i) Financing Amount: US$ 548,947 which is Can$ 721,834 at US$/Can$ 0.76049;

 

3

 

 

  (ii) Units: 1,604,076 units where each unit consists of 1 Common Share and 1
warrant;         (iii) Terms of Common Share: issue price of Can$ 0.45/share;  
      (iv) Terms of Warrant: exercise price of C$0.60 and a term of 3 years; and
        (v) Ownership of Gemstone post transaction: 16.19% of Common Shares, and
19.9% on a partially diluted basis (assumes Gemstone’s proposal to
simultaneously cancel all of its 2 million Can$2.00 warrants from the Company’s
December 2017 financing).

 

3 Exercise of Warrants

 

3.1 The Warrants shall be exercisable in whole or in part at any time during the
Subscription Period. To the extent that the Warrants have not been exercised at
the expiry of the Subscription Period, they shall lapse. The Warrants shall be
exercised by the delivery of the Notice of Exercise (in substantially the same
form as included in Schedule 1 of this Deed signed by the Warrant Holder
specifying the number of Common Shares in respect of which the Warrants are to
be exercised) and the requisite remittance (rounded up to the nearest whole
cent) for the aggregate Subscription Price of the Warrant Shares to the
registered office of the Company by personal delivery, first class prepaid post
or facsimile transmission:

 

  (a) personal delivery shall be deemed to have occurred on the next working day
in the place where left;         (b) delivery by post as aforesaid shall be
deemed to have occurred two working days following the date of posting; and    
    (c) delivery by facsimile shall be deemed to have occurred on production of
the transmission report evidencing that all the pages of the Notice of Exercise
have been sent;

 

PROVIDED ALWAYS that the requisite remittance for the Subscription
Consideration, by telegraphic transfer to the Company’s bank account as notified
to the Warrant Holder or by bankers draft made payable to the Company and
cleared through the Company’s bank account.

 

3.2 The date of the allotment and issue of any Warrant Shares subject to the
Notice of Exercise delivered in accordance with clause 4.1 shall be not more
than five Business Days after receipt by the Company of the Subscription
Consideration.

 

4

 

 

3.3 Not later than ten Business Days after the valid Notice of Exercise (duly
completed and accompanied by the requisite remittance for the Subscription
Consideration) is lodged at the registered office of the Company in accordance
with clause 4.1, share certificates shall be issued (free of charge) and
despatched (at the risk of the person entitled thereto) showing the date of
allotment and issue of such Warrant Shares as being in accordance with this
clause 4.     3.4 Each Warrant will be cancelled once the Subscription Rights
attaching thereto have been exercised and Warrant Shares allotted and issued
pursuant to such exercise.     3.5 Warrant Shares allotted pursuant to the
exercise of Subscription Rights will rank for all dividends and distributions
declared on any date on or after the date on which the relevant Warrant Shares
are issued and shall have the rights and privileges prescribed in the
Constitution in relation to Common Shares.     3.6 The Company shall make
application for the Warrant Shares so issued on the exercise of Warrants to be
admitted to listing and trading on CSE as soon as reasonably practicable after
the date of issue and for listing of the Warrant Shares, and on all other stock
exchanges (if any) on which its other issued ordinary share capital is then
listed with effect from the earliest possible date after the date of issue.    
3.7 Notwithstanding anything in this Deed, in the event that the Subscription
Period expires at any time when the Company is unable by law or regulation to
issue the Warrant Shares, then the Subscription Period shall be deemed to be
extended to a date falling three calendar months after the first Business Day
that the Company is next able to issue such Warrant Shares.     3.8 The Warrant
Holder shall not be entitled to exercise any of the Warrant Rights at such times
when to do so would not be permitted by the applicable rules of any stock
exchange on which the Common Shares in issue are admitted to trading.

 

4 Anti-Dilution Provisions

 

4.1 Subject always to clause 6 after any of the following on a date prior to the
end of the Subscription Period, namely:

 

  (a) any allotment or issue of fully paid Common Shares by way of
capitalisation of profits or reserves (including share premium account and any
capital redemption reserve fund) to holders of Equity Shares on the Share
Register;         (b) a reduction of capital of whatever nature or any other
reduction in the number of Common Shares in issue from time to time;

 

5

 

 

  (c) an issue of Common Shares by way of dividend or distribution;         (d)
a consolidation, amalgamation or merger of the Company with or into another
entity; or         (e) any sub-division or consolidation of Equity Shares;

 

the number and/or nominal value of Warrant Shares to be, or capable of being,
subscribed for on any subsequent exercise of the Subscription Rights and/or the
final Subscription Price will be adjusted in such manner as the Auditors shall
certify in writing to the Company and the Warrant Holder(s) to be necessary in
order that, after such adjustment:

 

  (f) the total number of Warrant Shares which may be subscribed pursuant to the
Subscription Rights, is such that Warrant Shares when issued:

 

  (i) will carry as nearly as possible (and in any event not less than) the same
proportion of the votes as the Warrant Shares carried prior to such adjustment;
and         (ii) will carry the entitlement to participate in the same
proportion in the profits and assets of the Company as would the total number of
Warrant Shares which could have been subscribed for pursuant to the Subscription
Rights immediately prior to the event giving rise to such adjustment; and

 

  (g) the Subscription Consideration payable in order to subscribe for all the
Warrant Shares which may be subscribed pursuant to Subscription Rights will be
as nearly as possible (and in any event no more than) the same as it was prior
to such adjustment.

 

4.2 The Company shall procure that no such event as is referred to in clause 4.1
shall occur prior to the end of the Subscription Period unless the Auditors
shall either (i) prior to or (ii) contemporaneously with, the relevant
resolution of the members of the Company or the Directors giving effect to or
sanctioning such event, certify the appropriate adjustments. The Company shall
send notice of such adjustments to the Warrant Holder(s) as soon as practicable
(and in any event no later than seven days) following such resolution as
aforesaid.     4.3 In calculating any entitlement to additional Subscription
Rights under this clause 4 fractions shall be rounded down to the nearest whole
Common Share.

 

6

 

 

5 Supplementary Protection     5.1 Prior to the end of the Subscription Period
the Company shall not without providing written notice of not less than fifteen
Business Days to the Warrant Holder modify the rights attached to any of its
shares whether issued or unissued in any way which has or will have a material
adverse effect on the rights of the Warrant Holder or the holder of Warrant
Shares or the respective abilities of such persons to enjoy such rights (but so
that such restriction shall not be construed as a restriction or prohibition on
sub-division or consolidation of Common Shares subject always to the provisions
of clause 5).

 

5.2 At all times prior to the end of the Subscription Period, the Company shall
keep available for issue sufficient authorised but unissued share capital to
satisfy in full and in accordance with the terms thereof all Subscription Rights
remaining exercisable.     5.3 If at any time an offer is made to all holders of
Common Shares (or all holders of Common Shares other than the offeror and/or any
company controlled by the offeror and/or persons acting in concert with the
offeror) to acquire the whole or any part of the issued share capital of the
Company and the Company becomes aware that as a result of such offer the right
to cast a majority of the votes which may ordinarily be cast on a poll at a
general meeting of the Company has or will become vested in the offeror and/or
such persons or companies as aforesaid, the Company shall give notice to the
Warrant Holder of such vesting within fourteen days of its becoming so aware. If
such offer becomes unconditional in all respects and the Warrant Holder has not
exercised some or all of his Warrants, all unexercised Warrants shall
immediately lapse.     5.4 Publication of a scheme of arrangement with the
Company’s shareholders providing for the acquisition by any person of the whole
or any part of the issued share capital of the Company shall be deemed to be the
making of an offer for the purposes of this clause 5.4.     5.5 If the Company
commences liquidation, whether voluntary or compulsory (except for the purpose
of reconstruction or amalgamation on terms sanctioned by the Warrant Holder), it
shall forthwith give notice thereof to the Warrant Holders; thereupon each
Warrant Holder will (if upon such winding-up there shall be a surplus available
for distribution amongst the holders of the Common Shares (including for this
purpose the Common Shares which would arise on the exercise of all the
outstanding Subscription Rights) which, taking into account the amounts payable
on the exercise of the Subscription Rights, exceeds in respect of each Common
Share a sum equal to the Subscription Price) be treated as if immediately before
the date of such order or resolution his Subscription Rights had been
exercisable and had been exercised in full and shall accordingly be entitled to
receive out of the assets available on liquidation pari passu with the holders
of the Common Shares such a sum as he would have received had he been the holder
of the Common Shares to which he would have become entitled by virtue of such
subscription after deducting a sum per share equal to the Subscription Price;
subject to the foregoing, all Subscription Rights shall lapse on liquidation of
the Company.

 

7

 

 

6 Assignment of Warrants and Warrant Register     6.1 The Warrants may be
assigned by a Warrant Holder to any member of its group in whole or in part.    
6.2 The Company shall, or shall procure that its registrar shall, maintain a
register of the holders of Warrants.     7 Modification of Rights     7.1 No
modification, variation or amendment to this Deed shall be effective unless such
modification, variation or amendment is in writing and has been signed by or on
behalf of the parties.     7.2 All or any of the rights for the time being
attaching to the Warrants (including the Subscription Rights) may from time to
time (whether or not the Company is being wound up) be altered or abrogated with
the prior written consent of the Warrant Holder.     8 Information and
Representation Rights of Warrant Holder     8.1 The Company shall send or
procure to be sent to each Warrant Holder a copy of its annual report together
with all documents required by law to be annexed thereto and copies of every
statement, notice or circular issued to the members of the Company concurrently
with the issue of the same to its members.     8.2 A Warrant Holder shall have
the right to attend and speak (but not, by virtue or in respect solely of
holdings of Warrants, to vote) at all meetings of members of the Company at
which any business is to be moved which has any effect (actually or reasonably
foreseeable) on the value of the Warrants or the rights attaching thereto or the
enjoyment thereof.     9 REPLACEMENT CERTIFICATES       If a Certificate is
mutilated, defaced, lost, stolen or destroyed it will be replaced by the Company
for the time being at the expense of the Company and on such terms as to
evidence and indemnity as the Company may reasonably require. Mutilated or
defaced Certificates must be surrendered before replacements will be issued.

 

8

 

 

10 Notice     10.1 Any notice to be given by any party hereunder shall be in
writing and shall be deemed to have been duly given if delivered by hand or by
email (to such email address as may from time to time be notified by the
relevant party) or given by letter sent by first-class registered mail to the
party to receive such notice provided that any party may change its address or
facsimile number for notice by giving to the other party written notice of such
change.     10.2 Any notice given under this Clause shall be effective:

 

  (a) if delivered personally, when delivered;         (b) if sent by email to
the Company (FAO Helga Fairhurst to hf@bunkerhillmining.com) and to the Warrant
Holder (FAO Tom Hill to tom@hummingbirdresources.co.uk), either (i) on receipt
of a read receipt email from the correct address; (ii) 24 hours from delivery if
sent to the correct email address and no notice of delivery failure is received;
or (iii) on receipt of confirmation of receipt from the recipient; or        
(c) if sent by first-class registered post within the United Kingdom, two
Business Days after posting or if sent from or to any place outside the United
Kingdom by prepaid priority airmail seven Business Days after posting.

 

11 ENTIRE AGREEMENT       This Deed sets out the entire agreement and
understanding between the parties hereto in respect of the Warrants and it is
expressly declared that no variations hereof shall be effective unless made in
writing and signed by or on behalf of each of the parties.     12 Governing Law
      The provisions of this Deed shall be subject to and governed by English
Law. The Warrant Holder and the Company hereby submit to the exclusive
jurisdiction of the Courts of England in relation to any matters arising out of
this Deed.

 

IN WITNESS WHEREOF this Deed has been duly executed on behalf of the Company as
a Deed and is intended to be and is hereby delivered on the day and year first
above written.

 

9

 

 

EXECUTED AS A DEED by )         BUNKER HILL MINING CORPORATION )         acting
by: )       Director           Director/Secretary       EXECUTED AS A DEED by )
        HUMMINGBIRD RESOURCES PLC )         acting by: )       Director        
  Director/Secretary

 

10

 

 

SCHEDULE 1

 

Form of Warrant Certificate

 

Warrant Certificate Representing Subscription Rights for [●] Common Shares each
at Can$0.45 per Common Share in Bunker Hill Mining Corporation.

 

Warrant Certificate No.  

Transfer No.

  Date of Registration          

 

This is to certify that ____________________ is the registered owner of [●]
Warrants to subscribe for [●]Common Shares at Can$0.45 per Common Share in
Bunker Hill Mining Corporation.

 

11

 

 

SCHEDULE 2

 

Notice of Exercise

 

To: The Directors       Bunker Hill Mining Corporation

 

We the registered holders of the attached Warrant Certificate(s) hereby exercise
the Subscription Rights over [●] of the Common Shares the subject of the
attached Warrant Certificate(s), and attach hereto a bankers draft for £[●]/
confirm that a telegraphic transfer for US$[●] has been made to the Company’s
bank account (delete as appropriate), being the Subscription Consideration
payable in respect thereof.

 

Signed:         Full Name:         Address:  

 

We hereby authorise and direct the Company to allot the Common Shares to be
issued hereto to the following proposed allottees:

 

No. of Shares   Name of Proposed Allottee   Address of Proposed Allottee        
  1.                   2.                   3.                   4.            
      5.        

 

We hereby authorise and request you to despatch a certificate for such Common
Shares to be sent by post at our risk at the first address shown above or to our
agent as mentioned below:

 

We agree to accept such Common Shares subject to the Constitution of the
Company.

 

Signed:           Full Name:           Address:                                
  Lodged by: (agent to whom certificate(s) should be sent).         Name of
Agent           Address:                

 

12