Exhibit 10.1

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

AND THE UNITED STATES DEPARTMENT OF JUSTICE

____________________________________

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IN THE MATTER OF:

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BUNKER HILL SUPERFUND SITE

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KELLOGG, IDAHO

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)

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SETTLEMENT AGREEMENT AND

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In re:  

BUNKER HILL MINING CORP.

ORDER ON CONSENT FOR RESPONSE

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ACTION BY BUNKER HILL MINING

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CORP., PURCHASER, UNDER THE

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COMPREHENSIVE ENVIRONMENTAL

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RESPONSE, COMPENSATION AND

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LIABILITY ACT, 42 U.S.C. §§ 9601–9675

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____________________________________)

SETTLEMENT AGREEMENT AND ORDER ON CONSENT FOR

 RESPONSE ACTION BY

BUNKER HILL MINING CORP.

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TABLE OF CONTENTS

I.

INTRODUCTION

1

II.

JURISDICTION AND GENERAL PROVISIONS

1

III.

PARTIES BOUND

2

IV.

DEFINITIONS

2

V.

FINDINGS OF FACT

4

VI.

DETERMINATIONS

6

VII.

SETTLEMENT AGREEMENT

6

VIII.

DESIGNATION AND AUTHORITY OF REMEDIAL PROJECT MANAGER

6

IX.

WORK TO BE PERFORMED

7

X.

PAYMENT

12

XI.

ACCESS/NOTICE TO SUCCESSORS/INSTITUTIONAL CONTROLS

14

XII.

INSURANCE

15

XIII.

RECORD RETENTION, DOCUMENTATION, AND AVAILABILITY OF INFORMATION  16

XIV.

DISPUTE RESOLUTION

16

XV.

CERTIFICATION

17

XVI.

WORK TAKEOVER

17

XVII.

COVENANT NOT TO SUE BY UNITED STATES

18

XVIII.

RESERVATION OF RIGHTS BY UNITED STATES

18

XIX.

COVENANT NOT TO SUE BY PURCHASER

19

XX.

EFFECT OF SETTLEMENT/CONTRIBUTION

20

XXI.

RELEASE AND WAIVER OF LIENS

20

XXII.

INDEMNIFICATION

21

XXIII.

MODIFICATION

21

XXIV.

ATTACHMENTS

22

XXV.

NOTICE OF COMPLETION

22

XXVI.

EFFECTIVE DATE

22

XXVII.

DISCLAIMER

22

XXVIII.

PAYMENT OF COSTS

23

XXIX.

NOTICES AND SUBMISSIONS

23

XXX.

PUBLIC COMMENT

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I.

INTRODUCTION

1.

This Settlement Agreement and Order on Consent for Response Action by Bunker
Hill Mining Corp. (“Settlement Agreement”) is voluntarily entered into by and
between the United States, on behalf of the Environmental Protection Agency
(“EPA”), and Bunker Hill Mining Corp. (“Purchaser”).  As described in this
Settlement Agreement, Purchaser agrees to perform a response action at or in
connection with the property located at the Bunker Hill Mine, south of Kellogg,
in the Silver Valley of Shoshone County, Idaho (the “Mine”), which is located in
and part of the “Non-Populated Areas Operable Unit of the Bunker Hill Superfund
Site” or the “Site,” and to make payments for, and in partial or total
satisfaction of the liability of Placer Mining Corp. and the Estate of Robert
Hopper, relating to the Mine, under the Comprehensive Environmental Response,
Compensation, and Liability Act (“CERCLA”), 42 U.S.C. §§ 9601 – 9675, as
provided below.

II.

JURISDICTION AND GENERAL PROVISIONS

2.

This Settlement Agreement is issued pursuant to the authority of the Attorney
General to compromise and settle claims of the United States, and the authority
vested in the President of the United States by CERCLA, and delegated to the
Administrator of EPA by Executive Order No. 12580, 52 Fed. Reg. 2923 (Jan. 23,
1987).

3.

The Parties agree that the United States District Court for the District of
Idaho will have jurisdiction pursuant to Section 113(b) of CERCLA, 42 U.S.C.
§ 9613(b), for any enforcement action brought with respect to this Settlement
Agreement.

4.

EPA has notified the State of Idaho (the “State”) of this action pursuant to
Section 106(a) of CERCLA, 42 U.S.C. § 9606(a).

5.

In view of the complex nature and significant extent of the work to be performed
in connection with the response actions at the Mine and the Site, and the risk
of claims under CERCLA being asserted against Purchaser as a consequence of
Purchaser’s activities at the Site pursuant to this Settlement Agreement, one of
the purposes of this Settlement Agreement is to resolve, subject to the
reservations and limitations contained in Section XVIII (“Reservations of Rights
by United States”), any potential liability of Purchaser under CERCLA for the
Existing Contamination and Work as defined by Paragraph 10.

6.

The resolution of this potential liability in exchange for Purchaser’s
performance of the Work and payments made in accordance with Paragraph 40 of
this Agreement, is in the public interest.

7.

The United States and Purchaser recognize that this Settlement Agreement has
been negotiated in good faith. Purchaser agrees to comply with and be bound by
the terms of this Settlement Agreement and further agrees that it will not
contest the basis or validity of this Settlement Agreement or its terms.

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III.

PARTIES BOUND

8.

This Settlement Agreement applies to and is binding upon the United States and
upon Purchaser and its successors and assigns. Any change in ownership or
corporate status of Purchaser including, but not limited to, any transfer of
assets or real or personal property shall not alter Purchaser’s responsibilities
under this Settlement Agreement.

9.

Purchaser shall ensure that its contractors, subcontractors, and representatives
comply with this Settlement Agreement, and, where appropriate, receive a copy of
this Settlement Agreement. Purchaser shall be responsible for any noncompliance
with this Settlement Agreement.

IV.

DEFINITIONS

10.

Unless otherwise expressly provided herein, terms used in this Settlement
Agreement that are defined in CERCLA or in regulations promulgated under CERCLA
shall have the meaning assigned to them in CERCLA or in such regulations,
including any amendments thereto.

“Bunker Hill Mine” or the “Mine” shall mean that portion of the Site located at
the Bunker Hill Mine, south of Kellogg, in the Silver Valley of Shoshone County,
Idaho, which is described in the Lease Agreement and Option to Purchase
(“Lease”) attached hereto as Appendix 1, and that certain parcel not being
listed in the Lease but that is an integral part of the Mine as more
particularly described in Appendix 2.

“Bunker Hill Mining and Metallurgical Complex Special Account” shall mean the
special account, within the EPA Hazardous Substance Superfund, established for
the Site by EPA pursuant to Section 122(b)(3) of CERCLA, 42 U.S.C. § 9622(b)(3).

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. §§ 9601-9675.

“Day” or “day” shall mean a calendar day.  In computing any period of time under
this Settlement Agreement, where the last day would fall on a Saturday, Sunday,
or federal or State holiday, the period shall run until the close of business of
the next working day.

“Effective Date” shall mean the effective date of this Settlement Agreement as
provided in Section XXVI.

“EPA” shall mean the United States Environmental Protection Agency and its
successor departments, agencies, or instrumentalities.

“EPA Hazardous Substance Superfund” shall mean the Hazardous Substance Superfund
established by the Internal Revenue Code, 26 U.S.C. § 9507.

“Existing Contamination” shall mean any hazardous substances, pollutants or
contaminants that migrated from the Mine prior to the Effective Date.

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“Interest” shall mean interest at the rate specified for interest on investments
of the EPA Hazardous Substance Superfund established by 26 U.S.C. § 9507,
compounded annually on October 1 of each year, in accordance with 42 U.S.C. §
9607(a). The applicable rate of interest shall be the rate in effect at the time
the interest accrues. The rate of interest is subject to change on October 1 of
each year. Rates are available online at
http://www2.epa.gov/superfund/superfund-interest-rates.

“National Contingency Plan” or “NCP” shall mean the National Oil and Hazardous
Substances Pollution Contingency Plan promulgated pursuant to Section 105 of
CERCLA, 42 U.S.C. § 9605, codified at 40 C.F.R. Part 300, and any amendments
thereto.

“Paragraph” shall mean a portion of this Settlement Agreement identified by an
Arabic numeral or an upper or lower case letter.

“Parties” shall mean the United States and Purchaser.

 “Purchaser” or “Lessee” shall mean Bunker Hill Mining Corp., formerly Liberty
Silver Corp., a Nevada Corporation, including any subsidiary entities.

“RCRA” shall mean the Solid Waste Disposal Act, 42 U.S.C. §§ 6901-6992 (also
known as the Resource Conservation and Recovery Act).

“RPM” shall mean the Remedial Project Manager as defined in 40 C.F.R. § 300.5.

“Section” shall mean a portion of this Settlement Agreement identified by a
Roman numeral.

“Settlement Agreement” shall mean this Settlement Agreement and Order on Consent
for Response Action by Bunker Hill Mining Corp. (“Agreement”) and all appendices
attached hereto (listed in Section XXIV). In the event of conflict between this
Settlement Agreement and any Attachment, this Settlement Agreement shall
control.

 “Site” shall mean the Bunker Hill Mining and Metallurgical Superfund Site (the
“Site”) encompassing approximately 21 square miles along Interstate 90 in the
Silver Valley area of Northern Idaho, located in Shoshone County, Idaho, and
depicted generally on the map attached as Appendix 3. The Site shall include the
Mine, and all areas to which hazardous substances and/or pollutants or
contaminants have been deposited, stored, disposed of, placed, or otherwise come
to be located.

“State” shall mean the State of Idaho.

“United States” shall mean the United States of America and each department,
agency, and instrumentality of the United States, including EPA.

“Waste Material” shall mean (a) any “hazardous substance” under Section 101(14)
of CERCLA, 42 U.S.C. § 9601(14); (b) any pollutant or contaminant under Section
101(33) of CERCLA, 42 U.S.C. § 9601(33); (c) any “solid waste” under Section
1004(27) of RCRA,

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42 U.S.C. § 6903(27); and (d) any “hazardous waste” under Section 39-4403(8) of
the Idaho Hazardous Waste Management Act of 1983.

“Work” shall mean all activities and obligations Purchaser is required to
perform under this Settlement Agreement except those required by Section XIII
(Record Retention, Documentation and Availability of Information).

V.

FINDINGS OF FACT

11.

The Purchaser is Bunker Hill Mining Corp., formerly Liberty Silver Corporation.

12.

The Mine is currently owned by Placer Mining Corporation (“PMC”).

13.

On August 17, 2017, the Purchaser and PMC entered into a Mining Lease with
Option to Purchase (“Lease”).  The Lease became effective December 1, 2017 and
the term of the Lease is two years from the effective date.  The Lease provides
that the Purchaser will operate the Bunker Hill Mine and make certain
improvements on the Mine along with making payments to PMC over the term of the
Lease.  Pursuant to the Lease, the Purchaser has the exclusive right to purchase
the Bunker Hill Mine during the lease term upon notice to PMC and the United
States.  Consummation of the purchase of the Mine is conditioned on, among other
things, reaching agreement with the United States regarding potential
environmental liabilities arising from the purchase of the Mine.  The Lease is
attached as Appendix 1 hereto.

14.

Purchaser intends to increase operations and increase the number of individuals
employed at the Mine.  This increase in employment would not occur absent the
Lease and purchase of the Mine by the Purchaser.

15.

The Mine is located south of Kellogg, in the Silver Valley of Shoshone County,
Idaho within the Bunker Hill Mining and Metallurgical Superfund Site (the
“Site”).  The Site includes residential communities, industrial areas, and
non-populated areas.

16.

Environmental contamination of surface water, groundwater, soil, and sediment
occurred at the Site as a result of mining, milling, and smelting operations in
the Silver Valley, including but not limited to, at the Bunker Hill Mining and
Metallurgical Complex (“Complex”), of which the Mine was a part.  Operations at
the Complex started in 1885 and continued through the 1980s, and included an
integrated system of mining, milling, and smelting.  Prior to 1928, liquid and
solid waste from the Complex was discharged directly into the South Fork of the
Coeur d’Alene River and its tributaries.  Following 1928, waste from the Complex
was directed to a nearby floodplain where a Central Impoundment Area (“CIA”) was
developed.  Acid mine drainage (“AMD”) and wastewater from the Complex were
discharged to a settling pond in the CIA.  In 1974, a Central Treatment Plant
(“CTP”) was built by the Bunker Hill Mining Company, the owner and operator of
the Complex at the time.  AMD and wastewater from the Complex were stored in an
unlined pond in the CIA before being decanted to the CTP.  In 1981, following
the closure of the smelter, the CIA was no longer required to impound wastewater
from the Complex, although surface runoff from the Complex and AMD from the Mine
were still routed to the CIA prior to treatment at the CTP.  Sludge which formed
during the treatment process was also disposed in unlined ponds at the CIA.

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17.

  Ownership of the Complex passed through a number of companies throughout the
100-year operation of the Complex.  In early 1991, the Bunker Limited
Partnership, then owner of the Complex and operator of the CTP, closed the Mine
and filed for bankruptcy.  In late 1991 and 1992, PMC purchased a portion of the
Site, which includes underground workings, mineral rights, and much of the land
surface above the Mine, from Bunker Limited Partnership.  PMC did not purchase
the entire Complex nor the CTP.  In November 1994, federal and State governments
assumed operation of the CTP for ongoing treatment of AMD.

18.

AMD is a result of acid-forming reactions occurring within the Mine among water,
oxygen, sulfide minerals (especially pyrite), and bacteria.  AMD is acidic with
typical pH levels between 2.5 and 3.5, and it contains high levels of dissolved
and suspended heavy metals.  For human receptors, the constituents of primary
concern at the Site found in the AMD are arsenic, cadmium, lead, mercury, and
thallium, and for aquatic and terrestrial receptors they are aluminum, arsenic,
cadmium, copper, iron, lead, manganese, mercury, selenium, silver, and zinc.
 Impacts on human health from exposure to these constituents include
carcinogenic effects, skin lesions, neuropathy, gastrointestinal irritation,
kidney damage, interference with metabolism, and interference with the normal
functioning of the central nervous system.  Impacts on the environment from
exposure to these constituents include significant mortality of fish and
invertebrate species, elevated concentrations of metals in the tissues of fish,
invertebrates, and plants, and reduced growth and reproduction of aquatic life.

19.

AMD is generated and discharged from the Mine continuously.  AMD from the Mine
is drained through the Kellogg Tunnel portal and then passes through a
conveyance system to the CTP for treatment.  Average AMD discharge from the Mine
during typical flow periods is approximately 1300 gallons per minute.  During
high flow periods AMD may be diverted to a lined surface impoundment on the
Site, where it mixes with other minimal wastewater streams from the Mine.  From
the impoundment, it is pumped to the CTP for treatment.  If not collected and
treated at the CTP, AMD from the Mine would flow downhill through the mine yard,
across properties where public and environmental exposures would occur, and into
Bunker Creek and the South Fork Coeur d’Alene River where it would have
significant detrimental effects on water quality and the ecosystem.

20.

Initially, the Bunker Hill Superfund Site was divided into two operable units,
the Populated Areas and the Non-Populated Areas, in order to focus investigation
and cleanup efforts.  A Record of Decision (“ROD”) for the Non-Populated Areas
Operable Unit was signed on September 22, 1992.  A ROD Amendment for the
Non-Populated Areas Operable Unit, addressing the management of AMD was issued
in December 2001.  A third operable unit was created to address contamination in
the Coeur d’Alene Basin, and a ROD for Operable Unit 3, the Coeur d’Alene Basin,
was issued in 2002.

21.

In 1994, EPA issued a unilateral administrative order (“UAO”) to PMC directing
PMC to keep the mine pool pumped to an elevation below the level of the South
Fork Coeur d’Alene River (at or below Level 11 of the Mine) to prevent
discharges to the river, to convey mine water to the CTP for treatment unless an
alternative form of treatment was approved, and to provide for emergency mine
water storage within the mine. In 2017, EPA issued a UAO to PMC directing PMC to
control mine water flows to the CTP during needed upgrades at the CTP and in
high flow periods, to conduct operation and maintenance of the Reed Landing
Flood Control

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Project, to file an environmental covenant on a portion of the Mine property
regarding access and operation and maintenance, and allowing PMC to fill the
mine pool to Level 10 during diversion events.

22.

Response actions required by the 1994 and 2017 UAOs are currently being
performed by PMC.  Upon the later of the Effective Date of this Settlement
Agreement or the Consent Decree resolving the United States’ pending CERCLA
claims against PMC and the Estate of Robert Hopper, Sr., EPA will withdraw the
1994 and 2017 UAOs.  To the extent that aspects of those UAOs require ongoing
work, Purchaser agrees to perform such work when Purchaser becomes the operator
of the Mine, and to continue to perform such work when Purchaser becomes the
owner upon subsequent purchase of the Mine.  Ongoing work requirements are
described in detail in Section IX (Work to be Performed) below.

VI.

DETERMINATIONS

23.

Based on the Findings of Fact set forth above, and the Administrative Record
supporting this removal action, EPA has determined that:

a.

The Mine is a “facility” as defined by Section 101(9) of CERCLA, 42 U.S.C. §
9601(9).

b.

The contaminants found at and released from the Mine, as identified in the
Findings of Fact above, include “hazardous substances” as defined by Section
101(14) of CERCLA, 42 U.S.C. § 9601(14).

c.

Purchaser is a “person” as defined by Section 101(21) of CERCLA, 42 U.S.C. §
9601(21).

d.

The conditions described in Paragraphs 18-19 of the Findings of Fact above
constitute an actual or threatened “release” of a hazardous substance from the
facility as defined by Section 101(22) of CERCLA, 42 U.S.C. § 9601(22).

e.

The Work is necessary to protect the public health, welfare, or the environment
and, if carried out in compliance with the terms of this Settlement Agreement,
will be considered consistent with the NCP, as provided in Section
300.700(c)(3)(ii) of the NCP.

VII.

SETTLEMENT AGREEMENT

24.

In consideration of and in exchange for the United States’ Covenant Not to Sue
in Section XVI Purchaser agrees to comply with all provisions of this Settlement
Agreement, including, but not limited to, all attachments to this Settlement
Agreement and all documents incorporated by reference into this Settlement
Agreement.

VIII.

DESIGNATION AND AUTHORITY OF EPA PROJECT MANAGER

25.

EPA has designated Ed Moreen of the Office of Environmental Cleanup, Region 10,
as its Project Manager (PM).  EPA shall have the right to change its designated
PM.  EPA intends to notify Purchaser within 30 days of such change.

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26.

The PM shall be responsible for overseeing Purchaser’s implementation of this
Settlement Agreement. The PM shall have the authority to halt, conduct, or
direct any Work required by this Settlement Agreement, or to direct any other
response action undertaken at the Site. Absence of the PM from the Site shall
not be cause for stoppage of work unless specifically directed by the PM.

IX.

WORK TO BE PERFORMED

27.

Purchaser’s Project Coordinator. Within 10 days of the Effective Date of this
Settlement Agreement, Purchaser shall identify a Project Coordinator who shall
be available daily via email and phone, and act as the Project Coordinator on
behalf of the Purchaser for the duration of the Work to be Performed.  Purchaser
may change its Project Coordinator with written notice to the RPM at least 15
days prior to such change.

28.

Purchaser shall perform, at a minimum, all actions necessary to manage AMD as
directed by EPA so as to allow necessary maintenance of and upgrades to the CTP
and to avoid damaging or overwhelming the CTP, as described below in Paragraphs
29 through 34 (these actions, collectively, are the “Work to be Performed” by
the Purchaser under this Settlement Agreement).

29.

In-Mine Diversion System and Mine Pool.  Purchaser shall construct an In-Mine
Diversion System and manage the mine pool such that diverted flows of Mine
Waters, as defined in Paragraph 29.a, will be stored within the mine or
discharged at a controlled rate, and not result in uncontrolled discharge to the
environment.  The following criteria describe the performance criteria to be
met.

a.

Mine Waters to be Stored: Waters to be stored by Purchaser include all mine
water which originate upstream of the Barney Switch within the mine, including
the east side (Milo) gravity flows, the west side (Deadwood) gravity flows, and
the lower country (Mine Pool) pumped flows.

b.

Mine Pool Storage Volume:  Purchaser shall provide storage volume using all void
space (the mine workings) from a minimum of 30 feet below the sill of 11 Level
at the No. 2 Raise to the sill of 10 Level at the No. 2 Raise.

c.

In-Mine Diversion System Construction:  Purchaser shall construct a diversion
dam system in the Kellogg Tunnel just downstream from the Barney Switch which
backs up all Mine Waters into the Barney Vent Raise or other appropriate and
approved location.  The system shall have the capability to divert a minimum of
7,000 gallons per minute.

d.

In-Mine Diversion System Activation:  Purchaser shall activate the In-Mine
Diversion System under the following circumstances:

(1)

For initial compliance inspection: Within 70 days of the Effective Date of this
Settlement Agreement, for a duration to be determined and requested by EPA
during the initial compliance inspection;

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(2)

For emergencies: Within 4 hours of notification from EPA, for a duration to be
determined and requested by EPA based on the emergency situation, which may
occur at any time; and

(3)

For CTP or Conveyance Line Maintenance: Within 14 days of notification from EPA,
for a duration to be determined and requested by EPA based on the maintenance
required.

e.

In-Mine Diversion System Operation and Maintenance: Purchaser shall maintain and
operate the In-Mine Diversion System until notification from EPA that the system
may be decommissioned and removed, in accordance with the following:

(1)

The amount of In-Mine Diversion System building materials continuously kept at
the diversion structure location shall be sufficient to divert all flows as
required by Paragraph 29.a, and to construct the diversion dam to provide the
storage capacity required in Paragraph 29.c.

(2)

The diversion dam structure, location as described in Paragraph 29.c, and
adjoining ditches, are to be kept serviceable and in operable condition at all
times for diversion dam construction, operation, and maintenance.

(3)

The entire In-Mine Diversion conveyance system (e.g. Barney Vent Raise or other
appropriate and approved location) shall be inspected a minimum of twice per
year, and more frequently if there are concerns regarding its ability to convey
the capacity required in Paragraph 29.c. Purchaser shall develop and maintain a
written report of each inspection, and shall provide it to EPA upon request.

(4)

The In-Mine Diversion conveyance system shall be cleaned, by hydraulic flushing
or other means as necessary, at least once per year, and more frequently if
needed to provide the capacity required in Paragraph 29.c. Purchaser shall
inform EPA within 7 days of completing each cleaning.

(5)

Written diversion dam construction procedures and In-Mine Diversion System
operation and maintenance procedures are to be developed and posted near the
diversion dam structure location within 70 days of the Effective Date of this
Settlement Agreement which provide sufficient detail for diversion dam
construction, and system operation and maintenance by all crew members. The
written diversion dam construction procedures and system operation and
maintenance procedures shall be periodically updated as needed.  Purchaser shall
provide the written procedures to EPA upon request.

(6)

Diversion dam construction procedures and system operation and maintenance
procedures required by Paragraph 29.e(5) shall be

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periodically practiced, at least once per year, or more frequently as needed to
ensure the required diversion response time can be met.  Purchaser shall inform
EPA a minimum of 7 days prior to each diversion dam construction practice.

30.

Kellogg Portal Contingency Diversion System. Purchaser shall obtain and store a
sufficient quantity of sand bags or other appropriate materials near the
entrance to the Kellogg Tunnel with the designated purpose of containing,
damming, and/or rerouting any flows into the Kellogg Tunnel ditch, in order to
prevent any overland flow outside the ditch.

a.

Waters to be diverted:  All mine waters that are not contained within the
Kellogg Tunnel ditch that are either within the Kellogg Tunnel or outside of the
Kellogg Tunnel in the mine yard.

b.

Contingency Diversion System Materials:  Sand bags or other materials that could
be easily transported and assembled to route mine water back to the ditch in an
emergency situation.

c.

Contingency Diversion System Activation:

(1)

Obtain materials:  Within 90 days of the Effective Date of this Settlement
Agreement.

(2)

Deployment of Contingency Diversion System:  Within 1 hour of the first
indication, or when the Purchaser knowns or should know, of mine water flowing
outside of the Kellogg Tunnel ditch, regardless of cause.

d.

Contingency Diversion System Operation and Maintenance: Purchaser shall maintain
and operate the Contingency Diversion System until notification from EPA that
the system may be decommissioned and removed, in accordance with the following:

(1)

The amount of Contingency Diversion System building materials continuously kept
shall be sufficient to divert all flows as required by Paragraph 30.a, and shall
be deployed in accordance with Paragraph 30.c to control flows during high flow
events or to respond to emergencies.

(2)

The Contingency Diversion System storage location and materials are to be kept
serviceable and in operable condition at all times for Contingency Diversion
System construction and operation.

(3)

Written Contingency Diversion System construction procedures are to be developed
and posted near the diversion system materials storage location within 90 days
of the Effective Date of this Settlement Agreement.  Construction procedures
shall provide sufficient detail for diversion system construction by all crew

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members.  The construction procedures shall be periodically updated as needed.
 Purchaser shall provide the construction procedures to EPA upon request.

(4)

Contingency Diversion system procedures are to be periodically practiced, at
least once per year, or more frequently as needed, to ensure the required
diversion response times in Paragraph 30.c can be met. Purchaser shall inform
EPA a minimum of 7 days prior to each Contingency Diversion System construction
practice.

31.

 Reed Landing Flood Control Project Operations and Maintenance.

a.

Purchaser shall conduct operations and maintenance in accordance with the Reed
Landing Flood Control Project Operations and Maintenance Manual (“O&M Manual”),
attached as Appendix 4 to this Settlement Agreement.

b.

Purchaser shall conduct inspections of the Reed Landing Flood Control Project in
accordance with the frequency described in the O&M Manual, fill out the
Inspection Checklist for each inspection, and provide a copy of the completed
checklist to EPA and the State upon request.

c.

Purchaser shall remove snow and take any other necessary steps to maintain
access roads to provide for safe access to the Reed Landing Project area
year-round.

32.

Manage mine wastes, including existing piles of such waste around the Mine
boundaries (i.e., the slope north of the wash building and south of the City of
Kellogg offices) to prevent a release of such waste into the environment.

33.

Continue to convey AMD to the CTP for treatment until an alternate treatment
option is approved by EPA.

34.

Treat flows from the Reed and Russell adits prior to discharge into surface
waters or route back into the Mine to prevent discharge, without treatment,
off-site.

35.

Inspections.

a.

EPA may require an inspection of the In-Mine Diversion System following its
initial construction pursuant to Paragraph 29(d)(1) to determine compliance with
the requirements of Paragraph 29.

b.

EPA may have an on-site presence during the Work to be Performed. At EPA’s
request, the Purchaser or Purchaser’s designee shall accompany EPA for
inspections during the Work to be Performed.

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c.

Purchaser shall provide specialty personal protective equipment needed for EPA
personnel, transportation, and an escort for any oversight officials to perform
their oversight and/or inspection duties within the mine.

d.

Upon notification by EPA of any deficiencies during the Work to be Performed on
any component, Purchaser shall take all necessary steps to correct the
deficiencies and/or bring the Work to be Performed into compliance.  If
applicable, Purchaser shall comply with any schedule provided by EPA in its
notice of deficiency.

36.

Emergency Response and Reporting. The reporting requirements under this
Paragraph are in addition to the reporting required by CERCLA § 103 and/or the
Emergency Planning and Community Right-to-Know Act (“EPCRA”) § 304.

a.

If any incident occurs during performance of the Work to Be Performed that
causes or threatens to cause a release of Waste Material on, at, or from the
Mine and that either constitutes an emergency situation or that may present an
immediate threat to public health or welfare or the environment, Purchaser
shall: (1) immediately take all appropriate action to prevent, abate, or
minimize such release or threat of release; (2) immediately notify the
authorized EPA officer, as specified in Paragraph 36.c, orally; and (3) take
such actions in consultation with the authorized EPA officer.

b.

Upon the occurrence of any incident during performance of the Work to be
Performed that Purchaser is required to report pursuant to Section 103 of
CERCLA, 42 U.S.C. § 9603, or Section 304 of EPCRA, 42 U.S.C. § 11004, Purchaser
shall also immediately notify the authorized EPA officer orally.

c.

The “authorized EPA officer” for purposes of immediate oral notifications and
consultations under Paragraphs 36.a and 36.b is the EPA RPM, or the EPA
Emergency Response Unit, Region 10 at 206-553-1263 (if the RPM is not
available).

d.

For any incident covered by Paragraphs 29.a and 29.b, Purchaser shall: (1)
within 14 days after the onset of such incident, submit a report to EPA
describing the actions or incidents that occurred and the measures taken, and to
be taken, in response thereto; and (2) within 30 days after the conclusion of
such incident, submit a written report to EPA describing all actions taken in
response to such incident.

37.

Purchaser shall perform all actions required by this Settlement Agreement in
accordance with all applicable local, state, and federal laws and regulations,
except as provided in Section 121(e) of CERCLA, 42 U.S.C. § 9621(e), and 40
C.F.R. §§ 300.400(e).  All on-Site actions required pursuant to this Settlement
Agreement shall attain applicable or relevant and appropriate requirements
(“ARARs”) under federal environmental or state environmental or

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facility siting laws as set forth in the 1992 Record of Decision and the 2001
Record of Decision Amendment referenced in Paragraph 20 above.

X.

PAYMENT

38.

For so long as the Purchaser leases, owns, and/or occupies the Mine, Purchaser
shall pay on behalf of PMC, as a portion of the purchase price, and in
satisfaction of EPA’s claim for cost recovery against PMC as set forth in the
Complaint filed by the United States on March 17, 2004 in the United States
District Court for the District of Idaho (2:04-cv-00126), to EPA $20,000,000 in
accordance with the following payment schedule:

Date

Amount

Within 30 days of the Effective Date

$1,000,000

November 1, 2018

$2,000,000

November 1, 2019

$3,000,000

November 1, 2020

$3,000,000

November 1, 2021

$3,000,000

November 1, 2022

$3,000,000

November 1, 2023

$3,000,000

November 1, 2024

$2,000,000

Purchaser shall make such payments for each year in which Purchaser leases,
owns, and/or occupies the Mine on or after July 1.  Purchaser’s liability for
such payments shall not extend to any year in which Purchaser no longer leases,
owns, and/or occupies the Mine after July 1.  

39.

Purchaser shall additionally pay EPA for water treatment costs incurred at the
Central Treatment Plant (“CTP”) from December 1, 2017 onward in semi-annual
installments of $480,000 beginning within 30 days of the Effective Date and then
every six months after December 1, 2017, for so long as Purchaser leases, owns,
and/or occupies the Mine.  Payments made toward water treatment and actual costs
incurred will be reconciled annually.  EPA will send written notification to
Purchaser annually to reconcile costs paid with actual costs incurred, along
with a bill for any owed costs, as appropriate.  Payment of any owed costs as
indicated in such notification and bill shall be paid 30 days after the date of
such bill.  The requirement in this Paragraph shall continue until the Purchaser
finds alternative means to treat the water.

40.

Purchaser shall make payment to EPA by Fedwire Electronic Funds Transfer (EFT)
to:

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Federal Reserve Bank of New York

ABA = 021030004

Account = 68010727

SWIFT address = FRNYUS33

33 Liberty Street

New York, NY 10045

Field Tag 4200 of the Fedwire message should read “D 68010727 Environmental
Protection Agency”

Such payment shall reference Site/Spill ID Number 1020 and the EPA docket number
for this action.

41.

The total amount paid by Purchaser pursuant to Paragraphs 38 and 39 shall be
deposited by EPA in the Bunker Hill Mining and Metallurgical Complex Special
Account to be retained and used to conduct or finance response actions at or in
connection with the Site, or to be transferred by EPA to the EPA Hazardous
Substance Superfund.

42.

Notice of such payments pursuant to this Section shall be provided to EPA in
accordance with Paragraph 83, and to the EPA Finance Center by email or regular
mail at:

EPA Cincinnati Finance Center

26 W. Martin Luther King Drive

Cincinnati, Ohio 45268

Cinwd_acctsreceivable@epa.gov

Such notice shall reference Site/Spill ID Number 1020 and the EPA docket number
for this action.

43.

 Potential Alteration of Payment Schedule.  The Parties acknowledge that
circumstances may arise necessitating alteration of the payment schedule set
forth in Paragraph 38 above.  The Parties address here those circumstances that
are reasonably foreseeable to them at this time:

a.

If Purchaser cancels or defaults on the lease, or the lease terminates for any
reason other than expiration of the lease term (or any extended lease term) or
Purchaser’s purchase of the Mine:

Purchaser shall pay any amounts due pursuant to Paragraph 38, above, and shall
pay in full any outstanding payment due for water treatment pursuant to
Paragraph 39 up through the month in which the lease terminates.  Water
treatment costs shall be calculated using the monthly rate of $80,000 and
further reconciled with actual costs;

b.

If Purchaser extends the lease term:

Purchaser shall make payments as they come due pursuant to Paragraph 38, above,
and shall continue to make payments for water treatment in accordance with
Paragraph 39;

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c.

If Purchaser purchases the Mine and transfers all or substantially all of its
interest in the Mine prior to completing the entire schedule of payments
referenced in Paragraph 38:

(1)

The payment schedule in Paragraph 38 shall be accelerated and all payments
thereunder shall be due and payable to the United States effective upon such
transfer and the United States shall be deemed to have a security interest in
any consideration given for such transfer;

(2)

Purchaser shall pay in full any outstanding payment due for water treatment up
through the month of the transfer. Water treatment costs shall be calculated
using the monthly rate of $80,000 and further reconciled with actual costs;

(3)

To the extent that consideration for such transfer realized by Purchaser exceeds
Purchaser’s documented investment in the Mine plus 10% of that investment, the
United States is entitled to an 80% share of such excess until the United States
has been reimbursed all of its $24 million past costs incurred at the Mine plus
interest as provided by 42 U.S.C. § 9607;

(4)

Such transfer must be conditioned upon Transferee reaching agreement with the
United States regarding ongoing responsibility for water treatment costs;

d.

If Purchaser purchases the Mine and files for bankruptcy or ceases operating at
the Mine at any time prior to completing the payments required in Paragraph 38:

The United States shall be deemed a secured creditor of Purchaser to the extent
of all payments required under Paragraph 38 and not remitted at the petition
date and all payments due under Paragraph 39.

e.

If Purchaser fails to make a payment as set forth in the payment schedules of
Paragraphs 38 or 39, Purchaser shall have a three-month period in which to cure
such default, which shall include Interest (as defined above) during the period
of nonpayment.

XI.

ACCESS/NOTICE TO SUCCESSORS/INSTITUTIONAL CONTROLS

44.

Purchaser agrees to provide EPA, its authorized officers, employees,
representatives, and all other persons performing response actions under EPA
oversight, an irrevocable right of access at all reasonable times to the Mine
and to any other property owned or controlled by Purchaser to which access is
required for the implementation of response actions at the Site. EPA agrees to
provide reasonable notice to Purchaser of the timing of response actions to be
undertaken at the Mine and other areas owned or controlled by Purchaser.
Notwithstanding any provision of this Settlement Agreement, the United States
retains all of its access authorities

14

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and rights, including enforcement authorities related thereto, under CERCLA,
RCRA, and other authorities.

a.

In particular, Purchaser shall not obstruct access to a pipeline maintenance
port in the Mine yard area.  Access to this port is required for routine
maintenance, including but not limited to pipeline pigging, conducted by the CTP
operators to ensure flows can reliably be conveyed to the CTP for treatment.
 The location is marked as “Upper Pigging/Camera Access Vault and Gate Valve” on
the map included as Appendix 5.

45.

Purchaser shall submit to EPA for review and approval a notice to be filed with
the Recorder’s Office or other appropriate office, Shoshone County, State of
Idaho, which shall provide notice to all successors-in-title that the Mine is
part of the Site, and that EPA issued a Record of Decision in 1992 and a Record
of Decision Amendment in 2001 providing for the performance of a remedial action
at the Site. Purchaser shall record the notice within 15 days of EPA’s approval
of the notice. Purchaser shall provide EPA with a certified copy of the recorded
notice within 7 days of recording such notice.

46.

Purchaser shall implement and comply with any land use restrictions and
institutional controls on the Mine.

47.

For so long as Purchaser is an owner or operator of the Mine, Purchaser shall
require that assignees, successors in interest, and any lessees, sublessees and
other parties with rights to use the Mine shall provide access and cooperation
to EPA, its authorized officers, employees, representatives, and all other
persons performing response actions under EPA oversight. Purchaser shall require
that assignees, successors in interest, and any lessees, sublessees, and other
parties with rights to use the Mine implement and comply with any land use
restrictions and institutional controls on the Mine, and not contest EPA’s
authority to enforce any such land use restrictions and institutional controls
on the Mine.

48.

Upon sale or other conveyance of the Mine or any part thereof, Purchaser shall
require that each grantee, transferee or other holder of an interest in the Mine
or any part thereof shall provide access and cooperation to EPA, its authorized
officers, employees, representatives, and all other persons performing response
actions under EPA oversight. Purchaser shall require that each grantee,
transferee or other holder of an interest in the Mine or any part thereof shall
implement and comply with any land use restrictions and institutional controls
on the Mine in connection with a response action and not contest EPA’s authority
to enforce any such land use restrictions and institutional controls on the
Mine.

49.

Purchaser shall provide a copy of this Settlement Agreement to any current
lessee, sublessee, and other party with rights to use the Mine as of the
Effective Date.

XII.

INSURANCE

50.

Not later than 15 days before commencing any Work to be Performed on-site under
this Settlement Agreement, Purchaser shall secure, and shall maintain,
commercial general liability insurance with limits of two million dollars, for
any one occurrence, naming the United States as an additional insured with
respect to all liability arising out of the activities performed

15

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by or on behalf of Purchaser pursuant to this Settlement Agreement. In addition,
for the duration of the Settlement Agreement, Purchaser shall satisfy, or shall
ensure that its contractors or subcontractors satisfy, all applicable laws and
regulations regarding the provision of worker’s compensation insurance for all
persons performing the Work to be Performed on behalf of Purchaser in
furtherance of this Settlement Agreement. Within the same time period, Purchaser
shall provide EPA with certificates of such insurance and a copy of each
insurance policy. Purchaser shall submit such certificate and copies of policies
each year on the anniversary of the Effective Date. If Purchaser demonstrates by
evidence satisfactory to EPA that any contractor or subcontractor maintains
insurance equivalent to that described above, or insurance covering some or all
of the same risks but in an equal or lesser amount, then, with respect to that
contractor or subcontractor, Purchaser needs provide only that portion of the
insurance described above that is not maintained by the contractor or
subcontractor.

XIII.

RECORD RETENTION, DOCUMENTATION, AND AVAILABILITY OF INFORMATION

51.

Purchaser shall preserve all documents and information in its possession
relating to the Work, or relating to the hazardous substances, pollutants or
contaminants found on or released from the Mine, and shall submit them to EPA
upon completion of the Work required by this Settlement Agreement, or earlier if
requested by EPA.

52.

Business Confidential Claims.  Purchaser may assert that all or part of a Record
provided to EPA pursuant to this Settlement Agreement is business confidential
to the extent permitted by and in accordance with Section 104(e)(7) of CERCLA,
42 U.S.C. § 9604(e)(7), and 40 C.F.R. § 2.203(b). Purchaser shall segregate and
clearly identify all Records or parts thereof submitted under this Settlement
Agreement for which Purchaser asserts business confidentiality claims. Records
claimed as confidential business information will be afforded the protection
specified in 40 C.F.R. Part 2, Subpart B. If no claim of confidentiality
accompanies Records when they are submitted to EPA, or if EPA has notified
Purchaser that the Records are not confidential under the standards of Section
104(e)(7) of CERCLA or 40 C.F.R. Part 2, Subpart B, the public may be given
access to such Records without further notice to Purchaser.

XIV.

DISPUTE RESOLUTION

53.

 The dispute resolution procedures of this Section shall be the exclusive
mechanism for resolving disputes arising under this Settlement Agreement. The
United States and Purchaser shall attempt to resolve any disagreements
concerning this Settlement Agreement expeditiously and informally. If the United
States contends that Purchaser is in violation of this Settlement Agreement, the
United States shall notify Purchaser in writing, setting forth the basis for its
position.  Purchaser may dispute the United States’ position pursuant to
Paragraph 54.

54.

If Purchaser disputes the United States’ position with respect to Purchaser’s
compliance with this Settlement Agreement or objects to any United States action
taken pursuant to this Settlement Agreement, Purchaser shall notify EPA in
writing of its position unless the dispute has been resolved informally. The
United States may reply, in writing, to Purchaser’s position within 30 days of
receipt of Purchaser’s notice. The United States and Purchaser shall have 20
days from EPA’s receipt of Purchaser’s written statement of position to resolve
the

16

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dispute through formal negotiations (the “Negotiation Period”). The Negotiation
Period may be extended by agreement of the parties. Such extension must be
confirmed in writing.

55.

Any agreement reached by the Parties pursuant to this Section shall be in
writing and shall, upon signature by both Parties, be incorporated into and
become an enforceable part of this Settlement Agreement. If the Parties are
unable to reach an agreement within the Negotiation Period, an EPA management
official in the Region 10 Office of Environmental Cleanup at or above the level
of Unit Manager will review the dispute on the basis of the Parties’ written
statements of position and issue a written decision on the dispute. That written
decision shall be incorporated into and become an enforceable part of this
Settlement Agreement. Purchaser’s obligations under this Settlement Agreement
shall not be tolled by submission of any objection for dispute resolution under
this Section. Following resolution of the dispute, as provided by this Section,
Purchaser shall fulfill the requirement that was the subject of the dispute in
accordance with the agreement reached or with the written decision, whichever
occurs.

XV.

CERTIFICATION

56.

By entering into this Settlement Agreement, Purchaser certifies that to the best
of its knowledge and belief it has fully and accurately disclosed to the United
States all information known to Purchaser and all information in the possession
or control of its officers, directors, employees, contractors and agents which
relates in any way to any Existing Contamination or any past or potential future
release of hazardous substances, pollutants or contaminants at or from the Site
and to its qualification for this Settlement Agreement. Purchaser also certifies
that to the best of its knowledge and belief it has not caused or contributed to
a release or threat of release of hazardous substances or pollutants or
contaminants at the Site. If the United States determines that information
provided by Purchaser is not materially accurate and complete, this Settlement
Agreement, within the sole discretion of the United States, shall be null and
void and EPA reserves all rights it may have.

XVI.

WORK TAKEOVER

57.

 In the event EPA determines that Purchaser: (1) has ceased implementation of
any portion of the Work to be Performed; (2) is seriously or repeatedly
deficient or late in its performance of the Work to be Performed; or (3) is
implementing the Work to be Performed in a manner that may cause an endangerment
to human health or the environment, EPA may issue a written notice (“Work
Takeover Notice”), which may be electronic, to Purchaser. Any Work Takeover
Notice issued by EPA will specify the grounds upon which such notice was issued
and will provide Purchaser a period of 3 days within which to remedy the
circumstances giving rise to EPA’s issuance of such notice.

58.

If, after expiration of the 3-day notice period specified in Paragraph 57,
Purchaser has not remedied to EPA’s satisfaction the circumstances giving rise
to EPA’s issuance of the relevant Work Takeover Notice, EPA may at any time
thereafter assume the performance of all or any portion(s) of the Work to be
Performed as EPA deems necessary (“Work Takeover”). EPA will notify Purchaser in
writing, which may be electronic, if EPA determines that implementation of a
Work Takeover is warranted under this Paragraph.

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59.

Notwithstanding any other provision of this Settlement, EPA retains all
authority and reserves all rights to take any and all response actions
authorized by law.

XVII.

COVENANT NOT TO SUE BY UNITED STATES

60.

Except as provided in Section XVIII (Reservation of Rights by the United States)
and in consideration of the actions that will be performed in Section IX and the
payments that will be made by Purchaser, pursuant to Paragraph 39, under the
terms of this Settlement Agreement, the United States covenants not to sue or to
take administrative action against Purchaser pursuant to Sections 106 and 107(a)
of CERCLA, 42 U.S.C. §§ 9606 and 9607(a), for Existing Contamination, Work, and
payments made pursuant to Paragraph 39. This covenant not to sue shall take
effect upon the Effective Date and is conditioned upon the complete and
satisfactory performance by Purchaser of all obligations under this Settlement
Agreement coming due during Purchaser’s leasehold, ownership, and/or occupancy
of the Mine, including, but not limited to, performance of the Work required by
this Settlement Agreement and the payments required pursuant to Paragraph 39.
This covenant not to sue extends only to Purchaser and does not extend to any
other person.  In no event shall Purchaser’s liability for Existing
Contamination exceed the amount owed by Purchaser pursuant to Paragraphs 38 and
39.

 

XVIII.

RESERVATION OF RIGHTS BY UNITED STATES

61.

Except as specifically provided in this Settlement Agreement, nothing herein
shall limit the power and authority of EPA or the United States to take, direct,
or order all actions necessary to protect public health, welfare, or the
environment or to prevent, abate, or minimize an actual or threatened release of
hazardous substances, pollutants or contaminants, or hazardous or solid waste
on, at, or from the Site. Further, nothing herein shall prevent the United
States from seeking legal or equitable relief to enforce the terms of this
Settlement Agreement, or from taking other legal or equitable action as it deems
appropriate and necessary.

62.

The covenant not to sue set forth in Section XVII, above, does not pertain to
any matters other than those expressly identified therein. The United States
reserves, and this Settlement Agreement is without prejudice to, all rights
against Purchaser with respect to all other matters, including, but not limited
to:

a.

liability for failure by Purchaser to meet a requirement of this Settlement
Agreement;

b.

criminal liability;

c.

liability for damages for injury to, destruction of, or loss of natural
resources, and for the costs of any natural resource damage assessments;

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d.

liability for violations of federal, state, or local law or regulations during
or after implementation of the Work other than as provided in the Workplan, the
Work, or otherwise ordered by EPA;

e.

liability resulting from the release or threat of release of hazardous
substances, pollutants or contaminants at or in connection with the Site after
the Effective Date, not within the definition of Existing Contamination;

f.

liability resulting from exacerbation of Existing Contamination by Purchaser,
its agents, contractors, sub-contractors, successors, assigns, lessees, or
sublessees;

g.

liability arising from Purchaser’s, its agents’, or its employees’ disposal,
release or threat of release of Waste Materials outside of the Site.

63.

With respect to any claim or cause of action asserted by the United States,
Purchaser shall bear the burden of proving that the claim or cause of action, or
any part thereof, is attributable solely to Existing Contamination and that
Purchaser has complied with all of the requirements of 42 U.S.C. § 9601(40).

XIX.

COVENANT NOT TO SUE BY PURCHASER

64.

Purchaser covenants not to sue and agrees not to assert any claims or causes of
action against the United States, or its contractors or employees, with respect
to Existing Contamination, the Work, payments pursuant to Paragraph 39, or this
Settlement Agreement, including, but not limited to:

a.

any direct or indirect claim for reimbursement from the EPA Hazardous Substance
Superfund established by 26 U.S.C. § 9507, based on Sections 106(b)(2), 107,
111, 112, or 113 of CERCLA, 42 U.S.C. §§ 9606(b)(2), 9607, 9611, 9612, or 9613,
or any other provision of law;

b.

any claim arising out of response actions, including any claim under the United
States Constitution, the Tucker Act, 28 U.S.C. § 1491, the Equal Access to
Justice Act, 28 U.S.C. § 2412, or at common law; or

c.

any claim pursuant to Sections 107 and 113 of CERCLA, 42 U.S.C. §§ 9607 and
9613, Section 7002(a) of RCRA, 42 U.S.C. § 6972(a), or state law.

65.

Purchaser reserves, and this Settlement Agreement is without prejudice to,
claims against the United States, subject to the provisions of Chapter 171 of
Title 28 of the United States Code, and brought pursuant to any statute other
than CERCLA or RCRA and for which the waiver of sovereign immunity is found in a
statute other than CERCLA or RCRA, for money damages for injury or loss of
property or personal injury or death caused by the negligent or wrongful act or
omission of any employee of the United States, as that term is defined in
28 U.S.C. § 2671, while acting within the scope of his or her office or
employment under circumstances where the United States, if a private person,
would be liable to the claimant in

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accordance with the law of the place where the act or omission occurred.
However, the foregoing shall not include any claim based on EPA’s selection of
response actions, or the oversight or approval, disapproval, or modification of
Purchaser’s plans, reports, other deliverables, or activities.

66.

Nothing in this Settlement Agreement shall be deemed to constitute approval or
preauthorization of a claim within the meaning of Section 111 of CERCLA, 42
U.S.C. § 9611, or 40 C.F.R. § 300.700(d).

XX.

EFFECT OF SETTLEMENT/CONTRIBUTION

67.

Nothing in this Settlement Agreement precludes the United States or Purchaser
from asserting any claims, causes of action, or demands for indemnification,
contribution, or cost recovery against any person not a party to this Settlement
Agreement. Nothing herein diminishes the right of the United States, pursuant to
Sections 113(f)(2) and (3) of CERCLA, 42 U.S.C. § 9613(f)(2) and (3), to pursue
any such persons to obtain additional response costs or response actions and to
enter into settlements that give rise to contribution protection pursuant to
Section 113(f)(2).

68.

If a suit or claim for contribution is brought against Purchaser, the Parties
agree that this Settlement Agreement shall then constitute an administrative
settlement pursuant to which Purchaser has, as of the Effective Date, resolved
liability to the United States within the meaning of Sections 113(f)(2) of
CERCLA, 42 U.S.C. § 9613(f)(2), and is entitled, as of the Effective Date, to
protection from contribution actions or claims as provided by Sections 113(f)(2)
of CERCLA, or as may be otherwise provided by law, for the “matters addressed”
in this Settlement Agreement. The “matters addressed” in this Settlement
Agreement are the Work to be Performed and payments made pursuant to Paragraph
39.

69.

The Parties agree that this Settlement Agreement shall constitute an
administrative settlement pursuant to which Purchaser has, as of the Effective
Date, resolved liability to the United States within the meaning of Section
113(f)(3)(B) of CERCLA, 42 U.S.C. § 9613(f)(3)(B).

70.

Purchaser agrees that with respect to any suit or claim brought by it for
matters related to this Settlement Agreement it will notify the United States in
writing no later than 60 days prior to the initiation of such suit or claim.

71.

Purchaser also agrees that with respect to any suit or claim for contribution
brought against it for matters related to this Settlement Agreement it will
notify the United States in writing within 10 days of service of the complaint
on it. In addition, Purchaser agrees that it will notify the United States
within 10 days of service or receipt of any Motion for Summary Judgment and
within 10 days of receipt of any order from a court setting a case for trial,
for matters related to this Settlement Agreement.

XXI.

RELEASE AND WAIVER OF LIENS

72.

Subject to the Reservation of Rights in Section XVIII of this Settlement
Agreement, and so long as Purchaser is in compliance with the requirements of
Sections IX

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(Work to be Performed) and X (Payment), EPA agrees not to enforce any lien it
may have on the Mine, and upon satisfactory completion of the Payments specified
in Section X, Paragraph 38, EPA agrees to release and waive any lien it may have
on the Mine now and in the future under Section 107(r) of CERCLA, 42 U.S.C.§
9607(r), for costs incurred or to be incurred by EPA in responding to the
release or threat of release of Existing Contamination.

XXII.

INDEMNIFICATION

73.

Purchaser shall indemnify, save, and hold harmless the United States, its
officials, agents, contractors, subcontractors, employees, and representatives
from any and all claims or causes of action arising from, or on account of,
negligent or other wrongful acts or omissions of Purchaser, its officers,
directors, employees, agents, contractors, or subcontractors, in carrying out
actions pursuant to this Settlement Agreement. In addition, Purchaser agrees to
pay the United States all costs incurred by the United States, including but not
limited to attorneys’ fees and other expenses of litigation, arising from or on
account of claims made against the United States based on negligent or other
wrongful acts or omissions of Purchaser, Purchaser’s officers, directors,
employees, agents, contractors, subcontractors, and any persons acting on
Purchaser’s behalf or under Purchaser’s control, in carrying out activities
pursuant to this Settlement Agreement. The United States shall not be held out
as a party to any contract entered into by or on behalf of Purchaser in carrying
out activities pursuant to this Settlement Agreement. Neither Purchaser nor any
such contractor shall be considered an agent of the United States.

74.

The United States shall give Purchaser notice of any claim for which the United
States plans to seek indemnification pursuant to this Section and shall consult
with Purchaser prior to settling such claim.

75.

Purchaser waives all claims against the United States for damages or
reimbursement or for set-off of any payments made or to be made to the United
States, arising from or on account of any contract, agreement, or arrangement
between Purchaser and any person for performance of Work on or relating to the
Site, including, but not limited to, claims on account of construction delays.
In addition, Purchaser shall indemnify and hold harmless the United States with
respect to any and all claims for damages or reimbursement arising from or on
account of any contract, agreement, or arrangement between Purchaser and any
person for performance of Work on or relating to the Site, including, but not
limited to, claims on account of construction delays.

XXIII.

MODIFICATION

76.

Any requirements of this Settlement Agreement may be modified in writing by
mutual agreement of the Parties.

77.

No informal advice, guidance, suggestion, or comment by any EPA representative
regarding reports, plans, specifications, schedules, or any other writing
submitted by Purchaser shall relieve Purchaser of its obligation to obtain any
formal approval required by this Settlement Agreement, or to comply with all
requirements of this Settlement Agreement, unless it is formally modified.

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XXIV.

ATTACHMENTS

78.

The following attachments are attached to and incorporated into this Settlement
Agreement:

a.

Appendix 1 is the Lease (and associated amendment) between Purchaser and PMC;

b.

Appendix 2 is the description of the parcel not being listed in the Lease but
that is an integral part of the Mine;  

c.

Appendix 3 is a Map of the Site;

d.

Appendix 4 is the Reed Landing Flood Control Project Operations and Maintenance
Manual; and

e.

Appendix 5 is the Map indicating the location of the Upper Pigging/Camera Access
Vault and Gate Valve.

XXV.

NOTICE OF COMPLETION

79.

When Purchaser has remitted all payments required by Section X and EPA
determines that Purchaser has performed all Work in accordance with this
Settlement Agreement, EPA will provide written notice to Purchaser. If, at the
time that Purchaser has fully remitted all payments required pursuant to Section
X EPA determines that any such Work has not been completed in accordance with
this Settlement Agreement, EPA will notify Purchaser, provide a list of the
deficiencies, and require that Purchaser correct such deficiencies. Purchaser
shall correct such deficiencies and shall submit written notification of such
corrections in accordance with the EPA notice. Failure by Purchaser to correct
such deficiencies and submit a notification reflecting that deficiencies have
been corrected shall be a violation of this Settlement Agreement.

XXVI.

EFFECTIVE DATE

80.

The Effective Date of this Settlement Agreement shall be the date upon which the
United States Department of Justice issues written notice to Purchaser that the
United States Department of Justice has fully executed the Settlement Agreement
after review of and response to any public comments received.

XXVII.

DISCLAIMER

81.

This Settlement Agreement in no way constitutes a finding by EPA as to the risks
to human health and the environment which may be posed by contamination at the
Mine or the Site nor constitutes any representation by EPA that the Mine or the
Site is fit for any particular purpose.  

22

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XXVIII.

PAYMENT OF COSTS

82.

If Purchaser fails to comply with the terms of this Settlement Agreement, it
shall be liable for all litigation and other enforcement costs incurred by the
United States to enforce this Settlement Agreement or otherwise obtain
compliance.

XXIX.

NOTICES AND SUBMISSIONS

83.

Any notices, documents, information, reports, plans, approvals, disapprovals, or
other correspondence required to be submitted from one party to another under
this Settlement Agreement, shall be deemed submitted either when hand-delivered
or as of the date of receipt by certified mail/return receipt requested, express
mail, or facsimile.

Submissions to Purchaser shall be addressed to:

Bunker Hill Mining Corp.

c/o Bruce Reid, President

401 Bay Street, Suite 2702

Toronto, ON-M5H 2Y4

With copies to:

Lyons O’Dowd, PLLC
201 N. 3rd St.
P.O. Box 131
Coeur d’Alene, Idaho 83816

Attn:

Marc Lyons and Luke O’Dowd

marc@lyonsodowd.com

luke@lyonsodowd.com

Submissions to U.S. EPA shall be addressed to:

Ed Moreen

Project Manager

U.S. EPA, Region 10

1910 Northwest Boulevard, Suite 208

Coeur d’Alene, Idaho 83814

With copies to:

Kris Leefers

Assistant Regional Counsel

U.S. EPA, Region 10

1200 Sixth Avenue, M/S: ORC-113

Seattle, WA  98101

Chief, Environmental Enforcement Section

23

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Environment and Natural Resources Division

U.S. Department of Justice

P.O. Box 7611

Washington, D.C.  20044-7611

Ref. No. 90-11-3-07227/8

XXX.

PUBLIC COMMENT

84.

This Settlement Agreement shall be subject to a 14-day public comment period,
after which the United States may modify or withdraw its consent to this
Settlement Agreement if comments received disclose facts or considerations which
indicate that this Settlement Agreement is inappropriate, improper or
inadequate.

The undersigned representative of Purchaser certifies that it is fully
authorized to enter into the terms and conditions of this Settlement Agreement
and to bind the party it represents to this document.

IT IS SO AGREED:

BUNKER HILL MINING CORP.

BY:

/s/ Howard Crosby                                                

      1/30/2018        

Howard Crosby

Date

Vice President, Director

Bunker Hill Mining Corp.

24

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IT IS SO AGREED:

UNITED STATES DEPARTMENT OF JUSTICE

BY:

/s/ Jeffrey Wood                                                     

        3/3/2018           

Jeffrey Wood

Date

Acting Assistant Attorney General

Environment and Natural Resources Division

U.S. Department of Justice

/s/ Frederick S. Phillips                                          

         3/6/2018        

Frederick S. Phillips

Date

Senior Attorney, Environmental Enforcement Section

Environment and Natural Resources Division

U.S. Department of Justice

25

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IT IS SO AGREED:

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

BY:

/s/ Sheryl Bilbrey                                                  

        3/6/2018       

Sheryl Bilbrey

Date

Director, Office of Environmental Cleanup

EPA Region 10

26

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Appendix 1

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Appendix 2

KELLOGG MINE PLANT SHORT PLAT NO 1 LOT 3
Parcel Number: RPD07250000030A

Acres: 3.83

Legal Description:

Being a tract of land situated in the Northeast 1/4 of the Southeast 1/4 of
Section 1, Township 48 North, Range 2 East, B.M., Shoshone County, State of
Idaho more particularly described as follows:

Beginning at a point whence the East 1/4 corner of Section 1, Township 48 North,
Range 2 East, B.M., Shoshone County, State of Idaho bears North 59°22'09" East,
395.37 feet distant; thence

Along a curve left, radius = 40 feet, the long chord bears South 15°24'18" West,
27.50 feet; thence

North 78°22'26" West, 36.16 feet; thence

South 10°52'21" West, 204.04 feet; thence

North 75°18'39" West, 252.91 feet; thence

North 02°48'24" West, 383.22 feet; thence

North 31°43'07" East, 271.88 feet; thence

South 39°32'35" East, 342.19 feet; thence

South 17°00'49" West, 108.69 feet; thence

South 09°45'56" East, 92.08 feet to the point of beginning and sometimes
referred to as Lot 3 Mine Plant Short Plat No. 1.

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Appendix 3

[ex10155.gif] [ex10155.gif]

 

The Site, for purposes of this settlement, is depicted as “The Bunker Hill Box”
on this map.

1

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Appendix 5

41

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1

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2