Nicola Mining Inc., a very unique cash-flow focused North American Junior Explorer-Miner of Copper, Gold, and Silver, is one of our “Innovative Companies to Watch 2024”

The Silicon Review

Nicola Mining Inc. (TSX.V: NIM) (FSE: HLIA) (OTCQB: HUSIF) came to our attention late last year, and we are pleased to feature the company in our “Innovative Companies to Watch 2024” for numerous reasons highlighted in this article. One attribute in particular caught our attention; Nicola’s unique position as a junior miner to maintain diversified operational cash-flow streams to support funding for their ongoing copper exploration.

Furthermore, Nicola’s business pursuits all embrace ESG principles while the company’s value-added peripheral endeavors, such as gravel quarry and rock quarry, are accomplished in alliance with local First Nation partners.

A second attribute we did not expect to find, was such outstanding management let alone such a seasoned Board of Directors, and that is why we believe Nicola is a company to watch in 2025. You see at the helm of Nicola is Peter Espig, a seasoned global investment banker, SPAC pioneer and turnaround specialist who has held executive positions at Goldman Sachs and Olympus Capital.

Serendipitously, although he is multilingual and a MBA grad from Columbia University, Espig’s roots in mining run deep, having spent formative years in highschool and under-grad on rigs as a helper and exploration diamond driller before transitioning to high-level finance and corporate restructuring. He has leveraged his turnaround and M&A experiences to create multiple cash flowing business units that mitigate dilution, readying Nicola for its most important copper diamond drilling exploration in Canada’s premier copper district, with active mine and mill permits associated with the project.

The ability to expedite exploration to operation is envious amidst a burgeoning worldwide demand for copper, “the green metal”. Nicola has an impressive location surrounded by five current and past producing copper mines in Canada’s #1 copper producing district. The confluence of all these characteristics is also why Nicola is worthy of our “Innovative Companies to Watch” and why we are bringing you Nicola’s story.

Coincidently, a Goldman Sachs Research Report turned podcast, dated April 13, 2021, pointed out that Copper, the Green Metal, is the new oil and that there’s no decarbonization without it. (1) So who better to run a “cash-flow focused, think outside the box miner/explorer” than Espig, a Goldman Sachs Alumni, so with our introduction complete, read on.

Craigmont Mine pioneered British Columbia’s copper boom, leading to the province’s global market re-emergence

Nicola is located in what is known as the Quesnel Trough, Canada’s most storied and historic copper belt, (2) which is not only of paramount importance to the province of British Columbia and Canada, but North America, thanks to its rich mineral endowment particularly in copper, gold, and silver.

Nicola’s flagship “New Craigmont Copper Project” is surrounded by five present and past producing copper mines including the 3 largest in Canada. Immediately north is Canada’s #1 largest and lowest cost producer Highland Valley Copper; further north is the #2 Gibraltar Mine; to the south is #3 Copper Mountain; just northeast is the New Afton Mine; while the Brenda Mine is just southeast.

The “New Craigmont Project” is named after the historic past producing Craigmont open pit and underground mine which operated from 1962 to 1982. It was B.C.’s first modern, large-scale open pit mine, employing as many as 660 people during its peak years. Over its lifespan the Craigmont Mine produced a total of 36,750,000 tons of ore (3) with an average grade of 1.3% copper.

Back in 1957, Craigmont’s discovery hole, yielded an eye popping grade of over 4 % copper over 195 meters in its No.1 ore body. (4) The historic cut-off grade, used as a minimum value to determine if rock was ore or waste, ranged from 1% to 0.7% copper until its closing in 1982. This is impressive given today’s operating copper mines can have an average grade below 0.3%. Craigmont led BC’s push to become a large-scale regional producer of copper. (5)

New Craigmont’s land package stands at 10,800+ hectares with its 100% ownership achieved by the end of 2015, for the 1st time since 1961. Not only is it adjacent to the largest and lowest cost producing copper mine in Canada, Teck Resources’ Highland Valley Copper Mine Property, their Chairman Emeritus Dr. Norm Keevil Jr., in fact, wrote his PhD Thesis in 1965 at University of California, Berkeley on Exploration at the Craigmont Mine. (6)

Nicola has commenced its highly anticipated drilling campaign in July. CEO Espig explained its significance, “this is the culmination of 3 years of commitment to geotechnical investment and review. Our geologists believe we could find copper deposits matching those that made the original Craigmont Open Pit - Underground Mine so successful” (7) , which is why the Company is taking full advantage of a multi-year area-based exploration permit (MYAB) (8) that was granted in late 2022.

It is hard to imagine that Nicola are drilling to the immediate west of one of North America’s highest-grade historic copper mines that is adjacent to Canada’s largest copper mine, yet it still remains almost completely unexplored. The Company is both excited and confident about the blue-sky upside. A real estate term is “location, location, location” which describes Nicola’s

New Craigmont Project well. It is located at the intersection of 2 key faults within the Quesnel Trough. (9)

The axiom of the Company’s assets are its two permitted mine properties, the historic Craigmont Copper Mine (Permit M-68), Treasure Mountain Silver Mine (Permit M-239), the Merritt Mill, (above right), the province’s only site permitted to process gold and silver ore from multiple sources across the province. Less known, but also coadjutant, is Nicola’s operating gravel pit, rock quarry, pending ready mix concrete plant (above left), along with a 75% economic stake in their Dominion Creek Gold Property.

The gravel pit and rock quarry are operated through a strong and mutually beneficial partnership with Lower Nicola Site Services, a joint venture between the Lower Nicola Indian Band Corporation and Infracon Construction of Kamloops.

This strategic asset diversification coupled with operational focus allows Nicola to aggressively commit to copper exploration while minimizing dilution, and creating multiple win-win situations with Indigenous partners, their local communities, and shareholders. Here’s a list of Nicola’s projects and assets:

The silver lining to Nicola’s future

Our goal has been to shine a light on the merits of Nicola, its location, leadership, and the burgeoning importance of the copper sector for North America. We haven’t even delved into Nicola’s Treasure Mountain Silver Mine or silver’s critical role in the clean energy transition, as an industrial metal and as a precious metal but we encourage you to read these 2 given links silver’s coinciding growing importance (11) and silver’s self-healing breakthrough could be a game changer for electronics. (12)

Historically, the industrial sector has accounted for half of silver demand, with the rest coming from jewelry, silverware, and bullion. Recently, industrial applications have increased to 55% of total demand. In a market of 1.2 billion ounces, this segment is expected to reach a record high of 654 million ounces in the past year.

In 2023, silver demand had outpaced supply for the third year in a row, driven by industrial needs. Key sectors like photovoltaics, automotive, electric vehicles, and artificial intelligence have contributed to a 9% increase in demand. This strong trend supports silver mining and is positive for silver prices.

Silver crashed from its April 26, 2011 High of $45.48 USD to a Low of $12.98 USD by March 16, 2020 (13) This led to Nicola’s 100% wholly owned Treasure Mountain Silver Mine being put on care and maintenance on June 26, 2013 with silver at $18.51 USD. Since that time, the mine has remained inactive while the Company awaits a more stable trading rate around $30, at which point mining operations could potentially recommence.

Conclusion

Bottom line, since Espig assumed the role of President and CEO in late 2013, an incredibly capable and seasoned Board of Directors (14) has been assembled coupled with a top notch Geology Team (15) whose background includes Barrick-Newmont, Freeport-McMoran, and the Colorado School of Mines. The Nicola Team embraces creativity, working smart, spending money carefully, and Nicola is one of the few companies we’ve seen under current management who have morphed from a distressed enterprise to a cash flow positive miner.

Above laid out for you, you can see why we view Nicola as a unique situation versus their North American peers and why we selected them as one of our Innovative Companies to Watch for 2024.

Their leadership, self-sustaining cash-flow, location, MYAB, focus on copper, exposure to gold and silver in a bullish commodity cycle makes them a company to watch 2025 onward.

Their website www.nicolamining.com explains all in detail where you’ll also learn about their impressive collaboration with the University of British Columbia’s (MDRU) Mineral Deposit Research Unit (10).

The first ever comprehensive
drill program west of their Craigmont Mine has begun.
If a porphyry deposit at New
Craigmont is discovered,
permits and existing infrastructure on site could significantly streamline the process of moving towards production. But, for now the
focus is the blue-sky potential drilling that is in full swing.

Website: www.nicolamining.com

Email address: info@nicolamining.com

Citations:

(1) Goldman Sachs Commodity Research Podcast 13 April 2021 Green Metals- Copper is the new oil

(2) April 25, 2024 Ahead of The Herd Lured by copper, major miners drawn to Quesnel Trough & Golden Triangle

(3) https://www.merrittherald.com/gearing-edge-the-craigmont-mine-more-than-20-years-of-prosperity/

(4) British Columbia Minefile Record Summary, MINFILE No 092ISE035

(5) https://www.merrittherald.com/merritts-long-history-with-the-mining-industry/

(6) Dr. Norm Keevil - “Exploration at the Craigmont Mine – 1965 U of Cal. Berkeley

(7) The Historic Craigmont Mine 20+yrs. of Prosperity

(8) Nicola receives a multi-year area-based exploration permit (MYAB)

(9) The Strategic Location of New Cragmont 3:01 video