RCKS Talk

30-Oct-2018

Nicola Mining inc.

Another Sweetener to a Copper Explorer

Impact: Positive

Higher cut-off grades applied by historic operators appear to have left a potential bulk mineable copper resource. Following positive results from the Phase 1 RC drilling program, Nicola is proceeding with Phase 2, focused on the South Waste Piles and 3060 Ore Portal zones. The objective is to define a resource for the copper-magnetite bearing crushed materials left behind at surface by previous operators. We note that a Waste Pile processing operation could help kick start a larger copper mining project at New Craigmont or be of interest to Teck Resources operating the low-grade Highland Valley copper mine next door. We continue to view Nicola as a high-potential copper exploration story and await results from diamond drilling of the mineralized halo surrounding the existing pit and previously identified porphyry targets.
Highlights:

  • Assessing Economics of the Waste Piles. Phase 2 will test the South Waste Piles and 3060 Ore Portal area. Dill results from 29 holes drilled near the 3060 Ore Portal in 2017 suggest an average grade of 0.24% copper within nine meters of surface. Given that the waste piles are unconsolidated and at surface, mining costs would be negligible. Thus, relatively low copper grades (Q3/18 head grade at Highland Valley was 0.24%Cu) this would be accretive if a larger copper project is discovered. 
  • Magnetite – possible sweetener to a copper story? Between 1993 and 2014, 27 million tonnes of historic tailings were processed to extract magnetite at New Craigmont. In addition to assaying for copper, Nicola will be completing studies to assess the economics of magnetite in the waste piles.
    On track for resource estimate in H1/2019. A resource is expected in H1 2019 for the Waste Piles. We expect any additional mineralized copper-magnetite ore to enhance potential development of a larger future copper project, as the waste piles could serve as low cost mill feed in the early years of an operation at New Craigmont.
Valuation:
We continue to view Nicola as an undervalued copper explorer with highly prospective past producing assets in BC. Due to high cut-off grades applied by historic operators at New Craigmont, we see the potential for the company to define a bulk mineable copper resource. Upcoming Catalysts include: 1) Results from further exploration drilling at Craigmont West and Craigmont Central and 2) Drill results from porphyry targets.

 

19-Oct-2018

Nicola Mining Inc.

Custom Milling Kicks-Off

Impact: Positive

Nicola to recommence milling for Gavin Mines, positioning itself as the only permitted mill to process third party Au-Ag ore. The mine anticipates shipping up to 40ktpy (~11.2g/t Au & ~100.8g/t Ag) to the Merritt Mill, which only fills ~50% of the mill’s capacity, leaving the remaining capacity open to be fed by other mines. The announcement supports our thesis of custom milling being a sweetener to what we believe is a high-potential copper-focused exploration story.

Highlights:

  • Milling hub for nearby small-medium sized mines. The mill is both centrally located and is the only permitted Au-Ag processing facility for third party ore in the province. British Columbia has strict regulatory requirements tightened further since the Mount Polley disaster. In light of this and high CAPEX costs for mill construction, barriers to entry are high for the emergence of competing mills. Nicola's 200tpd mill and tailings storage facility, accessible by highway and connected to a power grid, are fully permitted and include grinding, crushing and flotation circuits.
  • Profit share agreements with four gold miners. As Gavin Mines will only fill 50% of the mill’s capacity, the mill could accept more feed from Gavin or other smaller neighbouring operations lacking a mill. In addition to Gavin Mines, the company currently has profit share agreements with AMA Gold Exploration Ltd., Huldra Silver Inc. and Clibetre Exploration Inc.
  • Merritt Mill: a sweetener to a good copper exploration story. While there are no synergies between Nicola's toll milling operation and its flagship New Craigmont copper project, currently being drilled for copper skarns and porphyries, potential cash flows from its milling operation will likely help fund exploration at New Craigmont and minimize shareholder dilution.
Valuation:
We continue to view Nicola as an undervalued copper explorer with highly prospective past producing assets in BC. Due to high cut-off grades applied by historic operators at New Craigmont, we see the potential for the company to define potentially bulk mineable copper resources that may have been previously overlooked. Upcoming Catalysts include: 1) Results from further exploration drilling at Craigmont West and Craigmont Central and 2) Drill results from porphyry targets. 

25-Sep-2018

Nicola Mining Inc.

Nicola Delivers Big Step-Out Hole, More to Come

Impact: Positive

Nicola Mining has announced the intersection of 73.6m grading 1.05% Cu, within a wider interval of 150m grading 0.54% Cu (CC-18-02) ~100m north of the historic Craigmont open pit, within the company’s active Mine Permit M-68.

  • Step-out hole CC-18-02 returned a wide zone of copper mineralization approximately 100m north of the historic Craigmont open pit, confirming the potential for a mineralized "halo" surrounding historic mining operations
  • Assays are pending for two more holes being drilled to the east and west of hole CC-18-02 with the aim of confirming the lateral continuity of the zone
  • Of note, a historic resource (pre NI 43-101) of 50Mt grading >0.4% Cu was defined within the "halo" to the west of the historic Craigmont Pit which when taken with today's drilling results appear to validate the company's strategy of defining a bulk mineable copper resource within the skarns surrounding historic mining operations
  • While this hole is significant for the expansion of Craigmont Central, we also note that two compelling porphyry targets remain to be tested on the property
We view this news as positive as it validates Nicola's thesis that due to higher cut-off grades applied by historic operators, significant potential remains for defining a potentially bulk mineable copper resources in the vicinity of historic mining operations at the Craigmont Project. We expect results from further exploration drilling at Craigmont West and Craigmont Central, in addition to the two porphyry targets, to be important catalyst for the stock.

10-Aug-2018

Nicola Mining Inc.

Nicola Drills Positive Results from Historic Wastepiles

Impact: Mildly Positive

Nicola Mining has released results from its 20-hole Phase 1 Reverse Circulation (RC) drill program designed to test the 80-90Mt historic wastepile surrounding the Craigmont Mine Pit, at the New Craigmont Project in B.C.
  • The deepest hole in the program returned 0.25% Cu over 40m (CC-RC-18-12) with the discovery of potential high-grade copper mineralization in the southern side of the wastepiles
  • A clear zone of interest has been established in the largest volume section of the wastepiles on the southern side of the pit and results have warranted a follow up program to delineate copper mineralization and trace the extent of higher grade material within the wastepiles
  • Nicola was encouraged that the grading of the wastepiles were associated with location and not depth, which would limit waste rock; the value of the wastepile has been deemed significant and warrants a Phase 2 program of ~100 holes, which Nicola currently has the funds to complete
We conclude that preliminary results from the RC drilling program on historic waste piles are encouraging and it suggests that the south-central portion of the wastepiles may host economic copper mineralization at surface. The Phase 2 drilling program on the wastepiles is expected to commence shortly and likely to be completed by Fall 2018.

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