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Nicola Mining Inc
Symbol NIM
Shares Issued 205,138,956
Close 2018-10-30 C$ 0.10
Market Cap C$ 20,513,896
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Nicola Mining begins RC drilling at New Craigmont

2018-10-30 12:05 ET - News Release

Mr. Peter Espig reports

NICOLA MINING COMMENCES PHASE 2 RC DRILL PROGRAM TO REVIEW COPPER AND MAGNETITE GRADES IN HISTORIC WASTE PILES

Nicola Mining Inc. has commenced an extensive reverse circulation drilling program on the historic Craigmont copper mine waste piles and the 3060 ore portal. The approximate 80 million to 90 million tonnes of waste piles and 3060 portal surround the historic Craigmont pit, which is located three kilometres southeast of Merritt, B.C. The waste piles are part of the company's wholly owned New Craigmont project. In addition to RC drilling of the waste piles, the company is currently conducting a diamond drilling program to actively explore a mineralized halo that is known to exist around the pit.

This current program is part of Nicola's second phase of RC drilling on both the waste piles and the 3060 portal, and is designed as a follow-up to positive results during the phase 1 RC programs completed in the spring of 2018 (released Aug. 10, 2018) and 2017 ore portal program (released Sept. 26, 2017).

In addition to the 49 holes drilled between 2017 and early 2018, Nicola has planned an additional 60 RC holes, which will focus on the south waste piles and ore portal to test the economic viability of the crushed rock. Highlights from previous RC drilling in these areas include:

  • An average grade of 0.24 per cent copper for the first nine metres of the 29 drill holes at the 3060 portal;
  • An average grade of 1.03 per cent copper and 8.5 per cent magnetite/iron in hole P-34, as well as 0.86 per cent copper and 9.5 per cent magnetite/iron in hole P-72;
  • An average grade of 0.25 per cent copper and 6.5 per cent magnetite/iron over 40 metres in CC-RC-18-12.

Combining economic potential of both copper and magnetite

In addition to analyzing copper grades, the company will also review magnetite grades. Approximately a decade after the Craigmont copper mine closed in 1982, mining operations of magnetite (Fe304 (iron oxide)) began on the approximate 27 million tonnes of historic tailings. Magnetite operations began in 1993 and continued until 2014, at which time Nicola took over sole usage of the tailings. On Nov. 19, 2015, Nicola announced that it had garnered full ownership of all the historic Craigmont Crown grants, claims, mine leases and mine permits.

Given that the site has hosted both copper mining and magnetite mining operations, the company will focus on the combined economic value.

Nicola has awarded Northspan Explorations Ltd. of Kelowna, B.C., with the contract for RC drilling. A drill rig was mobilized on Oct. 19, 2018, to commence the phase 2 RC program.

Waste piles

Drilling is focused on expanding the low-grade, near-surface copper mineralization defined earlier this year on the south side of the Craigmont open pit. The benches of mined rock vary in height from 10 metres to 50 metres. However, the anomalous copper assays were found to be within the central portion of the piles, where waste pile thickness is the greatest. In addition to the 36 additional drill holes currently continuing, metallurgical testing will be completed to understand how copper extraction may be optimized.

3060 ore portal

During the summer of 2017, Nicola executed the first RC drilling program adjacent to the 3060 ore portal, an area known to contain material excavated from underground workings of the Craigmont mine. The results confirmed significant copper grades. However, the program was suspended due to poor air quality from forest fire smoke. Nicola will complete the drilling at the ore portal that was left unfinished in 2017, aiming to include these results in a potential combined resource estimate with the waste piles.

Resource evaluation

Nicola has entered into a consulting agreement with James Gray, PGeo, of Advantage Geoservices Ltd., with the goal of completing a resource estimate in the first half of 2019, in accordance with CIM (Canadian Institute of Mining, Metallurgy and Petroleum) definition standards for mineral resources and mineral reserves.

Scientific and technical information

All information of a scientific or technical nature contained in this document, including sampling, analytical and test data, has been reviewed and approved by Kevin Wells, PGeo, a consulting geologist to Nicola Mining. Mr. Wells is a qualified person as defined by National Instrument 43-101 -- Standards of Disclosure for Mineral Projects.

Sample preparation, analysis and quality assurance/quality control

Nicola Mining applies a thorough quality assurance/quality control program at the New Craigmont project compliant with industry best practices. A qualified geoscientist has logged and sampled all core, and samples have been delimited according to lithologic, alteration and mineralization characteristics. This includes systematic insertion of blank, duplicate and certified reference materials into the sample batches by Nicola's geological staff. Core is then halved, where the sample is placed in a labelled sample bag with sample tag and the other half of the core is retained on site as a physical record. Samples are placed in sealed bags and transported to Actlabs (ISO 17025 certified) in Kamloops, B.C., for analysis, following a chain of custody. Samples are crushed up to 80 per cent passing two micrometres, riffle split (250 grams) and pulverized to 95 per cent passing 105 microm. Samples are analyzed using aqua regia ICP-OES 38-element (1E3) packages. All samples greater than 10,000 parts per million copper are tested using overlimit mass spectrometry methods (8-AR). All results included in this release have passed the QA/QC procedures as described herein and have been reviewed by Mr. Wells, PGeo. There are no known factors that could materially affect the reliability of data collected and verified. No quality assurance/quality control issues have been identified to date.

About New Craigmont

The New Craigmont project is a wholly owned copper property with an active mine permit (M-68), located within the world-class Highland Valley porphyry district. It benefits from excellent infrastructure. The property is at the corner intersection of the Nicola and Guichon batholiths, of which the latter is the precursor to mineralization at Highland Valley. In November, 2015, Nicola became the first group in decades to consolidate ownership of the property and has been actively conducting mineral exploration since.

There are currently no mineral resource estimates on the property. Historical non-NI 43-101 resource calculations are recorded in internal memos and geological reports for placer development. An internal memo written by J.F. Bristow on Oct. 30, 1985, to Craigmont Mines Ltd. reported a zone known as Body No. 3, containing a historic estimate of 1.29 million tons (1,170,268 metric tonnes) of copper grading 1.53 per cent. This estimate assumes a 0.7-per-cent-copper cut-off and a 20-foot mining width between drill sections 6565E and 8015E. The material in Body No. 3 contains mineralization primarily in silicate-rich rocks.

Additionally, Mr. Bristow reported, in an internal memo on July 22, 1985, to Craigmont Mines, a rough calculation of more than 60 million pounds (1.6 million short tons or 1.45 metric tonnes) of greater than 1.5 per cent copper from an original ore estimate of 27,754,000 short tons (25,178,005 metric tonnes) of copper grading 1.79 per cent left behind in the sublevel cave. In addition, the Bristow report highlights a 50-million-tonne halo grading greater than 0.4 per cent surrounding the high-grade underground orebody.

It should be noted that these historical estimates do not meet the requirements needed to conform to NI 43-101 standards. The company notes that an independent qualified person has not done sufficient work to verify and classify the historical estimates as current mineral resources. Therefore, the company is not treating the historical estimates as current mineral resources or mineral reserves.

About Nicola Mining Inc.

Nicola Mining is a junior mining company listed on the TSX Venture Exchange and is in the process of recommencing mill feed processing operations at its 100-per-cent-owned state-of-the-art mill and tailings facility, located near Merritt, B.C. It has already signed four mill profit share agreements with high-grade gold producers. The fully permitted mill can process both gold and silver mill feed through gravity and flotation processes. The company also owns 100 per cent of Treasure Mountain, a high-grade silver property, and an active gravel pit that is located adjacent to its milling operations.

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