Mr. Peter Espig reports

NICOLA MINING ANNOUNCES TEST RESULTS FROM MAGNETITE RECOVERY WHICH RESULTS IN AN INCREASE IN COPPER EQUIVALENT GRADES OF UP TO 34%

Nicola Mining Inc. has released the results of a preliminary metallurgical testing program and has talked about the significance of a copper-magnetite grade equivalent at its wholly owned New Craigmont project, located 14 kilometres from the city of Merritt, B.C.

Nicola contracted ALS Metallurgy's Kamloops laboratory to perform magnetic separation and froth floatation testing on samples collected from a number of selected diamond drill and reverse circulation drill holes.

A total of 39 samples were classified into low-grade copper and high-grade copper composites that reflect mineralization grades encountered at the project. The composites were tested using a Davis Tube for magnetite separation. Composite samples were then tested by froth floatation to determine copper recovery. The tailings from the froth floatation was then retested using the Davis Tube test to determine the iron recovery after copper extraction.

Metallurgical testing was conducted to provide a CuEq value, based on recoverable magnetite associated with Cu mineralization, as not all Fe grades can be attributed to magnetite. ALS Metallurgy provided the company its findings in the metallurgy testing for Nicola Mining -- KM8541 report, which is available on the company's website and filed on SEDAR.

The composite samples created are described herein.

Low-grade copper composite: Feed assays on the LG composite were conducted by ALS and returned grades of 0.27 per cent Cu and 5.1 per cent Fe.

• The presence of magnetite in low-grade material provided an economic contribution of approximately 34 per cent and an increase in CuEq of approximately 0.09 per cent.

High-grade copper composite: Feed assays on the HG composite were conducted by ALS and returned grades of 3.26 per cent copper and 11.4 per cent iron.

• The presence of magnetite in high-grade material provided an economic contribution of approximately 11 per cent and an increase in CuEq of approximately 0.35 per cent.

The reduction in economic contribution and increase in CuEq in the HG composite, relative to the LG composite, is attributed to higher grades and economic value of Cu and magnetite in the HG material. Preliminary metallurgical results indicate average recoverable magnetite to be equivalent to 25 per cent of assayed Fe. As expected, results also indicate that higher magnetite recovery is associated with increased Cu grades.

The froth floatation test of the two composite samples aimed to evaluate the percentage of recoverable copper held within each composite using rougher and cleaner techniques. Following floatation simulations, a second Davis Tube test was completed on the tails from each composite to confirm the amount of recoverable magnetite from Fe after copper had been extracted.

The results of the froth floatation tests on the composite samples demonstrate that copper may be economically recovered. Approximately 96 per cent of Cu was recovered from HG composite with no significant difference between the recovery from rougher and cleaner results. Approximately 81 per cent of Cu was recovered from LG composite, with limited improved Cu recovery from regrinding.

Understanding the amount of recoverable magnetite from iron is important because magnetite, which is sold via contract, sells between $100 (U.S.) to $300 (U.S.) per metric tonne, whereas iron spot prices are closer to $80 (U.S.) per metric tonne.

From these results, a CuEq can be calculated for magnetite by applying the magnetite recovery ratio from iron for both the low-grade and high-grade material to estimate the magnetite content of a given sample and calculate copper grade equivalent based on current market prices.

Based on these results, for the LG composite the economic contribution of magnetite accounted for 34 per cent of the overall CuEq, which increased by from 0.27 per cent Cu to 0.36 per cent CuEq (an increase of approximately 0.09 per cent CuEq). The contribution and increased CuEq could be significant in cut-off grades and future National Instrument 43-101 resource estimates.

The company remains focused on high-grade copper exploration, of which the high-grade CuEq is most characteristic. Economic contribution of magnetite in the HG composite accounted for 11 per cent of the overall CuEq, which increased from 3.26 per cent Cu to 3.61 per cent CuEq (an increase of approximately 0.35 per cent CuEq).

Peter Espig, chief executive officer, commented: "The company has yet to issue several drill results from its 2018 exploration program because we were waiting for the results as described in the 124-page metallurgy testing for Nicola Mining report. The historic Craigmont copper mine operated for 21 years prior to closing in 1982 because of 60-cent-per-pound copper prices. Operations then shifted to 21 years of magnetite production, which focused on extracting magnetite from historic tailings. It's logical to combine the economic value of both copper and magnetite for this project. Going forward, exploration results will include CuEq grades."

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 at the Craigmont property as a physical record. All results included in this release have passed the QA/QC procedures as described in this news release and have been reviewed by Mr. Wells. 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 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.

About New Craigmont property

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.