Mr. Peter Espig reports

NICOLA PROVIDES YEAR IN REVIEW: 2023

Nicola Mining Inc. has provided its year in review for 2023, with the hope of providing additional clarity on several key milestones that were achieved in 2023. In addition to highlighting the significance of noteworthy events, the company is hopeful that this letter can provide clarity on key news releases and insight into next year.

Financially, the company has undergone a positive metamorphosis; Nicola ended Q3 with close to $6-million in cash versus $800,000 one year earlier. For the first nine months of the year, Nicola achieved positive earnings, a unique characteristic amongst junior mining companies. Revenues were attributed to the following sources: milling, gravel and rock quarry, and reclamation soils. In addition to the current cash position, the company was able to repay a $750,000 (U.S.) ($1,028,475) prepayment facility to Ocean Partners U.K. Ltd. The relationship between Nicola and Ocean Partners was further strengthened when the co-chief executive officer of the latter joined Nicola's board of directors.

It is best to break down the year in review by separating the company's projects.

Merritt mill site (mine permit M-68) -- 900 acres of freehold land

Following on the company announcing that it, on Dec. 2, 2023, signed a memorandum of understanding with Osisko Development Corp., on Jan. 30, 2023, Nicola announced that it was preparing to recommence milling operations. At the time of the release the company announced that it had received approximately 15,000 tonnes of gold mill feed from Osisko's Cariboo gold project. Subsequently, the company announced on March 28, 2023, that it had completed upgrades to the mill and commenced the production of gold concentrate. Given the time required to process the Osisko material, the company applied and received amendments to its ore stockpile duration from 30 to 90 days, which was followed by a one-time grant of up to 120 days from the Ministry of Energy, Mines and Low Carbon Innovation (EMLI) on July 26, 2023.

Later in spring, Nicola and its rock quarry/gravel pit partner, Lower Nicola Site Services Ltd. (LNSS), ramped up production to help repair highways and infrastructure that were damaged during the November flooding of 2021. The company also worked as a partner to the Trans Mountain pipeline expansion project by receiving soils and non-acid-generating rock as part of its reclamation requirement. The ability to generate operational revenues minimizes the requirement to raise operational capital allows the company to service debt obligations and funds exploration at its flagship New Craigmont copper property.

New Craigmont copper property (mine permit M-68) -- 10,913 hectares of mineral claims

On May 2, 2023, Nicola announced that it had finalized a 2023 diamond drilling exploration program and hired William Whitty, PGeo, as vice-president of exploration. The 2023 program had two key targets, southeast of the historic mine and the Marb 72 and WP zones, which are located proximal to the Lornex fault. The rational of drilling southeast of the historic mine was to test the extension of skarn mineralization southeastward from the historic pit because previous drilling northeast of the pit included very high-grade and long intercepts, including NC-2018-03: 100.6 metres of 1.3 per cent copper. Five holes were drilled, which helped define and close off the southeastern extent of skarn mineralization. Future exploration of a mineralized halo will focus on the northern side and east and west of the pit. These five holes contained important porphyry indicators that prompted the extension of the fifth hole and the drilling of an additional sixth hole, which are being used to target a potential porphyry copper system on the property.

The second area of importance was the Marb 72 and WP zones. A significant amount of time was spent mapping and exploring the two zones, which see copper outcroppings supported by aeromagnetic and ZTEM (Z-axis tipper electromagnetic) surveys. The company opted to postpone drilling until 2024 because it was deemed important to complete induced polarization (IP) surveys prior to drilling. Given the size of the resistive and magnetic body, an IP survey would help define targets.

An exciting characteristic of the two zones is that it includes both Nicola and Guichon units and highlights copper mineralization to be indifferent of either host unit. Nittetsu Mining Ltd. of Japan was also active exploring the Marb 72 and WP zones and has provided key input into its 2024 program. It is important to understand that Nittetsu's suspension of the LOI is not based on a conclusion that the project lacks merit, but rather that the overburden (which is characteristic of British Columbia) limited its ability to view outcrops. One of its suggestions is to carry out more trenching and IP surveys in key areas.

In summary

Two thousand twenty-three has proved to be a pivotal year for Nicola with operational activities driving cash flow and heightened interest in the Craigmont project. Since the Nov. 28, 2023 news release, UBC Mineral Deposit Research Unit (MDRU) has published its "New Porphyry Signatures at North America's Highest Grade Historic Copper Mine" poster on the Craigmont project. The company has also been approached by additional suitors regarding the Craigmont project, as well as opportunities for the Merritt mill.

Qualified person

Kevin Wells, PGeo, a consulting geologist to the company, is the independent qualified person as defined by National Instrument 43-101 for the technical disclosure contained in this letter to shareholders.

We seek Safe Harbor.