Canadas Newest Gold & Silver Concentrate Producer

0:08 Well, hello and welcome everyone to Nicola Mining's live summit today, hosted by 6. I'm pleased to introduce Peter Espig, Nicola Mining's CEO, President and Director. Peter is going to walk us through a presentation and then after we will move on to a live Q&A session. So as a reminder, you can submit your questions at any time on the Q&A panel on the right-hand side of the screen and we'll get to them after the presentation.

0:32 And as always, the summit is being recorded and will be available to watch afterwards on SIX.com. So without any further ado I'll throw it over to you Peter to kick things off. Hi, thank you very much for the introduction. This is going to be a very quick and simple update. We recently gave a presentation, and so this is just kind of a follow-up and hopefully it provides some clarity. I just wanna talk about 4 things today. One is the geology, the recent exploration program that we had in 2021 and just kind of summarize that, provide an update on milling, discuss a little bit about our ESG initiatives, and then kind of touch on really the true value of the company or what we see as really what the true value drivers of Nikola are because we do have the 4 assets 1 asset being the Craigmont the other the mill Treasure Mountain and then our recent investment into Dominion. So I think that it makes sense to talk about the value drivers of the company and see how they fit together. So with that said, I'd just like to begin with the presentation.

1:48 Just a few slides that I would like to share. So what we have here, this is the program that we did this year. And so the focus was in 2021 to look at some vector inversion modeling that these anomalies that we saw on site and they certainly were were very clearly highlighted and we wanted to see if there was copper associated with that. Now we know that based on these electromagnetic version inverted models that there is magnetite exists there or iron or hematite but that doesn't necessarily mean that there's copper associated with those with those base metals. So we wanted to test these and we also wanted to test 2 other areas that are referred to as the MARB zone and the CAZ zone.

2:47 And we were kind of, we applied for a multi-year exploration permit, which is called the MYAB. Unfortunately, we didn't receive the MYAB on time because Our number 1 target for the Craigmont right now would probably be the Marb Zone followed by the Kaz. We didn't receive the permits on time to do the exploration there, so then we kind of stepped into where we were permitted to receive, to do, conduct exploration drilling. And that's the anomalies. And I don't know if you can see my icon, but here and these 3 sections. And we had target A and target B. We started with target B first. Now this is a, it's a quite a large area, it's much larger than the historic pit that we have and to put it in perspective, well it's about 4 to 8 times larger, but there's an anomaly there, it was really never explored, so we wanted to see if there was, and test whether there was scarring material that existed there that had never been found or drilled.

4:03 So we, and you can see here the numbers. So we've got, this is TH002, where this had 80, 85 meters of 1.1%. And then there's about 600 meters from where we started drilling so if if the thesis held true and there was you know significant copper mineralization the hope is to connect those dots. Without getting into too much detail, the first 2 holes were encountered a significant amount of hematite and magnetite, but again, not as much copper as we had hoped but again one thing about the Craigmont property whether you know we view that as good or bad is is that we historically it's a very very high grade mine so you know what other drilling projects would view as good results for our property, we hope to have higher. We hope to intercept 1% or over tens of meters and 0.5% well over 100 meters. So that's kind of the framework that we had.

5:26 But as we drilled, there was some very positive things that came out of this. So in whole CC 2179, you know, we encountered hematite, it continued. We also saw disseminated chalcopyrite and we hit, we experienced 75 meters of 0.29%. Now, certainly to put it in perspective Highland Valley operates at below 0.2% so we would just make the statement that the results of here are encouraging but we you know not exactly what we hoped for. The overall result though, had some very encouraging results or outcome in that if you look at, and specifically this here where we look at whole CC 2178, we had 11.5 meters of 2.19% copper.

6:30 Now what this tells us is that we know that outside of the pit in areas that were never explored, that there is, continues to be high grade copper and that that high grade copper can connect to, there's potential that it connects to the, the, we don't know, but it that it could connect to the historic embayment zone or the Craigmont West, but the key takeaway here is that in that large anomaly is that there is, there was an intercept of 71 meters grading 0.38 percent and then in the 7, hole 7-9, there was 130 meters grading 0.21 and 71.35 meters grading 0.29.

7:25 Now we didn't do a copper equivalent with a magnetite, we had done that historically, but we really wanted to focus on the copper this time. So we were encouraged in that we know that copper exists and we wanna continue to

7:42 look in finding a pore-free system, which would be, it makes sense in that, you know, a much larger system, given the fact that there's this large amount of of of scarn material on the site still, 1 can easily conclude that there, the existence of a porphyry driven system is there. And so this is just a map here where we had the 11 and a half meters grading 2.1% and you can see it in where the pit is. Again, I just like to highlight though that, this is a, it's a very, very large property and we, the majority of the property exists in the Gishon Creek Batholith, which is the same mineralized area that Highland Valley exists in. And so we're starting to, after this year, we will continue to, we expect to have next year our multi-year permit that will allow us to explore on the entire property and go after look at the marb in the calzones as well.

8:54 And here you can just see the different types of mineralization that we encountered and as as we announced in 2019 we did also encounter a porphyry type of mineralization that's encouraging. And here you can see how scarns, this is a very well known model by Silco where you see that a lot of the often scarns are associated, especially this size where they're associated with the larger porphyry type of system. And so the next step is really, how are we going to, because we've done an electromagnetic survey and then we've got an IP survey, we've completed IP survey on just small portions of the property. But what we really would like to do the next step, I think, for what we believe for the property to be is to do a Z-tip or electromagnetic. So that's a Z-temp survey And that's a type of survey where they utilize a helicopter and you can see it's almost like they carry

9:59 a large swimming pool without the water down below, but they fly over the entire property with a helicopter and they essentially assimilate ionic lightning strikes. And the reason is that you've probably heard that when there's a rainstorm or a thunderstorm or lightning to not going to a field with a steel umbrella or something because metal is susceptible to lightning and it reacts with lightning so in doing a lightning Z-TEM survey they're able to see the direction of where the lightning goes. Now this isn't what the purpose of this is then to put it over top of the electromagnetic survey and then we also have the IP surveys that we've done. So what you want to do is you want to get as much information and layer them on top of 1 another and that's going to give you the best clarity of where to do exploration. So Z-TEM has been utilized for quite a while and some of the projects that you see here, so like the Huckleberry find, now these are all mines in British Columbia that were mines or properties that utilized, successfully utilized Z-TEM surveys, So that includes a recent like Kodiak and then you've got Surge Copper Imperial Metals with their Huckleberry, Newmont Lake. So it Sea Bridge has utilized it that the

11:29 KSM in Northwestern British Columbia. So this is something that we would like to, prior to committing to drilling for next year, we would like to conduct first the Z-TEM survey, and hopefully that's going to, and we expect that to give us clarity as to where our really clear targets are. So that's the geological update. I will,

11:58 from there, I'd like to discuss a little bit, provide an update on the milling. So we're pleased we had a news release yesterday that on our milling production with our partner, Blue Lagoon, a metal mountain mine, the mills is running today. So we go 2 weeks on 1 week off. That's the current scheduling.

12:25 Up until now, we've milled approximately 2,400 tons of material from that project. And we have a stockpile that will take us into November, end of October, November. We are also looking, it's very interesting because we're increasingly, I think the market because of Blue Lagoon has become more and more aware of the existence of our mill. And when I say market, I don't mean capital markets. I mean the other smaller players that are looking at doing bulk samples and smaller projects. So, and I've said this before that we view our mill as like an airport and small projects as airplanes and we're like the de facto site because we are the only site in British Columbia permitted to receive third-party material.

13:19 Interestingly, because of the news with Blue Lagoon, we're seeing more and more opportunities come out out of the woods. So we're in discussions with 2 groups who we have NDA signed with that we can't really talk about. And we've, as you all know, that we recently did an investment in Dominion that we would like to, we're waiting for the bulk sample permit. And once the bulk sample permit gets approved, then we'll look at bringing that into production as well, or at least doing a bulk 10,000 ton bulk sample. The site as well, so the Craigmont site where the mill is situated, We are also a key site or one of the approved and designated sites for the Trans Mountain Pipeline, which

14:14 has 2 very important benefits. 1 benefit is that we're able to use the material from the HydroVac trucks that are part of the pipeline project as our reclamation material and the reclamation because we are doing dust reclamation. So It's just been a godsend that this pipe that we were, are now a designated site because the costs that we would have had to incur to do reclamation are now mitigated and they're not just mitigated, but we are receiving revenues from the pipeline as part of our reclamation. So it's like a win-win, we're conducting reclamation as well as receiving cashflow from the project. Is to move on to our ESG initiative. So we've really, we've hired a key employee in the company and her specific role is to do First Nation engagement and community engagement.

15:14 And We recently announced, we had previously announced Besta Filipchuk who had previously worked with Tech Resources and she is our advisor on ESG initiatives. And this is really important because the new paradigm of mining is that you need to, it's not just about getting permit approval, it's about getting community acceptance and acceptance with the local community, environmental acceptance and First Nation acceptance. So I think that this is the path that we're going down is clearly showing to be very positive in the fact that with the positive community relations and with the First Nation consultation, that also opens more doors to opportunity.

16:04 So we are very excited with, because in British Columbia, one of the most difficult things to do is to get permitting. So with us working with the First Nations and with the local community, we're actually able to help facilitate these projects to move forward. And this is something that we can't underestimate the importance of. And the last thing I wanted to talk about shortly is, you know, what Nikola views to be the true value of the company. And I've talked about this in the last presentation, but I just want to provide clarity. So we have Nikola Mining has 4

16:46 key assets. So the one asset is New Craigmont Copper, the other is the mill, and then we have Treasure Mount, and then we have Dominion. If we were to look at a long-term vision of the company and what we believe. We believe that new Craigmont will be at some time it will be a copper mine. Now we can't we don't have the we can't verify that we still have a lot of work that needs to get done but we certainly are confident with the results that we've seen and we're very excited both on on the the the grades of copper that we've seen but also with the patterns of that the Electromax and you know that the Z10 can bring us but also even this recent exploration program that we conducted.

17:45 So we believe that copper being a metal of the future and you know copper is the green metal and we are in the right location. The property continues to be very very unexplored, underexplored and most of the property has never been explored. So that's something that we believe to be a real long-term true value driver.

18:06 But I want to talk about the mill here. We do talk about in our presentation that we have a $30 million mill. So What's unique about our mill site, there's a lot of characteristics, but one is that the land is owned freehold. So we own the land. That land was acquired in a transaction for $11 million. We also have a fully lined tailings facility and we are permitted to receive third-party material. Now for the true mining experts, what has become more and more clear is that it's very, very difficult to receive a mine permit in or a mill permit in the province of British Columbia, as well as Yukon. I mean, Yukon, there's only 2 active mines in the Yukon territories, which has an image of being

19:02 a mining jurisdiction, but there are not really many active mines. And the same in British Columbia. And you can look at Red Crest and how long that took. It took 14 years from when it began the permitting process to when their mill was completed. So when we talk about that we have a $30 million mill, we need to understand that the following is that what is the cost of getting the permit? What is the true value of the permit? And having the mill on that site with that permit and what would the replacement cost be? So after Mount Pauly, which happened in 2014, the Ministry, and rightfully so, has been very, very careful about protecting the environment.

19:49 It's been very careful of protecting, you know, new catastrophes.

19:57 So the reclamation bonds have gone up very, very significantly. You can look at the reclamation bonds that a mill our size would cost and we know this from when Dome Mountain, this is prior to Blue Lagoon acquiring it, but when they looked at putting a mill on their site, the reason why they originally reached out to Nicholas, the fact that putting a mill on the site, the reclamation bond made it very, very difficult to raise the capital. We can look at other projects that are now approaching us and the reason they're approaching us is because there's a realization that they're not able to build a mill. So, yes, we have a $30 million mill, but the real value of that mill is the permit and the site. And so without putting a number on that, I think that if you look at the time and you were to do a model where you did a net present value, and if you look at the time when you have to start all the work and all the research and the consultation process and then your economic feasibility studies, your environmental impact studies, and if you look at that entire process and then you string it out 10 years and then you do a discounted cash flow, you can certainly see the value in the permits that we have.

21:21 So we believe that in the near term, there is an incredible amount of value that the market, that we'll slowly start to recognize based on our operations and our cashflow in the mill site. Treasure Mountain is something that we hope to, we not hope, we expect to do exploration on the property next year. And a major difference between Treasure Mountain and Craigmont is Craigmont has huge upside, but Treasure Mountain is easier to understand. And so

22:00 we can do exploration on Treasure Mountain and without doing a lot, provide a lot of clarity as to the value of that project. And then Dominion, again, we own 75% economic interest in the Dominion property. We hope to, there's still a lot unknown, but we certainly believe that the bulk sample that will, that we, that Dominion is currently applying for will get approved and then we'll start being able to monetize that. And as we monetize it, then we can do expiration on it. But the main thing about the Dominion property is not to use our hard capital to do the expirations, to use the cash flows from

22:46 the bulk sample permit to do any further exploration. So those are, I just wanted to provide that a summary. We're at a very exciting time right now for the company because it's, we're in a very stable position. We believe there's lots of upside and we also believe that as investors become increasingly aware of the company's stability that that will be reflected in the share price. So that's all I have to say everyone. I know it was short and quick, but thank you for your time. Great, thanks so much Peter. I think we're going to jump right into the live Q&A now, so if anyone has a question feel free to submit them. But it's great news on the milling front with Blue Lagoon, I was wondering if this is an exclusive agreement.

23:35 No, it's not exclusive. So we have the ability to receive material from other parties. I mean, I don't wanna say we are the exclusive partner to Blue Lagoon because we're the only site permitted to be able to do it. But certainly, nickel mining is not at this stage going to enter into an exclusive agreement with anyone unless it completely fills the mill and it makes economic sense. But the one card that we have is knowing that we're in a very strong position because of our permits and we also want to have the ability because, you know, in entering an exclusive agreement, what you run the risk of is entering into an exclusive agreement and then having another project that could actually bring in more cash flow or more upside to the company. So it's our fiduciary duty to the shareholders to protect that because we have to look after Nikola's shareholders and that is to bring in as much profitability and cash flow as possible. But right now, the only project that we are currently milling is Blue Lagoon and they've been a very good partner.

24:50 Great, thank you. And what excites you most about Nikola at this moment?

24:56 I think what really excites us is the stability now. You know, when you're in a position where you're doing exploration and you know even if that exploration is good, you're always looking for, you know in the back of your mind is when you're going to do the next capital raise. And so I think right now we're in a very good position because we're with, for example, like on the Craigmont with the Z-TEM, that's going to give us a lot of visibility as to where to do the next exploration program. But in the meantime, you know, the cash flow generation from our operations gives us that, you know, ability to not have to worry about when we're going to do the next race. So this is and that's very rare. I mean, I think I read a statistic once that 1.8 percent of listed mining companies have cash flow. And we're in that 1.8 percent. So that's something that really excites us in the near term now.

26:07 Great, thank you. So of the 4 assets, the mill, New Craigmont, Treasure Mountain, or the recent investment into Dominion, Which is the most important to the company? That's a very good question. I think for the, what's very important is the near term, certainly it's the mill, the mill and our operations, because that's going to allow us to leverage revenues

26:39 to explore and bring the value of our prize project which will always be Craigmont. The most valuable asset that we have today is our permits and our ability to operate, the fact that we are able to process material from throughout British Columbia. So that's the near term most valuable asset, but the long term, we believe to be Craigmo. All right, well, we have a question here from Richard. He's asking what percentage of the Blue Lagoon stockpile have you worked through?

27:24 About 0.333. Okay, thank you. Okay, so Craig is asking what is the capital outlay upgrade maintenance plan over the next year or 5 years? And he goes on to say in regards for the merit mill. Yeah, It's both a very good question and it's a very complex question to answer. So we've spent with this project now with Blue Lagoon, we've certainly invested 500,000 dollars to get the project to get the mill where it is today. What is our plan going forward in the future?

28:13 Let me explain why that is difficult. It's going to be contingent on how much material we're putting through. So, you know, if we get to a point where our capacity is at 100%, then we would be looking at doing investment or cap backs into increasing our capacity and getting the permit approval for that. The thing with milling is that it takes 2 to 3 years to get your mill really fine-tuned, and then as you get new material you're always fine tuning it. So the mill is is is much better than it was in 2016, far better not even compared but it is a modern mill. We'll continue to modernize it and and so the the CapEx investment is going to be contingent on what material we're putting through, how much free gold, whether we put in concentrators.

29:16 And so it's difficult, but we will continue to as we mill to continue to perfect the operation. So that's an ongoing process. Great, thank you. We have a question here. What are the grades of Blue Lagoon stockpile so far?

29:41 That's also a very difficult question because we haven't measured all the stockpile. We haven't processed it all. But what I would say is that, you know, the 43101 on, you know, the 43101 on the boulder vein, which Blue Lagoon is transporting to us, is about 13 grams. That kind of coincides with what their geologists, their geological team, when they did their assays. Ours is slightly lower, but the true grade of the material, you know, will be somewhere between, because there is dilution and everything, so we expect it to be somewhere between 8 to 11 grams and we're only going to be able to know that once it's all completed.

30:34 But it certainly is very good looking material and it's very millable. All right, thank you. John's question is, If you had 1 wish for the company and 1 wish only, what would it be?

30:54 If I had 1 wish for the company and only one wish, that would be to, in the next exploration program to find the copper system that we're looking for.

31:12 All right, thank you. We actually just got one more question in. Is there much exploration upside in Dominion Creek asset? You know, that's a very good question. I'm going to answer it this way in that We don't, you know, I'm very pragmatic and so I'm not, and I'm also not a promoter. So, you know, most people will say, yeah, you know, there's, we've got X ounces, but there's huge upside And that's the way they'll explain and get the market excited. But the way we look at Dominion, to be very clear and I guess blunt is that we recognize that there's a bulk sample.

32:01 And we've already published the grade. So at surface, we've had grades from 1 ounce to 2 ounces gold at surface along the vein but So we know that there are high grades that exist there. We know that they had previously done on that property a bulk sample permit that had 14 grams per ton. So those are facts that we know. We know that we have a mill that is permitted to process the material and we know that they're in the process of applying for a bulk sample permit. So now to get to the upside question, I think that we will know a lot more about the potential upside of the Dominion property once we do the bulk sample permit because as you're going along the vein and you're trenching and you're extracting that you're going to see it that vein much clearer than you would if you were putting drill holes through it. And so I am not going to really talk about the long-term upside potential of the Dominion property, because what excites us is the nearer term cash flow opportunity and to monetize that, and to see if there is a long-term upside potential. So that's kind of our viewpoint of the Dominion.

33:25 You know, is the ability to actually do expiration while you're monetizing it. I find that to be very exciting because, you know, when you're putting drill holes in the ground, you're not monetizing anything. You're cash out. But when you're trenching, extracting, milling, processing, selling, and one thing about the Dominion material, It's very, very sellable because of the, and this is very important to understand is that, high grades in themselves doesn't mean it's good material. Like you can have high grade gold, you can have 15 to 20 grams gold, and then you've got arsenic, mercury, antimony, and that makes it difficult to sell the material. So, one of the very, very exciting points about the Dominion property is how sellable that concentrate would be based on the assays that we've submitted to the labs.

34:23 Great, thank you. And in closing, this isn't a question but a comment from Ben. He says, I really like the investor stability with Nikola. So with that, I just want to thank you, Peter, so much for taking us through the presentation and the Q&A. And also thank you for everyone who joined and submitted questions. If you do think of a question after this summit, we will be sending out a short survey where you can leave your contact details and Nikola Mining team will follow up with you directly. You can also find more information at their website, NicolaMining.com. But to close out, I'll pass it back to you, Peter, for the final word. Yeah, thank you, everyone, for taking the time. This was a very quick ad hoc presentation, but the you know, we just felt it would be worthwhile having recently given a presentation on the company and we reached out to 6 and asked them if we could have just a follow-up and just to provide an update because, you know, the news releases don't tell the whole story and so this is an opportunity to talk about the things you don't write about. So thank you for your time and thank you for your support. Cheers.