New Craigmont Property

PROJECT HISTORY

The historic Craigmont Copper mine (the “Craigmont Mine”), located 14km from Merritt, British Columbia, has a history spanning more than two decades (1958 – 1982). During its life span, the Craigmont Mine yielded in excess of 36,750,000 tons of ore at an average grade of 1.30% Cu, containing approximately 900,000,000 pounds of Cu extracted from both open pit and underground mining activities (“Craigmont Central”).^[1]

Near the end of the Craigmont Mine’s life (1977 and 1979), a small on-site exploration program was conducted by Craigmont Mines Ltd. that focused on a smaller land package than currently held by Nicola. The exploration was driven by a conceptual model that ore metals were derived from the country rock, mobilized by heat from the Guichon batholith and concentrated in skarns formed in reef-margin facies^[2] and did not significantly add to the reserves of the Craigmont Mine. The Craigmont Mine was shut down and dismantled in 1982, due primarily to the low copper prices ($0.60 per pound)^[3]. Since the early 1980’s, fragmented ownership prevented cohesive mineral exploration on the Craigmont Mine project.

Nicola succeeded in consolidating the ownership of the mineral claims and mining leases which now comprise the New Craigmont Project (the “New Craigmont Project”) in November 2015 and has actively conducted exploration since.

Nicola now owns 10,913 hectares of mineral claims, a significantly larger land package than held by Craigmont Mines Limited. It is compliant with the Mines Act and holds a mine permit on site (M-68). Nicola is in the process of extending the mining leases to allow for future development of the New Craigmont Project.

Since consolidating the New Craigmont Project, Nicola has conducted extensive exploration on the New Craigmont Project, including 10,498 meters of diamond drilling, 1,869 meters of reverse circular drilling, extensive soil sampling, induced polarization (“IP”) and ground magnetic surveys, property scale mapping, upgrading copper grades through the utilization of X-Ray Transmission (“XRT”) sorter technologies, and the publishing of a National Instrument 43-101 – Standards of Disclosure for Mineral Projects technical report on historic mine waste terraces published June 1, 2020 (the “New Craigmont Project Technical Report”) and filed on Nicola’s SEDAR profile.

Through these efforts, exploration results from the 10,913-hectare New Craigmont Project have included several copper high-grade intercepts:

• DDH- THU-002: 85.92m @ 1.11% Cu
  • See September 7 2016 news release
• S-100: 116.7m grading 0.54% Cu (resampling)
  • See January 23 2017 news release
• NC-2018-01: 71.4m @ 0.6% Cu
  • See February 28 2018 news release
• NC-2018-03: 100.6m @ 1.33% Cu
  • See April 2 2018 news release
• CC-18-02: 73.6m @ 1.05 % Cu
  • See September 25 2018 news release
• CC-19-72: 0m @ 0.40% CuEq and 44.0m @ 0.56% CuEq
  • See July 24 2019 news release

Prior to the exploration work above, an airborne survey (2) was conducted over the Thule Copper Property in 2012 by SJ Geophysics Ltd. (“SJ Geophysics”), as disclosed in their Memorandum dated December 20, 2012 entitled “Geophysical Interpretation of airborne magnetic and radiometric data – Craigmont Project, Merritt area, B.C.” (the “Memorandum”). The purpose of the survey was to identify potential new and untested magnetic features along strike of from the known New Craigmont Project Cu/Fe deposits. A technical report on the Thule Copper Property mining leases and mineral claims titled “Technical Report on the Thule Copper – Iron Property in Southern British Columbia, Canada” (the “Thule Property Technical Report”) was prepared in May 7, 2013 by Jim Cuttle, B.Sc., P. Geo. The Thule Property Technical Report was filed under the Company’s profile on SEDAR on May 8, 2013.

[1] “Annual Report 1982”, Craigmont Mines Ltd. (December 1, 1982)

[2] Cuttle, J. B.Sc., P. Geo, “Technical Report on the Thule Copper – Iron Property in Southern British Columbia, Canada”, Huldra Silver Inc. (May 7, 2013)

[3] Copper Prices – 45 Year Historical Chart

CURRENT SCOPE AND DEVELOPMENT

Utilizing an exploration pipeline approach, the primary objective of Nicola’s exploration efforts on the New Craigmont Project have been to advance the project to discovery while at the same time minimizing risk. Accordingly, Nicola foresees the highest priority exploration targets as those which require verification of historic work.

Figure 1: Exploration Pipeline Approach at New Craigmont Project

KEY EXPLORATION PIPELINE MILESTONES

Mineral Inventory Development

In connection with the exploration pipeline above, Nicola has:

1. Conducted 1,869 meters of reverse circular drilling on the Southern Dumps and 3060 Portal Dumps (see NI-43 101: New Craigmont Project Technical Report);
2. Developed an inferred mineral resource estimate of 18,669,000 tonnes at 0.13% copper on the historic Mining Terraces (see NI-43 101: New Craigmont Project Technical Report);
3. Concurrent to the inferred mineral resource, Nicola evaluated the upgrading potential of copper grades through the utilization of XRT sorter technologies (June 15 2020 news release); and
4. Identified the potential economic contribution from magnetite at low grades (February 19 2019 news release).

Target Delimitation

Craigmont Central (near-mine) intercepts:

• CC-18-02: 152.30 meters grading 0.55% Cu, including 60 meters grading 1.05% Cu and;
• CC-19-72: 34.0m @ 0.40% CuEq and 44.0m @ 0.56% CuEq.

Target Confirmation

1. Craigmont West (Embayment):

• S-100 116.7m @ 0.54% Cu (January 23 2017 news release) (resampled historic hole);
• DDH-THU-002: 85.92m @ 1.11% Cu (September 7 2016 news release);
• NC-2018-01: 71.4m @ 0.6% Cu (February 28 2018 news release); and
• NC-2018-03: 100.6m @ 1.33% Cu (April 2 2018 news release).

Target Development:

1. Promontory Hills:

• No significant drill intercepts or anomalies have been found (subsequently downgraded).

Target Generation:

1. Soils:

• Confirmed anomalous soils around Marb, Cas, Marb 72/Gus, Hank and Tom mineral showings; and
• Identified three new zones (Zone B, C and F) as having anomalous copper. Zone B is coincident with magnetic high within the Nicola Group and is coincident with “Craigmont style” geophysical anomaly as identified by SJ Geophysics in 2012 (see also Memorandum).

2. Geophysics:

• Hogg & Associates completed aeromagnetic survey over majority of Craigmont Mine claims in 2012 Report; and,
• SJ Geophysics reprocessed these and identified six “Craigmont style” magnetic anomalies, the majority of which have remained untested.

ONGOING AND FUTURE EXPLORATION

Building upon the historical work completed by Nicola, the company intends to:

Mineral Inventory Development

Follow-up on the New Craigmont Projects’ inferred mineral resource (as disclosed in the New Craigmont Project Technical Report) by:

1. Density testing to increase confidence in resource model;
2. Evaluating mass proportions of fines near surface; and
3. Evaluating the grade of fine mass fraction.

Exploration for In-Situ Mineralization

On approval of the Multi-Year Area Based Permit, Nicola aims to test several areas of prospective mineralization. These include a 2021 plan to test three main areas:

1. Craigmont Central:

• East of the open pit and underground workings:
  1. Test two pipe-like magnetic anomalies:
     1. Eastern margin of open pit lobe of magnetic body with copper oxides seen at surface (target depths ~400m), and
     2. 500m East of open pit- bulge on the southern edge of the border phase (target depths ~500m); and
  2. Test west of the Craigmont open pit and east of the Embayment fault for skarn. Prior geophysical targets suggest two lobes totaling 500m in strike length. (Target depth ~550m);

2. Craigmont West (Embayment):

• Delimitation drilling to follow up on intercepts encountered in THU-002, NC-2018-01 and NC-2018-03 to further delineate previous findings; and
• CAS showing- short drilling to identify the extent of magnetite-chalcopyrite mineralization within calc-silicate alteration of diorite.

3. MARB:

• Re-open surface trenching as well as open new trenches over magnetic and soil anomalies.

Target Generation Stage Targets

1. Follow-up mapping on soil anomalies; and
2. IP and ground magnetic survey across soil anomalies.