Nicola Mining (NIM.V) has exited the CCAA procedure at the end of last year and is now aiming to create value for its shareholders with its existing assets. We recently had a chance to sit down with CEO Peter Espig to get a better understanding of what the company intends to do in the next few quarters and years.
The key element of Nicola’s assets will be the Merritt Mill in British Columbia. It offers an enticing ‘toll’ milling opportunity as there are several smaller (precious) metals projects in the region which are either too small to be developed independently or which will encounter several difficulties during the permitting process for a new mill. The Merritt mill could offer a solution for this, and instead of entering into a ‘normal’ toll milling agreement (whereby the ore provider pays the milling company a fixed fee per processed tonne), we have the impression Nicola Mining would be leaning towards some sort of profit-sharing partner agreement whereby the property owners and Nicola as a mill operator would become partners.
Only one agreement been signed just yet but we are looking forward to see how the first few deals will be structured as we think this might be the template for further deals. Once the first deals will be announced, we will be able to try to establish a fair value for Nicola Mining, which also owns the Thule Copper project as a lottery ticket. Despite the low copper price, Thule could actually have quite a bit of value as the property is located right next to Highland Valley Copper (operated by Teck Resources (TCK), emphasizing the strategic value of the asset.
We have the impression CEO Peter Espig really wants to make this work and restore value for the Nicola shareholders that lost almost everything after the company went belly-up and initiated the CCAA-procedure.
Go to Nicola’s website
The author holds a long position in all stocks mentioned in this article. Please read the disclaimer
