Nicola Mining Inc 40-F for FY2025
Nicola Mining Inc. (NICM)
About this 40-F
Nicola Mining Inc filed this 40-F on April 27, 2026, covering the fiscal year ended December 31, 2025 (FY2025).
Headline figures
Fiscal year ended December 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- 1.54M CAD
- up 87.6% from 818.16K CAD a year earlier
- Net loss
- 5.52M CAD
- compared with a net loss of 5.23M CAD a year earlier
- Diluted EPS
- -0.03 CAD
- compared with -0.03 CAD a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
(Exact name of Registrant as specified in its charter) |
| | N/A | ||
(Province or other jurisdiction of | (Primary Standard Industrial | (I.R.S. Employer |
Telephone ( |
(Address and telephone number of Registrant’s principal executive offices) |
Telephone ( |
(Name, address (including zip code) and telephone number (including area code) of agent for service in the United States) |
Copies of all communications, including communications sent to agent for service, should be sent to: |
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Virgil Hlus Jun Ho Song Cozen O’Connor LLP Bentall 5 550 Burrard Street, Suite 2501 Vancouver, British Columbia V6C 2B5, Canada Telephone (236) 317-5567 |
Securities registered or to be registered pursuant to Section 12(b) of the Securities Exchange Act of 1934 (“Exchange Act”):
Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
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| The |
Securities registered or to be registered pursuant to Section 12(g) of the Exchange Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Exchange Act: None
For annual reports, indicate by check mark the information filed with this form:
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
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Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.
Emerging growth company
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
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EXPLANATORY NOTE
Nicola Mining Inc. (the “Company” or the “Registrant”) is a Canadian issuer eligible to file this annual report (this “Annual Report”) pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on Form 40-F pursuant to the multi-jurisdictional disclosure system of the Exchange Act. The Registrant is a “foreign private issuer” as defined in Rule 3b-4 under the Exchange Act. Equity securities of the Registrant are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act pursuant to Rule 3a12-3.
PRINCIPAL DOCUMENTS
The following documents have been filed as part of this annual report on Form 40-F:
A. | Annual Information Form |
The Registrant’s Annual Information Form for the fiscal year ended December 31, 2025 is attached as Exhibit 99.1 to this Annual Report on Form 40-F, and is incorporated by reference herein.
B. | Audited Annual Financial Statements |
The Registrant’s audited annual financial statements for the fiscal year ended December 31, 2025, including the report of the independent registered public accounting firm with respect thereto, are attached as Exhibit 99.2 to this Annual Report on Form 40-F, and is incorporated by reference herein.
C. | Management’s Discussion and Analysis |
The Registrant’s management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2025 is attached as Exhibit 99.3 to this Annual Report on Form 40-F, and is incorporated by reference herein.
FORWARD LOOKING STATEMENTS
This annual report on Form 40-F, including the exhibits incorporated by reference into this Annual Report, includes certain statements that constitute “forward-looking statements” and “forward-looking information” (collectively referred to as “forward-looking statements”) within the meaning of applicable Canadian and United States securities laws. These statements are based on the Registrant’s current expectations, estimates and assumptions in light of its experience and perception of historical trends. All statements other than statements of historical fact may constitute forward-looking statements. Often, forward-looking statements are identified by words such as “believe,” “may,” “plan,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “project,” “potential,” “ongoing,” “could,” “would,” “target” or the negative of these terms or similar expressions, although not all forward-looking statements contain these terms or similar expressions. These statements reflect management’s beliefs with respect to future events and are based on information available to management as of the respective dates of this Annual Report and the document incorporated by reference herein, including reasonable assumptions, estimates, internal and external analysis and opinions of management considering its experience, perception of trends, current conditions and expected developments as well as other factors that management believed to be relevant as at the date such statements were made. These statements involve known and unknown risks, uncertainties, and other factors that may cause actual results or events to differ materially from those anticipated or implied in such forward-looking statements, including, without limitation, those described in the Registrant’s Annual Information Form for the year ended December 31, 2025, attached hereto as Exhibit 99.1 and those described in the Registrant’s management discussion and analysis for the year ended December 31, 2025, attached hereto as Exhibit 99.3.
The Registrant and management caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date made. Although the Registrant believes that the expectations reflected in the forward-looking statements were reasonable as of the time such forward-looking statements were made, it can give no assurance that such expectations will prove to have been correct. The Registrant and management assume no obligation to update or revise them to reflect new events or circumstances except as required by applicable securities laws.
DIFFERENCES IN UNITED STATES AND CANADIAN REPORTING PRACTICES
The Registrant is permitted, under a multi-jurisdictional disclosure system adopted by the United States and Canada, to prepare this Annual Report in accordance with Canadian disclosure requirements, which are different from those of the United States. The Registrant prepares its audited annual financial statements, which are filed with this Annual Report and attached hereto as Exhibit 99.2, in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and the audit is subject to Canadian auditing and auditor independence standards. Such financial statements may not be comparable to financial statements of United States companies prepared in accordance with United States generally accepted accounting principles.
CURRENCY
Unless otherwise indicated, all dollar amounts in this Annual Report and the documents incorporated herein by reference are in Canadian dollars. The exchange rate of Canadian dollars into United States dollars, on April 24, 2026, based upon the average rate of exchange of Canadian dollars into United States dollars as quoted by the Bank of Canada was US$1.00 = CDN$1.3678.
OFF-BALANCE SHEET ARRANGEMENTS
The Registrant does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Registrant’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, cash requirements or capital resources.
DISCLOSURE CONTROLS AND PROCEDURES
As of the end of the period covered by this annual report, the Company carried out an evaluation, under the supervision of the Company’s Chief Executive Officer (the “CEO”) and Chief Financial Officer (the “CFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based upon that evaluation, the Company’s CEO and CFO have concluded that, as of the end of the period covered by this annual report, the Company’s disclosure controls and procedures are effective. The disclosure controls and procedures are controls and other procedures to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities Exchange Commission rules and forms, and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.
While the Company’s principal executive officer and principal financial officer believe that the Company’s disclosure controls and procedures provide a reasonable level of assurance that they are effective, they do not expect that the Company’s disclosure controls and procedures or internal control over financial reporting will prevent all errors or fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
MANAGEMENT’S ANNUAL REPORT ON
INTERNAL CONTROL OVER FINANCIAL REPORTING
Management, including the CEO and CFO, is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act. The Company’s management has employed a framework consistent with Exchange Act Rule 13a-15(c), to evaluate the Company’s internal control over financial reporting described below. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, that accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with applicable IFRS, and that receipts and expenditures of the company are only being made in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. It should be noted that a control system, no matter how well designed or operated, can provide only reasonable assurance, not absolute assurance of achieving the desired control objectives. These inherent limitations include, among other items: (i) that management’s assumptions and judgments could ultimately prove to be incorrect under varying conditions and circumstances; (ii) the impact of any undetected errors; and (iii) that controls may be circumvented by the unauthorized acts of individuals, by collusion of two or more people, or by management override. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that any design will not succeed in achieving its stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected.
The Company’s management, including the CEO and CFO, is responsible for establishing and maintaining adequate internal control over financial reporting, and used the framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013) to evaluate the effectiveness of our controls. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2025.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There has been no change in the Registrant’s internal control over financial reporting during the fiscal year ended December 31, 2025, that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
AUDIT COMMITTEE
Identification of the Audit Committee
The Registrant has a separately designated standing Audit Committee established for the purpose of overseeing the accounting and financial reporting processes of the Company and audits of the financial statements of the Company in accordance with Section 3(a)(58)(A) of the Exchange Act and Rule 5602(c) of the NASDAQ Stock Market Rules. During the year ended December 31, 2025, the following individuals served on Company’s Audit Committee: Frank Höegel, Malcolm Swallow and Peter Espig. Brent Omland replaced Peter Espig as an Audit Committee member on January 30, 2026. All of the members of the Audit Committee are considered independent based on the criteria for independence prescribed by Rule 10A-3 of the Exchange Act and Rule 5605(a)(2) of the NASDAQ Stock Market Rules.
The Registrant has also determined that each member of the Audit Committee is financially literate, meaning each such member has the ability to read and understand a set of financial statements that present a breadth and level of complexity of the issues that can reasonably be expected to be raised by the Company’s financial statements.
Audit Committee Financial Expert
The Registrant has determined that Brent Omland qualifies as a financial expert (as defined in Item 407(d)(5)(ii) of Regulation S-K under the Exchange Act) and Rule 5605(c)(2)(A) of the NASDAQ Stock Market Rules; and (ii) is independent (as determined under Exchange Act Rule 10A-3 and Rule 5605(a)(2) of the NASDAQ Stock Market Rules).
The SEC has indicated that the designation or identification of a person as an audit committee financial expert does not make such person an “expert” for any purpose, impose any duties, obligations or liability on such person that are greater than those imposed on members of the audit committee and the board of directors who do not carry this designation or identification, or affect the duties, obligations or liability of any other member of the audit committee or board of directors.
ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM
As of the fiscal year ended December 31, 2025, the Registrant qualifies as an “emerging growth company” under Section 3 of the Exchange Act, as a result of enactment of the Jumpstart Our Business Startups Act (the “JOBS Act”). Under the JOBS Act, “emerging growth companies” are exempt from Section 404(b) of the Sarbanes-Oxley Act of 2002, which generally requires that a public company’s registered public accounting firm provide an attestation report relating to management’s assessment of internal control over financial reporting. The Registrant qualifies as an “emerging growth company” and therefore has not included in, or incorporated by reference into, this Annual Report such an attestation report as of the end of the period covered by this Annual Report.
CODE OF ETHICS
The Registrant has not adopted a written code of ethics applicable to officers and directors of the Registrant. The Board of Directors has found that the fiduciary duties placed on individual directors by the Registrant’s governing corporate legislation and the common law and the restrictions placed by applicable corporate legislation on an individual director’s participation in decisions of the Board of Director in which the director has an interest have been sufficient to ensure that the Board of Directors operated independently of management and in the best interests of the Registrant
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table sets out the fees billed to the Registrant by Davidson & Company LLP (PCAOB ID
(in Canadian dollars) |
| Year ended December | Year ended December |
Audit Fees |
| $171,257 | $140,000(1) |
Audit-Related Fees |
| $nil | $nil |
Tax Fees |
| $nil | $nil |
All Other Fees |
| $nil | $nil |
Total Fees Paid | $171,257 | $140,000(1) |
| (1) | $70,000 was charged by Crowe and MacKay LLP and $70,000 was charged by Davidson & Company LLP for the re-audit of the financial statements for the year ended December 31, 2024. |
PRE-APPROVAL OF AUDIT SERVICES PROVIDED BY INDEPENDENT AUDITOR
The audit committee pre-approves all audit services to be provided to the Company by its independent auditors. The audit committee sets forth its pre-approval and/or confirmation of services authorized by the audit committee in the minutes of its meetings.
CONTRACTUAL OBLIGATIONS
The information provided under the heading “Management’s Discussion and Analysis – Working Capital” contained in Exhibit 99.3 is incorporated by reference herein.
NASDAQ CORPORATE GOVERNANCE PRACTICES
A foreign private issuer that follows home country practices in lieu of certain provisions of the listing rules of the Nasdaq Stock Market LLC (the “Nasdaq Stock Market Rules”) must disclose the ways in which its corporate governance practices differ from those followed by U.S. domestic companies. As required by Nasdaq Rule 5615(a)(3), the Registrant has disclosed on its website, https://nicolamining.com, each requirement of the Nasdaq Stock Market Rules that it does not follow and described the home country practice followed in lieu of such requirements. Information contained on or that can be accessed through the Registrant’s website does not constitute part of this Annual Report and the inclusion of Registrant’s website address in this Annual Report is intended to be an inactive textual reference only.
Nasdaq Stock Market Rule 5605(d)(2) provides that each member of a company’s compensation committee must be an independent director, as defined in Nasdaq Stock Market Rule 5605(a)(2). The Registrant follows applicable Canadian laws, which do not mandate that a compensation committee be comprised entirely of independent directors.
NOTICES PURSUANT TO REGULATION BTR
None.
RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION
The Registrant has adopted a compensation recovery policy (the “Clawback Policy”) as required by Nasdaq Rule 5608 and pursuant to Rule 10D-1 of the Exchange Act. A copy of the Clawback Policy attached to hereto as Exhibit 97.
At no time during or after the fiscal year ended December 31, 2025, was the Registrant required to prepare an accounting restatement that required recovery of erroneously awarded compensation pursuant to the Clawback Policy. As of December 31, 2025, there was no outstanding balance of erroneously awarded compensation to be recovered from the application of the Clawback Policy to a prior restatement.
MINE SAFETY DISCLOSURE
None.
DISCLOSURE REGARDING FOREIGN JURIDCITIONS THAT PREVENT INSEPCTIONS
None.
UNDERTAKING
The Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to this Annual Report; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.
CONSENT TO SERVICE OF PROCESS
Concurrently with the filing of this Annual Report, the Registrant will file with the Commission an Appointment of Agent for Service of Process and Undertaking on Form F-X in connection with the class of securities to which this Annual Report relates. Any change to the name or address of the Registrant’s agent for service shall be communicated promptly to the Commission by amendment to the Form F-X referencing the file number of the Registrant.
EXHIBIT INDEX
The following documents are being filed with the Commission as exhibits to this Annual Report.
Exhibit | | Description |
97 | | |
99.1 | | Annual Information Form for the Fiscal Year ended December 31, 2025 |
99.2 | | Audited Financial Statements for the Fiscal Year ended December 31, 2025 |
99.3 | | Management’s Discussion and Analysis for the Fiscal Year ended December 31, 2025 |
99.4 | | |
99.5 | | |
99.6 | | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
99.7 | | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
99.8 | | |
99.9 | | |
99.10 | | |
101.INS | | XBRL Instance - the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document |
101.SCH | | XBRL Taxonomy Extension Schema |
101.CAL | | XBRL Taxonomy Extension Calculation Linkbase |
101.DEF | | XBRL Taxonomy Extension Definition Linkbase |
101.LAB | | XBRL Taxonomy Extension Label Linkbase |
101.PRE | | XBRL Taxonomy Extension Presentation Linkbase |
104 | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized.
NICOLA MINING INC. | |||
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| By: | /s/ Peter Espig | |
| | Name: | Peter Espig |
| | Title: | Chief Executive Officer (Principal Executive Officer) |
Date: April 27, 2026
Exhibit 97
NICOLA MINING INC.
(the “Company”)
COMPENSATION RECOVERY (CLAWBACK) POLICY
(adopted January 30, 2026)
I. | Purpose and Scope |
This Compensation Recovery (Clawback) Policy (the “Policy”) is adopted to promote accountability and alignment with the long-term interests of the Company and its shareholders by providing for the recovery of certain incentive compensation from current and former Executive Officers in the circumstances described in this Policy.
The Policy applies to all “Executive Officers,” meaning the Company’s current and former executive officers as determined by the Board of Directors (the “Board”) in accordance with applicable securities laws and stock exchange rules, including Rule 10D-1 under the Securities Exchange Act of 1934, as amended, and the listing standards of The Nasdaq Stock Market LLC (“Nasdaq”), in each case as laws and rules may be amended from time to time. The Policy applies regardless of any individual agreement, plan, program, or arrangement to the contrary, except to the extent an applicable law or regulation requires otherwise.
II. | DEFINITIONS |
For the purposes hereof, the following terms have the following meanings:
(a) | “Erroneously Awarded Compensation” means, with respect to any Executive Officer, the amount of Incentive-Based Compensation received that exceeds the amount that would have been received had it been determined based on the restated or corrected Financial Reporting Measures, computed without regard to any taxes paid. |
(b) | “Financial Reporting Measure” means any measure determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, and any measure derived wholly or in part from such financial information, including stock price and total shareholder return. |
(c) | “Incentive-Based Compensation” means any compensation that is granted, earned or vested based wholly or in part upon the attainment of a Financial Reporting Measure, including but not limited to bonuses, annual or long-term cash incentives, equity awards (including restricted stock, restricted stock units, performance shares, performance share units, stock options, and stock appreciation rights) or other incentive compensation. |
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(d) | “Received” means Incentive-Based Compensation received in the fiscal period during which the relevant Financial Reporting Measure is attained, even if the payment or grant occurs after the end of that period. |
(e) | “Recovery Period” means the three completed fiscal years immediately preceding the date on which the Company is required to prepare a Restatement, plus any transition period resulting from a change in the Company’s fiscal year that falls within or immediately follows those three completed fiscal years. |
(f) | “Restatement” means an accounting restatement due to the Company’s material noncompliance with any financial reporting requirement under applicable securities laws, including (i) a restatement that corrects an error that is material to previously issued financial statements, and (ii) a restatement that corrects an error that is not material to previously issued financial statements but would result in a material misstatement if the error were corrected or left uncorrected in the current period. |
III. | MANDATORY RECOVERY UPON FINANCIAL RESTATEMENT |
In the event the Company is required to prepare a Restatement, the Company shall, except as provided in Section VI, reasonably promptly recover from any individual who served as an Executive Officer at any time during the performance period for the Incentive-Based Compensation that is subject to recovery, the amount of Erroneously Awarded Compensation.
The Company shall seek recovery of the amount of Erroneously Awarded Compensation Received during the Recovery Period. Where the Incentive-Based Compensation is based on stock price or total shareholder return, and the amount of Erroneously Awarded Compensation is not subject to direct mathematical recalculation, the Company shall determine the amount based on a reasonable estimate of the effect of the Restatement on the stock price or total shareholder return upon which the compensation was Received, and the Company shall maintain and provide documentation of the determination as required.
Recovery under this Section III is required without regard to misconduct, fault or responsibility of the Executive Officer and without regard to whether the Executive Officer had knowledge of the error.
The amount of Erroneously Awarded Compensation shall be determined without regard to any taxes paid or withheld.
IV. | RECOVERY FOR MISCONDUCT AND OTHER DETRIMENTAL ACTS |
In addition to the mandatory recovery required under Section III, the Board, or the Compensation Committee of the Board (the “Committee”), may as applicable, to the fullest extent permitted by applicable law and in its discretion, seek recovery, forfeiture, reduction, cancellation, or offset of any compensation (whether or not Incentive-Based
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Compensation) from any Executive Officer in the event of (a) fraud, willful misconduct, gross negligence or willful violation of Company policies or applicable law that causes or is reasonably likely to cause material financial, reputational or operational harm to the Company; (b) material violation of restrictive covenants or post-employment obligations; or (c) significant failure of risk management or supervisory responsibilities.
The lookback period for recovery under this Section IV shall be up to three (3) years (or such other period required by applicable laws) from the date of the misconduct or detrimental act, or such other period as the Board or the Committee determines appropriate under the circumstances, subject to applicable laws.
The Board or the Committee may determine the types and amounts of compensation subject to recovery under this Section IV, which may include cash and equity, whether vested or unvested, paid or unpaid, and any gains realized from the sale of shares acquired upon exercise, vesting, or settlement of equity awards, subject to applicable law and the terms of the applicable plans and award agreements.
V. | DETERMINATION AND PROCESS |
This Policy shall be administered by the Committee or by the Board. The Committee or the Board, as applicable, shall have full authority to interpret and apply this Policy and to make all determinations necessary for its administration, consistent with applicable laws and Nasdaq listing standards.
Following a Restatement or other triggering event under this Policy, the Committee or the Board, as applicable, shall: (a) identify each Executive Officer subject to recovery and each award or payment potentially subject to recovery; (b) determine the amount of Erroneously Awarded Compensation or other compensation to be recovered, including any reasonable estimate of the impact on stock price or total shareholder return, as applicable, and document the methodology and calculations used; (c) determine the appropriate means and timing of recovery, including repayment, forfeiture, cancellation, reduction of outstanding or future awards, setoff against amounts otherwise owed or other lawful means; (d) provide written notice to each impacted current or former Executive Officer describing the basis for recovery, the amount, and the proposed method and timeline for repayment; and (e) afford the Executive Officer an opportunity to respond within a reasonable period and consider any information submitted before making a final determination.
The Committee or the Board, as applicable, may, subject to applicable laws and any limitations in Section VI, require repayment in cash, reduce or cancel outstanding or future compensation or effect recovery through other lawful means. The Committee or the Board, as applicable, may enter into repayment arrangements or installments where appropriate, provided that recovery is pursued reasonably promptly.
To the extent feasible, incentive plans, award agreements, employment agreements, severance agreements and other compensatory arrangements with Executive Officers shall include terms that subject such compensation to this Policy and facilitate recoupment, including consent to setoff and cooperation in effecting recovery. In the
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event of any conflict, this Policy shall control except where applicable law or regulation requires otherwise.
VI. | IMPRACTICABILITY; LIMITED DISCRETION NOT TO RECOVER |
The Company shall recover Erroneously Awarded Compensation unless recovery would be impracticable as determined by the Committee or the Board, as applicable, consistent with applicable Nasdaq listing standards, including where: (a) the direct expenses paid to a third party to assist in enforcing the Policy would exceed the amount to be recovered, in which case the Company must make a reasonable attempt to recover, document such attempt, and provide such documentation to Nasdaq; (b) recovery would violate home country law where that law was adopted prior to November 28, 2022, as evidenced by an opinion of home country counsel acceptable to Nasdaq; or (c) recovery would likely cause a tax-qualified retirement plan to fail to meet the requirements of the Internal Revenue Code, to the extent such failure cannot be remedied.
The Company shall not indemnify or insure any Executive Officer against the loss of Erroneously Awarded Compensation, nor shall the Company pay or reimburse premiums for any insurance policy that covers an Executive Officer’s potential obligations under this Policy.
Subject to the requirement to recover reasonably promptly, the Committee or the Board, as applicable, retains discretion to determine the appropriate means and timing of recovery, taking into account factors such as feasibility, costs, and fairness, provided that the Committee or the Board, as applicable, shall not exercise discretion to reduce the amount of Erroneously Awarded Compensation required to be recovered except as permitted under Section VI.
VII. | LEGAL AND LISTING CONSIDERATIONS |
This Policy is intended to comply with applicable Nasdaq listing standards regarding recovery of erroneously awarded compensation and shall be interpreted and applied in a manner consistent with such standards.
Nothing in this Policy limits the Company’s or any regulator’s ability to enforce applicable laws or rules, or an Executive Officer’s obligations under applicable laws. Recovery under this Policy is in addition to, and not in lieu of, any other remedies or recourse available to the Company.
The rights of the Company to recover compensation under this Policy are in addition to any rights of recoupment, forfeiture, reduction, setoff or other remedies under any law, regulation, listing standard, governance guideline, plan, agreement or policy.
This Policy shall be governed by and construed in accordance with the laws of the Province of British Columbia, without regard to its conflict of law principles, except to the extent superseded by applicable federal law or Nasdaq listing standards.
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VIII. | DISCLOSURE AND RECORDKEEPING |
The Company shall make all disclosures concerning this Policy and any recovery of compensation required by applicable securities laws and Nasdaq listing standards, including in its annual reports and proxy statements, and shall file this Policy as an exhibit to its annual report when required.
The Company shall maintain records of Restatements, determinations of Erroneously Awarded Compensation (including reasonable estimates), recovery efforts, any determinations of impracticability, and related correspondence for not less than seven (7) years or such longer period as required by applicable laws.
IX. | ADMINISTRATION; AMENDMENTS |
The Committee or the Board, as applicable, shall administer and interpret this Policy and may adopt rules, procedures, and forms to implement it, consistent with applicable laws and Nasdaq listing standards.
The Board may amend, restate, or terminate this Policy at any time; provided that no amendment or termination shall be effective to the extent it would cause the Company to violate applicable law or Nasdaq listing standards, and provided further that any amendment shall apply to Incentive-Based Compensation Received on or after the effective date of such amendment unless otherwise required.
X. | ACKNOWLEDGMENT; CONDITION TO RECEIPT OF COMPENSATION |
As a condition to the grant, vesting, payment, or settlement of any compensation, each Executive Officer shall execute and deliver an acknowledgment in the form provided by the Company agreeing to be bound by this Policy, to cooperate fully with any efforts to recover compensation, and to consent to setoff and other recovery mechanisms to the fullest extent permitted by law.
The Company may condition the payment, vesting or settlement of compensation on the Executive Officer’s agreement to comply with this Policy and to promptly repay any amounts required to be recovered hereunder.
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Exhibit 99.1
NICOLA MINING INC.
ANNUAL INFORMATION FORM
FOR THE FINANCIAL YEAR ENDED
December 31, 2025
April 27, 2026
TABLE OF CONTENTS
ADVISORIES | 1 |
GLOSSARY OF TERMS | 5 |
CORPORATE STRUCTURE | 9 |
GENERAL DEVELOPMENT OF THE BUSINESS OF THE COMPANY | 9 |
DESCRIPTION OF THE BUSINESS OF THE COMPANY | 12 |
MINERAL PROJECTS | 15 |
RISK FACTORS | 19 |
DESCRIPTION OF CAPITAL STRUCTURE | 28 |
Market for Securities | 29 |
ESCROWED SECURITIES | 30 |
DIVIDENDS AND DISTRIBUTIONS | 30 |
DIRECTORS AND OFFICERS | 30 |
AUDIT COMMITTEE | 33 |
Legal Proceedings AND Regulatory actions | 35 |
INTERESTS OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS | 35 |
corporate governance | 35 |
AUDITOR, TRANSFER AGENT AND REGISTRAR | 39 |
MATERIAL CONTRACTS | 39 |
INTERESTS OF EXPERTS | 39 |
ADDITIONAL INFORMATION | 39 |
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SCHEDULe | |
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SCHEDULE A – Audit Committee Charter | |
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Schedule B – Compensation Committee Charter | |
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Schedule C – Corporate Governance Charter | |
ADVISORIES
In this Annual Information Form (“AIF”), unless otherwise specified or if the context otherwise requires, references to “we”, “us”, “our”, “its”, the “Company” or Nicola” mean Nicola Mining Inc. and its subsidiary, Huldra Properties Inc. The information in this AIF is stated as at December 31, 2025 unless otherwise indicated. For additional information and details, readers are referred to the audited consolidated financial statements for the year ended December 31, 2025 and notes that follow, as well as the accompanying annual MD&A (as defined herein), which are available on the Canadian Securities Administrator’s SEDAR+ System at www.sedarplus.ca.
Cautionary Statement Regarding Forward-Looking Information and Statements
This AIF contains forward-looking information and statements (collectively, “forward-looking statements”). These forward-looking statements relate to Nicola’s current expectations, estimates and projections as to future events or Nicola’s future performance and are provided to allow readers a better understanding of Nicola’s business and prospects and may not be suitable for other purposes. All statements, other than statements of historical fact, may be considered forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in, or suggested by, such forward-looking statements. Nicola believes the expectations reflected in the forward-looking statements included in this AIF are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. These statements speak only as of the date of this AIF and are expressly qualified, in their entirety, by this cautionary statement. Nicola assumes no obligation to revise or update these statements except as required pursuant to applicable securities laws
In particular, this AIF contains forward-looking statements pertaining to the following:
· | expectations regarding the Company’s future operations and strategic direction; |
· | the Company’s reliance on key management personnel and the potential impact of changes to senior leadership; |
· | the Company’s current and proposed development initiatives, operational plans and timelines; |
· | anticipated costs, schedules and availability of services necessary to support the Company’s projects and operations; |
· | environmental considerations, compliance obligations and potential liabilities arising from exploration, development, extraction and related activities; |
· | risks related to property title, as well as the acquisition, maintenance and renewal of significant licenses, concessions, and permits; |
· | the Company’s capital structure, liquidity position and funding needs for both ongoing and future initiatives; |
· | the Company’s ability to secure additional financing or access capital markets on terms that are commercially reasonable and in line with business objectives; and |
· | other statements under the heading “Management’s Discussion and Analysis”. |
With respect to forward-looking statements contained in this AIF, the Company has made assumptions regarding, among other things:
· | the Company’s continued access to adequate services and supplies, as supported by disclosures elsewhere in this document; |
· | the persistence of favourable economic conditions, stable commodity prices, and suitable foreign exchange and interest rates, as well as ongoing access to capital and debt markets; |
· | the ongoing availability of a qualified workforce to support the Company’s operations; |
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· | that exploration schedules and associated capital costs remain accurately estimated and are not materially impacted by unforeseen events or adverse weather conditions, consistent with the considerations outlined in this document; |
· | that any environmental or other legal proceedings or disputes, if initiated against the Company, are satisfactorily resolved, and that the Company maintains stable relationships with its business partners and relevant governmental authorities; |
· | the Company’s capacity to secure and maintain financing on terms that are acceptable and in line with its operational objectives; |
· | the influence of prevailing and emerging competition within the industry; |
· | potential changes to applicable laws, regulations and rules impacting the Company’s activities, as may be further detailed in this document; |
· | the Company’s ability to attract and retain key personnel critical to its success; and |
· | the absence of material adverse developments in the industry or within the broader Canadian and global economy, including those attributable to or arising from evolving global tariff policies, increased trade barriers and their resulting impact on international trade flows and broader economic stability. |
These forward-looking statements are based upon certain material factors, assumptions and analyses that were applied in drawing a conclusion or making a forecast or projection, including management’s experience and perceptions of historical trends, current market conditions and expected future developments, the timing and amount of capital and other expenditures, and other factors believed to be reasonable in the circumstances.
By their nature, forward-looking statements are subject to inherent risks and uncertainties which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct, and that objectives, strategic goals and priorities will not be achieved. A variety of material factors, many of which are beyond the control of the Company, could cause actual results to differ materially from current expectations of estimated or anticipated events or results. The risks, uncertainties and other factors that could influence actual results include, but are not limited to:
· | the Company’s potential challenges in managing its operations effectively; |
· | broad economic and business conditions, including those arising from shifting global tariff policies, increased trade barriers and their resulting effects on both international trade flows and overall economic stability; |
· | the presence of negative operating cash flow within the Company; |
· | the Company’s capacity to secure additional financing necessary to carry out the activities outlined in the AIF; |
· | possible increases in both capital and operating expenditures; |
· | fluctuations in commodity prices and in the market price of the Company’s Common Shares; |
· | inherent risks associated with the mineral exploration industry as a whole; |
· | the Company’s ability to adhere to relevant governmental regulations and standards; |
· | risks stemming from regulatory changes or governmental actions; |
· | competition within the mineral exploration sector; and |
· | the other risk factors set out in the Company’s short form base shelf prospectus dated January 29, 2026, a copy of which has been filed on SEDAR+ at www.sedarplus.ca. |
Readers are cautioned that the foregoing list of factors is not exhaustive and that other factors may emerge from time to time. It is not possible for management to predict all such factors and to assess in advance the impact of each such factor on the business of the Company, or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statement. Readers are also cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements. Although the forward-looking statements contained in this AIF are based upon what management of the Company currently believe to be reasonable assumptions, actual results, performance or achievements could differ materially from those expressed in, or implied by, the forward-looking
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statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur. The forward-looking statements contained herein are made as of the date of this AIF and, other than as specifically required by law, the Company does not assume any obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.
The Company has included the above summary of assumptions and risks related to forward-looking statements contained in this AIF in order to provide investors with a more complete perspective on the Company’s current and future operations and such information may not be appropriate for other purposes.
Additional information on these and other factors is available in the reports filed by the Company with Canadian securities regulators and available under the Company’s profile on SEDAR+ at www.sedarplus.ca. The forward-looking statements and information contained in this AIF are made as of the date hereof.
Readers are cautioned that the preparation of financial statements in accordance with international financial reporting standards in Canada requires management to make certain judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses. These estimates may change, having either a negative or positive effect on net earnings as further information becomes available and as the economic environment changes. The information contained in this AIF, including the documents incorporated by reference herein, identifies additional factors that could affect the operating results and performance of the Company. Readers are encouraged to carefully consider such factors.
Readers are also cautioned against placing undue reliance on forward-looking statements, which are given as of the date expressed in this AIF, or the MD&A disclosure incorporated by reference herein, and not to use future-oriented information or financial outlooks for anything other than their intended purpose. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The Company undertakes no obligation to publicly update or revise any forward-looking statements in this AIF or the MD&A or other disclosure incorporated by reference herein, whether as a result of new information, future events or otherwise, except as required by law.
Technical Information
Unless otherwise noted, the disclosure contained in this AIF of a scientific or technical nature for the New Craigmont Project is based on the technical report prepared by Kevin Wells, P.Geo., and James N. Gray, P.Geo. dated May 21, 2020 and entitled “NI 43-101 Technical Report on the Preliminary Copper Resource for the Southern Dump and 3060 Portal Dumps” prepared in accordance with the requirements of NI 43-101.
Any mineral reserve or resource figures, and scientific, technical, or projected economic information or estimates referred to in this AIF are estimates, and no assurances can be given that the information will materialize. Such information is based on expressions of judgment based on knowledge, mining experience, analysis of drilling results and industry practices. Valid estimates made at a given time may significantly change when new information becomes available. While the Company believes that the information included in this AIF is well established, the information by its nature is imprecise and depends, to a certain extent, upon statistical inferences which may ultimately prove unreliable. If such estimates of such information are inaccurate or are reduced in the future, this could have a material adverse impact on the Company.
Reference should be made to the full text of the Technical Report which has been filed with Canadian securities regulatory authorities pursuant to NI 43-101 and is available for review under the Company’s profile on SEDAR+ at www.sedarplus.ca.
William Whitty, P. Geo., the VP of Exploration of the Company and a “Qualified Person” under NI 43-101, reviewed and approved the written scientific and technical disclosure contained in this AIF.
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Monetary References
Except as otherwise indicated, all dollar amounts in this AIF are expressed in Canadian dollars and references to $ are to Canadian dollars. References to US$ are to United States dollars.
Securities Reference
Except as otherwise indicated, all information contained in this AIF relating to the securities of the Company is presented on a post-Consolidation (as defined herein) basis.
GLOSSARY OF TERMS
In this AIF, unless otherwise indicated or the context otherwise requires, the following terms shall have the indicated meanings. Words importing the singular include the plural and vice versa and words importing any gender include all genders. A reference to an agreement means the agreement as it may be amended, supplemented or restated from time to time.
“ADSs” | means American Depository Shares. |
“ADS Warrant” | means an ADS purchase warrant of the Company. |
“Affiliate” | means a company that is affiliated with another company as described below. A company is an Affiliate of another company if (a) one of them is the subsidiary of the other or (b) each of them is controlled by the same person. A company is “controlled” by a person if (a) voting securities of the company are held, other than by way of security only, by or for the benefit of that person and (b) the voting securities, if voted, entitle the person to elect a majority of the directors of the company. A person beneficially owns securities that are beneficially owned by (a) a company controlled by that person or (b) an Affiliate of that person or an Affiliate of any company controlled by that person. |
“AIF” | means this Annual Information Form dated April 27, 2026. |
“Applicants” | has the meaning ascribed to it under the heading Directors and Officers – Corporate Cease Trade orders, Bankruptcies, Penalties or Sanctions. |
“ARO” | means asset retirement obligations. |
“Audit Committee” | means the audit committee of the Company. |
“Audit Committee Charter” | means the audit committee charter. |
“Author” | means Kevin Wells, P. Geo. and James N. Gray, P. Geo., the authors of the Technical Report. |
“BCBCA” | means the Business Corporations Act (British Columbia), and the regulations thereunder, as amended from time to time. |
“BCSC” | British Columbia Securities Commission. |
“Blue Lagoon” | means Blue Lagoon Resources Inc. |
“Board” | means the board of directors of the Company. |
“CEO” | means chief executive officer. |
“CFO” | means chief financial officer. |
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“Common Share” | means a common share in the capital of the Company. |
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“company” | unless specifically indicated otherwise, means a corporation, incorporated association or organization, body corporate, partnership, trust, association or other entity other than an individual. |
“Company” or “Nicola” | means Nicola Mining Inc., a company incorporated under the laws of the Province of British Columbia. |
“Compensation Committee” | means the compensation committee of the Company. |
“Compensation Committee Charter” | means the compensation committee charter adopted by the Board on July 7, 2023. |
“Consolidation” | means the consolidation of the Common Shares which occurred on November 17, 2023, whereby the Company consolidated its then issued and outstanding Common Shares on the basis of one (1) Common Share for every two (2) Common Shares. |
“Corporate Governance Committee” | means the ccorporate governance committee of the Company. |
“Corporate Governance Committee Charter” | means the corporate governance committee charter adopted by the Board. |
“Court” | means the Supreme Court of British Columbia. |
“CSE” | means the Canadian Securities Exchange, operated by CNSX Markets Inc. |
“Dominion Creek Gold Property” | refers to a property consisting of eight mineral claims situated near Prince George, British Columbia, in which the Company holds a 50% ownership interest acquired from High Range Exploration Ltd. |
“DSUs” | means deferred share units of the Company. |
“Equity Incentive Plan” | means the equity incentive plan adopted by the Board on May 12, 2022, and as ratified by shareholders of the Company on July 11, 2025. |
“High Range” | Means High Range Exploration Ltd. |
“Huldra Properties” | means Huldra Properties Inc., the Company’s wholly-owned subsidiary, incorporated pursuant to the BCBCA. |
“IFRS” | means IFRS Accounting Standards as issued by the International Accounting Standards Board, applied on a consistent basis with prior periods. |
“IP” | means induced polarization. |
“LiDar” | means light detection and ranging laser system. |
“MD&A” | means Form 51-102F1 – Management’s Discussion & Analysis. |
“Merritt Mill” | refers to the Company’s milling operations in Merritt, British Columbia. |
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“Mines Act” | means the Mines Act (British Columbia), and the regulations thereunder, as amended from time to time. |
“Nasdaq” | means the Nasdaq Capital Market. |
“New Craigmont Project” | refers to a property consisting of 22 mineral claims and 10 mineral leases situated near Lower Nicola, British Columbia. |
“NGOs” | means certain non-governmental organizations. |
“NI 43-101” | means National Instrument 43-101 – Standards of Disclosure for Mineral Projects. |
“NI 51-102” | means National Instrument 51-102 – Continuous Disclosure Obligations. |
“NI 52-110” | means National Instrument 52-110 – Audit Committees. |
“NI 58-101” | means National Instrument 58‐101 – Disclosure of Corporate Governance Practices. |
“Ocean Partners UK” | Ocean Partners UK Limited, a United Kingdom-based metals trading firm. |
“Ocean Partners Holdings” | Ocean Partners Holdings Company. |
“Options” | means options to purchase Common Shares. |
“Oremex” | means Oremex Silver Inc. |
“Osisko” | means Osisko Development Corp. |
“Performance-Based Awards” | means RSUs, PSUs and DSUs collectively. |
“PSUs” | means performance share units of the Company. |
“Qualified Person” | has the meaning ascribed to such term in NI 43-101. |
“Reporting Issuer” | has the meaning ascribed to such term in the Securities Act (British Columbia), as amended. |
“RSUs” | means restricted share units of the Company. |
“SEDAR+” | means the System for Electronic Document Analysis and Retrieval. |
“Technical Report” | means the technical report of the Author dated May 21, 2020 entitled “NI 43-101 Technical Report on the Preliminary Copper Resource for the Southern Dump and 3060 Portal Dumps” prepared in accordance with the requirements of NI 43-101. |
“Treasure Mountain Project” | refers to a property consisting of 30 mineral claims and 1 mineral lease situated near Hope, British Columbia. |
“TSX” | means the Toronto Stock Exchange. |
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“TSXV” | means the TSX Venture Exchange Inc. |
“Units” | means a security of the Company comprised of one or more of any combination of Common Shares, Warrants, or other securities of the Company, issued together as a single unit pursuant to the terms of the applicable offering. |
“United States”, “USA” or “US” | means, collectively, the United States of America, its territories and possessions. |
“Warrant” | means a Common Share purchase warrant of the Company. |
“Warrant Share” | means a Common Share issued or issuable by the Company upon the valid exercise of a Warrant in accordance with its terms. |
“ZTEM” | means Z-Axis tipper electromagnetic. |
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CORPORATE STRUCTURE
Name, Address and Incorporation
The Company was incorporated by registration of its Memorandum and Articles pursuant to the provisions of the Company Act (British Columbia) on March 31, 1980 as “Huldra Silver Corporation”, with an authorized capital of 10,000,000 Common Shares without par value.
On April 21, 1980, the Company altered its Memorandum to change its name to “Huldra Silver Inc.” and to increase its authorized capital to 50,000,000 Common Shares without par value.
On April 9, 2005, the Company transitioned from the Company Act (British Columbia) to the BCBCA. At that time the Company filed its Notice of Articles, which effectively replaced its Memorandum, and adopted new Articles.
On June 23, 2010, the Company’s shareholders approved an amendment to the Company’s Notice of Articles to remove the pre-existing company provisions and to increase the authorized capital of the Company to an unlimited number of Common Shares without par value. On the same date, the Company’s shareholders approved an amendment to the Company’s Articles to bring the provisions of the Articles in line with the provisions of the BCBCA. On July 12, 2010, the Company filed a Notice of Alteration with respect to the amendment to the Notice of Articles.
On June 1, 2015, the Company changed its name from “Huldra Silver Inc.” to “Nicola Mining Inc.” and consolidated its issued and outstanding Common Shares on the basis of one (1) Common Share for every five (5) Common Shares.
On November 17, 2023, the Company completed the Consolidation whereby it consolidated its issued and outstanding Common Shares on the basis of one (1) Common Share for every two (2) Common Shares outstanding prior to the completion of the Consolidation.
The Company’s head office is located at Suite 1212 – 1030 West Georgia Street, Vancouver, British Columbia, V6E 2Y3, and its registered office is located at Suite 2501, 550 Burrard Street, Vancouver, British Columbia, V6C 2B5.
The Common Shares are listed and traded on the TSXV under the symbol “NIM” and the Frankfurt Securities Exchange under the symbol “HLI”. On April 14, 2026, the ADSs were listed and traded on Nasdaq under the symbol “NICM”. On November 3, 2021, the Company obtained Depository Trust Company eligibility in United States, and its Common Shares are quoted on OTCQB operated by the OTC Markets Group Inc. under the ticker “HUSIF”. The Company is a Reporting Issuer in British Columbia, Alberta and Ontario and files its continuous disclosure documents on SEDAR+ at www.sedarplus.ca. The Company’s filings through SEDAR+ are not incorporated by reference in this AIF.
Intercorporate Relationships
As of the date of this AIF, the Company has one wholly-owned subsidiary, Huldra Properties Inc. Huldra Properties was created pursuant to the BCBCA by an amalgamation between 0913103 B.C. Ltd. and Huldra Properties on January 1, 2016. Huldra Properties’ head office is located at 3329 Aberdeen Road, Lower Nicola, British Columbia, V0K 1Y0 and its registered office is located at Suite 2501, 550 Burrard Street, Vancouver, British Columbia, V6C 2B5.
GENERAL DEVELOPMENT OF THE BUSINESS OF THE COMPANY
Overview
Nicola is a junior exploration and custom milling company focused on the acquisition, exploration and development of mineral properties in British Columbia, Canada. The Company operates the Merritt Mill and holds interests in the New Craigmont Project, Treasure Mountain Project and Dominion Creek Gold Property.
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Three Year History
A detailed description on the significant developments of the business of the Company for the past three years is set out below.
Recent Developments since the Fiscal Year Ended December 31, 2025
On January 29, 2026, the Company issued 5,512,001 Units for gross proceeds of $4,960,800 pursuant to a private placement offering. Each Unit consisted of one Common Share and one transferable Warrant, with each Warrant entitling the holder to purchase one Common Share at a price of $1.10 per Common Share for a period of three years following the date of issuance, provided that the expiry of the Warrants can be accelerated if the closing price of the Common Shares on the TSXV is $1.70 or greater for a minimum of ten consecutive trading days, and a notice of acceleration is provided in accordance with the terms of the Warrants.
On April 14, 2026, the Company completed its underwritten public offering in the United States which consisted of 930,233 ADSs and Warrants to purchase 930,233 ADSs at an offering price of US$6.45 per ADS and accompanying Warrant. Each ADS offered represents 12 Common Shares of the Company. The gross proceeds, before deducting underwriter discounts, and commissions and offering expenses, were US$6.0 million. The Warrants have an exercise price of CAD$12.2213 per ADS, are exercisable immediately upon issuance and will expire on the fifth anniversary of the original issuance date. On April 17, 2026, the Company issued an additional 139,534 ADSs at the public offering price of US$6.45 per ADS, for total gross proceeds of approximately US$900K pursuant to the partial exercise of the underwriters’ over-allotment option in connection with Company’s public offering of ADSs and Warrants.
Fiscal Year Ended December 31, 2025
On January 3, 2025, the Company converted the remaining outstanding principal and interest totaling $49,421 from a convertible debenture, scheduled to mature on January 9, 2025, into 246,995 Common Shares.
On March 12, 2025, the Company completed a non-brokered private placement issuing 4,038,955 Units at $0.28 per Unit, for an aggregate gross proceeds of $1,130,907. The Company paid $98,455 of finder’s fees, resulting in net proceeds of $1,032,452. Each Unit consisted of one Common Share and one-half of one Warrant, with each whole Warrant entitling the holder thereof to purchase one Warrant Share at a price of $0.40 per Warrant Share for a period of three years from the closing of the offering. The Warrants are subject to acceleration in the event that, during their exercise period and after the resale restrictions on the Common Shares have expired, the Common Shares trade at a closing price of $0.60 or greater per share on the TSXV (or any other exchange where they are listed) for ten consecutive trading days, in which case the Company may, by giving notice through a press release, accelerate the expiry date of the Warrants to the thirtieth (30th) day after such notice. On July 21, 2025, the Company gave notice of the acceleration of the Warrants issued on March 12, 2025. By the accelerated expiry date of August 20, 2025, all of the 2,019,477 Warrants then outstanding had been exercised, resulting in total proceeds of $807,791.
On July 1, 2025, the Company granted 400,000 Options to an employee of the Company, which Options are exercisable into one Common Share at a price of $0.495 per Common Share until July 1, 2030.
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On July 17, 2025, the Company closed its non-brokered private placement in which it sold an aggregate of 4,350,000 Units at a price of $0.50 per Unit for gross proceeds of $2,175,000. Each Unit consists of one flow-through Common Share and one-half of one non-flow-through Warrant. Each Warrant is exercisable at a price of $0.65 and expires on July 17, 2027.
On December 3, 2025, the Company granted 2,850,000 Options to an directors, officers, consultants and employees of the Company, which Options are exercisable into one Common Share at a price of $1.00 per Common Share until December 3, 2030.
On December 3, 2025, the Company granted an aggregate of 1,015,000 RSUs to certain directors, officers and employees of the Company, which RSUs vest into Common Shares on January 1, 2027.
During the year ended December 31, 2025, debenture holders converted the principal and settled interest of $4,803,067 for the convertible debentures that matured on November 21, 2025, into 26,088,257 common shares.
During the year ended December 31, 2025, the Company issued 2,952,500 common shares from stock options exercised for total proceeds of $811,150.
During the year ended December 31, 2025, the Company issued 1,000,000 common shares to settle RSUs vested.
Fiscal Year Ended December 31, 2024
On December 3, 2024, the Company completed a flow-through private placement offering, pursuant to which it issued an aggregate of 1,641,790 Common Shares at a price of $0.335 per Common Share for aggregate gross proceeds of $550,000.
On December 18, 2024, the Company granted 500,000 Options to a consultant of the Company, which Options are exercisable into one Common Share at a price of $0.30 per Common Share until December 18, 2029.
On December 18, 2024, the Company granted an aggregate of 1,000,000 RSUs to certain directors, officers and employees of the Company, which RSUs vest into Common Shares on December 18, 2025.
On April 12, 2024, the Company completed a non-brokered private placement by the issuance of 5,499,994 Common Shares at a price of $0.23 per Common Share for aggregate gross proceeds of $1,264,999, which Common Shares were issued on a flow-through basis pursuant to the Income Tax Act (Canada).
On April 18, 2024, the Company granted an aggregate of 3,000,000 Options to certain directors, officers, consultants and employees, which Options are exercisable at a price of $0.265 until April 18, 2029.
On March 19, 2024, Warwick Bay resigned as the CFO and secretary and Sam Wong was appointed as the CFO and secretary of the Company.
Fiscal Year Ended December 31, 2023
On November 28, 2023, the Company issued 650,000 common shares at a value of $0.20 per share in connection with the exercise of 650,000 stock options for total proceeds of $130,000.
On November 21, 2023, a second tranche debenture holder elected to convert a total of $32,710 at a conversion price of $0.17 and was issued 213,529 common shares in accordance with terms of the debentures.
On November 17, 2023, the Company completed the Consolidation whereby it consolidated its issued and outstanding Common Shares on the basis of one (1) Common Share for every two (2) Common Shares.
On October 23, 2023, a second tranche debenture holder elected to convert a total of $234,776 at a conversion price of $0.17 and was issued 1,357,079 common shares in accordance with terms of the debentures.
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On October 3, 2023, the Company granted 200,000 Options to one employee, which Options are exercisable into one Common Share at a price of $0.35 per Common Share until October 3, 2028.
On August 3, 2023, the Company granted 200,000 Options to one employee, which Options are exercisable into one Common Share at a price of $0.30 per Common Share until August 3, 2028.
On July 26, 2023, the Company granted 2,000,000 Options to certain directors, officers, consultants and employes, which Options are exercisable into one Common Share at a price of $0.36 per Common Share until July 26, 2028.
On May 18 and 19, 2023, the Company issued 113,834 common shares at a value of $0.20 per share in settlement of interest of $22,767 of May 20, 2020 debentures.
On May 19, 2023, a May 20, 2020 Debenture holder elected to convert a total of $45,000 at a conversion price of $0.20 and was issued 225,000 common shares in accordance with terms of the debentures.
On May 18, 2023, May 20, 2020 Debenture holders elected to convert a total of $185,000 at a conversion price of $0.20 and the Company issued 925,000 common shares in accordance with terms of the debentures.
On May 2, 2023, the Company granted 100,000 Options to one consultant, which Options are exercisable into one Common Share at a price of $0.30 per Common Share until May 2, 2028.
On April 19, 2023, the Company issued 500,000 common shares at a value of $0.16 per share in connection with the exercise of 500,000 stock options for gross proceeds of $80,000.
On March 15, 2023, the Company issued 121,321 common shares on conversion of $20,000 of convertible debentures issued November 21, 2022, exercised at $0.17.
On February 14, 2023, the Company issued 40,262 common shares on conversion of $8,000 of convertible debentures issued January 9, 2023, exercised at $0.20.
On January 13, 2023, the Company issued 8,000,000 common shares at a value of $0.25 per share for gross proceeds of $2,000,000.
Significant Acquisitions
During the most recently completed financial year ended December 31, 2025, Nicola did not complete any acquisition that would be considered a “significant acquisition” as defined under Part 8 of NI 51-102. Accordingly, the Company has not filed a Form 51-102F4 – Business Acquisition Report in respect of any acquisition during the year.
DESCRIPTION OF THE BUSINESS OF THE COMPANY
General
Nicola is a junior resource company engaged in two principal business segments:
1. | Mineral Exploration and Development |
2. | Custom Milling Operations |
These segments are considered reportable under IFRS as they represent distinct revenue-generating activities with separate operational and financial characteristics.
Mineral Exploration and Development
The mineral exploration and development segment encompasses Nicola’s efforts to identify, acquire and advance mineral properties in British Columbia. The Company’s principal exploration assets include the New Craigmont Project, the Treasure Mountain Project
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and the Dominion Creek Gold Property. These projects are all in the exploration or pre-commercial development stage and have not yet reached commercial production and are further described below.
New Craigmont Project
The New Craigmont Project, a historic copper mine site near Merritt, British Columbia, is the Company’s flagship asset. It is permitted under Mine Permit M-68 and has been the focus of extensive geophysical surveys, soil sampling and diamond drilling. A mineral resource estimate was completed in 2020 for the Southern Mining Terraces and 3060 Portal Dump areas.
Treasure Mountain Project
The Treasure Mountain Project, located near Hope, British Columbia, is permitted for the removal of up to 60,000 tonnes of silver/lead/zinc mill feed annually but remains in care and maintenance. In June of 2025, the Company received a multi-year area-based exploration permit which allows for five years of exploration and plans to commence exploration at the MB Zone.
Dominion Creek Gold Property
The Dominion Creek Gold Property, in which Nicola holds a 50% interest and a 75% economic benefit through a profit-sharing agreement, received its bulk sample permit in March 2025. Nicola and its partner, High Range Exploration Ltd., are preparing for potential mining and milling activities in the current year.
The Company conducts its own exploration activities, including geological mapping, drilling, and geophysical surveys while subcontracting specialized services such as LiDAR and assay testing. The projects are not yet at the commercial production stage, and no sales have been made from these properties. The next steps toward commercialization include further drilling, resource definition and economic assessments. The Company has not disclosed specific cost estimates or timelines for achieving commercial production.
Custom Milling Operations
The custom milling operations segment is centered around the Merritt Mill, a fully permitted and operational facility located near Merritt, British Columbia. The mill is licensed to process up to 200 tonnes per day of silver, lead and gold ore. Nicola provides toll milling services to third-party mining companies, producing concentrate that is sold to offtake partners such as Ocean Partners UK. In 2025, the Company generated $1.54 million in milling revenue and $0.8 million from gravel, ash, soil and other income which compares to $818,000 in milling revenue and $1.97 million from gravel, ash, soil and other income in 2024 and $1.62 million and $8.15 million, respectively, in 2023. All revenue was derived from sales to external customers; there were no sales to joint ventures, equity-accounted entities or controlling shareholders. The method of providing milling services involves receiving ore shipments from clients, processing the ore through crushing, grinding and flotation circuits at the Merritt Mill, and producing gold and silver concentrate. The concentrate is then shipped to offtake partners for sale. The Company also provides ancillary services such as storage, logistics coordination, and compliance with environmental and safety regulations.
The Merritt Mill has processed ore from clients including Blue Lagoon, Talisker Resources Ltd. and Osisko under profit-sharing agreements. The facility underwent upgrades in 2023 and 2024 to support increased throughput and quality control. The Company continues to seek new custom milling contracts to support its cash flow and maintain operational flexibility.
Production and Services
The Company’s custom milling services are conducted at its wholly-owned Merritt Mill, located near Merritt, British Columbia. The Merritt Mill is a fully permitted facility authorized under the Mines Act to process up to 200 tonnes per day of silver, lead and gold ore. The mill was originally constructed in 2012 and has undergone extensive modifications since 2017, including upgrades completed in 2023 to enhance its processing capabilities. The Company provides toll milling services to third-party mining companies, whereby it processes ore into concentrate on behalf of clients. The concentrate is then sold to offtake partners, such as Ocean Partners UK, under purchase agreements. Nicola has entered into profit-sharing agreements with clients including Blue Lagoon and Osisko, under which it receives a share of the proceeds from the sale of processed concentrate.
The method of providing milling services involves receiving ore shipments from clients, processing the ore through crushing, grinding and flotation circuits at the Merritt Mill, and producing gold and silver concentrate. The concentrate is then shipped to offtake partners
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for sale. The Company also provides ancillary services such as storage, logistics coordination and compliance with environmental and safety regulations.
In addition to milling, Nicola is actively engaged in mineral exploration and development at its New Craigmont, Treasure Mountain and Dominion Creek properties. These projects are in the exploration stage and are not yet producing. The Company’s exploration activities include geological mapping, soil and rock sampling, geophysical surveys (including ZTEM and IP), and diamond drilling. These activities are conducted by Nicola’s in-house geological team, with certain specialized services subcontracted to third-party providers. The Company has received multi-year area-based permits that allow for extensive exploration activities, including trenching and drilling, through to 2027.
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The Company does not currently produce any mineral products for sale from its exploration properties.
Specialized Skill and Knowledge
Nicola’s operations require specialized geological, metallurgical and engineering expertise, particularly in mineral exploration, resource modelling and custom milling. The Company relies on experienced geologists for exploration planning and execution, including geophysical surveys, soil sampling, and diamond drilling. Metallurgical knowledge is essential for operating and optimizing the Merritt Mill, which processes complex ore types into concentrate. Nicola also depends on regulatory and permitting expertise to navigate environmental and mining legislation. These skills are sourced through a combination of in-house personnel and external consultants. The Company has been able to access the required expertise without material constraint.
Competitive Conditions
The Company operates in a highly competitive environment. In mineral exploration, it competes with junior and senior mining companies for land, capital, and talent—many with greater resources. In custom milling, Nicola’s Merritt Mill competes with other processors on capacity, turnaround and pricing. Its competitive edge lies in its fully permitted 200 tpd facility, flexible profit-sharing agreements and established client relationships. However, limited financial resources and reliance on third-party contracts constrain its position. Continued success depends on exploration outcomes, operational efficiency, and access to capital.
Cycles
The Company’s business segments, mineral exploration and custom milling, are subject to seasonal and cyclical influences. Exploration activities are typically concentrated in the spring through autumn months due to weather and ground conditions in British Columbia, which limit access and drilling during winter. Custom milling operations at the Merritt Mill are influenced by the availability and scheduling of third-party mill feed contracts, which can vary throughout the year. As such, both revenue and expenses may fluctuate significantly between quarters depending on project activity and contract timing.
Economic Dependence
Nicola is substantially dependent on a key offtake and financing agreement with Ocean Partners UK, a metals trading firm. This agreement governs the sale of gold and silver concentrate produced at the Company’s Merritt Mill and includes a revolving prepayment facility. Under the amended agreement signed on July 12, 2022, Ocean Partners UK agreed to purchase concentrate from Nicola and increased the revolving prepayment facility from US$500,000 to US$3,000,000. Nicola has drawn down US$750,000 under this facility, which was repaid December 29, 2022. The agreement provides critical working capital support and a guaranteed buyer for concentrate produced under custom milling contracts, including those with Blue Lagoon and Osisko. The Company’s reliance on this agreement is significant, as Ocean Partners UK accounted for 100% of Nicola’s milling revenue in both 2023 and 2024. The agreement also enables Nicola to process third-party ore at its Merritt Mill, which is a core component of its business model.
The Company also entered into a Mining and Milling Profit Share Agreement with High Range for the Dominion Creek Property. This agreement entitles Nicola to a 75% economic interest in the project and includes provisions for funding initial development and processing ore at the Merritt Mill.
These contracts are essential to Nicola’s operations and financial viability, providing both revenue generation and access to capital.
Changes to Contracts
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The Company does not currently anticipate any material renegotiation or termination of contracts that would significantly affect its business. However, the Company’s operations rely heavily on custom milling agreements, particularly with Ocean Partners UK. Any changes to this offtake agreement could impact revenue and working capital. Similarly, profit-sharing agreements with High Range and Osisko are integral to the Merritt Mill’s utilization. While no changes are expected, any termination or renegotiation of these agreements could adversely affect operational continuity and financial performance.
Environmental Protection
Nicola is subject to environmental protection regulations under the Mines Act and related provincial legislation. These requirements have a material impact on the Company’s capital expenditures, primarily through its asset retirement obligations or “ARO”, which totaled $13.8 million as of December 31, 2025. The ARO reflects estimated future reclamation and closure costs for the Merritt Mill and Treasure Mountain Project, including tailings management and site remediation.
In 2025, the Company recognized a $0.9 million reduction in ARO due to changes in estimates, partially offset by $0.5 million in accretion expense. These environmental liabilities directly affect the Company’s net loss and working capital position. While no immediate capital outlays were required in 2025, the obligations are expected to result in significant future expenditures over the next 8 to 15 years.
Environmental compliance also influences the Company’s competitive position, as it must maintain sufficient financial assurance (e.g., $1.4 million in restricted cash) to satisfy regulatory bonding requirements. These requirements may limit flexibility in capital allocation and increase the cost of operations relative to peers with lower environmental liabilities.
Nicola remains committed to maintaining compliance and proactively managing its environmental responsibilities.
Employees
As of the date of this AIF, the Company has 25 employees.
MINERAL PROJECTS
The Company’s principal mineral project is the New Craigmont Project in Lower Nicola, British Columbia. For the purposes of mineral project disclosure required to be included in this AIF, the New Craigmont Project is the Company’s sole material mineral project.
In addition to the New Craigmont Project, the Company holds a 100% interest in 30 mineral claims and 1 mineral lease comprising the Treasure Mountain Project located near Hope, British Columbia, subject to a 2% net smelter royalty. The Company also holds a 50% interest in 8 mineral claims comprising the Dominion Creek Gold Property located near Prince George, British Columbia.
New Craigmont Project
The following is an updated reproduction of the summary section from the Technical Report. Definitions contained in this section shall have the meanings ascribed to such definitions in the Technical Report and may not match definitions used elsewhere in this AIF. The Technical Report was prepared in accordance with NI 43-101 and has been filed with the securities regulatory authorities in Alberta, British Columbia and Ontario. Portions of the following information are based on assumptions, qualifications and procedures which are not fully described herein.
The Technical Report is incorporated by reference into this AIF. Readers are cautioned that the following summary should be read in the context of the qualifying statements, procedures and accompanying discussion within the complete Technical Report, and this summary is qualified in its entirety by the Technical Report.
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Property Description and Location
The Craigmont Project is in southern British Columbia, 18 km northwest of the city of Merritt. The UTM coordinates for the Craigmont Project are 5563500 North and 648500 East (geographic projection: NAD 83, Zone 10N). Access to the property is provided by paved and gravel roads. Additional mineral claims totaling 828 hectares were staked in December 2019, as a result the Craigmont Project now consists of 22 mineral tenures and 10 mineral leases with a total area of 10,913 hectares.
Ownership
The Craigmont Property is currently 100% owned by Nicola On March 3, 2011, Nicola agreed to buy all the outstanding shares of Craigmont Holdings Ltd. in consideration for certain cash and share payments.
On November 19, 2015, Nicola acquired the remaining shares of Craigmont Holdings Ltd. for a 2.0% net smelter royalty.
History
The property covers a large area along the southern extents of the Guichon Batholith, which is host to many copper prospects that have been intermittently explored since the early 1930’s. The most important discovery to date has been the past producing Craigmont Copper-iron mine located in the central portion of the property.
The Craigmont Mine was operated by Craigmont Mines Ltd. from 1961 to 1967 as an open pit mine before moving to an underground sub-level cave operation from 1967 to 1982. The mine produced in excess of 36,750,000 tons at an average grade of 1.30% Cu, containing approximately 900 000 000 lbs. of copper. The mine was shut down in 1982 due to low copper prices.
Following the mine shutdown in 1982, Craigmont shipped up to 60,000 tonnes of clean metallurgical magnetite per year until 1992 from its stockpile to coal producers throughout North America for use in the coal flotation process. After 1992, Craigmont continued to produce a limited amount of magnetite product for the coal industry from re-worked iron fines in the tailings pond. This operation was shut down in 2014 due to economic grades of magnetite being exhausted.
Status of Exploration
Nicola has been actively exploring the property since the project ownership was consolidated in 2015. This work has consisted of over 18,000m of diamond drilling, property-wide geological mapping, widespread soil sampling, IP surveys, and property-wide aeromagnetic and ZTEM surveys. Additionally, 1869m of RC drilling at the historic mine dump and the higher grade 3060 portal.
Geology and Mineralization
The geology of the property is underlain by an east-northeast trending, steeply dipping volcanic pile of Upper Triassic Nicola Group rocks that are bound to the north by the multistage Early Jurassic-Late Triassic Guichon Creek Batholith and unconformably overlain by the Middle and Upper Cretaceous Spences Bridge Group. Most of the area is covered by thick gravel overburden.
Near the project area, the Border phase of the Guichon Creek Batholith varies in composition from quartz diorite to granodiorite and intrude the Nicola Group, a thick volcanic and sedimentary series of agglomerate, breccia, andesitic flows, limestone, argillite and greywacke. Nicola Group sediments immediately adjacent to the batholith are
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hornfelsed quartzo-feldspathic greywackes. Spences Bridge Group agglomerates and flows dip approximately 15 degrees to the south and crop out in the areas south and west of the Craigmont mine area.
The property holds at least two types of mineralization described as copper-iron skarn and copper porphyry. Carbonate-rich, silicate-rich or intrusive rocks along the southern flank of the Guichon Batholith host the two types of mineralization. Within the property, mineralization is commonly associated with copper and iron skarn assemblages. Chalcopyrite, magnetite, specularite and minor bornite are principal minerals. Accessory assemblages at the Craigmont Mine include supergene minerals such as chalcocite and native copper have developed above the mineralized body. Gold, molybdenum and silver contents are generally low.
Several major faults cut through the property. Faults around the Craigmont mine include the northwest trending east and West Embayment Fault, the Mine East Fault and the East-West Fault.
Sample Database and Validation
A review of the sample collection and analysis practices used during the various drilling campaigns indicates that this work was conducted using generally accepted industry procedures.
Sampling programs conducted by Nicola were monitored using a QA/QC program that is typically accepted in the industry. It is the QPs’ opinion that the database is sufficiently accurate and precise to generate a mineral resource estimate.
Mineral Resource Estimate
Two areas of Inferred Mineral Resource have been outlined, both consisting of historically subeconomic material remaining from past mining at the New Craigmont Project. A portion of the southern mine dumps, covering an area of 82.5 hectares, has been tested at a drill spacing of approximately 100 m. A smaller area (1.4 ha) of stockpiled material, adjacent to the 3060 portal, is of much smaller tonnage but of higher grade and is generally drilled at a 10-20 m spacing.
Resource tonnage is based on the volume between a LiDAR survey of current topography and a recent contractor generated pre-mine surface based on historic contour maps tied into current survey control. Density was assigned based on historic and current assumptions; no bulk density measurements are currently available. Future work must include density measurement work. The southern dump material was assigned a density of 1.8 t/m3; portal area material was assigned a density of 2.15 t/m3.
Inverse distance weighting was chosen as the most appropriate grade estimation approach due in part to the fact that the material being evaluated is not, in its present form, a naturally occurring mineral deposit. The southern dump material was estimated using 15x15x8 m blocks with 4 m composites from 60 RC holes. The 3060 portal area material was estimated using 5x5x4 m blocks and 4 m composites from 39 RC holes.
Material was classified as Inferred Mineral Resource where it was within the area of reasonably consistent drill spacing. In the southern dump area, blocks classified as Inferred are generally within 100 m of the closest sample and the drill spacing is approximately 100 m. In the portal area, drill spacing is typically less than 25 m and the resource extends a maximum of 40 m beyond drilling to the edge of the pile.
In order to establish reasonable prospects of eventual economic extraction a three-year trailing average copper price of US$2.8/lb and an anticipated annual production scenario was considered and a cut-off grade of 0.06% copper is deemed appropriate. The resource is included in Table 1.1.
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Ongoing Exploration
Ongoing exploration at New Craigmont consists of drilling at several targets across the property, all of which show signs of porphyry-style alteration, mineral chemistry and mineralization. To date, over 8000 m of core has been drilled at porphyry targets throughout the property, and data analysis is ongoing. Geophysical and geochemical data from across the property is being compiled and analyzed to help generate exploration targets. Nicola collaborated with the Mineral Deposit Research Unit (MDRU) at UBC on a recently completed academic study which concluded that Craigmont is part of a porphyry-linked skarn system.
Recommendations
The following work is recommended for the New Craigmont Project:
· | Drill a large untested ZTEM anomaly (Jotun target) north of the historical pit, which could represent a porphyry system (planned for 2026). |
· | Create a 3D geological model of the property, particularly of the target areas. |
· | Continue to collect XRF and SWIR data from the core on site to incorporate into in the geochemical/geophysical dataset to help refine porphyry targeting. |
· | Mobile Metal Ion (MMI) soil sampling over areas of interest to refine drill targets. |
· | Airborne Audio-Frequency Magnetotellurics (MobileMT) survey as required to refine geophysical targeting across the property. |
· | Upgrading the historical waste dump resource by: |
o | Trench sampling or sonic drilling to determine the grade and volume of the fine material. |
o | Bulk density measurements. |
o | Additional testing on the cost benefit of Tomra sorting. |
o | Additional RC or sonic drilling at a spacing of 50 m on the Northern dump. |
Exploration, Development, and Production
Current exploration consists of compiling and validating current and historical data for New Craigmont into a unified database for targeting and geological modelling. Ongoing drilling during the summer with the possibility of geophysical surveys and soil sampling are being contemplated for New Craigmont. Exploration drilling is planned for 2026 on an untested tarted (MB Zone) at Treasure Mountain.
For more information, please see the Technical Report a copy of which is filed under Nicola’s profile on SEDAR+ at www.sedarplus.ca.
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RISK FACTORS
The following specific factors could materially adversely affect the Company and should be considered when deciding whether to make an investment in the Company. You should carefully consider the risks described below, which are qualified in their entirety by reference to, and must be read in conjunction with, the detailed information appearing elsewhere in this AIF, and all other information contained in this AIF. The risks and uncertainties described in this AIF and the information incorporated by reference herein are those the Company currently believes to be material, but they are not the only ones the Company will face. If any of the following risks, or any other risks and uncertainties that the Company has not identified or that it currently considers not to be material, actually occur or become material risks, the Company’s business, prospects, financial condition, results of operations and cash flows, and consequently the price of the Common Shares could be materially and adversely affected. In all these cases, the trading price of the Company’s securities could decline, and prospective investors could lose all or part of their investment.
Investors should carefully consider the risk factors set out below and consider all other information contained herein and in the Company’s other public filings before making an investment decision.
Any reference to “the Company” or “Nicola” in the risk factors refers to the Company and its subsidiary together on a consolidated basis.
Insufficient Capital
The Company currently has minimal revenue producing operations and may report a working capital deficit from time to time. To maintain its activities, the Company will require additional funds which may be obtained either by the sale of equity capital, debt financing, government grants or by entering into an option or joint venture agreement with a third party providing such funding. There is no assurance that the Company will be successful in obtaining such additional financing; failure to do so could result in the loss or substantial dilution of the Company. The Company’s unallocated working capital may not suffice to fund its business goals and objects as stated elsewhere in the AIF.
The Company expects to continue to incur negative investing and operating cash flows until such time as it enters into commercial production of its properties. This will require the Company to deploy its working capital to fund such negative cash flow and to seek additional sources of financing. There is no assurance that any such financing sources will be available or sufficient to meet the Company’s requirements. There is no assurance that the Company will be able to continue to raise equity capital or that the Company will not continue to incur losses.
Lack of Operating Cash Flow
The Company currently has a minimal source of operating cash flow and is expected to continue to do so for the foreseeable future. The Company’s failure to achieve profitability and positive operating cash flows could have a material adverse effect on its financial condition and results of operations. If the Company sustains losses over an extended period of time, it may be unable to continue its business. Further exploration and development of its mineral properties will require the commitment of substantial financial resources. It may be several years before the Company may generate any substantial revenues from operations, if at all. There can be no assurance that the Company will realize revenue or achieve profitability.
Resale of Common Shares
The continued operation of the Company will be dependent upon its ability to generate operating revenues and to procure additional financing. There can be no assurance that any such revenues can be generated or sustained or that other financing can be obtained. If the Company is unable to generate such revenues or obtain such additional
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financing, any investment in the Company may be lost. In such event, the probability of resale of the Common Shares purchased would be diminished.
Exploration of Mineral Property Interests
Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities to justify commercial operations or that the funds required for development can be obtained on a timely basis. The discovery of mineral deposits is dependent upon a number of factors. The commercial viability of a mineral deposit once discovered is also dependent upon a number of factors, some of which relate to particular attributes of the deposit, such as size, grade and proximity to infrastructure, and some of which are more general such as commodity prices and government regulations, including environmental protection. Most of these factors are beyond the control of the Company. In addition, because of these risks, there is no certainty that the expenditures to be made by the Company on the exploration of its various mineral properties as described herein will result in the discovery of commercial quantities of ore. The Company has no history of operating earnings and the likelihood of success must be considered in light of problems, expenses, etc. which may be encountered in establishing a business.
Exploring and developing natural resource projects bears a high potential for all manner of risks. Additionally, few exploration projects successfully achieve development due to factors that cannot be predicted or foreseen. Moreover, even one such factor may result in the economic viability of a project being detrimentally impacted, such that it is neither feasible nor practical to proceed. Natural resource exploration involves many risks, which even a combination of experience, knowledge and careful evaluation may not be able to overcome. Operations in which the Company has a direct or indirect interest will be subject to all the hazards and risks normally incidental to exploration, development and production of natural resources, any of which could result in work stoppages, damage to property, and possible environmental damage. If any of the Company’s exploration programs are successful, there is a degree of uncertainty attributable to the calculation of resources and corresponding grades and in the analysis of the economic viability of future development and mineral extraction. In addition, the quantity of reserves and resources may vary depending on commodity prices and various technical and economic assumptions. Any material change in quantity of reserves, grade or recovery ratio, may affect the economic viability of the Company’s properties.
Exploration, Development and Production Risks
The exploration for and development of minerals involves significant risks, which even a combination of careful evaluation, experience and knowledge may not eliminate. Few properties that are explored are ultimately developed into producing mines. There can be no guarantee that the estimates of quantities and qualities of minerals disclosed will be economically recoverable. With all mining operations there is uncertainty and, therefore, risk associated with operating parameters and costs resulting from the scaling up of extraction methods tested in pilot conditions. Mineral exploration is speculative in nature and there can be no assurance that any minerals discovered will result in an increase in the Company’s resource base.
The Company’s operations will be subject to all of the hazards and risks normally encountered in the exploration, development and production of minerals. These include unusual and unexpected geological formations, rock falls, seismic activity, flooding and other conditions involved in the extraction of material, any of which could result in damage to, or destruction of, mines and other producing facilities, damage to life or property, environmental damage and possible legal liability. In addition, operations are subject to hazards that may result in environmental pollution, and consequent liability that could have a material adverse impact on the business, operations and financial performance of the Company.
Substantial expenditures are required to establish Ore Reserves through drilling, to develop metallurgical processes to extract the metal from the ore and, in the case of new properties, to develop the mining and processing facilities and infrastructure at any site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities to
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justify commercial operations or that funds required for development can be obtained on a timely basis. The economics of developing gold and other mineral properties is affected by many factors including the cost of operations, variations in the grade of ore mined, fluctuations in metal markets, costs of processing equipment and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection. The remoteness and restrictions on access of properties in which the Company has an interest will have an adverse effect on profitability as a result of higher infrastructure costs. There are also physical risks to the exploration personnel working in the terrain in which the Company’s properties will be located, often in poor climate conditions.
The long-term commercial success of the Company depends on its ability to explore, develop and commercially produce minerals from its properties and to locate and acquire additional properties worthy of exploration and development for minerals. No assurance can be given that the Company will be able to locate satisfactory properties for acquisition or participation. Moreover, if such acquisitions or participations are identified, the Company may determine that current markets, terms of acquisition and participation or pricing conditions make such acquisitions or participation uneconomic.
Mineral Resources and Reserves
The figures for mineral resources for the Treasure Mountain Project disclosed in the Company’s Annual Information Form for the year ended December 31, 2012, and in its technical report filed on SEDAR on June 12, 2012, are only estimates. Mineral reserves at the Treasure Mountain Project have not been defined therefore the mineral resources currently cannot be considered ore.
The figures for Inferred Copper Resource for the Southern Dump and 3060 Portal Dumps at New Craigmont Project in the Technical Report and final ALS Metallurgy Laboratory report for upgrading and copper recovery test work filed on SEDAR on June 12, 2020, are only estimates. The inferred mineral resources are not mineral reserves as the Company has not yet demonstrated the economic viability. There is no certainty that any expenditures made in the exploration of the Company’s mineral properties will result in identification of commercially recoverable quantities of ore or that ore reserves will be mined or processed profitably. In addition, substantial expenditures will be required to develop the mining and processing facilities and infrastructure at any site chosen for mining.
Uncertainty of Economic Viability of Production from the Treasure Mountain Project
The Company has not undertaken any preliminary economic assessment or preliminary feasibility study with respect to the Treasure Mountain Project or any of its other projects and does not intend to undertake such a study or assessment. There are significant risks associated with making a production decision without a valid, current, economic analysis and the Company may subsequently determine that recommencing operations at the Treasure Mountain Project is not economically feasible.
Governmental Regulation and Policy
Mining operations and exploration activities are subject to extensive laws and regulations. Such regulations relate to production, development, exploration, exports, imports, taxes and royalties, labor standards, occupational health, waste disposal, protection and remediation of the environment, toxic and radioactive substances, transportation safety and emergency response, and other matters. Compliance with such laws and regulations increases the costs of exploring, developing, constructing, and operating projects. It is possible that, in the future, the costs, delays and other effects associated with such laws and regulations may impact decisions of the Company with respect to the exploration and development of properties, such as the properties in which the Company has an interest. The Company will be required to expend significant financial and managerial resources to comply with such laws and regulations. Since legal requirements change frequently, are subject to interpretation and may be enforced in varying degrees in practice, the Company is unable to predict the ultimate cost of compliance with these requirements or their effect on operations. Furthermore, future changes in governments, regulations and policies and practices, such as those affecting exploration and development of the Company’s properties could materially
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and adversely affect the results of operations and financial condition of the Company in a particular year or in its long-term business prospects.
No Assurances
There is no assurance that economic mineral deposits will ever be discovered, or if discovered, subsequently put into production. Most exploration activities do not result in the discovery of commercially mineable deposits. Mining exploration is highly speculative in nature, involves many risks and frequently is not productive. Most exploration projects do not result in the discovery of commercially mineable ore deposits and no assurance can be given that any anticipated level of recovery of mineral reserves will be realized or that any identified mineral deposit will ever qualify as a commercially mineable (or viable) ore body which can be legally and economically exploited.
Indigenous Peoples’ title claims and rights to consultation and accommodation may affect our existing operations as well as development projects and future acquisitions.
Governments in many jurisdictions must consult Indigenous Peoples with respect to grants of mineral rights and the issuance or amendment of exploration and project authorizations. Consultation and other rights of Indigenous Peoples may require accommodations, including undertakings regarding financial compensation, employment and other matters in impact and benefit agreements. This may affect the Company’s ability to acquire, explore or develop, within a reasonable time frame, mineral titles in these jurisdictions and may affect the timetable and costs of development of mineral properties in these jurisdictions. The risk of unforeseen aboriginal title claims also could affect existing operations as well as exploration and development projects and future acquisitions. These legal requirements may increase the Company’s operating costs and affect the Company’s ability to expand its operations or to explore and develop new projects.
Community Relations and License to Operate
The Company’s relationship with the host communities where it operates is critical to ensure the future success of its existing operations and the construction and development of its projects. There is an increasing level of public concern relating to the perceived effect of mining activities on the environment and on communities impacted by such activities. Certain non-governmental organizations (“NGOs”), some of which oppose globalization and resource development, are often vocal critics of extractive industries and their practices. Adverse publicity generated by such NGOs or others related to extractive industries generally, or the Company’s exploration or development activities specifically, could have an adverse effect on the Company’s reputation. Reputation loss may result in decreased investor confidence, increased challenges in developing and maintaining community relations and an impediment to the Company’s overall ability to advance its projects, which could have a material adverse impact on the Company’s results of operations, financial condition and prospects. While the Company is committed to operating in a socially responsible manner, there is no guarantee that the Company’s efforts in this respect will mitigate this potential risk.
Title Risks
Although the Company has exercised the usual due diligence with respect to determining title to properties in which it has a material interest, there is no guarantee that title to such properties will not be challenged or impugned. The Company’s mineral property interests may be subject to prior unregistered agreements or transfers or native land claims and title may be affected by undetected defects. Surveys have not been carried out on any of the Company’s mineral properties, therefore, in accordance with the laws of the jurisdiction in which such properties are situated; their existence and area could be in doubt. Until competing interests in the mineral lands have been determined, the Company can give no assurance as to the validity of title of the Company to those lands or the size of such mineral lands.
Uninsurable Risks
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In the course of exploration, development and production of mineral properties, certain risks, and in particular, unexpected or unusual geological operating conditions including rock bursts, cave-ins, fires, flooding and earthquakes may occur. It is not always possible to fully insure against such risks and the Company may decide not to take out insurance against such risks as a result of high premiums or other reasons. Should such liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of the securities of the Company.
Future Share Issuances May Affect the Market Price of the Common Shares and Results in Significant Dilution
In order to finance future operations, the Company may raise funds through the issuance of additional Common Shares or the issuance of debt instruments or other securities convertible into Common Shares. The Company cannot predict the size of future issuances of Common Shares or the issuance of debt instruments or other securities convertible into Common Shares or the dilutive effect, if any, that future issuances and sales of the Company’s securities will have on the market price of the Common Shares.
Dilution
Common Shares, including rights, warrants, special warrants, subscription receipts and other securities to purchase, to convert into or to exchange into Common Shares, may be created, issued, sold and delivered on such terms and conditions and at such times as the Board may determine. In addition, the Company may issue additional Common Shares from time to time pursuant to Common Share purchase warrants and the options to purchase Common Shares issued from time to time by the Board. The issuance of these Common Shares could result in significant dilution to holders of Common Shares.
Operational Risks
The Company will be subject to a number of operational risks and may not be adequately insured for certain risks, including: environmental contamination, liabilities arising from historic operations, accidents or spills, industrial and transportation accidents, which may involve hazardous materials, labor disputes, catastrophic accidents, fires, blockades or other acts of social activism, changes in the regulatory environment, impact of non-compliance with laws and regulations, natural phenomena such as inclement weather conditions, floods, earthquakes, ground movements, cave-ins, and encountering unusual or unexpected geological conditions and technological failure of exploration methods.
There is no assurance that the foregoing risks and hazards will not result in damage to, or destruction of, the property of the Company, personal injury or death, environmental damage or, regarding the exploration or development activities of the Company, increased costs, monetary losses and potential legal liability and adverse governmental action. These factors could all have an adverse impact on the Company’s future cash flows, earnings, results of operations and financial condition.
Additionally, the Company may be subject to liability or sustain loss for certain risks and hazards against which the Company cannot insure or which the Company may elect not to insure because of the cost. This lack of insurance coverage could have an adverse impact on the Company’s future cash flows, earnings, results of operations and financial condition.
Environmental Risks
All phases of the mineral exploration and development business present environmental risks and hazards and are subject to environmental regulations. Compliance with such legislation and regulations can require significant expenditures and a breach could result in the imposition of fines and penalties, some of which may be material. Environmental legislation is evolving in a manner which may lead to stricter standards and enforcement, larger fines and liability and potentially increased capital expenditures and operating costs. No assurance can be given that the application of environmental laws to the business and operations of the Company will not result in a curtailment of
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exploration or production, material increase in the costs of production, development, or exploration activities, or otherwise adversely affect the Company’s financial condition, results of operations or prospects.
Regulatory and Permitting
Regulatory and permitting requirements have a significant impact on the Company’s operations and can have a material and adverse effect on future cash flow, results of operations and financial condition. To conduct mineral exploration and mining activities, the Company must obtain or renew exploration or mining permits and licenses in accordance with the relevant mining laws and regulations required by governmental authorities having jurisdiction over mineral projects. There is no guarantee that the Company will be granted the necessary permits and licenses, that they will be renewed, or that the Company will be in a-position to comply with all the conditions that are imposed. Mining is subject to potential risks and liabilities associated with pollution and the disposal of waste from mineral exploration and mining operations. Costs related to discovery, evaluation, planning, designing, developing, constructing, operating, closing, and remediating mines and other facilities in compliance with these laws and regulations are significant. In addition to environmental protection, applicable laws and regulations govern employee health and safety. Not complying with these laws and regulations can result in enforcement actions that may include corrective measures requiring capital expenditures, installation of additional equipment, remedial action, and changes to operating procedures resulting in additional costs and temporary or permanent shutdown of operations. The Company may also be required to compensate those parties’ suffering loss or damage and may face civil or criminal fines or penalties for violating certain laws or regulations. Changes to these laws and regulations in the future could have an adverse effect on the Company’s cash flow, results of operations and financial condition. Further, the issuance of permits may be subject to review by third parties who may challenge future permitting and the validity of existing permits based on, among other things, the government’s obligation to consult and accommodate.
Volatility of Mineral Prices
The Company’s revenues, if any, are expected to be in large part derived from the extraction and sale of precious and base minerals and metals. Factors beyond the control of the Company may affect the marketability of metals discovered, if any. Metal prices have fluctuated widely, particularly in recent years. Consequently, the economic viability of any of the Company’s exploration projects cannot be accurately predicted and may be adversely affected by fluctuations in mineral prices. In addition, currency fluctuations may affect the cash flow which the Company may realize from its operations, since most mineral commodities are sold in a world market in US dollars.
Infrastructure
Exploration, development and processing activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important elements of infrastructure, which affect access, capital and operating costs. The lack of availability on acceptable terms or the delay in the availability of any one or more of these items could prevent or delay exploration on the Company’s mineral properties. If adequate infrastructure is not available in a timely manner, there can be no assurance that the exploration or development will be commenced or completed on a timely basis on the Company’s mineral properties, if at all. Furthermore, unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of necessary infrastructure could adversely affect our operations.
Global Financial Conditions
Global financial conditions have from time to time been subject to periods of elevated volatility. Government debt, the risk of sovereign defaults, political instability and wider economic concerns in many countries have been causing significant uncertainties in the markets. Disruptions in the credit and capital markets can have a negative impact on the availability and terms of credit and capital. Uncertainties in these markets could have a material adverse effect on the Company’s liquidity, ability to raise capital and cost of capital. High levels of volatility and market turmoil
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could also adversely impact commodity prices, exchange rates and interest rates and have a detrimental effect on the Company’s business.
Resulting Effects of Broad Economic and Business Conditions
The Company’s operations and financial performance may be adversely affected by broad economic and business conditions, including those driven by shifting global tariff policies, the imposition or escalation of trade barriers, and other geopolitical developments. These factors can disrupt international trade flows, reduce market stability, and limit growth opportunities. Uncertainty surrounding global economic conditions—such as inflationary pressures, currency volatility, and supply chain disruptions—may impact demand for minerals, cost structures, and strategic planning. While the Company seeks to remain adaptable, there can be no assurance that it will be able to mitigate all risks associated with such macroeconomic fluctuations.
Executive Employee Recruitment and Retention
The success of the Company will be dependent upon the performance of its management and key employees. The loss of any key executive or manager of the Company may have an adverse effect on the future of the Company’s business. The number of persons skilled in acquisition, exploration and development of mining properties is limited and competition for such persons is intense. As the Company’s business activity grows, it will require additional key financial and administrative personnel as well as additional operations staff. Recruiting qualified personnel as the Company grows will be critical to its success. As the Company’s business activity grows, it will require additional key financial, administrative, engineering, geological and other personnel. If the Company is not successful in attracting and training qualified personnel, the efficiency of its operations could be affected, which could have an adverse impact on future cash flows, earnings, results of operations and the financial condition of the Company. The Company is particularly at risk at this state of its development as it relies on a small management team, the loss of any member of which could cause severe adverse consequences. There is no assurance that it will be successful in attracting, training and retaining qualified personnel as competition for persons with these skill sets increases. If the Company is not successful in attracting, training and retaining qualified personnel, the efficiency of its operations could be impaired, which could have an adverse impact on its future cash flows, earnings, results of operations and financial condition.
Adverse General Economic Conditions
The unprecedented events in global financial markets in the past several years have had a profound impact on the global economy. Many industries, including the mineral exploration sector, were impacted by these market conditions. Some of the key impacts of the financial market turmoil included contraction in credit markets resulting in a widening of credit risk, devaluations, high volatility in global equity, commodity, foreign exchange and precious metal markets, a lack of market liquidity, natural disasters, public health crisis (such as the ongoing dispute between the sovereign state of the Ukraine and Russia) and other events outside of the Company’s control. A similar slowdown in the financial markets or other economic conditions, including but not limited to, inflation, fuel and energy costs, lack of available credit, the state of the financial markets, interest rates and tax rates, may adversely affect the Company’s operations. Specifically, a global credit/liquidity crisis could impact the cost and availability of financing and our overall liquidity, the volatility of mineral prices would impact the Company’s prospects, volatile energy, commodity and consumables prices and currency exchange rates would impact costs and the devaluation and volatility of global stock markets would impact the valuation of its equity and other securities. These factors could have a material adverse effect on the Company’s financial condition and results of operations.
In recent years, the securities markets in Canada, as well as in other countries around the world, have experienced a high level of price and volume volatility, and the market prices of securities of many companies have experienced wide fluctuations in price that have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. There can be no assurance that continual fluctuations in price will not occur. It may be anticipated that any quoted market for the Common Shares will be subject to market trends and conditions generally, notwithstanding any potential success of the Company in developing assets, adding additional resources,
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establishing feasibility of deposits or creating revenues, cash flows or earnings. The value of securities will be affected by market volatility. An active public market for the Common Shares might not develop or be sustained. If an active public market for the Common Shares does not develop or continue, the liquidity of a shareholder’s investment may be limited and the price of the Common Shares may decline.
Legal and Litigation
All industries, including the mining industry, are subject to legal claims, with and without merit. Defense and settlement costs of legal claims can be substantial, even with respect to claims that have no merit. Due to the inherent uncertainty of the litigation process, the resolution of any particular legal proceeding to which the Company may become subject could have a material adverse effect on the Company’s business, prospects, financial condition, and operating results. There are no current claims or litigation outstanding against the Company.
Insurance
The Company is also subject to a number of operational risks and may not be adequately insured for certain risks, including: accidents or spills, industrial and transportation accidents, which may involve hazardous materials, labor disputes, catastrophic accidents, fires, blockades or other acts of social activism, changes in the regulatory environment, impact of non-compliance with laws and regulations, natural phenomena such as inclement weather conditions, floods, earthquakes, tornados, thunderstorms, ground movements, cave-ins, and encountering unusual or unexpected geological conditions and technological failure of exploration methods.
There is no assurance that the foregoing risks and hazards will not result in damage to, or destruction of, the properties of the Company, personal injury or death, environmental damage or, regarding the exploration or development activities of the Company, increased costs, monetary losses and potential legal liability and adverse governmental action, all of which could have an adverse impact on the Company’s future cash flows, earnings, results of operations and financial condition. The payment of any such liabilities would reduce the funds available to the Company. If the Company is unable to fully fund the cost of remedying an environmental problem, it might be required to suspend operations or enter into costly interim compliance measures pending completion of a permanent remedy.
Competition
All aspects of the Company’s business are subject to competition from other parties. Many of the Company’s competitors for the acquisition, exploration, production and development of mineral properties, and for capital to finance such activities, will include companies that have greater financial and personnel resources available to them than the Company. Competition could adversely affect the Company’s ability to acquire suitable properties or prospects in the future.
The international resource industries are highly competitive. The value of any future reserves discovered and developed by the Company may be limited by competition from other world resource mining companies, or from excess inventories. Existing international trade agreements and policies and any similar future agreements, governmental policies or trade restrictions are beyond the control of the Company and may affect the supply of and demand for minerals, including lithium, around the world.
Conflicts of Interest
Certain of the directors and officers of the Company will be engaged in, and will continue to engage in, other business activities on their own behalf and on behalf of other companies and, as a result of these and other activities, such directors and officers of the Company may become subject to conflicts of interest. The BCBCA provides that in the event that a director has a material interest in a contract or proposed contract or agreement that is material to the issuer, the director shall disclose his interest in such contract or agreement and shall refrain from voting on any
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matter in respect of such contract or agreement, subject to and in accordance with the BCBCA. To the extent that conflicts of interest arise, such conflicts will be resolved in accordance with the provisions of the BCBCA.
Volatility of the Market Price of the Common Shares
Securities of junior companies have experienced substantial volatility in the past, often based on factors unrelated to the financial performance or prospects of the companies involved. These factors include macroeconomic developments in North America and globally and market perceptions of the attractiveness of particular industries. The Common Share price is also likely to be significantly affected by delays experienced in progressing with development plans, a decrease in investor appetite for junior stocks, or in adverse changes in the Company’s financial condition or results of operations as reflected in the Company’s quarterly and annual financial statements. Other factors unrelated to performance that could have an effect on the price of the Common Shares include:
(a) the trading volume and general market interest in the Common Shares could affect a shareholder’s ability to trade significant numbers of Common Shares; and (b) the size of the public float in the Common Shares may limit the ability of some institutions to invest in the Company’s securities.
As a result of any of these or other factors, the market price of the Common Shares at any given point in time might not accurately reflect the Company’s long-term value. Securities class action litigation has been brought against companies following years of volatility in the market price of their securities. The Company could in the future be the target of similar litigation. Securities litigation could result in substantial costs and damages and divert management’s attention and resources.
Dividends
The Company has never paid cash dividends on its Common Shares, and does not expect to pay any cash dividends in the future in favor of utilizing cash to support the development of our business. Any future determination relating to the Company’s dividend policy will be made at the discretion of the Company’s board of directors (the “Board”) and will depend on a number of factors, including future operating results, capital requirements, financial condition and the terms of any credit facility or other financing arrangements the Company may obtain or enter into, future prospects and other factors the Board may deem relevant at the time such payment is considered. As a result, shareholders will have to rely on capital appreciation, if any, to earn a return on their investment in the Common Shares for the foreseeable future.
Reporting Issuer Status
As a reporting issuer in Canada and the United States of America, the Company is subject to reporting requirements under applicable securities law and stock exchange policies. Compliance with these requirements may increase legal and financial compliance costs, make some activities more difficult, time consuming or costly, and increase demand on existing systems and resources. Among other things, the Company will be required to file annual, quarterly and current reports with respect to its business and results of operations and maintain effective disclosure controls and procedures and internal controls over financial reporting. In order to maintain and, if required, improve disclosure controls and procedures and internal controls over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could harm the Company’s business and results of operations.
The Company may need to hire additional employees to comply with these requirements in the future, which would increase its costs and expenses.
Management of the Company expects that being a reporting issuer will make it more expensive to maintain director and officer liability insurance. This factor could also make it more difficult for the Company to retain qualified directors and executive officers.
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Tax Issues
Income tax consequences in relation to the Common Shares will vary according to the circumstances by each purchaser. Prospective purchasers should seek independent advice from their own tax and legal advisors prior to subscribing for Common Shares.
DESCRIPTION OF CAPITAL STRUCTURE
Common Shares
The Company’s authorized share structure consists of an unlimited number of Common Shares.
As of the date hereof, 229,525,709 Common Shares are issued and outstanding, 10,137,500 Options, each exercisable for one Common Share, 1,015,000 RSUs, each exercisable for one Common Share, 18,659,501 Warrants, each exercisable for one Common Share, 1,106,194 ADSs, and 914,375 ADS Warrants, each exercisable into one ADS, are issued and outstanding. See “Market for Securities – Prior Sales” for more information. A description of your company’s current and contemplated exploration, development or production activities.
The holders of Common Shares are entitled to dividends if, as and when declared by the Board. The holders of the Common Shares shall be entitled to vote at all meetings of shareholders of the Company and at all such meetings each such holder has one (1) vote for each Common Share held. Each holder of Common Shares is, upon liquidation, entitled to share equally in such assets of the Company as are distributable to the holders of Common Shares.
In the event of a liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, or other distribution of assets or property of the Company amongst its shareholders for the purpose of winding up its affairs, shareholders will be entitled to receive all property and assets of the Company properly distributable to the shareholders.
There are no pre-emptive rights, no conversion or exchange rights, no redemption, retraction, purchase for cancellation or surrender provisions. There are no sinking or purchase fund provisions, no provisions permitting or restricting the issuance of additional securities or any other material restrictions, and there are no provisions which are capable of requiring a security holder to contribute additional capital.
Equity Incentive Plan
The Company adopted its Equity Incentive Plan (the “Equity Incentive Plan”) on May 12, 2022. The Equity Incentive Plan provides flexibility to the Company to grant equity-based incentive awards in the form of Options, RSUs, PSUs and DSUs. The purpose of the Equity Incentive Plan is to promote the long-term success of the Company and the creation of shareholder value by: (i) encouraging the attraction and retention of eligible persons; (ii) encouraging such eligible persons to focus on critical long-term objectives; and (iii) promoting greater alignment of the interests of such eligible persons with the interests of the Company.
The Equity Incentive Plan is a rolling plan for Options and a fixed plan for Performance-Based Awards such that the aggregate number of Common Shares that: (i) may be issued upon the exercise or settlement of Options granted under the Equity Incentive Plan (and all of the Company’s other security-based compensation arrangements), shall not exceed 10% of the Company’s issued and outstanding Common Shares from time to time; and (ii) may be issued in respect of Performance-Based Awards granted under the Equity Incentive Plan (and all of the Company’s other security-based compensation arrangements) shall not exceed 14,587,604. Options which have been exercised, cancelled, terminated, surrendered, forfeited or expired without being exercised shall be available for subsequent grants under the Equity Incentive Plan and the number of awards available to grant increases as the number of issued and outstanding Common Shares increases. Performance-Based Awards which have been settled in cash, cancelled, terminated, surrendered, forfeited or expired without being settled shall be available for subsequent
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grants, but Performance-Based Awards which are settled in securities will reduce the number of Common Shares reserved for issuance under the fixed 10% portion of the Equity Incentive Plan.
As of April 27, 2026, the Company has 10,137,500 Options, 1,015,000 RSUs, nil PSUs and nil DSUs outstanding.
Market for Securities
Trading Price and Volume of Common Shares
The Common Shares have been listed and posted for trading on the TSXV under the symbol “NIM” since June 1, 2015. The following table sets forth the price range (high and low prices) in Canadian dollars of the Common Shares and volume traded on the TSXV, for the periods indicated.
| High ($) | Low ($) | Volume |
April 1 to April 24, 2026 | 1.01 | 0.79 | 2,687,923 |
March 2026 | 1.25 | 0.87 | 2,736,098 |
February 2026 | 1.29 | 1.13 | 3,033,671 |
January 2026 | 1.24 | 0.96 | 5,241,590 |
December 2025 | 1.1 | 0.84 | 346,584 |
November 2025 | 0.96 | 0.79 | 1,774,545 |
October 2025 | 1.20 | 0.91 | 2,964,940 |
September 2025 | 1.25 | 0.73 | 3,498,770 |
August 2025 | 0.84 | 0.71 | 4,015,057 |
July 2025 | 0.79 | 0.495 | 2,735,823 |
June 2025 | 0.53 | 0.405 | 3,322,872 |
May 2025 | 0.43 | 0.355 | 1,445,701 |
April 2025 | 0.40 | 0.32 | 1,755,175 |
Prior Sales
The following table summarizes the issuances of unlisted securities during the year ended December 31, 2025:
Date of Issuance | Securities | Number of Common Shares Issued/Issuable or Aggregate Amount | Exercise Price per Security |
December 3, 2025 | Options(1) | 2,850,000 | 1.00 |
December 3, 2025 | Restricted Share Units(2) | 1,015,000 | N/A |
July 17, 2025 | Units(3) | 4,350,000 | 0.50 |
July 1, 2025 | Options(4) | 400,000 | 0.495 |
March 12, 2025 | Units(5) | 4,038,955 | 0.28 |
(1) | These Options are exercisable at a price of $1.00 per Common Share until December 3, 2030 and vest immediately. |
(2) | These RSUs vest on January 1, 2027. |
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(3) | Each Unit consists of one Common Share issued on a “flow-through” basis as defined in the Income Tax Act (Canada) and one-half of one-half of one Warrant. Each whole Warrant is exercisable into one Common Share at a price of $0.65 per Common Share until July 17, 2027. |
(4) | These Options are exercisable at a price of $0.495 per Common Share until July 1, 2030 and vest immediately |
(5) | Each Unit consists of one Common Share and one-half of one Warrant. Each whole Warrant is exercisable into one Common Share at a price of $0.40 per Common Share until March 12, 2028. |
ESCROWED SECURITIES
As at the date hereof, there are no securities held in escrow.
DIVIDENDS AND DISTRIBUTIONS
The Company has not declared or paid a dividend for the three most recently completed financial years: 2023, 2024 and 2025. Other than the requirements of the BCBCA, there are no restrictions on the Company that would prevent it from paying a dividend. However, as of the date of this AIF, the Board intends to retain any future earnings (when available) for reinvestment in the Company’s business, and therefore, it has no current intention to declare or pay dividends on the Common Shares in the foreseeable future. Any future determination to pay dividends on the Common Shares will be at the sole discretion of the Board after considering a variety of factors and conditions existing from time to time including its earnings, financial condition and other relevant factors.
DIRECTORS AND OFFICERS
As at the date hereof, the Board is comprised of five individuals. The following table sets forth the names and municipalities of residence of the current directors and executive officers of the Company, their respective positions and offices with the Company and the date first appointed or elected as a director and/or officer and their principal occupation(s) within the past five years.
Name, Occupation and Security Holding
Name | Position Held | Principal Occupation within the past five years |
|---|---|---|
Peter Espig(3) | President and Chief Executive Officer | Mr. Espig has been the President and CEO of the Company since November 7, 2013. The former Goldman Sachs banker and Olympus Capital Partners executive founded TriAsia Capital, a private equity and consulting firm focused on raising capital for mid-sized companies and pre-initial public offering investment in 2006. Mr. Espig is a founding director of Phosplatin Therapeutics, a private biopharmaceutical company, and has been a board member of that company since November 2010. He has been involved in several public and private companies, as well as charitable organizations. He is currently a director of First Lithium Minerals Corp., a mineral exploration and development company listed on the TSXV. Mr. Espig is a pioneer of SPACs, having completed two transactions with a combined value of greater than US$1.0 BN. He received his MBA from Columbia Business School, where he was a Chazen International Scholar. |
Sam Wong | Chief Financial Officer | Mr. Wong is a Certified Public Accountant with more than 19 years of international experience in the mining and resource sector. He has held senior executive positions in publicly traded mining companies. Mr. Wong’s expertise includes financial reporting, corporate risk management, corporate strategy and planning, and investment evaluation. Mr. Wong began his career at Deloitte LLP in Vancouver, where he provided assurance and tax services. |
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Name | Position Held | Principal Occupation within the past five years |
William Cawker | Secretary (March 19, 2024) | Mr. Cawker is an experienced inhouse specialist that works with primarily assist small cap / microcap companies. Mr. Cawker specialized in publicly listed companies in the fields of technology and natural resources for over three decades. Mr. Cawker has worked at leading Canadian financial institutions and been active with numerous public companies. |
Frank Höegel(1)(2)(3) | Director (November 21, 2014 | Mr. Höegel is an asset manager actively involved in the financial evaluation of companies and convertible debenture structuring. He has also served as President and Chief Executive Officer of Peter Beck Performance Funds and Peter Beck and Partner Asset Management Company Limited since 2002. He is also currently involved in other stock exchange listed companies as set out in the Section “Corporate Governance”. |
Paul Johnston(3) | Director (May 13, 2016) | Dr. Johnston is a geologist with more than 25 years of experience in the mining industry and has accumulated extensive international experience in early to advanced stage exploration for gold, copper, and zinc. He is currently Vice President of Exploration for Element 29 Resources Inc. Dr. Johnston began his career in the late 1980s as a mine geologist before joining Teck Resources, where he worked in a variety of international positions. He holds a PhD from Queen’s University and is a member of the Association of Professional Engineers and Geoscientists of British Columbia. |
Malcolm Swallow(1)(2) Langley, British Columbia, Canada | Director (October 5, 2021) | Mr. Swallow qualified as a Mining Engineer in 1971 from the Royal School of Mines and has been a Fellow of the Institute of Mining and Metallurgy, a Chartered Engineer, a European Engineer and a Professional Engineer in BC from 1994 until his retirement from professional practice in 2020. He has consulted on both open pit and underground mining and specialized over the latter half of his career in mine development and project management on a number of significant projects. Mr. Swallow was a director of NorZinc Ltd., a junior mining company listed on the TSX, the Frankfurt Stock Exchange and the Over-The-Counter Bulletin Board, from 2016 to 2020 and a director of Silvercorp Metals Inc., a mining company listed on the TSX and American Stock Exchange, from 2013 to 2017. |
Brent Omland(1)(2) | Director (January 30, 2023) | Mr. Omland has been the CEO and a Director of Ocean Partners Holdings since 2013. In 2023, Mr. Omland was appointed to the role of co-CEO of Ocean Partners Holdings. Before joining Ocean Partners Holdings, Mr. Omland was the Chief Financial Officer for Ivernia Inc. and Enirgi Metals Group, companies focused on lead mining and secondary lead smelting in Australia. Mr. Omland also worked in finance roles for Teck Cominco. Mr. Omland is a graduate of the University of British Columbia (Commerce) and a Canadian Chartered Accountant with 20 years of experience in the mining, metals, and trading business. He also serves on the boards of Galantas Gold Corporation and Cygnus Metals Limited, both junior mining companies listed on the Exchange. He is also a director of DynaResource Inc., a mining company listed on the OTC market in the United States and Canadian Copper Inc., a mining company listed on the CSE. |
(1) | Member of the audit committee (the “Audit Committee”) of the Company. |
(2) | Member of the compensation committee (the “Compensation Committee”) of the Company. |
(3) | Member of the corporate governance committee (the “Corporate Governance Committee”) of the Company. |
As at the date hereof, the directors and senior officers of Nicola, as a group, beneficially own or control, directly or indirectly, 49,577,387 Common Shares or 23% of the issued and outstanding Common Shares, as well as 7,900,000 Options and 813,953 RSUs.
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The directors listed above will hold office until the next annual meeting of the Company or until their successors are elected or appointed.
Corporate Cease Trade Orders, Bankruptcies, Penalties or Sanctions
To the knowledge of management, no director or executive officer as at the date hereof, is or was within 10 years before the date hereof, a director, chief executive officer or chief financial officer of any company (including Nicola), that (a) was subject to an order that was issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer, or (b) was subject to an order that was issued after the director or executive officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer. For the purposes hereof, “order” means (a) a cease trade order, (b) an order similar to a cease trade order, or (c) an order that denied the relevant company access to any exemption under securities legislation that was in effect for a period of more than 30 consecutive days.
To the knowledge of management, other than as disclosed herein, no director or executive officer of Nicola, or a shareholder holding a sufficient number of securities of Nicola to affect materially the control of the company (a) is, as at the date hereof, or has been within the 10 years before the date hereof, a director or executive officer of any company (including Nicola) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, or (b) has, within the 10 years before the date hereof, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director, executive officer or shareholder.
To the best of management’s knowledge, no director, or proposed director of the Company has, within the ten (10) years before the date of this Information Circular, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the proposed director.
Penalties or Sanctions
No director, executive officer or shareholder holding a sufficient number of securities of Nicola to materially affect the control of the Company has been subject to: (i) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or (ii) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.
Conflicts of Interest
There are potential conflicts of interest to which the directors and officers of Nicola will be subject to in connection with the operations of Nicola. In particular, certain of the directors and officers of Nicola are involved in managerial or director positions with other companies whose operations may, from time to time, be in direct competition with those of Nicola or with entities which may, from time to time, provide financing to, or make equity investments in, competitors of Nicola.
In accordance with the applicable corporate and securities legislation, directors who have a material interest or any person who is a party to a material contract or a proposed material contract with Nicola are required, subject to certain exceptions, to disclose that interest and generally abstain from voting on any resolution to approve the contract. In addition, the directors are required to act honestly and in good faith with a view to the best interests of Nicola. Certain of the directors and each of the executive officers of Nicola have either other employment or other business or time restrictions placed on them and accordingly, these directors of Nicola will only be able to devote
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part of their time to the affairs of Nicola. To the extent that conflicts of interest arise, such conflicts will be resolved in accordance with the provisions of the applicable corporate law.
AUDIT COMMITTEE
Audit Committee Charter
On January 30, 2026, the Board adopted a new Audit Committee Charter. The full text of the Company’s Audit Committee Charter is included as Schedule A to the AIF.
Audit Committee Composition
The following are the members of the Audit Committee as at the date hereof:
Audit Committee Members | ||
Brent Omland | Independent(1) | Financially Literate(2) |
Frank Höegel | Independent(1) | Financially Literate(2) |
Malcolm Swallow | Independent(1) | Financially Literate(2) |
(1) | A member of an audit committee is independent if the member has no direct or indirect material relationship with the Company, which could, in the view of the Board, reasonably interfere with the exercise of a member’s independent judgment. Under NI 52-110, an individual who is, or has been within the last three years, an employee or executive officer of the issuer, is considered to have a material relationship with the issuer. |
(2) | An individual is financially literate if he has the ability to read and understand a set of financial statements that present a breadth of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Company’s financial statements. |
Relevant Education and Experience
Brent Omland
Mr. Omland has been the CEO and as a Director of Ocean Partners Holdings since 2013. In 2023, Mr. Omland was appointed to the role of co-CEO of Ocean Partners Holdings. Before joining Ocean Partners Holdings, Mr. Omland was the Chief Financial Officer for Ivernia Inc. and Enirgi Metals Group, companies focused on lead mining and secondary lead smelting in Australia. Mr. Omland also worked in finance roles for Teck Cominco. Mr. Omland is a graduate of the University of British Columbia (Commerce) and a Canadian Chartered Accountant with 20 years of experience in the mining, metals, and trading business. He also serves on the boards of Galantas Gold Corporation and Cygnus Metals Limited, both junior mining companies listed on the Exchange. He is also a director of DynaResource Inc., a mining company listed on the OTC market in the United States and Canadian Copper Inc., a mining company listed on the CSE.
Frank Höegel
Mr. Höegel is an asset manager actively involved in the financial evaluation of companies and convertible debenture structuring. He has also served as President and CEO of Peter Beck Performance Funds and Peter Beck and Partner Asset Management Company Limited since 2002. His background includes more than 14 years of direct experience in the mining industry and expertise as an international financier / investor. Mr. Höegel holds a degree in Economics and International Business and Management from the University of Nürtingen in Germany.
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Malcolm Swallow
Mr. Swallow qualified as a Mining Engineer in 1971 from the Royal School of Mines and has been a Fellow of the Institute of Mining and Metallurgy, a Chartered Engineer, a European Engineer and a Professional Engineer in BC from 1994 until his retirement from professional practice in 2020. He has consulted on both open pit and underground mining and specialised over the latter half of his career in mine development and project management on a number of significant projects. Mr. Swallow was a director of NorZinc Ltd., a junior mining company listed on the TSX, the Frankfurt Stock Exchange and the Over-The-Counter Bulletin Board, from 2016 to 2020 and a director of Silvercorp Metals Inc., mining company listed on the TSX and American Stock Exchange, from 2013 to 2017.
Each member of the Audit Committee has:
· | an understanding of the accounting principles used by the Company to prepare its financial statements, and the ability to assess the general application of those principles in connection with estimates, accruals and reserves; |
· | experience with analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company’s financial statements, or experience actively supervising individuals engaged in such activities; and |
· | an understanding of internal controls and procedures for financial reporting. |
Audit Committee Oversight
At no time since the commencement of the Company’s financial year ended December 31, 2025, was a recommendation of the Committee to nominate or compensate an external auditor not adopted by the Board.
Reliance on Certain Exemptions
At no time since the commencement of the Company’s financial year ended December 31, 2025 has the Company relied on the exemptions contained in Sections 2.4, 6.1.1(4), 6.1.1(5) or Part 8 of NI 52-110. Section 2.4 (De Minimis Non-audit Services) provides an exemption from the requirement that the Audit Committee must pre-approve all non-audit services to be provided by the auditor, where the total amount of fees related to the non-audit services are not expected to exceed 5% of the total fees payable to the auditor in the financial year in which the non-audit services were provided. Sections 6.1.1(4) (Circumstance Affecting the Business or Operations of the Venture Issuer), 6.1.1(5) (Events Outside Control of Member) and 6.1.1(6) (Death, Incapacity or Resignation) provide exemptions from the requirement that a majority of the members of the Company’s Audit Committee must not be executive officers, employees or control persons of the Company or of an affiliate of the Company. Part 8 (Exemptions) permits a company to apply to a securities regulatory authority or regulator for an exemption from the requirements of NI 52-110 in whole or in part.
Pre-Approval Policies and Procedures
The Audit Committee is authorized by the Board to review the performance of the Company’s external auditors and approve in advance provision of services other than auditing and to consider the independence of the external auditors, including reviewing the range of services provided in the context of all consulting services bought by the Company. The Audit Committee is authorized to approve any non-audit services or additional work which the Chairman of the Audit Committee deems as necessary who will notify the other members of the Audit Committee of such non-audit or additional work.
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External Auditor Service Fees
The aggregate fees billed by the Company’s external auditors in each of the last two fiscal years for audit fees are as follows:
Financial Year Ending | Audit Fees(1) | Audit Related Fees(2) | Tax Fees(3) | All Other Fees(4) |
2025 | 171,257 | Nil | Nil | Nil |
2024 | 140,000(5) | Nil | Nil | Nil |
(1) | “Audit Fees” include fees necessary to perform the annual audit and quarterly reviews of our financial statements. Audit Fees include fees for review of tax provisions and for accounting consultations on matters reflected in the financial statements. Audit Fees also include audit or other attest services required by legislation or regulation, such as comfort letters, consents, reviews of securities filings and statutory audits. |
(2) | “Audit-Related Fees” for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported as audit fees. The services provided in this category include due diligence assistance, accounting consultations on proposed transactions, and consultation on International Financial Reporting Standards conversion. |
(3) | “Tax Fees” include fees for all tax services other than those included in “Audit Fees” and “Audit-Related Fees”. This category includes fees for tax compliance, tax planning and tax advice. |
(4) | “All Other Fees” includes all fees other than those reported as Audit Fees, Audit-Related Fees or Tax Fees. |
(5) | $70,000 was charged by Crowe and MacKay LLP and $70,000 was charged by Davidson & Company LLP for the re-audit of the financial statements for the year ended December 31, 2024 related to NASDAQ listing application. |
Legal Proceedings AND Regulatory actions
Nicola is not, and has not been at any time within the most recently completed financial year, a party to any legal proceedings, nor is or was Nicola property the subject of any legal proceedings, known or contemplated, that involves a claim for damages exclusive of interest and costs that met or exceeded 10% of the Company’s current assets.
Further, there have not been any (a) penalties or sanctions imposed against the Company by a court relating to securities legislation or by a securities regulatory authority during the year ended December 31, 2025, (b) any other penalties or sanctions imposed by a court or regulatory body against the Company that would likely be considered important to a reasonable investor in making an investment decision, or (c) settlement agreements entered into by the Company before a court relating to securities legislation or with a securities regulatory authority during the year ended December 31, 2025.
INTERESTS OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
Other than as set forth herein, or as previously disclosed, the Company is not aware of any material interests, direct or indirect, by way of beneficial ownership of securities or otherwise, of any director or executive officer or any shareholder holding more than 10% of the Common Shares or any associate or affiliate of any of the foregoing in any transaction within the three most recently completed financial years or during the current financial year or any proposed or ongoing transaction of the Company which has or will materially affect the Company.
corporate governance
Pursuant to NI 58-101, the Company is required to disclose its corporate governance practices as follows:
General
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NI 58-101, as adopted by the Canadian Securities Administrators, prescribes certain disclosure by the Company of its corporate governance practices. This disclosure is presented below.
Board of Directors
The Board facilitates its exercise of independent supervision over the Company’s management through meetings of the Board and through consultation with the Corporate Governance Committee. The Corporate Governance Committee’s primary responsibilities include reviewing the skills, areas of expertise, backgrounds, independence, and qualifications of the members of the Board, reviewing the size and composition of the Board to ensure there remain an appropriate number of “unrelated” and “independent” directors, recommending to the Board structures and procedures to enable the Board to function independently of management, overseeing the development and implementation of any structures and procedures approved by the Board, and reviewing the relationship of the Board with management and recommending, where appropriate, limits on management’s authority to act without the express approval of the Board.
Mr. Espig, the Company’s President and CEO, is not considered to be independent as he is an officer of the Company. Messrs. Höegel, Johnston, Swallow and Omland are considered to be independent in that they are independent and free from any interest and any business or other relationship which could or could reasonably be perceived to materially interfere with the respective director’s ability to act with the best interests of the Company, other than the interests and relationships arising from being shareholders of the Company.
Directorships
The following table sets out information regarding other directorships presently held by directors of the Company with other reporting issuers (or the equivalent) in Canada or any foreign jurisdiction:
Name of Director | Name of Other Reporting Issuers | Securities Exchange |
Peter Espig | First Lithium Minerals Corp. | CSE |
| ESGold Corp. | CSE, OTCQB |
| LaFleur Minerals Inc | CSE, OTCQB |
| Foremost Clean Energy Ltd | CSE, NASDAQ |
Frank Höegel | Avrupa Minerals Ltd. | TSXV, OTC PINK |
| Canamex Gold Corp. | CSE |
| Monarca Minerals Inc. | TSXV |
| Lake Victoria Gold Ltd. | TSXV |
| Golden Goliath Resources Ltd. | TSXV, OTCQX |
Brent Omland | Cygnus Metals Limited | TSXV, ASX |
| Galantas Gold Corporation | TSXV, OTCQB |
| DynaResource, Inc. | OTCQX |
| Canadian Copper Inc. | CSE |
Orientation and Continuing Education
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The Board briefs all new directors with respect to the policies of the Board and other relevant corporate and business information. The Corporate Governance Committee oversees the development and implementation of orientation programs for new directors and continuing education for all directors.
Ethical Business Conduct
The Board has not adopted a written ethical business code of conduct for directors, officers and employees. However, the Board believes that the fiduciary duties placed on individual directors by the Company’s governing corporate legislation and the common law, and the restrictions placed by applicable corporate legislation on an individual director’s participation in decisions of the Board in which the director has an interest, have been sufficient to ensure that the Board operates independently of management and in the best interests of the Company.
Nomination of Directors
On January 30, 2026, the Board adopted a board of director nomination process (the “Nomination Process”) regarding nomination of directors.
Pursuant to the Nomination Process, the Board has determined that director nominees will be recommended for the Board’s selection by a majority of the Company’s independent directors in a vote in which only the independent directors participate, and to have the full Board participate in the consideration of board of director nominees.
In general, when the Board determines that expansion of the board or replacement of a director is necessary or appropriate, the Company’s independent directors will be responsible for identifying one or more candidates to fill such directorship, investigating each candidate, evaluating his/her suitability for service on the Board and recommending for selection suitable candidates for nomination to the Board.
The Company’s independent directors are authorized to use any methods they deem appropriate for identifying candidates for Board membership, including recommendations from current members of the Board, senior management or other third parties (including recommendations from stockholders). The Company’s independent directors may engage outside search firms to identify suitable candidates.
The Company’s independent directors are also authorized to engage in whatever investigation and evaluation processes they deem appropriate, including a thorough review of the candidate’s background, characteristics and qualifications, and personal interviews with all or some of the Company’s independent directors, the Company’s management or one or more other members of the Board. While diversity may contribute to an evaluation, it is not considered by the Board as a separate or independent factor in identifying board of director nominees.
In formulating its recommendation, the Company’s independent directors will consider not only the findings and conclusions of the investigation and evaluation process, but also the current composition of the Board; the diversity of the board, including the gender diversity; the attributes and qualifications of serving members of the Board; additional attributes, capabilities or qualifications that should be represented on the Board; and whether the candidate could provide those additional attributes, capabilities or qualifications. The Company’s independent directors will not recommend any candidate unless that candidate has indicated a willingness to serve as a director and has agreed to comply, if elected, with the expectations and requirements of serving as a member of the Board.
Shareholders desiring to suggest a candidate for consideration must do so in accordance with the Company’s articles and applicable securities laws, and should send a letter to Sam Wong, the Company’s Chief Financial Officer, at the Company’s principal office, Suite 1212 – 1030 West Georgia Street, Vancouver, BC V6E 2Y3. Candidates recommended by the Company’s stockholders will be considered in the same manner as other candidates.
In considering whether to recommend directors who are eligible to stand for re-election, the Company’s independent directors may consider a variety of factors, including, without limitation, a director’s contributions to
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the Board and ability to continue to contribute productively; attendance at Board and committee meetings and compliance with the Company policies, including the Company’s corporate governance policies; whether the director continues to possess the attributes, capabilities and qualifications considered necessary or desirable for continued service on the Board; the independence of the director; and the nature and extent of the director’s non-Company activities.
Compensation
On February 14, 2023, the Board established the Compensation Committee and adopted a compensation committee charter (the “Compensation Committee Charter”). The full text of the Company’s Compensation Committee Charter is included as Schedule B to the AIF.
The role of the Compensation Committee is to:
(a) | review and recommend to the Board (the appropriate compensation level for the Company’s executive officers); |
(b) | oversee the Company’s compensation and benefit plans, policies and practices, including its executive compensation plans and incentive-compensation and equity-based plans; |
(c) | monitor and evaluate, at the Committee’s sole discretion, matters relating to the compensation and benefits structure of the Company; and |
(d) | take such other actions within the scope of the Compensation Committee Charter as the Board may assign to the Compensation Committee from time to time or as the Compensation Committee deems necessary or appropriate. |
On January 30, 2026, the Company adopted a Compensation Recovery (Clawback) Policy to promote accountability and alignment with the long-term interests of the Company and its shareholders by providing for the recovery of certain incentive compensation from current and former executive officers in certain circumstances.
Board Committees
On February 14, 2023, the Board established a corporate governance committee (the “Corporate Governance Committee”) and adopted a corporate governance charter (the “Corporate Governance Charter”). The full text of the Company’s Corporate Governance Charter is included as Schedule C to the AIF.
The Corporate Governance Committee consists of Peter Espig, Frank Höegel and Paul Johnson (Chair). The role of the Corporate Governance Committee is to:
(a) | advise and make recommendations to the Board in its oversight role with respect to: (i) the development of the Company’s corporate governance policies, principles, practices and processes; (ii) the effectiveness of the Board and its committees; (iii) the contributions of individual directors; (iv) the identification of individuals qualified to become board members; and (v) the selection of director nominees for election by the shareholders; and |
(b) | take such other actions within the scope of the Corporate Governance Charter as the Board may assign to the Corporate Governance Committee from time to time or as the Corporate Governance Committee deems necessary or appropriate. |
The Board has no committees other than the Audit Committee, the Compensation Committee and the Corporate Governance Committee.
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Assessments
The Board regularly monitors the adequacy and effectiveness of information given to directors, communications between the Board and management, and the strategic direction and processes of the Board and its committees.
AUDITOR, TRANSFER AGENT AND REGISTRAR
The auditors of the Company are Davidson & Company LLP, Chartered Professional Accountants, located at 609 Granville Street, #1200, Vancouver, British Columbia, V6E 4T5.
The transfer agent and registrar for the Common Shares is Computershare Investor Services Inc., located at 510 Burrard Street, 3rd Floor, Street, Vancouver, British Columbia, V6C 3B9.
MATERIAL CONTRACTS
Except for contracts entered into in the ordinary course of business, the only contracts which have been entered into by the Company as of the date hereof, and which are regarded presently as material are:
1. | The offtake and financing agreement dated April 6, 2021 with Ocean Partners UK, amended on July 12, 2022. For more details, see “Description of the Business of the Company – Economic Dependence”; |
2. | Mining and Milling Profit Share Agreement with High Range dated October 24, 2021. For more details, see “Description of the Business of the Company – Economic Dependence”; |
3. | Equity Incentive Plan adopted by the Board on May 12, 2022; |
4. | Underwriting Agreement dated April 12, 2026 between the Company and Maxim Group LLC; and |
5. | Deposit Agreement dated April 13, 2026 among the Company, The Bank of New York Mellon and Owners and Holders of American Depository Shares. |
INTERESTS OF EXPERTS
There is no person or company whose profession or business gives authority to a statement made by such person or company and who is named as having prepared or certified a statement, report or valuation described or included in a filing, or referred to in a filing, made under NI 51-102 by the Company during, or related to, the Company’s most recently completed financial year other than Davidson & Company LLP, the Company’s auditors.
Davidson & Company LLP are the auditors of the Company and have confirmed that they are independent with respect to the Company within the meaning of the relevant rules and related interpretations prescribed by the relevant bodies in Canada and any applicable legislation or regulations.
ADDITIONAL INFORMATION
Additional information relating to the Company may be found on SEDAR+ at www.sedarplus.ca.
Additional information, including directors’ and officers’ remuneration and indebtedness, principal holders of Nicola’s securities and securities authorized for issuance under equity compensation plans, where applicable, will be contained in Nicola’s information circular for the next annual meeting of shareholders that involves the election of directors and additional information as provided in Nicola’s comparative financial statements for its most recently completed financial year. Nicola will provide this information to any person, upon request made to the CFO of Nicola
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at Suite 1212 – 1030 West Georgia, British Columbia, V6E 2Y3. The documents will also be located on SEDAR+ at www.sedarplus.ca.
Additional financial information is provided in the Company’s comparative financial statements and management’s discussion and analysis for the period ended December 31, 2025, which are also available on SEDAR+.
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SCHEDULE A
AUDIT COMMITTEE CHARTER
nicola mining inc.
(the “Company”)
AUDIT COMMITTEE CHARTER
I. | PURPOSE |
The Audit Committee (the “Audit Committee” or the “Committee”) of the Board of Directors (the “Board”) of the Company, shall provide assistance to the directors of the Company in fulfilling their responsibility to the stockholders relating to corporate accounting matters, the financial reporting practices of the Company, and the quality and integrity of the financial reports of the Company. The Audit Committee’s purpose is to:
1. | Assist the Board’s oversight of: |
(a) | the reliability and integrity of the Company’s financial statements, accounting policies, financial reporting and disclosure practices; |
(b) | the establishment and maintenance of processes to assure compliance with all relevant laws, regulations and Company policies, including a process for receipt of complaints and concerns regarding accounting, internal control or auditing matters; |
(c) | the engagement, compensation, performance, qualifications and independence of the Company’s independent auditors, their conduct of the annual independent audit of the Company’s financial statements, and their engagement for all other services; and |
(d) | the functioning of the Company’s system of internal accounting and financial controls. |
2. | Provide an open avenue of communication between the internal accounting department, the independent auditors, the Company’s financial and senior management and the Board. |
3. | Prepare the report of the Audit Committee required by the rules of the Securities and Exchange Commission (“SEC”), as applicable. |
The Committee will primarily fulfill these responsibilities by carrying out the activities enumerated in this Charter.
While the Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Committee to plan or conduct audits, or to determine that the Company’s financial statements are complete and accurate or are in accordance with generally accepted accounting principles, accounting standards, or applicable laws and regulations. This is the responsibility of management of the Company, the Company’s internal accounting department and the Company’s independent auditors. Because the primary function of the Committee is oversight, the Committee shall be entitled to rely on the expertise, skills and knowledge of management, the internal accounting department, and the Company’s independent auditors and the integrity and accuracy of information provided to the Committee by such persons in carrying out its oversight responsibilities. Nothing in this Charter is intended to change the responsibilities of management and the independent auditors.
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II. | STRUCTURE AND OPERATION |
Composition and Qualifications
The Committee shall consist of at least three (3) members of the Board. The Committee will be composed of members of the Board as is required by applicable laws. To the extent applicable, and except as otherwise permitted by applicable rules and applicable laws, each of the members of the Committee shall, in the judgment of the Board, meet (i) the independence requirements of Rule 10A-3 of the Securities Exchange Act of 1934 (the “1934 Act”) and any other rules and regulations promulgated by the SEC thereunder; and (ii) the independence requirements of the rules of any applicable stock exchange or quotation system upon which the Company’s shares are listed from time to time. One or more members of the Committee, as required by the applicable rules and regulations, shall be, in the judgment of the Board, an “audit committee financial expert,” as such term is defined in Rule 309 of the 1934 Act and the rules and regulations promulgated by the SEC thereunder, and be able to read and understand fundamental financial statements.
Authority
The Committee shall have the authority to (i) retain (at the Company’s expense) its own legal counsel, accountants and other consultants that the Committee believes, in its sole discretion, are needed to carry out its duties and responsibilities; (ii) conduct investigations that it believes, in its sole discretion, are necessary to carry out its responsibilities; and (iii) take whatever actions that it deems appropriate to foster an internal culture that is committed to maintaining quality financial reporting, sound business risk practices and ethical behavior within the Company. In addition, the Committee shall have the authority to request any officer, director or employee of the Company, the Company’s outside legal counsel and the independent auditors to meet with the Committee and any of its advisors and to respond to their inquiries. The Committee shall have full access to the books, records and facilities of the Company in carrying out its responsibilities. Finally, the Board shall adopt resolutions which provide for appropriate funding, as determined by the Committee, for (i) services provided by the independent auditors in rendering or issuing an audit report, (ii) services provided by any adviser employed by the Committee which it believes, in its sole discretion, are needed to carry out its duties and responsibilities, or (iii) ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties and responsibilities.
The Committee, in its capacity as a committee of the Board, is directly responsible for the appointment, compensation, retention and oversight of the work of the independent auditors engaged (including resolution of disagreements between the Company’s management and the independent auditors regarding financial reporting) for the purpose of preparing and issuing an audit report or performing other audit, review or attestation services for the Company.
If and required by applicable laws, the Audit Committee shall ensure that the independent auditors submit to the Company annually a formal written statement delineating all relationships between the independent auditors and the Company and its subsidiaries addressing the non-audit services provided to the Company or its subsidiaries and the matters set forth in Independence Standards Board Standard No. 1.
The Audit Committee shall ensure that the independent auditors submit to the Company annually a formal written statement of the fees billed for each of the following categories of services rendered by the independent auditors: (i) the audit of the Company’s annual financial statements for the most recent fiscal year and any reviews of the financial statements; (ii) information technology consulting services for the most recent fiscal year, in the aggregate and by each service (and separately identifying fees for such services relating to financial information systems design and implementation); and (iii) all other services rendered by the independent auditors for the most recent fiscal years, in the aggregate and by each service.
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Appointment and Removal
The members of the Committee shall be appointed by the Board and continue to be members until their successors are elected and qualified or until their earlier retirement, resignation or removal. Any member of the Committee may be removed, with or without cause, by majority vote of the Board at any time. However, a member of the Committee shall automatically cease to be a member of the Committee upon either ceasing to be a director of the Board or, if applicable, ceasing to satisfy any applicable standards as required in Section II above of this Charter. Vacancies on the Committee will be filled by the Board.
Chairperson
The Board may appoint one member of the Committee to serve as Chair of the Committee, to convene and chair all regular and special sessions of the Committee, set the agendas for Committee meetings, to determine and communicate to management and the full Board the information needs of the Committee, and to report Committee determinations and actions on behalf of the Committee to the full Board. If the Board fails to appoint a Chair, the members of the Committee shall elect a Chair by majority vote of the full Committee to serve at the pleasure of the majority of the full Committee. If the Chair of the Committee is not present at any meeting of the Committee, an acting Chair for the meeting shall be chosen by majority vote of the Committee from among the members present. In the case of a deadlock on any matter or vote, the Chair shall refer the matter to the Board. The Committee shall also appoint a secretary who need not be a director. All requests for information from the Company or the independent auditors shall be made through the Chair.
Delegation to Subcommittees
The Committee may delegate its duties and responsibilities to a subcommittee consisting of one or more members of the Committee. Any delegation may be made only to the extent permitted by applicable rules, regulations, and the Company’s constating documents.
III. | COMMITTEE MEETINGS |
The Chair shall preside at each meeting of the Committee and set the agendas for the Committee meetings. The Committee shall have the authority to establish its own rules and procedures for notice and conduct of its meetings as long as they are not inconsistent with any provisions of the Company’s constating documents or this Charter.
The Committee shall meet (in person or by telephonic meeting) as often as may be deemed necessary or appropriate, generally at least four times annually, or more frequently as circumstances dictate. The Committee shall meet periodically with management and the independent auditors and, if necessary, in separate executive sessions with only the independent auditors and Committee members present, or with only management and Committee members present, to discuss any matters that the Committee believes should be discussed privately. The Committee shall maintain written minutes or other records of its meetings and activities, which shall be duly filed in the Company’s records.
Except as otherwise required by the constating documents of the Company, a majority of the members of the Committee shall constitute a quorum for the transaction of business and the act of a majority of the members present at any meeting at which there is a quorum shall be the act of the Committee. The Committee may also act by unanimous written consent in lieu of a meeting.
All non-management directors who are not members of the Committee may attend and observe meetings of the Committee, but shall not participate in any discussion or deliberation unless invited to do so by the Committee, and in any event shall not be entitled to vote. The Committee may, at its discretion, include in its meetings members of the Company’s management, representatives of the Company’s outside advisors, any other personnel employed or retained by the Company or any other persons whose presence the Committee believes to be necessary or appropriate. Notwithstanding the foregoing, the Committee may also exclude from its meetings any persons it
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deems appropriate, including, but not limited to, any non-management director who is not a member of the Committee.
The Chair of the Committee shall report to the Board following meetings of the Committee and as otherwise requested by the Board.
IV. | DUTIES AND RESPONSIBILITIES |
The Committee’s role is one of oversight. The Committee shall discharge its responsibilities, and shall assess the information provided by the Company’s management and the independent auditors, in accordance with its business judgment. In discharging its oversight role, the Committee encourages free and open communication among the Committee, the Company’s independent auditors, and management, and is empowered to investigate any matter brought to its attention with all requisite access to all books, records, facilities and personnel of the Company and to the Company’s auditors and outside legal counsel.
The following functions and responsibilities are set forth as a guide with the understanding that the Committee may carry out additional functions and adopt additional policies and procedures as may be appropriate in light of changing business, legislative, regulatory, legal or other conditions.
To fulfill its responsibilities and duties, the Committee is expected to:
General
1. | Develop and maintain free and open means of communication with the Board, the Company’s independent auditors, the Company’s internal auditors, if any, and the financial and general management of the Company. |
2. | Perform any other activities as the Committee deems appropriate, or as are requested by the Board, consistent with this Charter, the Company’s constating documents and applicable laws and regulations. |
3. | Review and reassess, at least annually, the adequacy of this Charter and submit any recommended changes to the Board for its consideration. |
4. | Report its findings regularly to the Board, including any issues that arise with respect to the quality or integrity of the Company’s financial statements, the Company’s compliance with legal or regulatory requirements, and the performance and independence of the Company’s independent auditors. |
5. | Maintain minutes and other records of meetings and activities of the Committee. |
Financial Statements and Published Information
1. | Review filings with the governmental bodies, including without limitation the Canadian securities commissions and the SEC, and other published documents containing the Company’s financial statements, including any certification, report, opinion or review rendered by the independent auditors, or any press releases announcing earnings (especially the use of “pro forma” or “adjusted” information not prepared in compliance with generally accepted accounting principles) and all financial information and earnings guidance intended to be provided to analysts and the public or to rating agencies, and consider whether the information contained in these documents is consistent with the information contained in the financial statements. |
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2. | Review and discuss with management and the independent auditors the annual and quarterly financial statements prior to their filing, including the Company’s disclosure under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and a discussion with the independent auditors (i) all significant matters related to the independent auditors’ review of the financial statements and (ii) the matters required to be communicated by applicable auditing standards. |
3. | Make a recommendation to the Board regarding the inclusion of the audited annual financial statements in the Company’s annual report and interim financial statements in the Company’s quarterly reports. |
4. | Consider and review with management, the Chief Financial Officer and/or the Controller, and the independent auditors: |
(a) | significant findings during the year, including the status of previous audit recommendations, and management’s responses thereto; |
(b) | any audit problems or difficulties encountered in the course of audit work including any restrictions on the scope of activities or access to required information; |
(c) | any changes required in the planned scope of the audit plan; |
(d) | the overall scope and plans for the audit (including the audit budget and the adequacy of compensation and staffing); and |
(e) | the coordination of audit efforts to monitor completeness of coverage, reduction of redundant efforts, and the effective use of audit resources. |
5. | Oversee the services rendered by the independent auditors (including the resolution of disagreements between management and the independent auditors regarding preparation of financial statements). |
6. | Prepare and include in the Company’s filings any report from the Committee or other disclosures as required by applicable laws and regulations. |
Performance and Independence of Independent Auditor
1. | On an annual basis, request from the independent auditors a formal written statement delineating all relationships between the independent auditors and the Company, consistent with Independence Standards Board Standard No. 1 and with all applicable laws, rules and regulations. The Committee shall review the qualification, performance and independence of the independent auditor annually and make determinations regarding the appointment or termination of the independent auditor. The Committee shall actively engage in a dialogue with the Company’s management and independent auditors with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent auditors from management and the Company and take appropriate action in response to the outside auditors’ report to satisfy itself of the independent auditor’s objectivity and independence. The Committee shall also: |
(a) | confirm with the independent auditors that the independent auditors are in compliance with the partner rotation requirements established by applicable laws and regulations; |
(b) | consider whether, in the interest of assuring continuing independence of the independence auditors, the Company should regularly rotate its independent auditors; |
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(c) | set clear policies for the Company’s hiring of employees or former employees of the independent auditors; and |
(d) | if applicable, consider whether the independent auditor’s provision of any permitted non-audit services to the Company is compatible with maintaining the independence of the independent auditors. |
2. | At least annually, obtain and review a written report by the independent auditors describing all relationships between the Company and the independent auditors and discuss the independent auditor’s internal quality-control procedures, and any material issues raised by the most recent peer review. |
Review of Services and Audit by Independent Auditor
1. | Have the sole authority and responsibility to appoint, evaluate, determine the compensation of and, where appropriate, replace the independent auditor. The Committee may, in its discretion, seek stockholder ratification of the independent auditor it appoints. The independent auditor shall report directly to the Committee, and the Committee’s responsibility includes the resolution of disagreements between management and the independent auditors regarding financial reporting. |
2. | Consider and pre-approve all auditing and non-audit services provided by the independent auditors. The Committee may delegate the authority to grant pre-approvals to one or more members of the Committee, whose decisions must be presented to the full Committee at its scheduled meetings. |
3. | Following completion of the annual audit, review with management, the independent auditors and the internal accounting department: |
(a) | the Company’s annual financial statements and related footnotes; |
(b) | the independent auditors’ audit of the financial statements and the report thereon; |
(c) | any significant changes required in the independent auditors’ audit plan; and |
(d) | other matters related to the conduct of the audit which are to be communicated to the Committee under generally accepted auditing standards |
4. | Reviewing with the independent auditors, as required by applicable laws and regulations: |
(a) | all critical accounting policies and practices used by the Company; |
(b) | all alternative treatments of financial information within generally accepted accounting principles that have been discussed with Company management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditors; and |
(c) | other material communications between the independent auditors and management, such as any management letters or schedule of unadjusted differences. |
Financial Reporting Process
1. | Review the activities, organizational structure, staffing and qualifications of the internal audit function, if any. |
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2. | The Committee shall review and approve any material off-balance sheet arrangements or other material financial arrangements of the Company that do not appear on the financial statements of the Company. |
3. | Review and discuss periodically with management and the independent auditors: |
(a) | the adequacy and effectiveness of the Company’s internal controls over financial reporting and disclosure controls and procedures; |
(b) | all significant deficiencies in the design or operation of the Company’s internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data; |
(c) | the integrity of its financial reporting processes; |
(d) | any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls; and |
(e) | the adequacy of its risk management programs and policies, including recommendations for any improvements in these areas. |
4. | Establish regular and separate systems of reporting to the Committee by each of management, the independent auditors and internal accounting department regarding any significant judgments made in management’s preparation of the financial statements and the view of each as to appropriateness of such judgments. |
5. | Review with management the adequacy of the insurance and fidelity bond coverages, reported contingent liabilities, and management’s assessment of contingency planning. Review management’s plans regarding any changes in accounting practices or policies and the financial impact of such changes, any major areas in management’s judgment that have a significant effect upon the financial statements of the Company, and any litigation or claim, including tax assessments, that could have a material effect upon the financial position or operating results of the Company. |
6. | Review with the Company’s counsel any legal, tax or regulatory matter that may have a material impact on the Company’s financial statements, operations, related Company’s compliance policies, and programs and reports received from regulators. |
7. | Meeting periodically with management, the internal auditors, if any, and the independent auditors in separate executive sessions to discuss matters which the Committee or these groups believe should be discussed privately. |
Ethical and Legal Compliance/General
1. | Review periodically with the Company’s general counsel any legal and regulatory matters that may have a material impact on the Company’s financial statements. |
2. | Establish procedures for (i) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters, and (ii) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters. |
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3. | The Committee shall review and approve any transactions or courses of dealing with related parties. |
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SCHEDULE B
COMPENSATION COMMITTEE CHARTER
NICOLA MINING INC.
(the “Company”)
COMPENSATION COMMITTEE CHARTER
(Adopted as of July 7, 2023)
1. | PURPOSE of the Compensation Committee |
The Compensation Committee (the “Committee”) is a standing committee of the Board of Directors (the “Board”) of the Company. The role of the Committee is to:
(a) | review and recommend to the Board the appropriate compensation level for the Company’s executive officers; |
(b) | oversee the Company’s compensation and benefit plans, policies and practices, including its executive compensation plans and incentive-compensation and equity-based plans; |
(c) | monitor and evaluate, at the Committee’s sole discretion, matters relating to the compensation and benefits structure of the Company; and |
(d) | take such other actions within the scope of this Charter as the Board may assign to the Committee from time to time or as the Committee deems necessary or appropriate. |
2. | COMPOSITION, OPERATIONS AND AUTHORITY |
Composition
The Committee shall be composed of members of the Board, the number of which shall be fixed from time to time by resolution adopted by the Board. Each member of the Committee shall be independent as determined by the Board in accordance with the applicable requirements of the laws governing the Company, the applicable stock exchanges on which the Company’s securities are listed and applicable securities regulatory authorities (collectively, the “Applicable Law”).
Members of the Committee shall be appointed by the Board and continue to be members until their successors are elected and qualified or until their earlier retirement, resignation or removal. Any member of the Committee may be removed by the Board in its discretion. However, a member of the Committee shall automatically cease to be a member of the Committee upon ceasing to be a director of the Board. Vacancies on the Committee will be filled by the Board.
Authority
The authority of the Committee is subject to the provisions of this Charter, the constating documents of the Company, such limitations as may be imposed by the Board from time to time and Applicable Law.
The Committee shall have the authority to (i) retain (at the Company’s expense) its own legal counsel and other advisors and experts that the Committee believes, in its sole discretion, are needed to carry out its duties and responsibilities, including, without limitation, the retention of a compensation consultant to assist the Committee in evaluating director and executive officer compensation; and (ii) conduct investigations that it believes, in its sole
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discretion, are necessary to carry out its responsibilities. In addition, the Committee shall have the authority to request any officer, director or employee of the Company, or any other persons whose advice and counsel are sought by the Committee, such as members of the Company’s management or the Company’s outside legal counsel and independent accountants, to meet with the Committee or any of its advisors and to respond to their inquiries. The Committee shall have full access to the books, records and facilities of the Company in carrying out its responsibilities.
The Committee shall have the authority to delegate to one or more of its members, responsibility for developing recommendations for consideration by the Committee with respect to any of the matters referred to in this Charter.
Operations
The Board may appoint one member of the Committee to serve as chair of the Committee (the “Chair”), but if it fails to do so, the members of the Committee shall designate a Chair by majority vote of the full Committee to serve at the pleasure of the majority of the full Committee. If the Chair of the Committee is not present at any meeting of the Committee, an acting Chair for the meeting shall be chosen by majority vote of the Committee from among the members present. In the case of a deadlock on any matter or vote, the Chair shall refer the matter to the Board. The Committee may appoint a secretary who need not be a director of the Board or Committee.
The Chair shall preside at each meeting of the Committee and set the agendas for the Committee meetings. The Committee shall have the authority to establish its own rules and procedures for notice and conduct of its meetings as long as they are not inconsistent with any provisions of the Company’s constating documents or this Charter.
The Committee shall have regular meetings (in person or by telephonic meeting) on at least a semi-annual basis or more frequently as circumstances dictate. The Committee shall maintain written minutes or other records of its meetings and activities, which shall be duly filed in the Company’s records. The Committee shall meet separately, on at least an annual basis, with the Chief Executive Officer, the vice president of human resources (or similar position) and any other corporate officers as the Board and the Committee deem appropriate to discuss and review the performance criteria and compensation levels of key executive officers.
Except as otherwise required by the Company’s constating documents, a majority of the members of the Committee shall constitute a quorum for the transaction of business and the act of a majority of the members present at any meeting at which there is a quorum shall be the act of the Committee. The Committee may also act by unanimous written consent in lieu of a meeting.
The Chair of the Committee shall report to the Board following meetings of the Committee and as otherwise requested by the Board.
3. | Responsibilities and duties |
The Committee’s primary responsibilities are to:
(a) | review the adequacy and form of compensation of the Company’s executive officers and ensure that the compensation realistically reflects the risks and responsibilities of such positions; |
(b) | review and recommend to the Board for approval policies relating to compensation of the Company’s executive officers and directors; |
(c) | review the performance of the Company’s executive officers and recommend annually to the Board for approval the amount and composition of compensation to be paid to the Company’s executive officers; |
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(d) | review and make recommendations to the Board with respect to pension, stock option and other incentive plans, benefit plans, perquisites and other remuneration matters with respect to the Company’s executive officers; |
(e) | review and approve the corporate goals and objectives relevant to compensation of the Chief Executive Officer (the “CEO”) and the Chief Financial Officer (the “CFO”) and recommend them to the Board for approval, lead the evaluation of the CEO’s and the CFO’s performance in light of these goals and objectives and recommend the compensation of the CEO and the CFO based on this evaluation; |
(f) | review the adequacy and form of compensation of directors and ensure that the compensation realistically reflects the responsibilities and risks of such positions and fix the amount and composition of compensation to be paid to members of the Board and the committees thereof; |
(g) | review and assess the Company’s compensation and benefit policies programs relating to all employees; |
(h) | review at least annually the corporate goals and objectives of the Company’s executive compensation plans, incentive-compensation and equity based plans and other general compensation plans (collectively the “Company Plans”), and if appropriate, recommend that the Board amend these goals and objectives; |
(i) | review at least annually the Company Plans in light of the Company’s goals and objectives with respect to such plans, and, if the Committee deems it appropriate, recommend to the Board the adoption of new, or the amendment of existing, Company Plans; |
(j) | monitor and assess the Company’s compliance with the requirements established by the Applicable Law; |
(k) | review executive compensation disclosure prior to public disclosure or filing with any securities regulatory authorities; |
(l) | issue an annual report on executive compensation for inclusion in the Company’s public filings, if required by Applicable Law; |
(m) | administer and otherwise exercise the various authorities prescribed for the Committee by any of the Company Plans; |
(n) | review, and if appropriate recommend for approval, any agreements between the Company and the CEO or the Company and its executive officers, including those assessing retirement, termination of employment or other special circumstances, as appropriate; |
(o) | exercise such other powers and perform such other duties and responsibilities as are incidental to the purposes, duties and responsibilities specified herein and as may from time to time be delegated to the Committee by the Board; |
(p) | report to the Board on all other matters and recommendations made by the Committee; |
(q) | report to the Board following each meeting of the Committee and at such other times as the Board may consider appropriate; |
(r) | maintain minutes and other records of meetings and activities of the Committee; |
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(s) | follow the process established for all committees of the Board for assessing the Committee’s performance; and |
(t) | review and assess the adequacy of this Charter on an annual basis and, where necessary or desirable, recommend changes to the Board. |
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SCHEDULE C
GOVERNANCE COMMITTEE CHARTER
NICOLA MINING INC.
(the “Company”)
CORPORATE GOVERNANCE COMMITTEE CHARTER
(Adopted as of July 7, 2023)
1. | PURPOSE of the Compensation Committee |
The Corporate Governance Committee (the “Committee”) is a standing committee of the Board of Directors (the “Board”) of the Company. The role of the Committee is to:
(a) | advise and make recommendations to the Board in its oversight role with respect to: (i) the development of the Company’s corporate governance policies, principles, practices and processes; (ii) the effectiveness of the Board and its committees; (iii) the contributions of individual directors; (iv) the identification of individuals qualified to become board members; and (v) the selection of director nominees for election by the shareholders; and |
(b) | take such other actions within the scope of this Charter as the Board may assign to the Committee from time to time or as the Committee deems necessary or appropriate. |
2. | COMPOSITION, OPERATIONS AND AUTHORITY |
Composition
The Committee shall be composed of members of the Board, the number of which shall be fixed from time to time by resolution adopted by the Board. A majority of the members of the Committee shall be independent as determined by the Board in accordance with the applicable requirements of the laws governing the Company, the applicable stock exchanges on which the Company’s securities are listed and applicable securities regulatory authorities (collectively, the “Applicable Law”).
Members of the Committee shall be appointed by the Board and continue to be members until their successors are elected and qualified or until their earlier retirement, resignation or removal. Any member of the Committee may be removed by the Board in its discretion. However, a member of the Committee shall automatically cease to be a member of the Committee upon ceasing to be a director of the Board. Vacancies on the Committee will be filled by the Board.
Authority
The authority of the Committee is subject to the provisions of this Charter, the constating documents of the Company, such limitations as may be imposed by the Board from time to time and Applicable Law.
The Committee shall have the authority to: (i) retain (at the Company’s expense) its own legal counsel and other advisors and experts that the Committee believes, in its sole discretion, are needed to carry out its duties and responsibilities; and (ii) conduct investigations that it believes, in its sole discretion, are necessary to carry out its responsibilities. In addition, the Committee shall have the authority to request any officer, director or employee of the Company, or any other persons whose advice and counsel are sought by the Committee, such as members of
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the Company’s management or the Company’s outside legal counsel and external auditors, to meet with the Committee or any of its advisors and to respond to their inquiries. The Committee shall have full access to the books, records and facilities of the Company in carrying out its responsibilities.
The Committee shall have the authority to delegate to one or more of its members, responsibility for developing recommendations for consideration by the Committee with respect to any of the matters referred to in this Charter.
Operations
The Board may appoint one member of the Committee to serve as chair of the Committee (the “Chair”), but if it fails to do so, the members of the Committee shall designate a Chair by majority vote of the full Committee to serve at the pleasure of the majority of the full Committee. If the Chair of the Committee is not present at any meeting of the Committee, an acting Chair for the meeting shall be chosen by majority vote of the Committee from among the members present. In the case of a deadlock on any matter or vote, the Chair shall refer the matter to the Board. The Committee may appoint a secretary who need not be a director of the Board or Committee.
The Chair shall preside at each meeting of the Committee and set the agendas for the Committee meetings. The Committee shall have the authority to establish its own rules and procedures for notice and conduct of its meetings as long as they are not inconsistent with any provisions of the Company’s constating documents or this Charter.
The Committee shall have regular meetings (in person or by telephonic meeting) on at least a semi-annual basis or more frequently as circumstances dictate. The Committee shall maintain written minutes or other records of its meetings and activities, which shall be duly filed in the Company’s records.
Except as otherwise required by the Company’s constating documents, a majority of the members of the Committee shall constitute a quorum for the transaction of business and the act of a majority of the members present at any meeting at which there is a quorum shall be the act of the Committee. The Committee may also act by unanimous written consent in lieu of a meeting.
The Chair of the Committee shall report to the Board following meetings of the Committee and as otherwise requested by the Board.
Responsibilities and duties
The Committee’s primary responsibilities are to:
(a) | review the Board committee structure on an annual basis and recommend to the Board any changes it considers necessary or desirable with respect to that committee structure, including (all in consultation with the Chair of the Board): (i) the mandates of each committee; (ii) the criteria for membership on any committee; (iii) the composition of each committee; (iv) the appointment and removal of members from any committee; (v) the operations of each committee, including the ability of any committee to delegate any or all of its responsibilities to a sub-committee of that committee; and (vi) the process for each committee reporting to the Board; |
(b) | review the charters of each committee of the Board, and recommend such changes as are required or desirable; |
(c) | review the Company’s corporate governance practices at least annually and recommend appropriate policies, practices and procedures to the Board; |
(d) | review the corporate governance sections to be included in the Company’s annual report or proxy material, including the statement of corporate governance practices; |
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(e) | develop and recommend to the Board a process for assessing the effectiveness of the Board, as a whole, the committees of the Board and the contribution of individual directors and be responsible for overseeing the execution of the assessment process approved by the Board; |
(f) | evaluate its effectiveness and the effectiveness of its members pursuant to the process for such evaluation approved by the Board; |
(g) | review, as required, the skills, areas of expertise, backgrounds, independence and qualifications of the members of the Board; |
(h) | review, as required, the size and composition of the Board to ensure that there remain an appropriate number of “unrelated” and “independent” directors; |
(i) | serve as a forum for individual directors to voice any concerns on matters not readily discussed at regular meetings of the Board; |
(j) | recommend to the Board a system which enables an individual director to engage outside advisers at the Company’s expense in appropriate circumstances and with the approval of the Committee; |
(k) | recommend to the Board appropriate criteria for the selection of new directors, periodically review the criteria adopted by the Board and, if deemed desirable, recommend to the Board changes to such criteria; |
(l) | identify and recommend qualified candidates to the Board who meet the selection criteria approved by the Board, and recommend the slate of nominees for election by shareholders at the annual meeting (and in this regard the Committee shall have the sole authority to retain and terminate any search firm to be used to identify director candidates or to otherwise assist the Committee in the discharge of its responsibilities, including the sole authority to approve the search firm’s fees and other retention terms); |
(m) | recommend to the Board structures and procedures to enable the Board to function independently of management and oversee the development and implementation of any structures and procedures approved by the Board; |
(n) | review the relationship of the Board with management and recommend, where appropriate, limits on management’s authority to act without the express approval of the Board; |
(o) | assess shareholder proposals as necessary for inclusion in the management information circular and make appropriate recommendations to the Board; |
(p) | oversee: (i) the development and implementation of orientation programs for new directors; and (ii) continuing education for all directors; |
(q) | monitor and assess the Company’s compliance with the requirements established by the Applicable Law; |
(r) | exercise such other powers and perform such other duties and responsibilities as are incidental to the purposes, duties and responsibilities specified herein and as may from time to time be delegated to the Committee by the Board; |
(s) | report to the Board on all other matters and recommendations made by the Committee; |
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(t) | report to the Board following each meeting of the Committee and at such other times as the Board may consider appropriate; |
(u) | maintain minutes and other records of meetings and activities of the Committee; |
(v) | follow the process established for all committees of the Board for assessing the Committee’s performance; and |
(w) | review and assess the adequacy of this Charter on an annual basis and, where necessary or desirable, recommend changes to the Board. |
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Exhibit 99.2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Directors of
Nicola Mining Inc.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of financial position of Nicola Mining Inc. (the “Company”), as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive loss, changes in shareholders’ deficit, and cash flows for the years ended December 31, 2025 and 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years ended December 31, 2025 and 2024 in conformity with IFRS Accounting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards”).
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, as at December 31, 2025, the Company has an accumulated deficit of $114,484,337 and working capital of $3,114,160. These events and conditions indicate that a material uncertainty exists that may raise substantial doubt to the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
DAVIDSON & COMPANY LLP | 1200 – 609 Granville Street | 604 687 0947 |
| PO BOX 10372, Pacific Centre | davidson-co.com |
| Vancouver, BC V7Y 1G6 | |
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Our audits included performing procedures to assess the risks of material misstatements of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the Company’s auditor since 2025.
/s/ | |
| |
Chartered Professional Accountants | |
| |
April 27, 2026 | |
Page 3
NICOLA MINING INC.
Consolidated Statements of Financial Position
(Expressed in Canadian dollars)
| | Note | | December 31, 2025 | | December 31, 2024 | ||
Assets | | | | | | | | |
Current assets |
| |
| | |
| | |
Cash and cash equivalent | | | | $ | |
| $ | |
Amounts receivable | | 4 | |
| |
| | |
Marketable securities | | 8 | |
| |
| | |
Prepaid expenses and other assets | | | |
| |
| | |
| | | |
| | | | |
Non-current assets | | | |
| |
| | |
Property, plant, and equipment | | 5 | |
| |
| | |
Right-of-use assets | | | |
| |
| | |
Mineral interests | | 7 | |
| |
| | |
Restricted cash | | 9 | |
| |
| | |
Total assets | | | | $ | |
| $ | |
Liabilities | | | |
| |
| | |
Current liabilities | | | |
| |
| | |
Accounts payable and accrued liabilities | | 16 | | $ | | | $ | |
Current portion of lease liabilities | | | |
| | |
| |
Deferred revenue | | | | | | | | — |
Loan payable | | 16 | |
| | |
| — |
Secured convertible debentures | | 10 | |
| — | |
| |
Flow-through liability | | 13 | |
| — | |
| |
| | | |
| | |
| |
Non-current liabilities | | | |
| | |
| |
Lease liabilities | | | |
| | |
| |
Asset retirement obligation (“ARO”) | | 11 | |
| | |
| |
Total liabilities | | | |
| | |
| |
Equity | | | |
| | |
| |
Shareholders’ deficit | | | |
| | |
| |
Share capital | | 13 | |
| | |
| |
Equity component of convertible debentures | | 10 | |
| — | |
| |
Warrants | | 13 | |
| | |
| |
Contributed surplus | | 14 | |
| | |
| |
Accumulated deficit | | | |
| ( | |
| ( |
Total shareholders’ deficit | | | |
| ( | |
| ( |
Total liabilities and shareholders’ deficit | | | | $ | | | $ | |
Nature of operations and going concern (Note 1)
Subsequent events (Note 20)
Approved on behalf of the Board: | | | |
| | | |
Peter Espig (signed) | Director | Frank Hoegel (signed) | Director |
The accompanying notes are an integral part of these consolidated financial statements.
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NICOLA MINING INC.
Consolidated Statements of Operations and Comprehensive Loss
(Expressed in Canadian dollars)
| | | | Year ended December 31 | ||||
| | Note | | 2025 | | 2024 | ||
Milling revenue |
| 15 | | $ | | | $ | |
Milling – cost of sales |
| 6 | |
| ( | |
| ( |
Gross margin |
| | |
| ( | |
| ( |
| | | | | | | | |
Care and maintenance |
| | |
| ( | |
| ( |
Change in estimate and accretion of ARO |
| 11 | |
| | |
| |
Consulting fees |
| 16 | |
| ( | |
| ( |
Depreciation |
| | |
| ( | |
| ( |
Exploration costs |
| 7 | |
| ( | |
| ( |
Office and general |
| | |
| ( | |
| ( |
Professional fees |
| | |
| ( | |
| ( |
Travel and investor relations |
| | |
| ( | |
| ( |
Regulatory and transfer agent fees |
| | |
| ( | |
| ( |
Rent |
| | |
| ( | |
| ( |
Salaries and benefits |
| 16 | |
| ( | |
| ( |
Share-based compensation |
| 14,16 | |
| ( | |
| ( |
Stripping costs | | 7 | | | ( | | | — |
Total operating expenses |
| | | | ( | |
| ( |
Net loss before other items |
| | | | ( | |
| ( |
| | | | | | | | |
Flow-through premium |
| 13 | |
| | |
| |
Other income |
| 15 | |
| | |
| |
Finance costs |
| 12 | |
| ( | |
| ( |
Fair value revaluation – marketable securities |
| 8 | |
| | |
| |
Foreign exchange loss |
| | | | ( | |
| ( |
Net loss for the year | | | | $ | ( | | $ | ( |
| | | | | | | | |
Loss per share – basic and diluted | | | | $ | ( | | $ | ( |
Weighted average number of common shares outstanding – basic and diluted | | | |
| | |
| |
The accompanying notes are an integral part of these consolidated financial statements.
Page 5
NICOLA MINING INC.
Consolidated Statements of Cash Flows
(Expressed in Canadian dollars)
| | Year Ended December 31 | ||||
| | 2025 | | 2024 | ||
Operating Activities |
| | |
| | |
Net loss for the year | | $ | ( | | $ | ( |
Adjustments for: | |
| | |
| |
Change in estimate and accretion of ARO | |
| ( | |
| ( |
Share-based compensation | |
| | |
| |
Depreciation | |
| | |
| |
Non-cash interest and finance costs | |
| | |
| |
Foreign exchange loss | |
| ( | |
| — |
Flow-through premium | |
| ( | |
| ( |
Fair value revaluation – marketable securities | |
| ( | |
| ( |
Changes in non-cash working capital items | |
| | |
| |
Amounts receivable | |
| ( | |
| ( |
Prepaid expenses and other assets | |
| ( | |
| ( |
Accounts payable and accrued liabilities | |
| | |
| |
Deferred revenue | | | | | — | |
Cash Used in Operating Activities | |
| ( | |
| ( |
Investing Activities | |
| | |
| |
Purchase of marketable securities | |
| ( | |
| ( |
Purchase of property, plant, and equipment | |
| ( | |
| ( |
Restricted cash advanced | |
| — | |
| ( |
Proceeds – sales of marketable securities | |
| | |
| |
Cash Provided by (Used in) Investing Activities | |
| | |
| ( |
Financing Activities | |
| | |
| |
Proceeds from issuance of common shares | |
| | |
| |
Share issuance costs | |
| ( | |
| ( |
Interest payment on secured convertible debenture | |
| — | |
| ( |
Repayment of lease liabilities | |
| ( | |
| ( |
Loan proceeds | |
| | |
| — |
Proceeds from warrants exercised | |
| | |
| — |
Proceeds from stock options exercised | |
| | |
| — |
Cash Provided by Financing Activities | |
| | |
| |
Net change in cash and cash equivalent for the year | |
| | |
| ( |
Cash and cash equivalent - beginning of year | |
| | |
| |
Cash and cash equivalent - end of year | | $ | | | $ | |
Non-cash transactions: | |
| | |
| |
Property, plant and equipment purchase in accounts payable and accrued liabilities | | $ | | | $ | — |
Fair value of stock options exercised | | $ | | | $ | — |
Fair value of shares issued to settle RSUs vested | | $ | | | $ | — |
Reclassification of the equity component of convertible debentures upon conversion | | $ | | | $ | |
Shares issued to settle convertible debentures and interest | | $ | | | $ | |
Initial recognition of flow-through premium liability | | $ | — | | $ | |
Initial recognition of right-of-use assets and lease liabilities | | $ | | | $ | |
Breakdown of cash and cash equivalent: | | | | | | |
Cash | | $ | | | $ | |
GIC | | | | | | |
Cash and cash equivalent - end of year | | $ | | | $ | |
The accompanying notes are an integral part of these consolidated financial statements.
Page 6
NICOLA MINING INC.
Consolidated Statements of Changes in Shareholders’ Deficit
(Expressed in Canadian dollars)
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | Equity | | | | | | | | | | |
| | | | | | | | | | Component | | | | | | | | | | |
| | | | | | | | | | of | | | | | | | | Total | ||
| | Number of | | Share | | | | | Convertible | | Contributed | | Accumulated | | Shareholders’ | |||||
| | Common Shares | | Capital | | Warrants | | Debentures | | Surplus | | Deficit | | Deficit | ||||||
Balance, January 1, 2025 | | | | $ | | | $ | | | $ | | | $ | | | $ | ( | | $ | ( |
Share issuance financing | | | | | | | | — | | | — | | | — | | | — | | | |
Share issuance financing, flow-through | | | | | | | | — | | | — | | | — | | | — | | | |
Share issuance costs | | — | | | ( | | | — | | | — | | | — | | | — | | | ( |
Stock options exercised |
| |
| | |
| | — |
| | — |
| | ( |
| | — |
| | |
Warrants exercised |
| |
| | |
| | — |
| | — |
| | — |
| | — |
| | |
Convertible debenture conversion |
| |
| | |
| | — |
| | ( |
| | — |
| | — |
| | |
Shares issued to settle RSUs vested |
| |
| | |
| | — |
| | — |
| | ( |
| | — |
| | — |
Share-based compensation |
| — |
| | — |
| | — |
| | — |
| | |
| | — |
| | |
Reclassification of equity component of convertible debentures to deficit |
| — |
| | — |
| | — |
| | ( |
| | — |
| | |
| | — |
Net loss for the year |
| — |
| | — |
| | — |
| | — |
| | — |
| | ( |
| | ( |
Balance, December 31, 2025 |
| | | $ | | | $ | | | $ | — | | $ | | | $ | ( | | $ | ( |
| | | | | | | | | | | | | | | | | | | | |
Balance, January 1, 2024 |
| | | $ | | | $ | | | $ | | | $ | | | $ | ( | | $ | ( |
Share issuance financing |
| | |
| | |
| — | |
| — | |
| — | |
| — | |
| |
Share issuance costs |
| — | |
| ( | |
| — | |
| — | |
| — | |
| — | |
| — |
Flow-through premium |
| — | |
| ( | |
| — | |
| — | |
| — | |
| — | |
| ( |
Convertible debenture conversion |
| | |
| | |
| — | |
| ( | |
| — | |
| — | |
| |
Share-based compensation |
| — | |
| — | |
| — | |
| — | |
| | |
| — | |
| |
Net loss for the year |
| — | |
| — | |
| — | |
| — | |
| — | |
| ( | |
| ( |
Balance, December 31, 2024 |
| | | $ | | | $ | | | $ | | | $ | | | $ | ( | | $ | ( |
The accompanying notes are an integral part of these consolidated financial statements.
Page 7
1. | NATURE OF OPERATIONS AND GOING CONCERN |
Nicola Mining Inc. (the “Company” or “Nicola”) is a junior exploration company that is engaged in the business of identification, acquisition, and exploration of mineral property interests together with custom milling operations at its mill located in Merritt, B.C. (the “Merritt Mill”). The Company’s head office is located at 3329 Aberdeen Road, Lower Nicola, B.C. Nicola is a publicly listed company incorporated under the Business Corporations Act (British Columbia). The Company’s common shares are listed on the TSX Venture Exchange (the “TSX-V”) under the symbol “NIM.V”, the Nasdaq Capital Market under the symbol “NICM”, and on OTCQB operated by the OTC Markets Group Inc. under the ticker “HUSIF”.
As at December 31, 2025, the Company had an accumulated deficit of $
The Company’s business may be affected by changes in political and market conditions, such as interest rates, availability of credit, inflation rates, tariffs, changes in laws, and national and international circumstances. Recent geopolitical events and potential economic global challenges such as the risk of higher inflation and energy crises, may create further uncertainty and risk with respect to the prospects of the Company’s business. These factors represent a material uncertainty that may raise substantial doubt about the Company’s ability to continue as a going concern. Realization values may be substantially different from carrying values as shown and the Company’s consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern.
These consolidated financial statements have been prepared using the going concern concept, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.
2. | BASIS OF PRESENTATION |
a)Statement of Compliance with IFRS Accounting Standards
The consolidated financial statements of Nicola have been prepared in accordance with IFRS Accounting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
These consolidated financial statements have been authorized for release by the Company’s Board of Directors on April 27, 2026.
b)Basis of Consolidation
These consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Huldra Properties Inc. All inter-company balances, and transactions are eliminated on consolidation.
c)Basis of Measurement
These consolidated financial statements are presented in Canadian dollars, which is also the Company’s and its subsidiary’s functional currency and have been prepared on a historical cost basis, except for certain financial instruments, which are carried at fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.
Page 8
2. | BASIS OF PRESENTATION – (continued) |
d) | Use of Estimates and Judgments |
The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments and estimates which affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. The judgments that have the most significant effect on the amounts recognized in the Company’s consolidated financial statements are as follows:
| i) | Going concern |
The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to conduct its planned work program on its mineral properties, meet its on-going levels of corporate overhead and commitments, keep its properties in good standing and discharge its liabilities as they come due. These matters result in material uncertainties which may cast significant doubt about the Company’s ability to continue as a going concern. See note 1 for details.
| ii) | Revenue – Agent versus Principal |
The Company uses judgment in assessing whether it is acting as an agent or principal in earning milling revenues. As part of this determination, consideration has been given as to whether the Company control the goods being delivered to the customer, is primarily responsible for fulling the promise to provides goods to the customer, having any inventory risk, and the Company’s ability in establishing pricing. Management has reviewed the relevant factors and assessed that the Company is an agent.
e) | Key Sources of Estimation Uncertainty |
The significant assumptions about the future and other major sources of estimation uncertainty as at the end of the reporting period that have a significant risk of resulting in a material adjustment to the carrying amounts of the Company’s assets and liabilities are as follows:
| i) | ARO |
The Company’s rehabilitation provision represents management’s best estimate of the present value of the future cash outflows required to settle the liability. Management assesses these provisions on an annual basis or when new information becomes available. This assessment includes the estimation of the future rehabilitation costs, the timing of these expenditures, inflation, and the impact of changes in discount rates, interest rates and foreign exchange rates. The actual future expenditures may differ from the amounts currently provided if the estimates made are significantly different than actual results or if there are significant changes in environmental and/or regulatory requirements in the future.
| ii) | Impairment of non-current assets |
At the end of each reporting period the carrying amounts of the Company’s non-financial assets are reviewed to determine whether there is any indication that those assets are impaired. The determination of whether indicators of impairment exist is based on management’s judgment of whether there are internal and external factors that would indicate that a non-financial asset is impaired. Impairment is assessed at the level of cash-generating units or “CGUs”, which are identified as the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets.
Page 9
3. | MATERIAL ACCOUNTING POLICIES |
a)Property, Plant, and Equipment
On initial recognition, property, plant, and equipment (“PPE”) are valued at cost, being the purchase price and directly attributable costs of acquisition or construction required to bring the asset to the location and condition necessary to be capable of operating in the manner intended by the Company, including appropriate borrowing costs and the estimated present value of any future unavoidable costs of dismantling and removing items.
PPE is subsequently stated at cost less accumulated depreciation, less any accumulated impairment losses, apart from land, which is not depreciated.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost can be measured reliably. The carrying amount of a replaced asset is derecognized when replaced. Repair and maintenance costs are charged to the statement of operations during the financial period in which they are incurred.
The Company allocates the amount initially recognized in respect of an item of PPE to its significant parts and depreciates separately each part. Residual values, method of depreciation and useful lives of the assets are reviewed annually and adjusted if appropriate.
Gains and losses on disposal of an item of PPE are determined by comparing the proceeds from disposal with the carrying amount of the asset and are recognized within operating expenses in the statement of operations.
PPE are depreciated using the following methods:
Mill | | |
Computers and office equipment | | |
Camp and site infrastructure | | |
Heavy machinery and equipment | |
b)Impairment of Non-financial Assets
At the date of each statement of financial position, the carrying amounts of the Company’s non-financial assets are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated to determine the extent of the impairment, if any. Where the asset does not generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
An asset’s recoverable amount is the higher of fair value less costs to sell and value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in the statement of operations for the period.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in the statement of operations.
Page 10
3. | MATERIAL ACCOUNTING POLICIES – (continued) |
c)Mineral Interests
The Company follows the method of accounting for its mineral interests whereby all costs related to acquisition and site restoration are capitalized by project, net of recoveries received. The amounts shown as mineral interests represent costs incurred to date less amounts written off, and do not necessarily represent present or future values. These costs will be amortized against revenue from future production or written off if the interest is abandoned or sold. The ultimate recoverability of amounts capitalized for mineral interests is dependent upon the delineation of economically recoverable ore reserves, the Company’s ability to obtain the necessary financing to complete development and realize profitable production or proceeds from the disposition thereof.
d)Exploration and Evaluation Expenditures
Exploration and evaluation expenditures (“E&E”) excluding mineral interest acquisition and site restoration costs are charged to the statement of operations as incurred. When it has been established that a mineral deposit is commercially mineable, and a decision has been made to formulate a mining plan (which occurs upon completion of a positive economic analysis of the mineral deposit), the costs subsequently incurred to develop the mine on the property prior to the start of the mining operations is capitalized. Any recoveries received that relate to exploration costs are recorded as a recovery of such costs.
e)Stripping Costs
Stripping costs that provide a benefit in the form of inventory produced are accounted for as part of the cost of inventory. Where stripping activity provides improved access to ore that will be mined in future periods, the costs are recognized as a stripping activity asset if it is probable that the future economic benefit (improved access to the ore body) associated with the stripping activity will flow to the entity, the entity can identify the component of the ore body for which access has been improved; and the costs relating to the stripping activity associated with that component can be measured reliably. As at December 31, 2025, management has determined that it is not probable that future economic benefit will flow to the entity. Accordingly, stripping costs have been expensed in the statement of operations and comprehensive loss.
f)Revenue Recognition
Milling Revenue
Revenue includes precious metals (gold and silver) revenue and milling revenue.
Precious metals revenue, based on spot metal prices, is recorded when the goods are physically delivered. The performance obligations are satisfied when concentrate is delivered to the customer. At this point in time, the Company physically transfers the product and the significant risks and rewards related to ownership of the concentrate to the customer. Revenue from gold sales is recorded based on the contract price.
Milling revenue is recorded when the ore processing service is rendered by the Company, accepted by the client and collection is reasonably assured. The performance obligations are satisfied when the milling services have been completed.
When applicable, the Company excludes amounts collected on behalf of third-parties from revenue when it does not control the goods or services before they are transferred to a customer, since it is acting as an agent rather than a principal to the transaction.
Page 11
3. | MATERIAL ACCOUNTING POLICIES – (continued) |
f)Revenue Recognition – (continued)
Milling Revenue
The Company’s concentrate sales contract provides for certain provisional payments based upon provisional assays and quoted prices. Final settlement is also subject to final adjustments based on an inspection of the product by the buyer. In such cases, sales revenue is initially recognized on a provisional basis using the Company’s best estimate of the contained metal and is subsequently adjusted. Revenue is recorded under this contract at the time the control passes to the buyer based on the expected settlement period. Revenue on provisionally priced sales is recognized based on estimates of the fair value of the consideration receivable based on forward market prices and estimated quantities.
Royalty on Gravel Pit
The Company earns royalty income based on the extraction and shipment of tonnes of gravel and rocks from its site by a third party. The royalty is calculated based on the weight of gravel and rocks that are extracted and shipped off site by the operator. Royalty income is recognized when the performance obligation is satisfied, which is when the gravel and rocks are shipped off site at which point economic benefits will flow to the Company and income can be measured reliably. Royalty income is presented as other income in the consolidated statements of operations.
Space Rental
Rental income arising from monthly rental of space for storage to third parties is recognized as other income when the performance obligation is satisfied over the rental period, it is probable that the economic benefits will flow to the Company and the income can be measured reliably over the period of the rental. Rental income is presented within other income in the consolidated statements of operations.
Materials Disposal
The Company earns income from the import of materials, fly ash and reclaimed soil, based on the tonnes and type of material received from third parties. The income is recognized when the performance obligation is satisfied, which is when the materials are deposited at the site at which point economic benefits will flow to the Company and income can be measured reliably. Materials disposal income is presented as other income in the consolidated statements of operations.
g)Financial Instruments
Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively. Cash and cash equivalent, amounts receivable, restricted cash, accounts payable and accrued liabilities, loan payable, lease liabilities and secured convertible debenture are carried at amortized cost.
Financial assets and liabilities carried at fair value or profit or loss are initially recorded at fair value and transaction costs are expensed in profit or loss in the statements of operations and comprehensive loss. Marketable securities is carried at fair value through profit or loss.
Page 12
3. | MATERIAL ACCOUNTING POLICIES – (continued) |
g)Financial Instruments – (continued)
Impairment of financial assets at amortized cost
The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost using the simplified approach. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If, at the reporting date, the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to the twelve month expected credit losses.
h)Share Capital
Common shares are classified as shareholders’ equity. Incremental costs directly attributable to the issue of common shares and share options are recognized as a deduction from equity, net of tax, from the proceeds.
The Company may issue units including common shares and warrants. To value these units, the Company uses residual value method. Under this method the Company values the common share, the easier component to value, and assigns the residual value to the warrant.
i)Share-based Payments
Share-based payments are arrangements in which the Company receives goods or services in consideration for its own equity instruments granted to non-employees. These are accounted for as equity settled share-based payment transactions and measured at the fair value of goods and services received. If the fair value of the goods or services received cannot be estimated reliably, the share-based payment transaction is measured at the fair value of the equity instruments granted at the date the Company receives the goods or services.
j)Share-based Compensation
The Company grants share-based awards in the form of stock options and restricted share units (“RSUs”), which are all considered to be equity-settled awards. The Company determines the fair value of the awards on the date of grant using the Black-Scholes option pricing model for stock options and based on closing price of the shares on grant date for RSUs. This fair value is expensed to the statement of operations using a graded vesting attribution method over the vesting period of the awards, with a corresponding credit to contributed surplus. When the share options or share units are exercised, the applicable amounts of contributed surplus are transferred to share capital.
k)Asset Retirement Obligation
The Company records the present value of estimated costs of legal and constructive obligations required to restore the site in the period in which the obligation is incurred. The nature of these restoration activities includes dismantling, and removing structures, rehabilitating mines and the tailings dam, dismantling facilities, closure of plant and waste sites and restoration, reclamation and re-vegetation of affected areas.
The obligation for mine closure activities is estimated by the Company using mine closure plans or other similar studies which outline the requirements that will be carried out to meet the obligations. Since the obligations are dependent on the laws and regulations of the countries in which the mines operate, the requirements could change because of amendments in the laws and regulations relating to environmental protection and other legislation affecting resource companies.
Page 13
3. | MATERIAL ACCOUNTING POLICIES – (continued) |
k)Asset Retirement Obligation – (continued)
As the estimate of the obligations is based on future expectations, several assumptions and judgments are made by management in the determination of closure provisions. The closure provisions are more uncertain the further into the future the mine closure activities are to be carried out.
The present value of decommissioning and site restoration costs are recorded as a non-current liability. The provision is discounted using a real, risk-free pre-tax discount rate. Charges for accretion and restoration expenditures are recorded as operating activities. In subsequent periods, the carrying amount of the liability is accreted by a charge to the statement of operations to reflect the passage of time and the liability is adjusted to reflect any changes in the timing of the underlying future cash flows.
Changes to the obligation resulting from any revisions to the timing or amount of the original estimate of undiscounted cash flows are recognized as an increase or decrease in the decommissioning provision, and a corresponding change in the carrying amount of the related long-lived asset. Where rehabilitation is conducted systematically over the life of the operation, rather than at the time of closure, or provision is made for the estimated outstanding continuous rehabilitation work at each statement of financial position date the cost is charged to the statement of operations.
Costs for restoration of subsequent site damage which is created on an ongoing basis during production are provided for at their net present values and charged against the statement of operations as extraction progresses.
l)Flow-Through Shares
Current Canadian tax legislation permits mining entities to issue flow-through shares to investors. Flow-through shares are securities issued to investors whereby the deductions for tax purposes related to exploration and evaluation expenditures may be claimed by investors instead of the entity. The issue of flow-through shares is in substance an issue of ordinary shares and the sale of tax deductions. At the time the Company issues flow-through shares, the sale of tax deductions is deferred and presented as other liabilities in the statement of financial position to recognize the obligation to incur and renounce eligible resource exploration and evaluation expenditures. The tax deduction is measured as the difference, if any, between the current market price of the Company’s common shares and the issue price of the flow-through shares. Upon incurring eligible resource exploration and evaluation expenditures, the Company recognizes the sale of tax deductions as a flow-through share premium on the statement of operations and reduces the liability.
m)Secured Convertible Debentures
Convertible debentures are financial instruments which are accounted for separately dependent on the nature of their components: a financial liability and an equity instrument. The identification of such components embedded within a convertible debenture requires significant judgment given that it is based on the interpretation of the substance of the contractual arrangement. Where the conversion option has a fixed conversion rate, the financial liability, which represents the obligation to pay coupon interest on the convertible debentures in the future, is initially measured at its fair value and subsequently measured at amortized cost. The residual is accounted for as an equity instrument at issuance.
Page 14
3. | MATERIAL ACCOUNTING POLICIES – (continued) |
n)Income and Loss per Share
Income (loss) per share is based on the weighted average number of common shares outstanding for the year.
Diluted income (loss) per common share is calculated by adjusting the weighted average number of common shares outstanding for the effect of conversion of all potentially dilutive share equivalents, such as stock options and warrants, and assumes that the receipt of proceeds upon exercise of the options are used to repurchase common shares at the average market price during the period. The net effect of the shares issued less the shares assumed to be repurchased is added to the basic weighted average shares outstanding. For convertible instruments, the common shares to be included in the diluted per share calculation assumes that the instrument is converted at the beginning of the period (or issue date if later). The profit or loss attributable to common shareholders is adjusted to eliminate related interest costs recognized in profit or loss for the period.
In a period when the Company reports a loss, the effect of potential issuances of shares under options and warrants outstanding would be anti-dilutive and, therefore basic and diluted loss and comprehensive per share are the same.
o)Adoption of New and Revised IFRS and IFRS Not Yet Effective
Certain new standards, interpretations and amendments to existing standards have been issued that are mandatory for accounting periods noted below. Some updates that are not applicable or are not consequential to the Company may have been excluded from the list below.
IFRS 18 Presentation and Disclosure in Financial Statements
IFRS 18 introduces three sets of new requirements to give investors more transparent and comparable information about companies’ financial performance for better investment decisions.
This new standard is effective for reporting periods beginning on or after January 1, 2027. The Company is currently in the process of assessing its impact on the consolidated financial statements.
4. | AMOUNTS RECEIVABLE |
| | December 31, 2025 | | December 31, 2024 | ||
Gravel, ash, soil, and other receivables | | $ | | | $ | |
GST receivable | |
| | |
| |
Provisional gold sales | |
| — | |
| |
| | $ | | | $ | |
Page 15
5. | PROPERTY, PLANT, AND EQUIPMENT |
| | | | | | | | Heavy | | Computers | | |
| | | | | | Camp and Site | | Machinery | | and Office | | |
| | Land | | Mill | | Infrastructure | | and Equipment | | Equipment | | TOTAL |
| | $ | | $ | | $ | | $ | | $ | | $ |
Cost | | | | | | | | | | | | |
Balance at December 31, 2023 | | | | | | | | | | | | |
Additions | | — | | | | — | | | | — | | |
Balance at December 31, 2024 | | | | | | | | | | | | |
Additions | | — | | — | | | | | | | | |
Balance at December 31, 2025 | | | | | | | | | | | | |
| | | | | | | | | | | | |
Accumulated Depreciation | | | | | | | | | | | | |
Balance at December 31, 2023 | | — | | | | | | | | | | |
Depreciation for the year | | — | | | | | | | | | | |
Balance at December 31, 2024 | | — | | | | | | | | | | |
Depreciation for the year | | — | | | | | | | | | | |
Balance at December 31, 2025 | | — | | | | | | | | | | |
| | | | | | | | | | | | |
Carrying Amounts | | | | | | | | | | | | |
At December 31, 2024 | | | | | | | | | | | | |
At December 31, 2025 | | | | | | | | | | | | |
6. | MILLING – COST OF SALES |
Cost of sales relate to all costs associated with operating the mill and are expensed as incurred as the Company does not control the goods or services before they are transferred to a customer. Revenue is recognized when the ore processing service is rendered by the Company, accepted by the customer, collection is reasonably assured, and performance obligations are satisfied. As a result, the recognition of milling costs does not necessarily coincide with the recognition of the related revenue and such costs are not matched to specific revenue periods.
| | Year | ||
| | Ended December 31, | ||
| | 2025 | | 2024 |
| | $ | | $ |
Amortization and depreciation | | | | |
Power and fuel | | | | |
Mill supplies and rentals | | | | |
Mill repairs | | | | |
Salaries and wages | | | | |
Other | | | | |
Total milling - cost of sales | | | | |
7. | MINERAL INTERESTS |
The Company holds a
The Company holds a
Page 16
7. | MINERAL INTERESTS – (continued) |
The Company’s group of claims consists of the following:
| | December 31, | | December 31, |
| | 2025 | | 2024 |
| | $ | | $ |
a) The Treasure Mountain group of claims located in the Similkameen Mining Division of British Columbia | | | ||
| | | | |
b) A Crown Grant mineral claim (Lot 1210) in the Yale Mining Division contiguous to the Treasure Mountain Claims known as the “Eureka” | | | ||
| | | | |
c) The surface rights to Lot 1209 located in the Yale Mining Diversion of British Columbia known as the “Whynot Fraction” | | | ||
| | | | |
d) Acquisition of | | | ||
| | | | |
| | |
Exploration costs incurred are as follows:
| | Years | ||
| | Ended December 31, | ||
| | 2025 | | 2024 |
| | $ | | $ |
New Craigmont Property | | | | |
Assay | | | | |
Depreciation and amortization | | — | | |
Drilling and mapping | | | | |
Field supplies and rentals | | | | |
First Nations liaison consulting | | | | |
Geological consulting and technical fees | | | | |
Tenure lease | | | | |
Exploration tax credits | | — | | ( |
Total costs incurred during the year | | | | |
Dominion Creek Property
On May 31, 2021, the Company entered into a Mineral Property Purchase Agreement (“Dominion Purchase Agreement”) and acquired a
The Company is committed to acquiring the
Page 17
7. | MINERAL INTERESTS – (continued) |
Dominion Creek Property – (continued)
| i) | Camp construction costs not to exceed $ |
| ii) | Road construction upgrade costs not to exceed $ |
| iii) | Reclamation bonding costs not to exceed $ |
| iv) | The Company also agreed to fund the project up to and including all costs to produce and ship |
A part of the Dominion Purchase Agreement, the Company entered a mining and profit sharing agreement (“Dominion Milling Agreement”). The Company would receive an even split for all profits after certain costs are reimbursed to High Range and Nicola (which includes all of Initial Costs).
Stripping costs incurred are as follows:
| | Years Ended December 31, | ||
| | 2025 | | 2024 |
| | $ | | $ |
Dominion Creek Project | | | | |
Depreciation and amortization | | | | — |
Field supplies and rentals | | | | — |
Geological consulting and technical fees | | | | — |
Trenching | | | | — |
Other exploration expense | | | | — |
Total costs incurred during the year | | | | — |
8. | MARKETABLE SECURITIES |
On January 17, 2024, the Company made a strategic investment of $
During the year ended December 31, 2025, the Company made a strategic investment of $
9. | RESTRICTED CASH |
The Company has in place deposits amounting to $
Page 18
10. | SECURED CONVERTIBLE DEBENTURE |
Year ended December 31, 2025
On January 3, 2025, a $
During the year ended December 31, 2025, debenture holders converted the principal and settled interest of $
Year ended December 31, 2024
During the year ended December 31, 2024, debenture holders converted $
The outstanding principal and interest of the Debentures and Second Tranche Debentures are secured against the assets of Nicola.
| | December 31, | | December 31, | ||
| | 2025 | | 2024 | ||
Opening | | $ | | | $ | |
Accrued interest and accretion | |
| | |
| |
Less payment of interest | |
| — | |
| ( |
Conversion of convertible debenture and interest | |
| ( | |
| ( |
| | $ | — | | $ | |
Current portion | | $ | — | | $ | |
Non-current portion | | $ | — | | $ | — |
11. | ASSET RETIREMENT OBLIGATION |
| | December 31, | | December 31, |
| | 2025 | | 2024 |
| | $ | | $ |
Opening balance | | | | |
Change in estimate | | ( | | ( |
Accretion expense | | | | |
Closing balance | | | | |
The Company’s estimates of future decommissioning and restoration for reclamation and closure costs for its mine and exploration and evaluation assets are based on reclamation standards that meet Canadian regulatory requirements. Elements of uncertainty in estimating these amounts include potential changes in regulatory requirements, reclamation plans and cost estimates, discount rates and timing of expected expenditures.
Page 19
11. | ASSET RETIREMENT OBLIGATION – (continued) |
Merritt Mill
The Merritt Mill reclamation costs were adjusted using a long-term inflation rate of
The Company estimates the undiscounted and uninflated reclamation costs associated with the Merritt Mill to be $
Treasure Mountain
The Treasure Mountain reclamation costs were adjusted using a long-term inflation rate of
The Company estimates the undiscounted and uninflated reclamation costs associated with Treasure Mountain is $
12. | FINANCE COSTS |
| | Year ended | ||
| | December 31, | ||
| | 2025 | | 2024 |
| | $ | | $ |
Interest and accretion on convertible debentures (Note 10) | | | | |
Lease liabilities | | | | |
Other | | | | ( |
| | | | |
13. | SHARE CAPITAL AND RESERVES |
a)Common Shares
Authorized
The authorized capital stock of the Company is an unlimited number of common shares without par value.
Year ended December 31, 2025
On January 3, 2025, a $
On March 12, 2025, the Company completed a non-brokered private placement issuing
Page 20
13. | SHARE CAPITAL AND RESERVES – (continued) |
a)Common Shares – (continued)
Year ended December 31, 2025 – (continued)
On July 17, 2025, the Company closed a non-brokered flow-through private placement for an aggregate of
On July 21, 2025, the Company elected to accelerate the expiry of outstanding common share purchase warrants of the Company originally issued under financings completed on March 12, 2025, exercisable at $
During the year ended December 31, 2025, debenture holders converted the principal and settled interest of $
During the year ended December 31, 2025, the Company issued
During the year ended December 31, 2025, the Company issued
Year ended December 31, 2024
On April 12, 2024, the Company completed a flow-through private placement offering, pursuant to which it issued an aggregate of
The Company paid an aggregate of $
On December 3, 2024, the Company completed a flow-through private placement offering, pursuant to which it issued an aggregate of
The Company paid an aggregate of $
During the year ended December 31, 2024, the Company converted $
b)Flow-Through Premium Liability:
| | December 31, 2025 | | December 31, 2024 | ||
Flow-through premium liability | | $ | | | $ | — |
Flow-through premium recognized | |
| — | |
| |
Settlement of flow-through premium liability pursuant to qualified expenditures | |
| ( | |
| ( |
Closing balance | | $ | — | | $ | |
The remaining qualifying expenditures to incur was $
Page 21
13. | SHARE CAPITAL AND RESERVES – (continued) |
c)Share Purchase Warrants
| | | | Weighted Average |
| | Number of | | Exercise Price |
| | Warrants | | $ |
Balance at December 31, 2024, 2023 |
| — | | — |
Warrants issuance |
| | | |
Warrants exercised |
| ( | | |
Balance at December 31, 2025 |
| | |
As at December 31, 2025,
14. | SHARE-BASED PAYMENT |
2022 Equity Incentive Plan
Effective May 14, 2022, the Company adopted an equity incentive plan (the “Equity Incentive Plan”). The Equity Incentive Plan has
Pursuant to the Equity Incentive Plan, the Company is authorized to grant stock options to executive officers, directors, employees, and consultants. The Board shall determine any vesting terms applicable to the grants.
Pursuant to the Equity Incentive Plan, the Company is authorized to grant Performance-Based Awards to executive officers, directors, employees, and consultants with the maximum aggregate number of common shares that may be issuable for Performance Based Awards not to exceed
During the year ended December 31, 2025, the Company issued
The stock options were valued using Black-Scholes valuation model with the following weighted average assumptions:
| | December 31, 2025 | | December 31, 2024 |
| ||
Fair value of common shares at grant | | $ | | | $ | | |
Exercise price | | $ | | | $ | | |
Expected life | |
| |
| | ||
Volatility | |
| | % |
| | % |
Dividend rate | |
| | % |
| | % |
Risk free rate | |
| | % |
| | % |
Fair value of stock option | | $ | | | $ | | |
Page 22
14. | SHARE-BASED PAYMENT – (continued) |
2022 Equity Incentive Plan – (continued)
Volatility was determined based on the historical trading prices of the Company.
The following is a summary of changes in stock options:
| | | | Weighted Average |
| | Number of | | Exercise Price |
| | Options | | $ |
Balance at December 31, 2023 |
| | | |
Issued options |
| | | |
Cancelled options |
| ( | | |
Balance at December 31, 2024 |
| | | |
Issued options |
| | | |
Exercised options |
| ( | | |
Cancelled/Expired options |
| ( | | |
Balance at December 31, 2025 |
| | |
The weighted average remaining life of the stock options is
As at December 31, 2025, the following stock options were outstanding and exercisable:
| | | | | | Weighted | | | |
| | | | | | | Average | | |
Number | | Number | | | Exercise | | Contractual | | |
Outstanding | | Exercisable | | Price | | Life (Years) | | Expiry Date | |
|
| | | $ | |
| | January 8, 2026* | |
|
| | | $ | |
| | October 5, 2026 | |
|
| | | $ | |
| | October 5, 2027 | |
|
| | | $ | |
| | May 2, 2028 | |
|
| | | $ | |
| | July 26, 2028 | |
|
| | | $ | |
| | August 3, 2028 | |
|
| | | $ | |
| | April 18, 2029 | |
|
| | | $ | |
| | December 18, 2029 | |
|
| | | $ | |
| | July 1, 2030 | |
|
| | | $ | |
| | December 3, 2030 | |
|
| | |
| |
| | | |
* Subsequent to the year-end,
Restricted Shares Unit
On December 18, 2024, the Company issued
Page 23
15. | MILLING REVENUE AND OTHER INCOME |
Major customers are defined as customers that each individually account for greater than
During the year ended December 31, 2025, the Company received $
16. | RELATED PARTY TRANSACTIONS |
Key management personnel are those persons having authority and responsibility for planning, directing, and controlling the activities of the Company, directly or indirectly, and consist of its directors, the Chief Executive Officer, and the Chief Financial Officer.
The following is a summary of the Company’s key management compensation:
| | Year ended December 31, | ||
| | 2025 | | 2024 |
| | $ | | $ |
Consulting fees | | |
| |
Salaries and benefits | | — |
| |
Share-based compensation | | |
| |
Total | | |
| |
As at December 31, 2025, included within accounts payable and accrued liabilities is $
During the year ended December 31, 2025, the Company received a $
17. | FINANCIAL AND CAPITAL RISK MANAGEMENT |
Fair Value
The carrying value of cash and cash equivalent, amounts receivables, accounts payable and accrued liabilities, loan payable and lease liabilities approximate their fair value because of the short-term nature of these instruments. The carrying value of restricted cash approximates fair value due to the nature of this asset.
The Company records its financial instruments, other than marketable securities which are at fair value through profit or loss, at amortized cost.
The financial instruments have been characterized on a fair value hierarchy based on whether the inputs to those valuation techniques are observable (inputs reflect market data obtained from independent sources) or unobservable (inputs reflect the Company’s market assumptions).
Page 24
17. | FINANCIAL and CAPITAL RISK MANAGEMENT – (continued) |
Fair Value – (continued)
The three levels of fair value estimation are:
Level 1 – quoted prices in active markets for identical instruments.
Level 2 – quoted prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
Level 3 – valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
Marketable securities common shares are measured using level 1 inputs and marketable securities warrants are measured using level 2 inputs.
Risk Exposure and Management
Overview
The Company has exposure to risks of varying degrees of significance which could affect its ability to achieve its strategic objectives. The principal financial risks to which the Company is exposed are credit risk, interest rate risk, liquidity risk, commodity and equity price risk, and currency risk.
Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its obligations. As at December 31, 2025, the Company’s maximum exposure to credit risk is the carrying value of its cash and cash equivalent, restricted cash, and amounts receivables in the amount of $
All off the Company’s cash is held with a major financial institution in Canada and management believes the exposure to credit risk with respect to such institutions is not significant. Those financial assets that potentially subject the Company to credit risk are primarily receivables. The Company considers the risk of material loss to be significantly mitigated due to the financial strength of the parties from whom the receivables are due, including government organizations.
Interest Rate Risk
The Company’s financial assets exposed to interest rate risk consist of cash and cash equivalents balances. The interest earned on the cash and cash equivalents is at a fixed rate and approximates fair value rates, and the Company is not subject to significant interest rate risks.
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its obligations associated with financial liabilities. The Company has a planning and budgeting process in place by which it projects the funds required to support its operations.
Page 25
17. | FINANCIAL and CAPITAL RISK MANAGEMENT – (continued) |
Liquidity Risk – (continued)
Management anticipates that it may incur expenditures towards exploring its mineral interests and other Company assets. However, there is no assurance that the Company will operate profitably or will generate positive cash flow in the future. The Company has limited working capital, no history of profitable operations and no assurance that additional funding will be available to it for further exploration and development of its mineral interests. The Company may also need further financing if it decides to obtain additional mineral properties. As such, the Company is subject to many risks common to exploration enterprises, including undercapitalization, cash shortages and limitations with respect to personnel, financial, access to other resources, and lack of revenues. Although the Company has been successful in the past in obtaining financing through credit facilities or the sale of equity securities, there can be no assurance that the Company will be able to obtain adequate financing in the future or that the terms of such financing will be favorable. Such means of financing typically result in dilution of the positions of existing shareholders, either directly or indirectly.
Failure to obtain additional financing could result in the delay or indefinite postponement of further exploration.
| | Less than 12 months | | | | |
December 31, 2025 | | ($) | | One to five years ($) | | Total($) |
Accounts payable and accrued liabilities |
| |
| — |
| |
Lease liabilities |
| |
| |
| |
Loan payable | | | | — | | |
Secured convertible debenture |
| — |
| — |
| — |
Total |
| |
| |
| |
| | Less than 12 months | | | | |
December 31, 2024 | | ($) | | One to five years ($) | | Total($) |
Accounts payable and accrued liabilities |
| |
| — |
| |
Lease liabilities |
| |
| |
| |
Secured convertible debenture |
| |
| — |
| |
Total |
| |
| |
| |
Foreign Exchange Rate Risk
The functional currency of the Company is the Canadian dollar. As at December 31, 2025 and 2024, the Company has not entered into contracts to manage foreign exchange risk.
Commodity and Equity Price Risk
The ability of the Company to explore its exploration assets, continue milling operations, and the future profitability of the Company are directly related to the market price of copper, gold, silver, and other precious metals. Equity price risk is defined as the potential adverse impact on the Company’s performance to movements in individual equity prices or general movements in the level of the stock market.
Capital Management
The Company considers capital to be the elements of shareholders’ equity (deficit). The Company’s primary objectives in capital management are to safeguard the Company’s ability to continue as a going concern to provide returns for shareholders and to maintain sufficient funds to finance the exploration and development of its mineral property interests and Merritt Mill operations. The Company manages its capital structure to maximize its financial flexibility by adjusting to changes in economic conditions, and the risk characteristics of the underlying assets and business opportunities. The Company does not presently utilize any quantitative measures to monitor its capital and is not subject to externally imposed capital requirements. There have been no changes to the management of capital during the current fiscal year.
Page 26
18. | INCOME TAXES |
A reconciliation of income taxes at statutory rates with the reported taxes is as follows:
| | 2025 | | 2024 | ||
Loss before income taxes | | $ | ( | | $ | ( |
| | | | | | |
Expected income tax (recovery) | |
| ( | |
| ( |
Other | |
| — | |
| — |
Items not deductible for income tax purposes | |
| | |
| |
Impact of flow through shares | |
| | |
| |
Share issue costs | |
| ( | |
| ( |
Adjustment to prior years provision versus statutory tax returns and expiry of non-capital losses | |
| ( | |
| — |
Change in unrecognized deductible temporary differences | |
| | |
| |
Total income tax expense (recovery) | | $ | — | | $ | — |
The following is the analysis of recognized deferred tax assets and liabilities:
Year ended December 31, | | 2025 | | 2024 | ||
Deferred tax liabilities |
| | |
| | |
Marketable securities | | $ | ( | | $ | ( |
Loan payable | |
| ( | |
| — |
| | | | | | |
Deferred tax assets | |
| | |
| |
Non-capital losses | |
| | |
| |
Net deferred tax assets (liabilities) | | $ | — | | $ | — |
The significant components of the Company’s temporary differences, unused tax credits and unused tax losses that have not been included on the consolidated statement of financial position are as follows:
| | | | | Expiry Date | | | |
| | 2025 | | Range | | 2024 | ||
Exploration and evaluation assets | | $ | |
| No expiry date | | $ | |
Investment tax credit | | $ | |
| 2030 to 2032 | | $ | |
Property, plant, and equipment | | $ | |
| No expiry date | | $ | |
Right-of-use assets/lease liabilities | | $ | | | 2027 to 2030 | | $ | — |
Share issue costs | | $ | |
| 2026 to 2029 | | $ | |
Debt with accretion | | $ | — |
| No expiry date | | $ | |
Asset retirement obligation | | $ | |
| No expiry date | | $ | |
Non-capital losses available for future periods | | $ | |
| 2026 to 2045 | | $ | |
Tax attributes are subject to review, and potential adjustment, by tax authorities.
Page 27
19. | CHANGES IN LIABILITIES FROM FINANCING ACTIVITIES |
| | January 1, | | Cash | | | | | | | | December 31, |
| | 2025 | | Flows | | Non–cash changes | | 2025 | ||||
| | | | | | Acquisition/ | | | | Interest | |
|
| | | | | | Amendment | | Conversion | | accretion/accruals | | |
| | $ | | $ | | $ | | $ | | $ | | $ |
Secured convertible debenture | | |
| — |
| — |
| ( |
| |
| — |
Lease liabilities | | |
| ( |
| |
| — |
| |
| |
Loan payable | | — | | | | — | | — | | | | |
Total | | |
| |
| |
| ( |
| |
| |
| | January 1, | | | | | | Non–cash | | December 31, |
| | 2024 | | Acquisition | | Cash Flows | | changes | | 2024 |
| | | | | | | | Interest | | |
| | | | | | | | accretion/accruals | | |
| | $ | | $ | | $ | | $ | | $ |
Secured convertible debenture |
| |
| — |
| ( |
| |
| |
Lease liabilities |
| |
| |
| ( |
| |
| |
Total |
| |
| |
| ( |
| |
| |
20. | SUBSEQUENT EVENTS |
| a) | On January 29, 2026, the Company completed a non-brokered private placement issuing |
| b) | On March 9, 2026, the Company granted |
On April 14, 2026, the Company closed an underwritten public offering in the United States consisting of
| c) | The Company estimates additional financing costs of the offering to be approximately US$ |
| d) | On April 17, 2026, the Company issued an additional |
| e) | Subsequent to the year-end, |
| f) | Subsequent to the year-end, |
Page 28
Exhibit 99.3
|
Management’s Discussion and Analysis For the year ended December 31, 2025 (Expressed in Canadian dollars, unless otherwise noted) |
April 27, 2026
The following management’s discussion and analysis (“MD&A”) was prepared as of date of the report per above and is management’s assessment of the operating results and financial condition of Nicola Mining Inc. (“Nicola” or the “Company”) together with its subsidiaries. For further information on the Company, reference should be made to its public filings on SEDAR+ at www.sedarplus.ca. Information is also available on the Company’s website at www.nicolamining.com. This MD&A should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2025 and the related notes thereto which have been prepared in accordance with IFRS Accounting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). The MD&A contains certain forward-looking statements, please review the disclaimers that are provided on the last page of the report.
OVERVIEW
Nicola is a junior exploration and custom milling company that is engaged in the business of identification, acquisition, and exploration of mineral property interests together with custom milling partnerships at its Merritt Mill.
The Company’s common shares are listed on the TSX Venture Exchange (the “TSX-V”) under the symbol “NIM.V”, the Nasdaq Capital Market under the symbol “NICM”, and on OTCQB operated by the OTC Markets Group Inc. under the ticker “HUSIF”.
FISCAL YEAR DECEMBER 31, 2025 HIGHLIGHTS
Page 1
Receipt of the MYAB Permit, the Company received a ten-year mining lease extension (the “Extension”) for Treasure Mountain 2 under its M-239 permit. The Extension is valid through April 26, 2032, and receipt of the MYAB Permit positions the Company to leverage both mining and exploration options.
Page 2
Subsequent to December 31, 2025
TREASURE MOUNTAIN PROJECT
Overview
Nicola’s Treasure Mountain Project is located 29 kilometres northeast of Hope, British Columbia, approximately 3 hours from Vancouver, British Columbia. In May 2012, the Company received a mining lease covering 335 ha of which 248 ha are active workings. The Company’s mineral claim holdings consist of 30 continuous mineral claims covering an area of approximately 2,200 ha, one partially overlapping mining lease covering 335 ha at the Treasure Mountain Project and a Mines Act (British Columbia) (the “Mines Act”) permit for the Treasure Mountain Project for the removal of 60,000 tonnes per year of silver/lead/zinc mill feed from the underground mine and the transfer of the mill feed offsite for processing. The Treasure Mountain Project has been in care and maintenance since July 26, 2013. A resource estimate was prepared in 2009 and an updated Technical Report was completed in 2012, in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”). From 2012 to 2019, no subsequent mining activity or exploration was completed on the project. A Qualified Person has not done any work to classify this historical resource estimate as current therefore Nicola Mining is not treating it as current. The majority of the Company’s Treasure Mountain Project historical mineral resource has been classified as Inferred according to CIM Definition Standards for Mineral Resources and Mineral Reserves (2014), whereby the economic viability of such resources cannot be determined.
Page 3
Outlook:
The Company believes that Treasure Mountain’s upside potential is not associated with the developed mine, but in its highest priority target, the MB Zone. While 2025 focused on exploration at New Craigmont, Company received a multi-year area-based permit from the Ministry of Mining and Critical Minerals on June 4, 2025 that authorizes it to conduct exploration activities for up to 5 years at Treasure Mountain. Exploration preparation commenced in June 2025, which included a review of soil sampling and an airborne magnetic survey in preparation for a drill program in the MB Zone. The planned 2026 drilling program is a culmination of airborne magnetic geophysical surveys, extensive soil sampling programs and field reconnaissance over the past decade.
NEW CRAIGMONT PROJECT
Overview
The Company’s claim holdings at the New Craigmont Project consist of 22 contiguous mineral claims covering approximately 10,600 hectares, and 10 partially overlapping mineral leases covering approximately 347 hectares located near Merritt, British Columbia, approximately 3 hours from Vancouver, British Columbia.
The New Craigmont Project (the “Project”) does not conform to a “typical” exploration pipeline. The Project is a permitted historic mine site with active permits under a current mine permit M-68, which covers an area approximately 1400 ha. In addition, extensive work done on the mine (c.1958-c.1982) was focused primarily on ore definition, development, and extraction of mineral inventory, known at the time. This work resulted in a cumulative production of 36.75 million tonnes of ore grading 1.28% copper (“Cu”). However, the Project had limited exploration beyond its historic operations.
The geological model adopted by Craigmont Mines Ltd. exploration team was one in which Cu and iron (“Fe”) were derived from country rock by fluids heated by intrusion of the Guichon Creek Batholith. Mineralization occurred preferentially along calcareous rocks resulting in a strata-bound skarn deposit.
Field relationships from mapping completed since 2015 and drilling in 2016 demonstrate that the Guichon Creek Batholith is cut by veins containing propylitic alteration mineral assemblages and copper mineralization, indicating that hydrothermal events occurred after emplacement of the Guichon Creek batholith. It is possible and more likely hydrothermal alteration and associated Cu mineralization was caused by magmatic-hydrothermal fluids. In the last decade, through increased demand for copper and diminishing copper grades, academic research primarily focussed on low-grade, large tonnage porphyry systems. This research suggests genetic links exist between magmatic-derived hydrothermal fluids and porphyry, skarn, and epithermal deposit formation. A recently published (2026) M.Sc. thesis from UBC concluded that Craigmont is a porphyry-linked skarn system. The geological team at Nicola Mining realise that the broader alteration system at the New Craigmont Project was not fully explored. Re-evaluation of this alteration system is believed to aid in efficient and effective exploration of the land package, which may have been historically overlooked.
Objectives and Strategy
Nicola’s primary objectives at the New Craigmont Project are to prove the historic skarn’s un-exploited mineral inventory and to explore for porphyry copper systems believed to be the source of fluid responsible for the skarn mineralization using modern exploration techniques. The Company also plans to re-evaluate the potential from material not processed at the time of mining and unlock its value with increasing commodity prices from global demand. To this effect, target development and confirmation drilling aims to develop targets deemed to have the potential for significant mineralization on the project land package. A mineral resource estimate was completed in 2020 in accordance with NI 43-101 on the Southern Mining Terraces and 3060 Portal Dump areas.
Page 4
Outlook:
The Company completed an IP Survey in May of 2024 to further define drill targets in the WP, MARB and CAS zones, which were subsequently drilled and results published. The Company also drilled a step out hole at the Embayment Zone, which expanded the known mineralized area. Given the successful results of the 2024 drill program, the Company drilled targets in the same areas in 2025 and published the results. Observations and interpretations from the 2025 diamond drilling program, along with the M.Sc. thesis results, support the presence of porphyry systems. Further diamond drilling is planned for 2026 as well as to continue the ongoing process of building a New Craigmont database using all current and historic exploration data.
DOMINION CREEK GOLD PROPERTY PROJECT
Overview
On June 15, 2021, the Company announced the acquisition of a 50% interest in the Dominion Creek Property, located 43 km northeast of the Town of Wells and about 110 kilometers east-southeast of Prince George from High Range Exploration Ltd (“High Range”). Pursuant to the terms of a Mineral Property Purchase Agreement (the “Mineral Property Purchase Agreement”) between the Company and High Range, the Company paid $150,000 for the 50% acquisition of the Dominion Creek Property consisting of 8 continuous mineral claims totalling 1,040 hectares plus $75,000 for High Range to commence work and to submit a 10,000-tonne bulk sample permit application.
On October 24, 2021, the Company executed a Mining and Milling Profit Share Agreement with High Range for mill feed to be delivered and processed at the Merritt Mill. The Company’s combined 50% ownership and terms under the Mining and Milling Profit Share Agreement provide it a 75% economic benefit of Dominion Creek.
Upon High Range receiving the permit, the Company would, within 30 days, commence incremental funding of $450,000 plus all costs to produce and ship 3,000 tonnes of mill feed to Merritt Mill for processing into concentrate. The $450,000 plus the $75,000 previously advanced as part of the Mineral Property Purchase Agreement shall be reimbursed from the distribution proceeds of the sale of concentrates.
On January 20, 2022, the Company announced that Dominion Gold Project has submitted its Cariboo Mitigation Plan to EMLI.
Outlook:
On November 4, 2025, the Company completed work at Dominion for 2025 and has completed all mine development for the 10,000 tonnes bulk sample, which is planned to recommence in July of 2026. Initially, the Company had planned to ship up to 2000 tonnes to the Nicola mill in 2025 for processing, but opted to wait until next year for two reasons – weather and project size. Mining activities will recommence in 2026.
LIQUIDITY AND CAPITAL RESOURCES
A summary of the Company’s cash position and changes in cash and cash equivalents for:
| | Year ended December 31, | ||||
(tabled amounts are expressed in thousands of Canadian dollars) | | 2025 | | 2024 | ||
Cash used in operating activities |
| $ | (5,569) |
| $ | (3,311) |
Cash (used in) provided by investing activities | | | 521 | | | (1,587) |
Cash provided by financing activities | | | 5,284 | | | 1,604 |
Decrease in cash | | | 236 | | | (3,294) |
Cash and cash equivalents, end of year |
| $ | 1,698 |
| $ | 1,462 |
As of December 31, 2025, the Company reported a net working capital of $3.1 million, compared to a net working capital deficit of $2.8 million as of December 31, 2024. The increase in the net working capital is primarily due to the fair value gain on the marketable securities and the secured convertible debentures being fully converted during the year ended December 31, 2025.
Page 5
Cash used in operating activities increased compared to the same period in 2024. This increase was primarily driven by the decline in revenue from gravel, ash, soil, and other ancillary income sources during the current period.
Cash inflow from investing activities amounted to $0.5 million during the current period, largely due to the sale of the Company’s strategic investment in Blue Lagoon Resources (“BLLG). This transaction represents a reversal from the prior year, in which the Company invested $1.0 million in BLLG.
Cash inflow from financing activities totaled $5.3 million in the current period, compared to a cash inflow of $1.6 million in the prior year. The cash inflow from financing activities in the current period was higher mainly due to $3.1 million from proceeds from private placement.
The Company’s ability to continue as a going concern remains dependent on its ongoing capacity to raise capital and sustain profitability in its milling operations.
On March 12, 2025, the Company completed a private placement with gross proceeds of $1.1 million for working capital purposes. All of the funds were used for working capital purposes with no variance.
On July 17, 2025, the Company completed a flow through private placement with gross proceeds of $2.2 million for exploration. As of December 31, 2025, the Company has approximately $1.4 million qualifying expenditures remaining to be spent.
On January 29, 2026, the Company completed a non-brokered private placement with gross proceeds of $5.0 million for working capital purposes.
ANNUAL FINANCIAL INFORMATION
In thousands ‘000 | | Year ended December 31, | |||||||
| | 2025 | | 2024 | | 2023* | |||
Milling revenue |
| $ | 1,535 | | $ | 818 | | $ | 1,618 |
Gravel, ash, soil, and other income | | | 801 | | | 1,969 | | | 8,146 |
Net loss | | | (5,525) | | | (5,231) | | | (3,326) |
Loss per share, basic/diluted | | | (0.03) | | | (0.03) | | | (0.02) |
| | | | | | | | | |
Cash | | | 1,698 | | | 1,462 | | | 4,756 |
Total assets | | | 14,550 | | | 10,659 | | | 12,224 |
Current liabilities | | | 4,038 | | | 6,226 | | | 699 |
Non-current financial liabilities** | | | 107 | | | 28 | | | 4,237 |
Cash dividend declared | | | — | | | — | | | — |
*The Company has restated certain previously reported amounts. Please see note 2(a) of the consolidated financial statements for further information.
**Non-current financial liabilities represent total non-current liabilities excluding the asset retirement obligation (“ARO”).
Net loss for the year ended December 31, 2025 was $5.5M, comparing to the net loss of $5.2M for the year ended December 31, 2024. Thie increase was mainly due to the expenditures incurred for the development of the Dominion Gold Project and lower other income during the year ended December 31, 2025. When compared to the year ended December 31, 2023, the net loss of $3.2M is lower than the year ended December 31, 2024 due to higher milling income and other income.
Total assets fluctuation is dependent on cash balance and the fair value gains or losses on the Company’s marketable securities as at year end. Cash balance is driven by the level of equity financing there are in its specific fiscal year and the marketable securities is driven by the share price of the Company’s investment as of year end. Overall financial liabilities have decreased as the convertible debenture has been fully converted as of December 31, 2025.
Page 6
QUARTERLY RESULTS
| | December 31, | | September 30, | | June 30, | | March 31, | | December 31, | | September 30, | | June 30, | | March 31, |
| | 2025 | | 2025 | | 2025 | | 2025 | | 2024 | | 2024 | | 2024 | | 2024 |
| | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) |
Milling revenue |
| 903,216 |
| 552,682 |
| 72,842 |
| 6,398 |
| 743,562 |
| Nil |
| Nil |
| 74,595 |
Gravel, ash, soil and other income |
| 180,199 |
| 196,730 |
| 206,229 |
| 218,209 |
| 263,727 |
| 1,136,445 |
| 252,562 |
| 241,612 |
Exploration expense |
| 256,956 |
| 558,115 |
| 267,342 |
| 131,687 |
| 440,987 |
| 554,239 |
| 586,529 |
| 177,655 |
Stripping costs |
| (15,993) |
| 1,346,555 |
| — |
| — |
| — |
| — |
| — |
| — |
Net Income (loss) |
| (2,236,169) |
| (3,994,137) |
| 1,181,286 |
| (475,808) |
| (210,267) |
| (1,472,665) |
| (2,519,885) |
| (1,028,129) |
Income (loss) per Share (basic and diluted) |
| (0.01) |
| (0.02) |
| 0.01 |
| (0.00) |
| (0.00) |
| (0.01) |
| (0.02) |
| (0.01) |
Total assets |
| 14,549,987 |
| 13,756,058 |
| 12,873,068 |
| 10,977,505 |
| 10,659,233 |
| 10,051,414 |
| 11,606,576 |
| 11,344,465 |
Three months ended December 31, 2025 compared to all historical quarters
Mill Revenue and Other Income - for the three months ended December 31, 2025, the Company generated combined milling revenue and other income of $1.1 million. Historically, this figure has varied based on the level of milling activity and the timing and volume of other business contracts. As these revenue streams are largely contract-dependent, fluctuations are expected across quarters.
Exploration Expense - Exploration expenses for the quarter totaled $256,956. Exploration activity increased in 2024 compared to 2023, largely driven by the completion of several flow-through financings and the 2024 drill program. The lower expense reported in 2025 is due to less drilling completed compared to 2024.
Stripping costs - During Q3 2025, significant exploration and development activities were incurred on the Company’s Dominion Creek Project in preparation for the for the 10,000 tonnes bulk sample.
Net Loss - The net loss for the Q4 2025 was $2,236,169, which was primarily due to the stock options and RSUs granted during Q4 2025.
Change in Total Assets
The Company’s total assets fluctuated between $10.0 million and $14.5 million. This is typically driven by the timing of private placements and cash position and the fair value gains or losses on the Company’s marketable securities.
Page 7
SHAREHOLDER’S EQUITY
As at December 31, 2025 and as at the date of this report
The Company’s authorized capital stock consists of an unlimited number of common shares without par value. As at December 31, 2025 and the date of this report, the Company has the following shareholder equity items outstanding:
| | Restricted | | | | Share | | |
| | share | | Stock | | purchase | | Common |
| | units | | options | | warrants** | | shares* |
As at December 31, 2025 |
| 1,015,000 |
| 10,197,500 |
| 2,175,000 |
| 210,614,380 |
January 2026 private placement |
| — |
| — |
| 5,512,001 |
| 5,512,001 |
U.S. Offering | | — | | — | | 11,162,796 | | 11,162,796 |
Broker warrants issued to underwriters of U.S. Offering | | — | | — | | 558,144 | | — |
Exercise of over-allotment | | — | | — | | 83,712 | | 1,674,408 |
Warrant exercises | | — | | — | | (832,152) | | 437,124 |
Stock options exercised |
| — |
| (125,000) |
| — |
| 125,000 |
Stock options granted |
| — |
| 65,000 |
| — |
| — |
As at date of the report |
| 1,015,000 |
| 10,137,500 |
| 18,659,501 |
| 229,525,709 |
*As of the date of this report, there are 1,106,194 ADSs outstanding that is listed on the Nasdaq Capital Market under the symbol “NICM”. Each ADS is equivalent to 12 common shares of the Company.
**As of the date of this report, there are 914,375 ADS warrants outstanding exercisable into ADRs of the Company.
Stock options
The table below provides a summary of the stock options outstanding as at date of the report:
| | | | | | | Weighted | | |
| | | | | | | Average | |
|
Number | | Number | | Exercise | | Contractual | |
| |
Outstanding | | Exercisable | | Price | | Life (Years) | | Expiry Date | |
150,000 |
| 150,000 |
| $ | 0.22 |
| 0.52 |
| October 5, 2026 |
1,822,500 |
| 1,822,500 |
| $ | 0.16 |
| 1.52 |
| October 5, 2027 |
100,000 |
| 100,000 |
| $ | 0.30 |
| 2.09 |
| May 2, 2028 |
1,850,000 |
| 1,850,000 |
| $ | 0.36 |
| 2.33 |
| July 26, 2028 |
50,000 |
| 50,000 |
| $ | 0.30 |
| 2.35 |
| August 3, 2028 |
2,350,000 |
| 2,350,000 |
| $ | 0.27 |
| 3.05 |
| April 18, 2029 |
500,000 |
| 500,000 |
| $ | 0.30 |
| 3.72 |
| December 18, 2029 |
400,000 |
| 400,000 |
| $ | 0.50 |
| 4.26 |
| July 1, 2030 |
2,850,000 |
| 2,850,000 |
| $ | 1.00 |
| 4.68 |
| December 3, 2030 |
65,000 |
| 65,000 |
| $ | 1.14 |
| 4.95 |
| March 9, 2031 |
10,137,500 |
| 10,137,500 | | | |
| |
| |
Restricted shares units (“RSUs”)
As at the date of this report, there are 1,015,000 RSUs that vest on January 1, 2027.
Warrants
As at the date of this report:
| ● | There are 2,175,000 warrants outstanding that have an exercise price of $0.65 and expires on July 17, 2027. |
| ● | There are 907,399 ADS warrants exercisable into 12 common shares of the Company at a price of $12.2213 per warrant and expires April 14, 2031. |
| ● | There are 6,976 ADS warrants exercisable into 12 common shares of the Company at a price of $9.8088 and expires on April 10, 2031. |
Page 8
REGULATORY DISCLOSURES
Off balance sheet arrangements
The Company does not have any off-balance sheet arrangements as at December 31, 2025 and date of this report.
Proposed Transactions
The Company does not have any proposed transactions as at December 31, 2025 and date of this report other than as disclosed elsewhere in this document.
Financial instruments
Fair Value
The carrying value of cash and cash equivalents, amounts receivables, accounts payable and accrued liabilities, loan payable and lease liabilities approximate their fair value because of the short-term nature of these instruments. The carrying value of restricted cash approximates to fair value due to the nature of this asset.
The Company records its financial instruments, other than marketable securities which are at fair value through profit or loss, at amortized cost.
The financial instruments have been characterized on a fair value hierarchy based on whether the inputs to those valuation techniques are observable (inputs reflect market data obtained from independent sources) or unobservable (inputs reflect the Company’s market assumptions).
The three levels of fair value estimation are:
Level 1 – quoted prices in active markets for identical instruments.
Level 2 – quoted prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
Level 3 – valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
Marketable securities are measured using level 1 inputs and marketable securities warrants are measured using level 2 inputs.
Risk Exposure and Management
Overview
The Company has exposure to risks of varying degrees of significance which could affect its ability to achieve its strategic objectives. The principal financial risks to which the Company is exposed are credit risk, interest rate risk, liquidity risk, commodity and equity price risk, and currency risk.
Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its obligations. As at December 31, 2025, the Company’s maximum exposure to credit risk is the carrying value of its cash and cash equivalents, restricted cash, and amounts receivables in the amount of $3,983,204 (December 31, 2024 - $3,570,649).
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All off the Company’s cash is held with a major financial institution in Canada and management believes the exposure to credit risk with respect to such institutions is not significant. Those financial assets that potentially subject the Company to credit risk are primarily receivables. The Company considers the risk of material loss to be significantly mitigated due to the financial strength of the parties from whom the receivables are due, including government organizations.
Interest Rate Risk
The Company’s financial assets exposed to interest rate risk consist of cash and cash equivalents balances. The interest earned on the cash balances is at a fixed rate and approximates fair value rates, and the Company is not subject to significant interest rate risks.
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its obligations associated with financial liabilities. The Company has a planning and budgeting process in place by which it projects the funds required to support its operations.
Management anticipates that it may incur expenditures towards exploring its mineral interests and other Company assets. However, there is no assurance that the Company will operate profitably or will generate positive cash flow in the future. The Company has limited working capital, no history of profitable operations and no assurance that additional funding will be available to it for further exploration and development of its mineral interests. The Company may also need further financing if it decides to obtain additional mineral properties. As such, the Company is subject to many risks common to exploration enterprises, including undercapitalization, cash shortages and limitations with respect to personnel, financial, access to other resources, and lack of revenues. Although the Company has been successful in the past in obtaining financing through credit facilities or the sale of equity securities, there can be no assurance that the Company will be able to obtain adequate financing in the future or that the terms of such financing will be favorable. Such means of financing typically result in dilution of the positions of existing shareholders, either directly or indirectly.
Failure to obtain additional financing could result in the delay or indefinite postponement of further exploration.
Foreign Exchange Rate Risk
The functional currency of the Company is the Canadian dollar. As at December 31, 2025, the Company has not entered into contracts to manage foreign exchange risk.
Commodity and Equity Price Risk
The ability of the Company to explore its exploration assets, continue milling operations, and the future profitability of the Company are directly related to the market price of copper, gold, silver, and other precious metals. Equity price risk is defined as the potential adverse impact on the Company’s performance to movements in individual equity prices or general movements in the level of the stock market.
Capital Management
The Company considers capital to be the elements of shareholders’ equity (deficit). The Company’s primary objectives in capital management are to safeguard the Company’s ability to continue as a going concern to provide returns for shareholders and to maintain sufficient funds to finance the exploration and development of its mineral property interests and Merritt Mill operations. The Company manages its capital structure to maximize its financial flexibility by adjusting to changes in economic conditions, and the risk characteristics of the underlying assets and business opportunities. The Company does not presently utilize any quantitative measures to monitor its capital and is not subject to externally imposed capital requirements. There have been no changes to the management of capital during the current fiscal year.
Related Party Transactions
Key management personnel are those persons having authority and responsibility for planning, directing, and controlling the activities of the Company, directly or indirectly, and consist of its directors, the Chief Executive Officer, and the Chief Financial Officer.
Page 10
The following is a summary of the Company’s key management compensation:
| | Year ended December 31, | ||
| | 2025 | | 2024 |
| | $ | | $ |
Consulting fees | | 558,463 | | 413,250 |
Salaries and benefits | | — | | 37,792 |
Share-based compensation | | 1,531,816 | | 477,460 |
Total | | 2,090,279 | | 928,502 |
As at December 31, 2025, included within accounts payable and accrued liabilities is $230,560 owed to related parties of the Company (December 31, 2024 - $18,310). See also note 15 for other related party transactions. The amounts due to related parties are unsecured, non - interest bearing, and due on demand.
During the year ended December 31, 2025, the Company received a 500,000 USD loan from a company controlled by a director of the Company. The loan is subject to an annual interest rate of 12% and shall be repaid against the Company’s milling income or cash. Subsequent to the year end, the loan principal and related interest were fully repaid.
Internal controls and procedures
During the audit of the 2024 consolidated financial statements, a material weakness in internal controls over financial reporting was identified regarding management’s review and assessment of the accounting impact of complex transactions. During the year ended December 31, 2025, the Company has implemented additional controls and procedures to remediate this weakness and to reduce the likelihood of a material misstatement.
The President and Chief Executive Officer and Chief Financial Officer of the Company are responsible for establishing and maintaining appropriate information systems, procedures and controls to ensure that information used internally and disclosed externally is complete, reliable and timely. The Chief Executive Officer and Chief Financial Officer of the Company have filed the Venture Issuer Basic Certificate with the MD&A and the Company’s annual consolidated financial statements for the year ended December 31, 2024 and December 31, 2025 on SEDAR+ at http://www.sedarplus.ca.
In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (“NI 52-109”), the venture issuer basic certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (“DC&P”) and internal control over financial reporting (“ICFR”), as defined in NI 52-109. Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost-effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency, and timeliness of interim and annual filings and other reports provided under securities legislation.
Accounting estimates
The preparation of the Company’s consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Such estimates primarily relate to asset retirement obligations. Actual results could differ from those estimates. The significant assumptions about the future and other major sources of estimation uncertainty as at the end of the reporting period that have a significant risk of resulting in a material adjustment to the carrying amounts of the Company’s assets and liabilities are described in note 2 of the consolidated financial statements.
Material Accounting Policy Information
Please refer to the audited annual consolidated financial statements for the years ended December 31, 2024 and December 31, 2025 that were filed on SEDAR+.
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New Accounting Standards Not Yet Adopted
The accounting policies adopted in the preparation of these consolidated financial statements have been prepared on the basis of all IFRS and interpretations effective as at December 31, 2025.
A number of new standards, and amendments to standards and interpretations, are not yet effective for the year ended December 31, 2025, and have not been early adopted in preparing these consolidated financial statements. The Company intends to adopt such standards upon the mandatory effective date.
IFRS 18 Presentation and Disclosure in Financial Statements
IFRS 18 introduces three sets of new requirements to give investors more transparent and comparable information about companies’ financial performance for better investment decisions.
2.Requirement for companies to disclose explanations of management-defined performance measures (MPMs) that are related to the income statement.
3.Enhanced guidance on how to organize information and whether to provide it in the primary financial statements or in the notes.
This new standard is effective for reporting periods beginning on or after January 1, 2027. The Company will be evaluating the impact of the above amendments on its consolidated financial statements.
Risk and Uncertainties
As described further below, the Company’s business may be affected by changes in political and market conditions, such as interest rates, availability of credit, inflation rates, tariffs, changes in laws, and national and international circumstances. Recent geopolitical events and potential economic global challenges such as the risk of higher inflation and energy crises, may create further uncertainty and risk with respect to the prospects of the Company’s business. These factors represent a material uncertainty that may raise substantial doubt about the Company’s ability to continue as a going concern.
The Company may be unable to meet its liquidity requirements for operations.
There can be no assurance that the amounts of cash from operations, together with amounts raised through financings will be sufficient to fund the Company’s ongoing operations and care and maintenance program. If these amounts are insufficient to meet the Company’s liquidity requirements, it may have to seek additional financing. There can be no assurance that such additional financing would be available or, if available, offered on acceptable terms. Failure to secure any necessary additional financing would have a material adverse impact on the Company’s continued operations and viability.
Page 12
Mineral Exploration and Development Activities are Inherently Risky
The business of exploration for minerals and mining involves a high degree of risk. Few properties that are explored are ultimately developed into mineral deposits with significant value. Unusual or unexpected ground conditions, geological formation pressures, fires, power outages, labour disruptions, flooding, earthquakes, explorations, cave-ins, landslides, and the inability to obtain suitable adequate machinery, equipment or labour are other risks involved in the operation of mines and the conduct of exploration programs. There are also physical risks to the exploration personnel working on the site of a mineral project. The Company’s exploration properties and any future mining operations will be subject to all the hazards and risks normally incidental to exploration, development, and production of silver and other metals, any of which could result in damage to or destruction of exploration facilities or mines, damage to life and property, environmental damage, and possible legal liability for any or all damage. Although the Company maintains insurance in an amount, which it considers adequate, the nature of these risks is such that liabilities could exceed policy limits, in which event the Company could incur significant costs that could have a materially adverse effect upon its financial condition.
Uncertainty of Mineral Resources
The figures for mineral resources for the Treasure Mountain Project disclosed in the Company’s Annual Information Form for the year ended December 31, 2012, and in its technical report filed on SEDAR on June 12, 2012, are only estimates. Mineral reserves at the Treasure Mountain Project have not been defined therefore the mineral resources currently cannot be considered ore.
The figures for Inferred Copper Resource for the Southern Dump and 3060 Portal Dumps at New Craigmont Copper Mine in the Technical Report filed on SEDAR on June 1, 2020, and final ALS Metallurgy Laboratory report for upgrading and copper recovery test work filed on SEDAR on June 12, 2020, are only estimates. The inferred mineral resources are not mineral reserves as the Company has not yet demonstrated the economic viability.
There is no certainty that any expenditures made in the exploration of the Company’s mineral properties will result in identification of commercially recoverable quantities of ore or that ore reserves will be mined or processed profitably. In addition, substantial expenditures will be required to develop the mining and processing facilities and infrastructure at any site chosen for mining.
Uncertainty of Economic Viability of Production from the Treasure Mountain Project
The Company has not undertaken any preliminary economic assessment or preliminary feasibility study with respect to the Treasure Mountain Project or any of its other projects and does not intend to undertake such a study or assessment. There are significant risks associated with making a production decision without a valid, current, economic analysis and the Company may subsequently determine those recommencing operations at the Treasure Mountain Project is not economically feasible.
Insurance
The mining industry is subject to significant risks that could result in damage to or destruction of property and facilities, personal injury or death, environmental damage and pollution, delays in production, expropriation of assets and loss of title to mining claims. No assurance can be given that insurance to cover the risks to which the Company’s activities are subject will be available at all or at commercially reasonable premiums. The Company currently maintains insurance within ranges of coverage that it believes to be consistent with industry practice for companies of a similar stage of development, however the insurance the Company has may not be sufficient to cover the full extent of any liabilities that may arise.
Prices, Markets and Marketing of Silver, Gold, and Precious Metal Prices
World prices for commodities fluctuate and are affected by numerous factors including international economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates, global or regional consumptive patterns, speculative activities, and increased production due to new mine developments and improved mining and production methods. The effect of these factors on the price of commodities, and the resulting impact on the viability of any of the Company’s exploration projects, cannot accurately be predicted.
Page 13
Liquidity and Capital Requirements
The Company currently has a working capital and a history of working capital deficits, no history of profitable operations and no assurance that additional funding will be available to it for further exploration and development of any of its projects. The Company may also need further financing if it decides to obtain additional mineral properties or further upgrades to the Merritt Mill. As such, the Company is subject to many risks common to exploration enterprises, including under-capitalization, cash shortages and limitations with respect to personnel, financial and other resources, and lack of revenues. Although the Company has been successful in the past in obtaining financing through credit facilities or the sale of equity securities, there can be no assurance that the Company will be able to obtain adequate financing in the future or that the terms of such financing will be favorable. Such means of financing typically result in dilution of the positions of existing shareholders, either directly or indirectly. Failure to obtain additional financing could result in the delay or indefinite postponement of further exploration and development of its mineral properties, the loss of substantial dilution of any of its property interests or all the liquidation of all its assets.
Dependence on Management
The Company is very dependent upon the personal efforts and commitment of its existing management. To the extent that management’s services would be unavailable for any reason, a disruption to the operations of the Company could result, and other persons could be required to manage and operate the Company.
Environmental Risks
All phases of the mineral exploration and development business present environmental risks and hazards and are subject to environmental regulations. Compliance with such legislation and regulations can require significant expenditures and a breach could result in the imposition of fines and penalties, some of which may be material. Environmental legislation is evolving in a manner which may lead to stricter standards and enforcement, larger fines and liability and potentially increased capital expenditures and operating costs. No assurance can be given that the application of environmental laws to the business and operations of the Company will not result in a curtailment of exploration or production, material increase in the costs of production, development, or exploration activities, or otherwise adversely affect the Company’s financial condition, results of operations or prospects.
Government Regulation
The natural resource exploration industry is subject to controls and regulations imposed by various levels of government. It is not expected that any of these controls or regulations will affect the operations of the Company in a manner materially different than they would affect other natural resource exploration companies of similar size. The current legislation is a matter of public record, and the Company is unable to predict what additional legislation or amendments may be enacted.
Indigenous Peoples’ title claims and rights to consultation and accommodation may affect our existing operations as well as development projects and future acquisitions.
Governments in many jurisdictions must consult Indigenous Peoples with respect to grants of mineral rights and the issuance or amendment of exploration and project authorizations. Consultation and other rights of Indigenous Peoples may require accommodations, including undertakings regarding financial compensation, employment and other matters in impact and benefit agreements. This may affect our ability to acquire, explore or develop, within a reasonable time frame, mineral titles in these jurisdictions and may affect the timetable and costs of development of mineral properties in these jurisdictions. The risk of unforeseen aboriginal title claims also could affect existing operations as well as exploration and development projects and future acquisitions. These legal requirements may increase our operating costs and affect our ability to expand our operations or to explore and develop new projects.
Competition
The mining industry is intensely competitive in all its phases, and the Company competes with other companies that may have greater financial resources and technical capacity. Competition could adversely affect the Company’s ability to acquire suitable properties or prospects in the future. The Company also competes with other mining companies in the recruitment and retention of qualified employees.
Page 14
Conflicts of Interest
The Company’s directors and officers may serve as directors or officers of, or may be associated with other reporting companies, or have significant shareholdings in other public companies. To the extent that such other companies may participate in business or asset acquisitions, dispositions, or ventures in which the Company may participate, the directors and officers of the Company may have a conflict of interest in negotiating and concluding terms respecting the transaction. If a conflict of interest arises, the Company will follow the provisions of the Business Corporations Act (British Columbia) (“BCBCA”) and any other applicable laws and rules dealing with conflicts of interest. These provisions state that where a director has such a conflict, that director must, at a meeting of the Company’s directors, disclose his interest and refrain from voting on the matter unless otherwise permitted by the BCBCA. In accordance with the laws of the Province of British Columbia, the directors and officers of the Company are required to act honestly, in good faith and in the best interests of the Company.
No Current Plans to Pay Cash Dividends
The Company has no plans to pay any cash dividends for the foreseeable future. Any decision to declare and pay dividends in the future will be made at the discretion of the Board and will depend on, among other things, the Company’s financial results, cash requirements, contractual restrictions, and other factors that the Board may deem relevant. In addition, the Company’s ability to pay dividends may be limited by covenants of any existing and future outstanding indebtedness that the Company or its subsidiaries incur. As a result, investors may not receive any return on an investment in the Company’s securities unless they sell the securities for a price greater than that which they paid for them.
Economic Conditions
Unfavourable economic conditions may negatively impact the Company’s financial viability. Unfavourable economic conditions could also increase the Company’s financing costs, decrease estimated income from prospective mining operations, limit access to capital markets and negatively impact the availability of credit facilities or other financing to the Company.
Price Volatility of Public Stock
The market price of the Company’s securities has experienced wide fluctuations, which may not necessarily be related to the operating performance, underlying asset values or prospects of the Company. Any market for the Company’s securities may be subject to market trends generally and the value of the Company’s securities on the Exchange may be affected by such volatility in response to numerous factors, many of which are beyond the Company’s control, including:
| ● | actual or anticipated fluctuations in the Company’s quarterly results of operations, |
| ● | changes in the economic performance or market valuations of other companies that investors deem comparable to the Company, |
| ● | the addition or departure of the Company’s executive officers or other key personnel, |
| ● | release or other transfer restrictions on outstanding Company securities, |
| ● | sales or perceived sales of additional Company securities, |
| ● | significant acquisitions or business combinations, strategic partnerships, joint ventures and or capital commitments by or involving the Company or its competitors, |
| ● | news reports relating to trends, concerns, competitive developments and or regulatory changes, and |
| ● | other related issues in the Company’s industry or target markets. |
Page 15
Financial markets continue to experience significant price and volume fluctuations that have particularly affected the market prices of equity securities of companies and that have, in many cases, been unrelated to the operating performance, underlying asset values or prospects of such companies. Accordingly, the market price of the Company’s securities may decline even if the Company’s operating results, underlying asset values or prospects have not changed.
Additionally, these factors, as well as other related factors, may cause decreases in asset values that are deemed to be other than temporary, which may result in impairment losses. As well, certain institutional investors may base their investment decisions on consideration of the Company’s environmental, governance and social practices and performance against such institutions’ respective investment guidelines and criteria, and failure to meet such criteria may result in limited or no investment in the Company’s securities by those institutions, which could adversely affect the trading price of the Company’s securities. There can be no assurance that fluctuations in price and volume will not occur in the future. If increased levels of volatility and market turmoil occur, the Company’s operations may be adversely impacted together with the trading price of the Company’s securities may also be adversely affected.
Regulatory and Permitting
Regulatory and permitting requirements have a significant impact on the Company’s operations and can have a material and adverse effect on future cash flow, results of operations and financial condition. To conduct mineral exploration and mining activities, the Company must obtain or renew exploration or mining permits and licenses in accordance with the relevant mining laws and regulations required by governmental authorities having jurisdiction over mineral projects. There is no guarantee that the Company will be granted the necessary permits and licenses, that they will be renewed, or that the Company will be in a-position to comply with all the conditions that are imposed. Mining is subject to potential risks and liabilities associated with pollution and the disposal of waste from mineral exploration and mining operations. Costs related to discovery, evaluation, planning, designing, developing, constructing, operating, closing, and remediating mines and other facilities in compliance with these laws and regulations are significant. In addition to environmental protection, applicable laws and regulations govern employee health and safety. Not complying with these laws and regulations can result in enforcement actions that may include corrective measures requiring capital expenditures, installation of additional equipment, remedial action, and changes to operating procedures resulting in additional costs and temporary or permanent shutdown of operations. The Company may also be required to compensate those parties’ suffering loss or damage and may face civil or criminal fines or penalties for violating certain laws or regulations. Changes to these laws and regulations in the future could have an adverse effect on the Company’s cash flow, results of operations and financial condition. Further, the issuance of permits may be subject to review by third parties who may challenge future permitting and the validity of existing permits based on, among other things, the government’s obligation to consult and accommodate.
FORWARD-LOOKING STATEMENT
This presentation includes “forward-looking statements” and “forward-looking information” (collectively, “forward-looking statements”) within the meaning of applicable securities legislation, which reflect Nicola Mining Inc.’s (“Nicola” or the “Company”) current expectations regarding the future results of operations, performance, and achievements. All statements included in this presentation, other than statements of historical fact, are forward-looking statements including, without limitation, the Company’s ability to develop its exploration assets via operational cash flow from gold concentrate production; the Company’s plans and expectations regarding its proposed exploration program for its Craigmont Copper Project; the Company’s plans and expectations regarding future exploration work on the Treasure Mountain Mine, including reopening the mine; the Company’s plans and expectations regarding future investments and operations at the Merritt Gold/Silver Mill Facility (the “Merritt Facility”); and statements regarding potential mergers, acquisitions, and joint venture opportunities. Forward-looking statements include predictions, projections and forecasts and are often, but not always, identified by the use of words such as “anticipate”, “believe”, “plan”, “estimate”, “expect”, “potential”, “target”, “budget” and “intend” and statements that an event or result “may”, “will”, “should”, “could” or “might” occur or be achieved and other similar expressions and includes the negatives thereof.
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Forward-looking statements are based on the reasonable assumptions, estimates, analysis and opinions of the management of the Company made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management of the Company believes to be relevant and reasonable in the circumstances at the date that such statements are made. Forward-looking information is based on reasonable assumptions that have been made by the Company as at the date of such information and is subject to known and unknown risks, uncertainties and other factors that may have caused actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: risks associated with general economic conditions, including risks related to macro-economic and global financial conditions; inflation; availability of capital; accuracy of the Company’s projections and estimates; interest and exchange rates; competition; financing and share price fluctuations; capital expenditures; changes in national and local government regulations; regulatory risks; the ability to retain key personnel necessary to conduct mill operations at the Merritt Facility; decreased demand for copper, gold, silver and other minerals; unexpected difficulties with the milling and extraction of minerals from the Company’s projects; delays or difficulties in timing of shipments of concentrates by the Company; operating or technical difficulties; personnel relations; fluctuations in commodity pricing, specifically copper, gold and silver; and any other risks outside the direct control or influence of the Company. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate and actual results, and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking information contained herein, except in accordance with applicable securities laws. The forward-looking information contained herein is presented for the purpose of assisting investors in understanding the Company’s business and the Company’s plans and objectives and may not be appropriate for other purposes. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws. Additional information about these and other risks and uncertainties are set out in the section entitled “Risk Factors” in the Company’s MD&A filed on SEDAR+ at www.sedarplus.ca.
Qualified person
The scientific and technical disclosures included on this webpage have been reviewed and approved by Will Whitty, P.Geo., who is the Qualified Person as defined by NI 43-101. Mr. Whitty is Vice President of Exploration for the Company.
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Exhibit 99.4
CERTIFICATION PURSUANT TO RULE 13a-14 OR 15d-14 OF
THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT
TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Peter Espig, certify that:
1. | I have reviewed this annual report on Form 40-F of Nicola Mining Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report; |
4. | The issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the issuer's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer's internal control over financial reporting; and |
5. | The issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer's auditors and the audit committee of the issuer's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer's internal control over financial reporting. |
Date: April 27, 2026
/s/ “Peter Espig” | |
Peter Espig | |
Chief Executive Officer | |
(Principal Executive Officer) | |
Exhibit 99.5
CERTIFICATION PURSUANT TO RULE 13a-14 OR 15d-14 OF
THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT
TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Sam Wong, certify that:
1. | I have reviewed this annual report on Form 40-F of Nicola Mining Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report; |
4. | The issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the issuer's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer's internal control over financial reporting; and |
5. | The issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer's auditors and the audit committee of the issuer's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer's internal control over financial reporting. |
Date: April 27, 2026
/s/ “Sam Wong” | |
Sam Wong | |
Chief Financial Officer | |
(Principal Financial Officer) | |
Exhibit 99.6
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Nicola Mining Inc. (the "Company") on Form 40-F for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Peter Espig, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: April 27, 2026
/s/ “Peter Espig” | |
Peter Espig | |
Chief Executive Officer | |
(Principal Executive Officer) | |
Exhibit 99.7
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Nicola Mining Inc. (the "Company") on Form 40-F for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Sam Wong, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: April 27, 2026
/s/ “Sam Wong” | |
Sam Wong | |
Chief Financial Officer | |
(Principal Financial Officer) | |
Exhibit 99.8
CONSENT OF Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in this Annual Report on Form 40-F for the year ended December 31, 2025 of Nicola Mining Inc. (the “Company”) of our report dated April 27, 2026, relating to the consolidated financial statements of the Company which appear in this Annual Report. We also consent to the incorporation by reference in the Company’s Registration Statement on Form F-10 (No. 333-293048) of our report referred to above, which forms part of the Annual Report on Form 40-F, that is incorporated by reference in the Form F-10.
/s/ “Davidson & Company LLP” | | |
Chartered Professional Accountants | | Vancouver, Canada |
April 27, 2026
Exhibit 99.9
April 27, 2026
To:Nicola Mining Inc.
Suite 1212 – 1030 West Georgia Street
Vancouver, BC V6E 2Y3, Canada
Consent of Expert
The undersigned hereby consents to the inclusion in the Annual Report on Form 40-F and the documents incorporated by reference therein (“Annual Report”) of Nicola Mining Inc. (the “Company”) for the year ended December 31, 2025 of references to, and the information derived from, the report titled “NI 43-101 Technical Report on the Preliminary Copper Resource for the Southern Dump and 3060 Portal Dumps” with an effective date of May 21, 2020 and to the references, as applicable, to the undersigned’s name included in or incorporated by reference with respect to the disclosure of technical and scientific information contained in the Annual Report (the “Technical Information”). The Annual Report incorporates by reference the Annual Information Form of the Company for the year ended December 31, 2025.
The undersigned further consents to the incorporation by reference in the Company’s Registration Statement on Form F-10 (No. 333-293048) filed with the United States Securities and Exchange Commission, of the references to the undersigned’s name and the Technical Information in the Annual Report.
/s/ “James N. Gray” |
|
James N Gray, P. Geo. |
|
|
|
|
Exhibit 99.10
Apri 27, 2026
To:Nicola Mining Inc.
Suite 1212 – 1030 West Georgia Street
Vancouver, BC V6E 2Y3, Canada
Consent of Expert
The undersigned hereby consents to the inclusion in the Annual Report on Form 40-F and the documents incorporated by reference therein (“Annual Report”) of Nicola Mining Inc. (the “Company”) for the year ended December 31, 2025 of references to, and the information derived from, the report titled “NI 43-101 Technical Report on the Preliminary Copper Resource for the Southern Dump and 3060 Portal Dumps” with an effective date of May 21, 2020 and to the references, as applicable, to the undersigned’s name included in or incorporated by reference with respect to the disclosure of technical and scientific information contained in the Annual Report (the “Technical Information”). The Annual Report incorporates by reference the Annual Information Form of the Company for the year ended December 31, 2025.
The undersigned further consents to the incorporation by reference in the Company’s Registration Statement on Form F-10 (No. 333-293048) filed with the United States Securities and Exchange Commission, of the references to the undersigned’s name and the Technical Information in the Annual Report.
/s/ “Kevin Wells” |
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Kevin Wells, P. Geo | |
|