Nicola Mining Inc. (NASDAQ: NICM) (TSX.V: NIM) (FSE: HLIA) has released initial assay results from two mill feed stockpiles containing material from Red Eye Resources Ltd., with which the company entered into a profit-share agreement earlier in August. The samples, totaling 47.82 kilograms, were taken from stockpiles estimated at approximately 1,200 tonnes and 300 tonnes, and returned an overall weighted average grade of 2.83 grams per tonne gold and 753.41 grams per tonne silver. These grades are notably high, particularly for silver, and could represent a significant economic opportunity for the company if the material proves amenable to processing.
The company plans to proceed with laboratory simulations aimed at maximizing recovery and evaluating the potential of processing this material at its wholly owned Merritt Mill, located near Merritt, British Columbia. The mill is fully permitted and capable of processing both gold and silver feed via gravity and flotation processes. Success in these tests could allow Nicola to generate revenue from the stockpiles under the profit-share arrangement without significant upfront capital expenditure, potentially providing a low-cost feed source for the mill.
However, Nicola cautioned that the results should not be considered representative of the entire stockpiles. Buried material was inaccessible during sampling, additional material was subsequently added to the larger pile, and assay results showed high variability. These factors introduce uncertainty regarding the true grade and tonnage of the stockpiles. The company will need to conduct further sampling and analysis to better estimate the potential value.
The announcement is important for Nicola as it seeks to maximize the utilization of its mill and generate cash flow. The company has been focusing on profit-share agreements with high-grade gold projects, and this development aligns with that strategy. If the stockpiles prove economically viable, they could provide a near-term revenue stream, enhancing the company's financial position.
Nicola Mining also owns 100% of the New Craigmont Project, a high-grade copper property spanning 10,913 hectares along the southern end of the Guichon Batholith, adjacent to Highland Valley Copper, Canada’s largest copper mine. Additionally, the company owns the Treasure Mountain Property, which includes 30 mineral claims and a mineral lease covering over 2,200 hectares. These assets provide long-term growth potential, but the immediate focus remains on the Red Eye stockpiles and the upcoming recovery tests.
Investors and stakeholders will be watching for the results of the laboratory simulations, which could provide more clarity on the feasibility of processing the stockpiles. The company’s ability to successfully process this material could set a precedent for future profit-share arrangements and bolster its reputation as a reliable milling partner.
For further details, the full press release is available at https://ibn.fm/JrBLd.
