Nicola Mining Inc. (NASDAQ: NICM) (TSX.V: NIM) (FSE: HLIA) has reported initial assay results from two mill feed stockpiles originating from Red Eye Resources Ltd., a company with which Nicola entered into a profit-share agreement in August. The samples, totaling 47.82 kilograms, were taken from stockpiles estimated at approximately 1,200 tonnes and 300 tonnes. The results revealed an overall weighted average grade of 2.83 grams per tonne gold and 753.41 grams per tonne silver, indicating a significant precious metal content that could be economically viable for processing.
The company plans to proceed with laboratory simulations aimed at maximizing recovery and evaluating the potential of processing the material at its wholly-owned Merritt Mill, located near Merritt, British Columbia. The Merritt Mill is fully permitted and capable of processing both gold and silver mill feed via gravity and flotation processes. This development is significant as it could transform stockpiled material into a revenue-generating asset, leveraging existing infrastructure to enhance shareholder value.
However, Nicola Mining cautioned that these results should not be considered fully representative of the entire stockpiles. The company noted that buried material was inaccessible during sampling, additional material was subsequently added to the larger pile, and the assay results showed high variability. This highlights the need for further testing and analysis to accurately determine the overall grade and economic potential of the stockpiles.
The announcement follows Nicola Mining's strategic move in August when it signed a Mining and Milling Profit Share Agreement with Red Eye Resources. Under this agreement, Nicola can process high-grade gold projects, aligning with its business model of operating its mill at full capacity. The company has previously signed similar agreements with other high-grade gold projects, positioning itself as a key player in the British Columbia mining sector.
Beyond its milling operations, Nicola Mining owns 100% of the New Craigmont Project, a high-grade copper property covering 10,913 hectares along the southern end of the Guichon Batholith, adjacent to Highland Valley Copper, Canada's largest copper mine. The company also holds the Treasure Mountain Property, which includes 30 mineral claims and a mineral lease spanning over 2,200 hectares. These assets provide a diversified portfolio that could offer long-term growth opportunities.
The initial assay results are a positive indicator for Nicola Mining, but the company remains cautious. The next steps involve detailed metallurgical testing to determine the optimal recovery process. If successful, this could lead to the processing of the stockpiles at the Merritt Mill, generating cash flow without the need for extensive mining operations. This approach aligns with the company's strategy to maximize the use of its existing infrastructure and capitalize on opportunities in the precious metals market.
Investors will be watching closely as Nicola Mining advances its testing and evaluation. The company's ability to efficiently process these stockpiles could set a precedent for future profit-share agreements and reinforce its reputation as a reliable milling partner in the region. For more details on the press release, visit https://ibn.fm/JrBLd.
