Nicola Mining Inc. (NASDAQ: NICM) (TSX.V: NIM) (FSE: HLIA) has released initial assay results from two mill feed stockpiles that comprise material from Red Eye Resources Ltd., with which Nicola 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. The overall weighted average grade returned 2.83 grams per tonne gold and 753.41 grams per tonne silver.
These results are significant because they indicate the potential for economic recovery of precious metals from material that is already mined and stockpiled, reducing the need for additional mining. The company plans to proceed with laboratory simulations aimed at maximizing recovery and evaluating the feasibility of processing this material at its Merritt Mill, which is fully permitted for gold and silver processing via gravity and flotation processes.
However, Nicola cautioned that these 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 the assay results showed high variability. These factors could affect the overall grade and tonnage estimates, and further testing is necessary to confirm the economic viability.
The company's Merritt Mill is a key asset, as it is one of the few fully permitted mills in British Columbia capable of processing both gold and silver. Nicola has been actively seeking profit-share agreements with high-grade gold projects to maximize the utilization of its mill. The Red Eye agreement is part of this strategy, and positive results could lead to additional agreements or expansion of existing ones.
Nicola also owns 100% of the New Craigmont Project, a high-grade copper property covering 10,913 hectares adjacent to Highland Valley Copper, Canada's largest copper mine. This provides diversification and potential for future growth. Additionally, the company holds the Treasure Mountain Property, which spans over 2,200 hectares and includes 30 mineral claims and a mineral lease.
The initial assay results are a positive development for Nicola Mining, as they suggest that the Red Eye material could provide a new revenue stream without significant capital expenditure. The company's ability to process material from third parties under profit-share arrangements is a unique business model that allows it to generate cash flow while minimizing risk.
Investors should note that these are preliminary results and further work is needed to determine the full potential of the stockpiles. The company's next steps will involve laboratory simulations to test recovery rates and process optimization. If successful, Nicola could begin processing the material at Merritt Mill, which would be a significant milestone.
For more information on Nicola Mining and its projects, visit the company's newsroom at https://ibn.fm/NICM. The full press release can be viewed at https://ibn.fm/JrBLd.
