Nicola Mining — Capital/Financing Update 2021

Jan 12, 2021

51-102F3 MATERIAL CHANGE REPORT [F]

Item 1 Name and Address of Company

Nicola Mining Inc. (the “ Company ”) 3329 Aberdeen Road Lower Nicola, BC V0K 1Y0

Item 2 Date of Material Change

January 4, 2021, January 8, 2021 and January 12, 2021

Item 3 News Release

The news release dated January 4, 2021 was issued by Market News and Stockwatch on January 4, 2021. The news release dated January 8, 2021 was issued by Market News and Stockwatch on January 8, 2021. The news release dated January 12, 2021 was issued by Market News and Stockwatch on January 12, 2021.

Item 4 Summary of Material Change

On January 4, 2021, the Company announced that it intends to pay all of the interest owing on the secured convertible debentures (the “ Debentures ”) issued on January 9, 2020 by the issuance of common shares (each, a “ Share ”) of the Company. The Debentures mature on January 9, 2023 and bear interest (“ Interest ”) at a rate of 10% per annum, which Interest is payable under the terms of the Debentures annually, at the option of the Company, in cash or by the issuance of Shares.

The Company intends on paying all of the Interest in Shares to holders of the Debentures to settle the outstanding interest payment obligation for the first year of the term of the Debentures.

Accordingly, the Company intends to issue 264,000 Shares at a price of $0.125 per Share in settlement of Interest owing of $33,000 (the “ Debt Settlement ”).

The Debt Settlement was subject to TSX Venture Exchange (the “ Exchange ”) approval. The Company received Exchange approval and issued 264,000 Debt Settlement Shares on January 11, 2021. The Debt Settlement Shares are subject to a statutory hold period expiring on May 12, 2021.

On January 8, 2021, the Company announced that it has granted an aggregate of 3,850,000 stock options to certain directors, officers, employees and consultants for the purchase of up to 3,850,000 common shares of the Company pursuant to its Stock Option Plan. Each option is exercisable for a period of 5 years at a price of $0.15 per common share.

Item 5 Full Description of Material Change

5.1 Full Description of Material Change

The material changes are fully described in Item 4 above and in the News Releases filed on SEDAR at www.sedar.com.

5.2 Disclosure for Restructuring Transactions

Not Applicable

Item 6 Reliance on subsection 7.1(2) of National Instrument 51-102

Not Applicable

Item 7 Omitted Information

None

Item 8 Executive Officer

Peter Espig, President and Chief Executive Officer, 778.385.1213

Item 9 Date of Report

January 12, 2021

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