Nicola Mining — Regulatory Filings 2021

Oct 27, 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

October 14, 2021

Item 3 News Release

The news release dated October 14, 2021 was issued by Stockwatch and Market News on October 14, 2021.

Item 4 Summary of Material Change

On October 14, 2021, the Company announced that it has repaid in full the $250,000 Prepayment Facility (“ Prepayment ”) to Ocean Partners UK Limited (“ Ocean Partners ”). The Company had announced on April 30, 2021, that it entered into a purchase contract for gold and silver concentrate with Ocean Partners.

The Company also announced that, further to its news release dated October 11, 2021, it has completed its flow-through private placement financing (the “ Offering ”) pursuant to which it sold an aggregate of 4,375,000 flow-through shares (“ FT Shares ”) at a price of price of $0.12 for gross proceeds of $525,000.

The FT Shares are issued on a “flow-through” basis pursuant to the Income Tax Act (Canada) and the Company paid $34,999.98 in finder’s fees for certain subscriptions in the Offering. All securities issued in connection with the Offering are subject to a statutory hold period expiring February 15, 2022.

An insider of the Company acquired 208,336 FT Shares in the Offering which constituted a related party transaction under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions (“ MI 61-101 ”). The issuance to the insider is exempt from the valuation requirement of MI 61-101 by the virtue of the exemption contained in section 5.5(b) as the Company’s shares are not listed on a specified market and from the minority shareholder approval requirements of MI 61-101 by virtue of the exemption contained in Section 5.7(1)(a) as the value of the Units did not exceed 25% of the Company’s market capitalization.

The aggregate gross proceeds from the Offering are expected to be used for further exploration on the Company’s wholly-owned New Craigmont and Treasure Mountain Properties.

The Company also hopes to utilize operational cashflows towards additional explorations costs during 2022.

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 attached News Release which has been filed on SEDAR.

MI 61-101 Requirements

Peter Espig, the chief executive officer, president and a director of the Company, acquired 208,336 FT Shares for $25,000.32. As such, a portion of the Offering is a “related-party transaction” as such term is defined in MI 61-101.

The following supplementary information is provided in accordance with Section 5.2 of MI 61-101.

• (a) a description of the transaction and its material terms:

See Item 4 above for a description of the Offering.

• (b) the purpose and business reasons for the transaction:

The purpose of the Offering is for the further exploration on the Company’s wholly-owned New Craigmont Property.

• (c) the anticipated effect of the transaction on the issuer’s business and affairs:

The Company does not anticipate any material effect on the Company’s business and affairs.

• (d) a description of:

(i) the interest in the transaction of every interested party and of the related parties and associated entities of the interested parties:

Peter Espig was issued 208,336 FT Shares for gross proceeds of $25,000.32.

(ii) the anticipated effect of the transaction on the percentage of securities of the issuer, or of an affiliated entity of the issuer, beneficially owned or controlled by each person or company referred to in subparagraph (i) for which there would be a material change in that percentage:

The following table sets out the effect of the Offering on the percentage of securities of the Company beneficially owned or controlled by Peter Espig:

NameandPosition	DollarAmount ofSecurities	Number ofSecurities	No.ofSecuritiesHeld prior tothe Issuance	Percentage ofIssuedandOutstandingSecuritiesprior to theIssuance	No.ofSecuritiesHeldAfterthe Issuance	Percentage ofIssuedandOutstandingSecuritiesAftertheIssuance
Peter EspigChiefExecutiveOfficer,Presidentand Director	$25,000.32	208,336 FTShares	Undiluted:11,136,029Diluted:14,611,029(1)	Undiluted:3.98%(2)Diluted:5.16%(3)	Undiluted:11,344,365Diluted:14,819,365(4)	Undiluted:3.99%(5)Diluted:5.15%(6)

(1) Comprised of: (a) 11,136,029 Shares; (b) 2,750,000 options, each of which is exercisable into one common share of the Company (each, a “ Share ”), of which 1,000,000 are exercisable at a price of $0.165 per Share until December 27, 2022, 1,000,000 are exercisable at a price of $0.15 per Share until January 7, 2026 and 750,000 are exercisable at a price of $0.15 per Share until October 11, 2026; (c) 450,000 Shares

that may be issuable on conversion of a convertible debenture in the principal amount of $45,000, at a deemed conversion price of $0.10 per Share, until November 21, 2022; (d) 200,000 Shares that may be issuable on conversion of a convertible debenture in the principal amount of $20,000, at a deemed conversion price of $0.10 per Share, until May 20, 2023; and (e) 75,000 warrants, each of which is exercisable into one Share at a price of $0.17 per Share until December 22, 2022, all of which may be exercised or converted within 60 days.

• (2) Based on 279,915,972 Shares outstanding prior to the Offering.

• (3) Based on 283,390,972 Shares comprised of: (a) 279,915,972 Shares outstanding prior to the Offering; (b) 2,750,000 Shares that may be issued on exercise of options; (c) 650,000 Shares that may be issued on conversion of convertible debentures; and (d) 75,000 Shares that may be issued on exercise of warrants, all of which are exercisable or convertible within 60 days.

• (4) Comprised of: (a) 11,344,365 Shares; and (b) all of the convertible securities of the Company set out in footnote (1), all of which may be exercised or converted within 60 days.

• (5) Based on 284,290,972 Shares outstanding after the completion of the Offering.

• (6) Based on 287,690,972 Shares comprised of: (a) 284,290,972 Shares outstanding after the completion of the Offering; (b) 2,750,000 Shares that may be issued on exercise of options; (c) 650,000 Shares that may be issued on conversion of convertible debentures; and (d) 75,000 Shares that may be issued on exercise of warrants, all of which are exercisable or convertible within 60 days.

• (e) unless this information will be included in another disclosure document for the transaction, a discussion of the review and approval process adopted by the board of directors and the special committee, if any, of the issuer for the transaction, including a discussion of any materially contrary view or abstention by a director and any material disagreement between the board and the special committee:

The board of directors approved the Offering. Peter Espig abstained from voting on the resolution approving the Offering. A special committee was not established in connection with the approval of the Offering, and no materially contrary view or abstention was expressed or made by any director.

• (f) a summary in accordance with section 6.5 of MI 61-101, of the formal valuation, if any, obtained for the transaction, unless the formal valuation is included in its entirety in the material change report or will be included in its entirety in another disclosure document for the transaction:

Not applicable.

• (g) disclosure, in accordance with section 6.8 of MI 61-101, of every prior valuation in respect of the issuer that related to the subject matter of or is otherwise relevant to the transaction:

  • (i) that has been made in the 24 months before the date of the material change report:

Not applicable.

(ii) the existence of which is known, after reasonable enquiry, to the issuer or to any director or officer of the issuer:

Not applicable.

• (h) the general nature and material terms of any agreement entered into by the issuer, or a related party of the issuer, with an interested party or a joint actor with an interested party, in connection with the transaction:

The Company entered into a subscription agreement with Peter Espig pursuant to which Peter Espig acquired 208,336 FT Shares for gross proceeds of $25,000.32.

• (i) disclosure of the formal valuation and minority approval exemptions, if any, on which the issuer is relying under sections 5.5 and 5.7 of MI 61-101 respectively, and the facts supporting reliance on the exemptions:

The Offering is exempt from the valuation and minority shareholder approval requirements of MI 61-101 by virtue of the exemptions contained in Section 5.5(b) as the Company’s shares are not listed on a specified market and from the minority shareholder approval requirements of MI 61-101 by virtue of the exemption contained in Section 5.7(1)(a) of MI 61101 in that the fair market value of the consideration of the Units issued to the related party did not exceed 25% of the Company’s market capitalization.

As this material change report is being filed less than 21 days before the closing of the Offering, there is a requirement under MI 61-101 to explain why the shorter period is reasonable or necessary in the circumstances. In the view of the Company, such shorter period is reasonable and necessary in the circumstances because the Company wished to complete the Offering in a timely manner.

• 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

October 27, 2021