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Nicola Mining Share Issue/Capital Change 2024
43861_rns_2024-12-12_81083cd1-5ce5-4570-b08f-0ddec14ced37.pdf
Share Issue/Capital Change
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51-102F3
MATERIAL CHANGE REPORT [F]
Item 1 Name and Address of Company
Nicola Mining Inc. (the “Company” or “Nicola”)
3329 Aberdeen Road
Lower Nicola, BC V0K 1Y0
Item 2 Date of Material Change
December 3, 2024
Item 3 News Release
The news release dated December 4, 2024 was issued by Newsfile Corp. on December 4, 2024.
Item 4 Summary of Material Change
The Company announced that it has completed drilling (totaling 4872m and 14 holes) and is pleased to provide updates on its 2024 drilling exploration program (the “2024 Program”)¹ at its New Craigmont Copper Project, near Merritt, B.C.
The Company also announced that it has completed its flow-through private placement offering (the “Offering”), pursuant to which it sold an aggregate of 1,641,790 common shares (each, a “Share”) in the capital of the Company at a price of $0.335 per Share for aggregate gross proceeds of $550,000.
Item 5 Full Description of Material Change
5.1 Full Description of Material Change
The first phase of the 2024 Program at the never-before-drilled West Craigmont-WP target totaled $\sim 1829.70\mathrm{m}$ , with initial findings reported in the August 30, 2024 Operations and Exploration Update. The second phase targeted the unexplored MARB-CAS Zones, both of which are approximately $3.5\mathrm{km}$ in diameter. Drilling aimed to develop a subsurface geology framework and assess mineralization potential beneath two small mineralized outcrops, one at the MARB Zone and another at the CAS Zone. The third phase stepped out from the MARB-CAS Zones towards the Embayment Zone to see if there was a continuation of mineralization. (Fig. 1)
¹ See the Company’s news release dated July 3, 2024 for more information on the 2024 Program.
Figure 1. Collar locations of 2024 drilling campaign at the New Craigmont Project.
The Company is finalizing core cutting, which will then be sent to a certified laboratory for expedited analysis and looks forward to issuing a news release with grades upon receipt.
The Company is also pleased to announce that it has made a deposit of $137,700.00 on behalf it itself and High Range Exploration Ltd. for a Notice of Work and Reclamation Program at the Dominion Creek Gold / Silver Project ("Dominion"). The deposit is a key component in garnering the final permit and conducting a bulk sample permit in 2025. Nicola owns a 75% economic interest in Dominion and is planning on commencing a bulk sample which will be processed at its Merritt Mill.
On December 3, 2024, the Company completed the Offering and issued the Shares for aggregate proceeds of $550,000.
The Shares are issued on a "flow-through" basis pursuant to the Income Tax Act (Canada) and in accordance with the policies of the TSX Venture Exchange. The Company paid an aggregate of $38,500 to one eligible finder in connection with the Offering.
The aggregate gross proceeds from the Offering are expected to be allocated towards following up on the 2024 Program. All securities issued in connection with the Offering are subject to a statutory hold period expiring April 4, 2025.
Peter Espig, the CEO and a director of the Company subscribed for a total of 44,776 Shares under the Offering, which is a "related party transaction" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The issuance to Mr. Espig is exempt from the valuation requirement of MI 61-101 by virtue of the exemption contained in section 5.5(b) as the 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(a) of MI 61-101 in that the fair market value of the consideration of the Shares to be issued to Mr. Espig does not exceed 25% of the Company's market capitalization.
MI 61-101 Requirements
Peter Espig, the Chief Executive Officer, President and a director of the Company, acquired 44,776 Shares for $14,999.96. 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 44,776 Shares for gross proceeds of $14,999.96.
(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:
| Name and Position | Dollar Amount of Securities | Number of Securities | No. of Securities Held prior to the Issuance | Percentage of Issued and Outstanding Securities prior to the Issuance | No. of Securities Held After the Issuance | Percentage of Issued and Outstanding Securities After the Issuance |
|---|---|---|---|---|---|---|
| Peter Espig | ||||||
| Chief Executive Officer, | ||||||
| President and Director | $14,999.96 | 44,776 Shares | Undiluted: 5,641,183 | |||
| Diluted: 8,216,183(1) | Undiluted: 3.38%(2) | |||||
| Diluted: 4.84%(3) | Undiluted: 5,685,959 | |||||
| Diluted: 8,260,959(4) | Undiluted: 3.37%(5) | |||||
| Diluted: 4.82%(6) |
(1) Comprised of: (a) 5,641,183 Shares and (b) 2,575,000 options, each of which is exercisable into one Share, 500,000 are exercisable at a price of $0.30 per Share until January 8, 2026, 375,000 are exercisable at a price of $0.22 per Share until October 5, 2026, and 1,000,000 are exercisable at a price of $0.16 per Share until September 28, 2027 and 700,000 are exercisable at a price of $0.265 until April 18, 2029, all of which may be exercised or converted within 60 days.
(2) Based on 167,117,580 Shares outstanding prior to the Offering.
(3) Based on 169,692,580 Shares comprised of: (a) 167,117,580 Shares outstanding prior to the Offering and (b) 2,575,000 Shares that may be issued on exercise of options, all convertible within 60 days.
(4) Comprised of: (a) 5,685,959 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 168,759,370 Shares outstanding after the completion of the Offering.
(6) Based on 171,334,370 Shares comprised of: (a) 168,759,370 Shares outstanding after the completion of the Offering and (b) 2,575,000 Shares that may be issued on exercise of options, all 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 44,776 Shares for gross proceeds of $14,999.96.
(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(a) of MI 61-101 in that the fair market value of the consideration of the Shares 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
4
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
December 12, 2024