Business
Nicola Mining Inc. Obtains Extension to Mineral Purchase Agreement to Acquire 50% of Dominion Creek Gold Project
Vancouver, British Columbia--(Newsfile Corp. - June 2, 2021) - Nicola Mining Inc. ( TSXV: NIM ...
About this update from Nicola Mining Inc.
[{"type":"text","content":"Nicola Mining Inc. Obtains Extension to Mineral Purchase Agreement to Acquire 50% of Dominion Creek Gold ProjectVancouver, British Columbia--(Newsfile Corp. - June 2, 2021) - Nicola Mining Inc. (TSXV: NIM) (FSE: HLI), (the \"Company\" or \"Nicola\") announces that it has signed an Amended and Restated Mineral Purchase Agreement (the \"Amended Mineral Purchase Agreement\") with High Range Exploration Ltd. (\"High Range\") to acquire 50% of the Dominion Creek Property (the \"Gold Project\") which is located 43 kilometers northeast of the Town of Wells and approximately 110 kilometers east-southeast of Prince George. The Company announced on September 17, 2020 that it had signed a Strategic Milling and Profit Share Agreement (\"Profit Share Agreement\") with High Range and on September 23, 2020 that it had entered into a Letter of Intent (\"LOI\") to acquire a 50% interest in the Gold Project. The Amended Mineral Purchase Agreement extends the closing until June 15, 2021, which allows the Company to complete its final due diligence and documentation for closing. The Company received support for the acquisition from Ocean Partners Holdings and is able to draw down non-dilutive funds for the transaction via a revolving US$500,000 prepayment provision that allows the Company to request an advance prepayment for the purpose of working capital. Nicola and High Range intend to bring the project towards a 10,000 tonne bulk sample permit. Under terms of the Amended Mineral Purchase Agreement, Nicola can acquire 50% of the Gold Project for $150,000 and the payment of $75,000 in expenses, which combined with a 50% economic benefit from the Profit Share Agreement, provide it with a 75% economic benefit in the Gold Project. Nicola agrees to finance estimated startup costs of $525,000 (see Table 1). The Company will also receive 100% of the economic benefit from the profits of the bulk sample until all startup costs have been repaid in full.Table 1: Bulk Sample Permit Start Up CostsUse of CapitalBudget EstimateRepaid Upon Production • Cost to acquire 50% of Dominion Creek Property$150,000Yes • Completion of bulk sample permit application $75,000Yes • Camp $50,000Yes • Road Construction and Infrastructure Upgrades$300,000Yes • Reclamation Bonding$100,000Yes Note: Figures are estima...