Nicola Mining Inc. (TSX.V: NIM)(FSE: HLI) has embarked on an exciting new venture by signing a non-binding letter of intent (LOI) with Nittetsu Mining Co. Ltd. (“Nittetsu”), a well-established Japanese company with a global presence. This significant milestone paves the way for a potential joint venture focused on Nicola’s wholly-owned New Craigmont Copper Project. The collaboration is set to inject fresh capital and expertise into the project, propelling it toward new heights in the world of copper mining.
The Non-Binding Letter of Intent
The LOI signifies the initial step in a potentially transformative partnership between Nicola and Nittetsu. Under this non-binding agreement, both parties have outlined the fundamental terms and objectives of the collaboration. Subject to further due diligence and successful negotiations, they aim to solidify their commitment in a Definitive Agreement by December 23, 2023.
Exploring New Opportunities
During the period leading up to the Definitive Agreement, the two companies have agreed to closely cooperate, pooling their geological and technical expertise. This collaborative effort will encompass the examination and organization of critical Project data, which includes the analysis of historic mine dumps, skarn mineralization, and current porphyry targets.
A Valuable Investment
Nittetsu’s involvement is expected to bring a substantial financial boost to the New Craigmont Copper Project. Their total investment could reach a remarkable $25.0 million, valuing the project at $62.5 million. In return, Nittetsu stands to gain a 40% interest in the New Craigmont Copper Project.
Investment Phases
The investment from Nittetsu will occur in two stages:
Optional Phase – 1st Stage: In this initial stage, Nittetsu may invest up to $10.0 million to secure a 20% ownership stake in the Project Entity, a new company formed for this venture. Importantly, Nittetsu has the flexibility to discontinue its investment at this stage if it chooses not to proceed to the next phase. This first stage is anticipated to last approximately three years, giving Nittetsu the option to move forward to the 2nd Stage at its sole discretion.
FS Stage – 2nd Stage: The second stage, spanning two years, will focus on the feasibility of the Project, including the extraction of copper from the historic waste dumps. Upon the successful completion of this stage and a cumulative investment of at least $15.0 million, Nittetsu will secure a 40% equity interest in the Project Entity.
A Promising Partnership
Under the Definitive Agreement, Nittetsu will also act as a sales agent for 100% of the copper production or can choose to partner with Nicola in case superior pricing for production offtake is available.
Peter Espig, CEO of Nicola Mining, expressed his enthusiasm for this collaboration, noting the invaluable experience and credibility that Nittetsu brings to the New Craigmont Copper Project. He believes that this infusion of capital will significantly augment the project’s post-money valuation. Furthermore, this venture will not dilute the outstanding shares of Nicola Mining Inc. and will exclude their fully permitted silver mine, Treasure Mountain, and the Merritt Mill Facility. Notably, this partnership marks Nittetsu’s first foray into a British Columbia-based copper project.
About Nittetsu Mining Co., Ltd.
Nittetsu Mining Co., Ltd. is a diversified company founded in 1899 with a wide array of global operations. Their current portfolio includes activities such as mining and distributing industrial minerals, purchasing and distributing coal and petroleum products, developing and distributing equipment, machinery, and environment-related products, as well as involvement in real estate and power generation using renewable energy. Nittetsu also operates the Atacama Copper Mine and is in the process of developing a second copper mine in the Republic of Chile.
This exciting partnership between Nicola Mining Inc. and Nittetsu Mining Co. Ltd. holds the promise of unlocking the vast potential of the New Craigmont Copper Project, bringing renewed vitality to the world of copper mining. Stay tuned for further updates as this collaboration unfolds.
