What you need to know: • Nicola holds two exploration assets with its flagship brownfield copper project showing early signs of a copper porphyry system. • The Company has two sources of revenue which minimizes dilution to shareholders – its Merritt Milling business (profit share agreements with its partners) and its Sand/Gravel Pit and Rock Quarry business. • NIM’s mill provides an expedited path to production for its assets. • We value the Company at $0.60/share, representing 97% upside. Nicola Mining Corp. (NIM:TSXV, HUSIF:OTC) is a junior mining company focused on the exploration and development of precious and base metals assets in British Columbia. With a heightened focus on copper, Nicola is developing its flagship New Craigmont Copper Project which lies proximal to major copper producers (Teck and New Gold) and sits on the historical Craigmont Mine, greatly reducing exploration and development risk. The Company owns and operates a mineral processing plant which processes ore from its partners’ operations and shares in the profits. Nicola also generates revenue from its Sand and Gravel Pit and Rock Quarry which services local infrastructure projects. Cash from its revenue-generating businesses supports Nicola’s exploration activities while limiting shareholder dilution. Lastly, NIM’s fully-permitted Treasure Mountain Mine is exploring for high-grade silver, lead, and zinc, is past producing, and hosts a high-grade resource. We are initiating coverage on Nicola Mining with a BUY rating and target price of $0.60/share. Investment Thesis Summary Strong Flagship Copper Asset at its Core. The New Craigmont Copper Project has all the signs of a legitimate copper asset and the historical high-grade copper mine only increases our confidence in the Company discovering a sizeable resource. As a brownfields project, development & permitting risks are greatly reduced. Operational Mill Provides Cashflow & Production Opportunities. Nicola’s Merritt Mill and Tailings facility is being utilized for profit-sharing agreements where it processes ore for its partners in the region. This business is just beginning to ramp up, and we expect new partnerships and cashflows to accelerate. Additionally, the fully operational mill could ultimately process ore from NIM’s own internal assets. Revenue Generating Businesses Limit Dilution. Nicola’s Mill and the Sand/Gravel Pit and Rock Quarry businesses provide non-dilutive cashflow to fund exploration of its core assets. Additionally, the Pit and Quarry are operated by local aboriginal communities, strengthening its relationships with key stakeholders. Secondary Asset Provides Upside. The Treasure Mountain Mine hosts a silver, lead, and zinc resource and is fully permitted for mineral extraction, making it a highly attractive asset for partnerships with other miners in the area and could also provide an ore source for NIM’s milling facility. Attractive Valuation. We value the New Craigmont Copper Project at $62.5M, assuming the valuation placed on it by Nittetsu Mining in 2023. Additionally, we value the milling business using an NPV of $25.5M and the secondary asset using an EV/oz valuation of $8.6M, resulting in our $0.60/share target price.