Analysts at Noble Capital Markets have updated their rating on the Canadian mining company Nicola Mining (WKN A3D3LF / TSXV NIM) after the company began processing gold ore at its facility near the city of Merritt.
Nicola Mining recently reported that it had begun processing ore at its 100% owned mill in British Columbia, sourced from the Mustang mine of cooperation partner Talisker Resources (TSX TSK), to produce gold and silver concentrate. Talisker had already begun delivering material to the mill in May. With the start of operations, the company’s transition to a long-term production plan, as well as sustainable revenues and cash flow, has now begun.
Nicola Mining Funds Copper Exploration
As the Noble analysts further report, Nicola Mining also raised CAD 2.175 million gross through a private placement, issuing 4.350 million units at CAD 0.50 per unit. Each unit consisted of one share and half a warrant. This warrant can be exercised at CAD 0.65 within two years of issuance. The financing, the analysts further stated, was oversubscribed by 350,000 units or CAD 175,000, with the proceeds intended for exploration on Nicola Mining’s copper project named New Craigmont.
In light of this, the experts have adjusted their valuation for Nicola Mining. They are raising the target price from CAD 0.70 to CAD 1.05 and from USD 0.50 to USD 0.75. This is based on an updated sum-of-the-parts valuation, it was stated, and reflects higher long-term precious metal prices, as well as a higher valuation for Nicola’s New Craigmont project and the securities Nicola holds from Blue Lagoon Resources (CSE BLLG).
The Noble analysts maintain an Outperform rating. They expect Nicola Mining to quickly ramp up the Merritt mill to nominal capacity. In the future, not only ore from Talisker but also from the Dome Mountain gold mine, owned by Blue Lagoon, should be processed there starting in the third quarter. Additionally, material from the Dominion Creek Gold Project, in which Nicola holds a 75% economic interest, will be processed. The full research in English is available on the Nicola Mining homepage.
