Epstein-Research Blog | Nicola Mining, $51 Mm Invested In 4 Assets, Market Cap $6 Mm, Cash Flow Next Year | Talkmarkets
Founder, Chairman, CEO, President, Treasurer, Analyst at Mockingjay, Inc.
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In 2011 Peter Epstein, CFA, left a $3 billion hedge fund where he was a senior natural resources analyst to help increase awareness of a number of natural resource companies in which he's invested in. 


Nicola Mining, $51 Mm Invested In 4 Assets, Market Cap $6 Mm, Cash Flow Next Year

Date: Tuesday, November 10, 2015 9:31 AM EDT

The July 2013 announcement of Peter Espig’s accepting the role of CEO may have come as a surprise to some; however, to Mr. Espig it was a natural career progression. He grew up around mines and exploration projects, having spent 8 years working as a diamond driller in the 1980s. His career as an internationally renowned turnaround specialist and financier, including working at Goldman Sachs & Olympus Capital, places him in an ideal position to advance Nicola Mining Inc. [NIM.V] (the “Company” or “Nicola”). 

Mr. Espig has structured greater than US$2.5 billion globally in private and public deals. According to Mr. Espig, “…regardless of the industry, turnarounds require hard work, professionalism and creativity. Mining is not the Wild West anymore, but managers have to constantly monitor cash burn, assets, debt and cash flow opportunities.”  Prior to accepting the full-time role as CEO, Mr. Espig served as an Independent Director to the Company, a role that allowed him to better understand the value of its assets and to hit the ground running.  

The following interview of Peter Espig, CEO Nicola Mining, was conducted by phone and email in the week ended October 30th. The views and opinions of Mr. Espig are entirely his own. The interviewer, Peter Epstein, CFA, MBA believes that the information provided by Mr. Espig is accurate, but cannot guarantee that it is.

Can you please explain the history of Nicola’s predecessor company Huldra Silver as far back as you care to go?

Huldra Silver Inc. (“Huldra”) was incorporated in 1980 and focused on the exploration and development of its wholly-owned group of mineral tenures located in British Columbia, Canada. The silver-lead-zinc Treasure Mountain property, situated 29 km northeast of Hope B.C., comprises 52 mineral tenures in an area covering 3,187 hectares (7,875 acres). After discovering a 250 meter long silver rich vein in 1985, which was tested in 1986, Huldra went public in 1987. Between 1987 and 1989, Huldra explored 4 underground levels with 2,743 meters (9,000 feet) of crosscuts, drifts & raises and punched another 1,676 meters (5,500 feet) of underground drill holes. An additional 3,048 meters (10,000 feet) of surface drilling was completed as well.

A bulk sample of 407 Metric tonnes, “Mt” of high-grade material was shipped to Cominco’s & Asarco’s smelters for testing. The shipped material was compatible with the smelters’ requirements, and Huldra was paid $344,265. However, progress towards achieving continuous production was halted in 1989 due to difficult financial market conditions.

Despite low metals prices in the 1990s and until 2006, Huldra was able to perform modest exploration programs at Treasure Mountain. Notably, management updated property maps, particularly mine plans, and conducted rotary drilling to investigate parts of the property evidencing significant mineralization. In 2007, mine workings were re-entered on two levels and check sampling was done to prepare a National Instrument 43-101 (“NI 43-101”) compliant resource. 

On the basis of updated, digitized versions, a NI 43-101 report of Treasure Mountain was completed in 2009. Total Indicated Resource above a 10.0 oz/ton (311g/Mt) cut-off was estimated at 33,000 Mt @ 24.2 opt (753g/Mt) silver, plus 4.16% lead & 3.80% zinc, an Inferred Resource estimated at 120,000 Mt @ 27 opt (840 g/Mt) silver, plus 2.79% lead & 4.36% zinc.

In preparation of a 10,000 Mt sample, Huldra’s Level 1 portal of underground workings was re-timbered. That same year, Huldra conducted an exploration program including stripping, trenching and diamond drilling to further explore a prospective area of silver lead-zinc mineralization. Several studies related to environmental and mine planning were also commenced. In 2011, the Company acquired additional surface rights adjoining historic mineral tenures for $350,000. Camp construction at Treasure Mountain, with facilities capable of supporting 50 workers, was completed at a cost of $1.2 million. Huldra also purchased mining equipment for $1.5 million to commence underground mining.

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