Nicola Mining : Condensed Consolidated Interim Financial Statements for the three and six months ended June 30, 2021 and 2020

NICOLA MINING INC.

Condensed Consolidated Interim Financial Statements

For the three and six months ended June 30, 2021, and 2020.

MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING

CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORTING

The accompanying unaudited condensed consolidated interim financial statements of Nicola Mining Inc. ("the Company") have been prepared by management in accordance with International Reporting Standards ("IFRS"). Management acknowledges responsibility for the preparation and presentation of the unaudited condensed consolidated interim financial statements, including responsibility for significant accounting estimates and the choice of accounting principles and methods that are appropriate to the Company's circumstances.

NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS

The Company's independent auditor has not performed a review of these condensed consolidated interim financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for review of interim financial statements by an entity's auditor.

NICOLA MINING INC.

Condensed Consolidated Interim Statements of Financial Position (Unaudited - Expressed in Canadian dollars)

			Note		June 30, 2021		December 31, 2020
Assets
Current assets
Cash and cash equivalents		$	1,380,158	$	824,705
Amounts receivable	4		125,251		100,881
Prepaid expenses and other assets			107,061		52,665
					1,612,470		978,251
Non-current assets
Property, plant and equipment	5		9,231,282		9,090,448
Right-of-use-assets	8		60,431		69,845
Mineral interests	6		225,003		3
Restricted cash	9		1,211,013		1,211,013
Total assets		$	12,340,199	$	11,349,560
Liabilities
Current liabilities
Accounts payable and accrued liabilities		$	565,259	$	671,821
Current portion of lease liabilities	8		16,994		15,927
Current portion of equipment loan	10		44,646		43,739
Working Capital loan	11		311,229		-
Flow-through share premium	14		12,845		95,231
					950,973		826,718
Non-current liabilities
Asset retirement obligation	7		3,870,755		3,831,834
Lease liabilities	8		46,468		55,141
Equipment loan	10		45,382		67,755
Secured convertible debenture	12		6,913,867		6,369,276
Total liabilities			11,827,445		11,150,724
Equity
Shareholders' equity
Share capital	14		81,148,435		78,605,424
Warrants	14		1,694,494		1,694,494
Equity component of convertible debentures		2,156,200		2,167,952
Contributed surplus			7,797,471		7,591,331
Accumulated deficit			(92,283,846)		(89,860,365)
Total shareholders' equity			512,754		198,836
Total liabilities and shareholders' equity		$	12,340,199	$	11,349,560
	Peter Espig (signed)		Director		Frank Hogel (signed)		Director

Nature of operations and going concern (Note 1)

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial

statements.

Page 3

NICOLA MINING INC.

Condensed Consolidated Interim Statements of Operations and Comprehensive Loss (Unaudited - Expressed in Canadian dollars)

			Three Months Ended		Six Months Ended
			June 30,		June 30,
	Note		2021		2020		2021		2020
Operating Expenses
Exploration costs	6	$	506,323	$	93,486	$	607,473	$	183,867
Mill costs	5		640,393		228,757		854,822		383,783
Accretion of asset retirement obligation	7		19,460		19,016		38,921		38,032
Salaries and benefits	16		35,914		38,126		70,318		71,430
Share-based compensation	15		-		-		338,465		72,470
Professional fees			23,636		68,471		61,395		96,090
Consulting fees	16		56,250		65,000		71,250		138,674
Office and general			8,912		15,409		23,990		31,240
Shareholder communications and investor relations			19,076		3,867		23,408		17,615
Regulatory and transfer agent fees			32,895		8,851		37,597		14,321
Rent			7,293		6,945		14,931		13,781
Vehicle expenses			5,430		3,358		6,573		4,264
Depreciation	5		641		435		1,052		822
Operating Loss			(1,356,223)		(551,721)		(2,150,195)		(1,066,389)
Gravel, ash, soil, and other income			163,534		232,959		310,560		608,147
Finance Costs	13		(354,645)		(320,937)		(666,629)		(615,146)
Part X11.6 tax			-		-		-		(8,439)
Flow-through share premium	14		70,482		-		82,386		-
Write-off of accounts payables			-		39,055		--		39,055
Foreign exchange gain (loss)			397		-		397		-
Loss before income taxes			(1,476,455)		(600,644)		(2,423,481)		(1,042,772)
Deferred income tax recovery			-		16,719		-		40,125
Loss and Comprehensive Loss
for the period		$	(1,476,455)	$	(583,925)	$	(2,423,481)	$	(1,002,647)
Loss Per Share - Basic and Diluted		$	(0.01)	$	(0.00)	$	(0.01)	$	(0.00)
Weighted Average Number of Common Shares Outstanding
Basic			270,492,928		246,907,106		275,666,988		246,875,991
Diluted			270,492,928		246,907,106		275,666,988		246,875,991

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

Page 4

NICOLA MINING INC.

Condensed Consolidated Interim Statements of Cash Flows (Unaudited - Expressed in Canadian dollars)

Six Months Ended June 30

		2021		2020
Operating Activities
Net loss for the period	$	(2,423,481)	$	(1,002,647)
Adjustments for:
Accretion of asset retirement obligation		38,921		38,032
Depreciation		75,269		60,965
Non-cash interest and finance expense		663,904		620,877
Flow-through premium		(82,386)		-
Share-based compensation		384,479		72,470
Deferred income tax recovery		-		(40,125)
Write-off of accounts payables		-		(39,055)
Foreign exchange		(397)		-
Changes in non-cash working capital items
Amounts receivable		(24,370)		(10,502)
Prepaid expenses and other assets		(54,396)		(78,686)
Accounts payable and accrued liabilities		(106,562)		(53,870)
Cash and Cash Equivalents Used in Operating Activities		(1,529,019)		(432,541)
Investing Activities
Acquisition of mineral interests		(225,000)		-
Purchase of property, plant, and equipment		(206,689)		(11,500)
Reclamation expenditures incurred		-		(130,509)
Cash and Cash Equivalents Used in Investing Activities		(431,689)		(142,009)
Financing Activities
Issuance of common shares		2,000,000		-
Convertible debentures issued		-		440,000
Repayment of convertible debenture		-		(250,000)
Interest payment on convertible debt		-		(12,500)
Repayment of lease liabilities		(12,120)		(9,543)
Repayment of equipment loan		(21,466)		(3,468)
Working capital loan		310,245		-
Interest payment on working capital loan		(1,623)		-
Exercise of stock options		241,125		-
Cash and Cash Equivalents Provided by Financing Activities		2,516,161		164,489
Net change in cash and cash equivalents for the period		555,453		(410,061)
Cash and cash equivalents, beginning of period		824,705		500,797
Cash and cash equivalents, end of period	$	1,380,158	$	90,736

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial

statements.

Page 5