Nicola Mining to Start Gold Production at Dominion Project in BC
Nicola Mining is finalizing preparations to commence gold and silver extraction at its high-grade Dominion Gold Project in British Columbia, with material to be processed at its fully permitted Merritt Mill.
Nicola Mining is in the final stages of preparation to commence gold and silver extraction at its Dominion Gold Project in British Columbia, the company announced on June 1, 2026.
The high-grade project, located about 43 kilometers northeast of Wells and 110 kilometers southeast of Prince George, will see material processed at Nicola's wholly owned Merritt Mill, the only fully permitted milling facility in the province authorized to handle gold and silver material. This milestone marks a significant step for the company as it transitions from exploration to production. For precious metals traders, the commencement of production at a new mine can signal potential increases in supply, though the immediate impact on global gold prices is likely limited given the project's scale. Traders can monitor real-time gold price movements on NowPrice's live dashboard to gauge market reactions to such developments. Since 2022, central banks have been aggressively buying gold to diversify reserves away from the US dollar, with net purchases exceeding 1,000 tonnes annually, which has provided a strong floor under prices. Additionally, the real US 10-year yield has shown a strong inverse correlation with gold, as lower real yields reduce the opportunity cost of holding non-yielding bullion. The COMEX-LBMA spread, which reflects arbitrage between futures and physical markets, has remained tight, indicating healthy physical demand. ETF flows into GLD and IAU have been mixed, with retail investors sensitive to price levels, while jewelry demand from India and China remains a key seasonal driver.
Looking ahead, investors will watch for initial production results and any updates on processing throughput at the Merritt Mill. The company's ability to ramp up operations smoothly will be key to its near-term performance. Additionally, broader market factors such as central bank gold buying trends and US real yield movements will continue to influence gold's trajectory. The DXY inverse correlation remains critical, as a weaker dollar makes gold cheaper for foreign buyers, while geopolitical tensions and inflation expectations further support safe-haven demand. Traders should also monitor the COMEX-LBMA spread for any dislocation that could signal physical tightness, and watch for shifts in gold ETF holdings as a proxy for investor sentiment.