Blue Lagoon Announces 10,000-Metre Dome Mountain Drilling Programme

Blue Lagoon Resources Inc. (CSE:BLLG)(FSE:7BL)(OTCQB:BLAGF) has announced a property-wide exploration and drilling programme around its Dome Mountain gold mine near Smithers, British Columbia. The company says a drilling contractor will mobilise rigs for 10,000 metres of NQ-size core drilling in Phase One.

Blue Lagoon says the scope of a continuing 2027 Phase Two programme will be determined by the results of the initial campaign. The company has identified several mineralised areas and exploration targets across the Dome Mountain property.

#Targets for the Phase One programme

The planned work includes the Alpine Veins, where the company reports 1.4 kms of exposed strike length. It will also target the gold-silver bearing McKendrick Prospect, located 9 km northwest of the Alpine Veins and reported to have 600 metres of known strike extent.

Historical drilling at McKendrick in 1991 intercepted 11.64 g/t Au over 2.50 metres. Blue Lagoon describes the vein as having a probable strike length of 500 to 600 metres, with exposed sections reaching up to 1.5 metres in width.

Other targets are the Chance Structural Zone and Flat Chance Vein, located 750 metres northeast of the Boulder Vein production portal; the Forks Prospect; a cadmium-in-soil anomaly approximately 650 metres ESE of the Boulder Vein system; and the down-dip continuation of the Boulder Vein below the current resource.

#Chance, Forks and Boulder drilling

At the Chance Structural Zone, Blue Lagoon says Phase One drilling is intended to examine the continuation of gold mineralisation along strike. The company says a later Phase Two programme would include infill drilling to support preparation of a resource estimate.

The Chance area is within 750 metres of the 1290 portal to the Dome Mountain mine. The source states that mining at the portal is taking place at a sustained level of 125 tonnes of ore per day.

At the Forks Prospect, the company plans short holes to address gaps in existing drilling and support preparation of a resource estimate. Historical drilling reported intervals of up to 7.6 metres grading 10.42 grams of gold per tonne and 53.38 grams of silver per tonne.

The source also reports that more than 50 tons of ore removed from the 9800 Zone in the 1980s graded 30.17 g/t Au and 771.4 g/t Ag. These figures relate to historical work and do not represent results from the planned Phase One drilling.

Two drill holes are planned to investigate the cadmium-in-soil anomaly east of the known Boulder Vein extent. Blue Lagoon also says infill drilling on the Boulder Vein is expected to continue until spring breakup in April 2027, with the stated aim of supporting an expanded resource estimate by early to mid-2027. These are company forward-looking statements and remain subject to risks and uncertainties.

#Dome Mountain operating context

Blue Lagoon says Dome Mountain has a Mine Permit and has been in production over the past year. The company’s disclosure states that its production decision was not based on a feasibility study of mineral reserves demonstrating economic and technical viability.

It also states that production undertaken before such a study carries increased uncertainty and a higher risk of failure. Technical information in the announcement was approved by Ted VanderWart, P.Geo., a senior geologist with Blue Lagoon and a qualified person under NI 43-101.

Blue Lagoon has granted an aggregate of 1,250,000 restricted share units and 275,000 stock options to certain employees, advisers and consultants. The restricted share units vest immediately. The options vest over a one-year period from the date of grant, are exercisable at $0.64 per share and expire five years from the date of grant.

The company also says several senior employees are being issued an aggregate of 205,583 common shares. The grants of the restricted share units and stock options are subject to acceptance by the Canadian Securities Exchange. The share issuance is also subject to acceptance by the Canadian Securities Exchange.

#Proposed debt settlements

Blue Lagoon intends to settle approximately $723,664 of outstanding indebtedness through the issue of an aggregate of 1,206,107 common shares at a deemed price of $0.60 per share.

Approximately $586,165 of the debt relates to legacy obligations assumed through the acquisition of the Dome Mountain Gold Mine in 2020. The company proposes to settle that amount through 976,941 common shares. A further approximately $137,500 is owed to Blue Lagoon’s President and Chief Executive Officer and is unrelated to the legacy Dome Mountain obligations. That amount is proposed to be settled through 229,166 common shares.

The proposed debt settlements and related share issuances are subject to acceptance by the Canadian Securities Exchange. The issuance of 229,166 common shares to the President and Chief Executive Officer is a related party transaction under Multilateral Instrument 61-101. Blue Lagoon says it is relying on exemptions from the formal valuation and minority shareholder approval requirements under sections 5.5(a) and 5.7(1)(a) of MI 61-101, respectively, because the fair market value of the related-party debt settlement does not exceed 25% of the company’s market capitalisation.

Separately, the company will issue an aggregate of 281,385 bonus common shares to its President and Chief Executive Officer under two previously disclosed and approved loan agreements. Those agreements provided two separate $500,000 unsecured, interest-free bridge loans to assist with working capital requirements during the ramp-up of Dome Mountain operations. The bonus shares represent the previously agreed consideration for those loans. The share issuances are subject to acceptance by the Canadian Securities Exchange.

#Forward-looking and regulatory disclosures

Blue Lagoon identifies statements about the timing and scope of exploration and drilling, possible mineral resource expansion, updated resource estimates, and completion of the proposed equity issuances and debt settlements as forward-looking statements. The company cautions that actual results may differ materially from those anticipated and advises readers not to place undue reliance on them.

The Canadian Securities Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the announcement.

#Key Takeaways

Blue Lagoon has announced 10,000 metres of NQ-size core drilling for a Phase One programme at Dome Mountain near Smithers, British Columbia.
Targets include the Alpine Veins, McKendrick Prospect, Chance Structural Zone, Forks Prospect, a cadmium-in-soil anomaly and the Boulder Vein.
The company says Boulder Vein drilling is expected to continue until spring breakup in April 2027, with an expanded resource estimate targeted by early to mid-2027.
Blue Lagoon has announced equity grants, proposed share issues and debt settlements, with the relevant grants and issuances subject to Canadian Securities Exchange acceptance.
The company states that Dome Mountain production began without a feasibility study of mineral reserves demonstrating economic and technical viability and carries increased uncertainty and a higher risk of failure.

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Frequently Asked Questions

Blue Lagoon Resources Inc. (CSE:BLLG)(FSE:7BL)(OTCQB:BLAGF) says it is initiating a property-wide exploration and drilling programme surrounding its producing Dome Mountain gold mine near Smithers, British Columbia. A drilling contractor is expected to mobilise rigs for 10,000 metres of NQ-size core drilling during a Phase One campaign. The company says the design of a continuing 2027 Phase Two programme will be based on the results of this drilling.

The stated targets include the Alpine Veins, the gold-silver bearing McKendrick Prospect, the Chance Structural Zone and Flat Chance Vein, the Forks Prospect, a cadmium-in-soil anomaly, and the down-dip continuation of the Boulder Vein below the current resource. The company says the Boulder Vein drilling is intended to support an expanded resource estimate by early to mid-2027, although this is a forward-looking statement subject to risks and uncertainties.

The source reports historical results including 11.64 g/t Au over 2.50 metres at the McKendrick Prospect; intervals of up to 7.6 metres grading 10.42 grams of gold per tonne and 53.38 grams of silver per tonne at the Forks Prospect; and a historical 9800 Zone production figure of 30.17 g/t Au and 771.4 g/t Ag over 50 tons of ore. These are historical results and do not establish the results of the planned Phase One drilling.

The company says Dome Mountain has a Mine Permit and has been in production over the past year. The source also states that the 1290 portal is presently being mined at a sustained level of 125 tonnes of ore per day. It further discloses that the production decision was not based on a feasibility study of mineral reserves demonstrating economic and technical viability, and that undertaking production before such a study involves increased uncertainty and a higher risk of failure.

The company says it has granted an aggregate of 1,250,000 restricted share units and 275,000 stock options. The restricted share units vest immediately, while the options vest over a one-year period, are exercisable at $0.64 per share and expire five years from the date of grant. Several senior employees are also being issued an aggregate of 205,583 common shares. The grants and share issuance are subject to acceptance by the Canadian Securities Exchange.

The company intends to settle approximately $723,664 of outstanding indebtedness through the issuance of an aggregate of 1,206,107 common shares at a deemed price of $0.60 per share. Approximately $586,165 relates to legacy obligations assumed in connection with the acquisition of the Dome Mountain Gold Mine in 2020 and would be settled through 976,941 common shares; approximately $137,500 is owed to the President and Chief Executive Officer and would be settled through 229,166 common shares. The proposed settlements and related share issuances are subject to acceptance by the Canadian Securities Exchange. The issuance to the President and Chief Executive Officer constitutes a related party transaction, with the company relying on stated exemptions under MI 61-101.

The company identifies forward-looking statements concerning the timing and scope of exploration and drilling, potential mineral resource expansion, updated resource estimates, and completion of the proposed equity issuances and debt settlements. It states that actual results may differ materially from those anticipated and cautions readers not to place undue reliance on these statements. The source also says the Canadian Securities Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the release.

Blue Lagoon Announces Phase One Drilling at Dome Mountain