Blue Lagoon Resources (BLLG) - Gold Producer Focused on Being Explorer

Blue Lagoon Resources is a mineral exploration company focused on high-grade gold exploration. The company currently has four major properties namely The Big Onion, Pellaire Gold, the Dome Mountain Mine, and the Golden Wonder Project.

We met with Rana Vig, CEO and Director, Blue Lagoon Resources, and his colleague Bill Cronk, the chief Geologist.

 Rana Vig is the CEO and Director at Blue Lagoon Resources. He has helped launch five different business ventures and has over 30 years of business experience. Rana also received the Senate 150th Anniversary Medal for his contribution to the Canadian communities.

He has a strong entrepreneurial spirit along with more than a decade-long experience of mining in capital markets. In his last 2 business dealings, Rana received a $520M raise upon taking the previous company public,while the second company brought a raise of $800M on going public. He currently owns 1M shares at Blue Lagoon Resources and has 5% ownership of the company.Additionally, he has made significant investments in the company, further cementing his overall confidence in the ongoing projects.

Bill Cronk is the Chief Geologist at Blue Lagoon Resources with over 25 years of exploration management and geological experience. He has worked across multiple continents on pre-feasibility work, site management, and grassroots reconnaissance for various projects. His skill set also includes project generation, program design, business development, and budget implementation.

Company overview

Blue Lagoon Resources is a mining and exploration company based out of Smithers, British Columbia. The company has a team of highly skilled individuals specializing in various disciplines ranging from geology, mining infrastructure, marketing, and more.

Their main focus is towards high-grade Gold exploration and their current strategy is to generate a steady cash flow that can be reinvested towards the exploration of their existing properties. As of June 7, 2021, Blue Lagoon has 6,000t high-grade mineralized material ready to ship for processing. 

Major properties under Blue Lagoon Resources

Pellaire Gold

Spread across 4,400 hectares, Pellaire Gold has 10 Gold-bearing veins.Blue Lagoon Resources is looking to develop small bridges and the road leading up to the property, which has a budgeted cost of $200,000, projected to start in summer 2021. The company has a stockpile surface for this property which is planned for evaluation in summer 2022. There aren't any additional permits needed at this site and the company is working towards complete ownership of the property.

The Dome Mountain

Spread across a land area of 10,970 hectares, the Dome Mountain property has a history of 41 mining claims from various operators that include Timmins and Noranda.

The Dome Mountain project has already had the infrastructure in place when it was acquired from the previous owners. They had already invested $28M on the project and obtained the required permits. For reference, the average timeline for obtaining a permit in B.C is 14-20 years. The previous owners fell short of funds amounting to $2M which resulted in Blue Lagoon Resources stepping in.

Currently, the company has deployed over 20 people working on the surface and underground to conclude the bolting process. A water treatment plant is already in place. The final testing is underway which is scheduled to commence in the coming 2-3 weeks. This will conclude the second amendment of the project.

15-high grade veins have already been discovered at this property along with 5 additional targets that are under planning. Blue Lagoon Resources is focused on approaching production at the earliest with output volumes up to Moz of combined Gold and Silver production within the 12g/t grading range.

The VRM (Vertical Retreat Mining) is close to the conclusion, while the reclamation plans are 60% complete. The company projects that all the amendments will be concluded along with a report submitted to the ministry by August 2021. Production will be scheduled to begin once the approval is granted.

The Big Onion

A 4,810-hectare property located East of Smithers, B.C is fully owned by Blue Lagoon Resources. This area has indicated high-grade reserves of porphyry Copper ever since the first exploration project began in the 1900s.

The Big Onion property is an ongoing project with high-grade reserves of Copper porphyry. This project has gained additional prominence as the prices of Copper have risen favorably in recent times. The company invested $8M in the project with more than 300 holes. Given the sharp rise in the value of Copper, the company is looking for ways to monetize the supply by generating a consistent revenue stream from Copper in the coming years. Generating businesses and shareholder revenue are among Blue Lagoon's topmost priorities.

The Dome Mountain and Big Onion projects are adjacent to one another,joined officially to be registered as a single property. This further reduces the overhead costs as the company saves additional expenditure required to keep the Big Onion project afloat. Furthermore, being patient with the Copper market will lead to a better cash-flow strategy in the coming years.

The Free Gold target is an extended high-grade Gold vein sitting atop porphyry Copper, which largely remains untested. Connecting the Boulder vein and Free Gold underground will lead to an efficient workflow, shared resources,and combined output of Gold, Silver, and Copper.

The initial drilling is scheduled to begin within the next two weeks. As per the existing budget allocation, the company can comfortably drill an additional 12,000m. Additionally, the site also has other high-grade veins and historic fork resources alongside the boulder vein system. The company is prioritizing the drilling targets that will help maintain the exiting cash flow until the production is underway. 

Revenue Generation and Outlook

The main focus of Blue Lagoon Resources is on exploration. The company plans to generate a cash flow that facilitates uninterrupted exploration along with geophysics, soil sampling, geochemistry, stream-sets,and drilling. This exploration strategy is driven by the target of reaching 1Moz+ production.

Blue Lagoon Resources raised $7.5M in the previous round of raising capital. The company has $3M in liquidity along with zero debt, placing them in a strong financial position. They also have an additional $5M in money warrants through shareholders. Currently, they have invested $2M and achieved 7,700m drilling with promising results.

The Pellair stock is projected to generate an additional revenue stream for the company. This project has been graded at 5g/t at the surface and the company plans to drill the surface and carry out testing to determine economic feasibility.

The company intends to start production at the earliest to maintain a consistent cash flow rather than developing an on-site mill. This site's monetization is planned on a turnkey basis through an existing agreement with Nicola Mining. The mined material will be delivered to Nicola Mining's mill which will lead to a steady cash flow.

The generated liquidity will then be repurposed towards the main boulder vein, bringing the production volume closer to the 1Moz goal. The company has also planned an airborne survey on at least 5 target sites across the property.

The drill results have shown promising returns as several high-grade deposits were identified over narrower widths. The company has already identified 15 high-grade veins and is currently focusing on the additional 5 targets, which are porphyry Copper. The company is aiming for a production cost of $1,700 and reinvest the funds towards drilling between 25,000m- 40,000m yearly to defer approaching the market to raise funds for further exploration. 

Indicated data at the Boulder Vein

The Boulder Vein has 200,000 inferred and indicated resources with 1Moz Silver and 12g/t grade gold reserves. The deepest drilling point at 338m returned up to 27g Gold and more than 70g of Silver deposits.

Towards the west, the previously 800m drilled area has mineralized deposits. The area is subject to additional drilling and exploration with a projection of doubling the production capacity to a potential 450,000oz -500,000oz.

As per the findings of the airborne survey and drilling, an extensive 1.5km long vein has been identified which is being tested as an extension of the boulder vein or a new discovery. There are also historical resources of 15 high-grade veins known as the Noranda which were uncovered in the 80s and 90s. Additional veins are spread within 10% of the entire property,while the majority of the 19,000-hectare land still remains unexplored.  

Blue Lagoon Resources has 7,000t of existing mineralized material in the mine which consists of 2,400oz-2,400oz is high-grade Gold while the remainder is Silver. Currently, the team is working towards placing standard systems in place which will streamline the whole process.

Another highlight of this project is that exploration and analysis have been carried out on this property for several years prior to acquisition.This significantly lowers the additional overhead required to locate high-grade deposits. 

Working as per Environmental Norms

Blue Lagoon Resources has acquired the permit for mining up to 75,000t on a yearly basis, which comes out to 200t daily. This provides an opportunity to mine sustainably while honoring the environmental norms of the region. The metallurgy of the site has returned a 1:4 Gold-to-Silver ratio in the region.

Unity in Diversity Through Regional Experts

Smithers, British Columbia is the nearest major town to the properties.The Dome Mountain project is located an hour's drive away, while the Big Onion project is located 20 minutes away from the town.

The company has recently hired an underground geologist, to further streamline the exploration process. 50% of the employed workforce at Blue Lagoon's projects belong to First Nation people. This further improves the employment opportunities with the locals, who provide invaluable information about the area such as contact personnel, infrastructure, administrative information.

To find out more, go to the Blue Lagoon Resources Website