Blue Lagoon's Underground Production Ramps Up

Executive Summary

• Blue Lagoon Resources reports resumption and acceleration of underground mining at Dome Mountain, targeting consistent production of ~100 t/day by month‑end and a future goal of 150 t/day.
• The company shipped ~1,300 t of mineralized material to toll‑miller Nicola Mining in December 2025, received payment for ~1,000 t, and has additional stockpiled material ready for shipment.
• A related‑party unsecured loan of $500,000 was received from the President, accompanied by a bonus share issuance (151,515 shares at $0.66 each).

Key Details

• Production Ramp‑Up: Introduction of a second underground shift; aim to achieve 100 t/day by end‑January 2026, moving toward 150 t/day in coming months.
• Assay Laboratory: New fire‑assay lab under construction, expected operational by month‑end with capacity ≥40 samples/day for rapid grade control.
• Survey Capability: Addition of a LiDAR unit to improve underground surveying accuracy and mine planning efficiency.
• Staffing & Safety: Ongoing training and certification programs to support safe, compliant operations.
• Material Shipments (Dec 2025): ~1,300 t shipped to Nicola Mining; payment received for ~1,000 t; remaining 300 t pending processing/settlement.
• Stockpile: Approximately 150 t of mineralized material currently stockpiled at Dome Mountain, with trucking scheduled to commence this week.
• Share Issuance (Employees): Aggregate of 116,884 common shares to be issued to senior employees, subject to CSE approval.
• Related‑Party Loan: $500,000 unsecured, interest‑free loan from President; due Dec 19 2026 (or earlier at company’s option).
• Bonus Share Issuance for Loan: 151,515 bonus common shares to be issued to lender at $0.66 per share (market price at agreement date).
• Regulatory Note: Transaction qualifies as a related‑party transaction under MI 61‑101; company relies on exemption from formal valuation and minority shareholder approval requirements.

Notable Quotes

“Following the holiday break, Dome Mountain has resumed production activity… positioning the Company to progress toward its fully permitted production level of 150 tonnes per day.” – Rana Vig, President & CEO

Materiality Assessment: Material – Positive (operational ramp‑up and financing actions are likely to have a significant positive impact on future cash flow and shareholder value).