Blue Lagoon Resources, near term producer for a $19 million market cap.

A rather unknown company up to this point, there could be some big catalysts ahead for the company.

I have been positioned in this company for well over a year at a much higher cost basis than the current share price, but I do believe the current valuation presents the potential for great value as a possible re-rate occurs later this year. I don’t see much hype or talk about this name, the only time I have seen it mentioned is by Crescat Capital as they have a large position in the company, which I see as a positive.

The focus for the company is the Dome Mountain project located In Central B.C, this was owned previously by a small private gold producer. They already have a 75,000 tonne per year permitted Gold Mine in place. The mine has all the required infrastructure ready to go, and the company is just waiting for the final go ahead to re-start from the B.C government, which they expect to receive later this year.

The company has a long term toll milling agreement in place with Nicola Mining, which goes all the way out to 2027, this agreement is for up to 40,000 tonnes annually. The company has 2 mine faces ready for production, and will be able to self fund exploration aggressively moving forward.

The exploration upside at this property is phenomenal, the company has over 15 known high grade gold veins at the property, the main one that has been explored so far is the Boulder Vein, which has an initial resource on it from 2021. They have around 250k ounces at 9 g/t Au, the company has done alot of drilling on the boulder zone since the resource estimate, and believes they likely have over 1 million ounces just at that one vein.

The company has had discoveries at some of the other veins, they hit 15 g/t Au over 7 metres at the Chance zone last year which is just a kilometre north of the Mine site, but they remain focused on the Boulder Vein as it remains open in several directions. The company has doubled the strike length and the deposit continues to impress at depth. They comment on the pathway to 1 million ounces below.

The next phase of drilling will focus on expanding the known mineralization further along strike and at depth. The identification of zones of wide, well-mineralized veins in all directions indicates the ability to continue to grow the resource quickly. Successful on-strike and down-dip drilling in the next phase would indicate the potential of an additional resource of 1M+ ounces Au resulting in a total potential deposit resource of 2M+ ounces Au. Infill drilling would commence and be paid for by funds generated from production of the Boulder Vein (currently in permitting) in order to upgrade the resource estimate.

The company has been doing a much better job of getting news to the market recently and telling the story of the potential at this project. This was a frustration of mine for a long time, and I think contributed to the current share price. They have around 100 million shares outstanding and with the cashflow from the toll mining, shouldn’t need to dilute shareholders much more.

The company had a pretty amazing run in 2020 and got all the way to $2 dollars a share, here is the weekly chart below, I believe at the current market cap we are very close to a bottom, and I think there is huge upside here. The chart has flattened out and created a nice base to break out from when things turn around.

Here is the most recent news release from the company which does an excellent job laying out what is to come for the company. Definitely worth a read if you are interested in this stock. Latest News Release Link Here

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