Blue Lagoon Resources Secures 10-Year Milling Agreement with Nicola Mining for Dome Mountain Project

Blue Lagoon Resources Inc. has signed an amended and restated Mining and Milling Partnership agreement with Nicola Mining Inc., extending their partnership to a 10-year term. This agreement secures long-term processing for mineralized material from Blue Lagoon's recently permitted high-grade Dome Mountain Gold Project located near Smithers, British Columbia. The extended partnership represents a significant milestone in Blue Lagoon's transition from development to production phase.

Nicola Mining operates a state-of-the-art, fully permitted mill and maintains an equity position in Blue Lagoon Resources. The relationship between the two companies has strengthened over time, building on Nicola's previously announced $2 million unsecured line of credit to Blue Lagoon on June 23, 2025. This strategic alignment ensures that Dome Mountain mineralized material will receive priority access to mill capacity, even as Nicola services other clients, providing operational certainty for Blue Lagoon's production timeline.

Rana Vig, President & CEO of Blue Lagoon Resources, emphasized the importance of this agreement, stating that securing the long-term partnership with Nicola represents a critical step in the company's transition from development to production. The 10-year commitment ensures Dome Mountain has a reliable and efficient pathway for processing mineralized material and concentrate sales, supporting the company's ability to move quickly toward near-term cash flow without shareholder dilution. Vig noted that the partnership with Nicola has grown considerably over the past year, with this latest agreement demonstrating the strengthened relationship between the two entities.

Peter Espig, CEO of Nicola Mining, expressed strong support for the extended agreement, highlighting that as both a mill operator and equity holder in Blue Lagoon, Nicola is fully aligned with the company's success. The combination of the $2 million line of credit announced in June and the milling agreement extension demonstrates Nicola's confidence in Blue Lagoon's prospects. Nicola remains committed to processing Blue Lagoon mill feed and continues to make strategic investments to support further growth of the partnership.

The amended agreement builds on recent milestones at Dome Mountain, including the commissioning of its water treatment plant and the commencement of underground blasting and mining operations. These developments collectively highlight Blue Lagoon's readiness to deliver production in a responsible and efficient manner. The company has targeted first gold sales for Q4 2025, with plans to reinvest internally generated cash flow into near-mine and regional exploration beginning in H1 2026 to further expand its resource base.

This long-term milling agreement provides significant operational stability for Blue Lagoon Resources, reducing processing uncertainties that often challenge mining companies during production phases. The guaranteed access to milling capacity through Nicola's facility, combined with the strategic financial backing, positions Blue Lagoon to potentially accelerate its production timeline and optimize operational efficiency. The partnership model between the two companies represents an innovative approach to resource development in British Columbia's mining sector, potentially serving as a template for future collaborations between mining operators and processing facilities.

The extended agreement also signals confidence in the long-term viability of the Dome Mountain Gold Project and the broader mining sector in British Columbia. With only nine full mining permits issued in the province since 2015, Blue Lagoon's permitted status combined with this secured processing arrangement creates a strong foundation for sustained operations. The company's approach to development, focusing on existing mining infrastructure and established mineral resources while maintaining strong community and First Nation engagement, reflects evolving industry standards for responsible resource development in Canada.