Blue Lagoon Enters Into Definitive Agreement With Quebec Based Mag One Operations To Form Joint Venture

BLUE LAGOON RESOURCES INC.

CSE: BLLG

FSE: 7BL

OTC: BLAGF

NEWS RELEASE

BLUE LAGOON ENTERS INTO DEFINITIVE AGREEMENT WITH

QUEBEC BASED MAG ONE OPERATIONS TO FORM JOINT VENTURE

January 7, 2020 – Vancouver, British Columbia – Blue Lagoon Resources Inc. (“Blue Lagoon” or “Company”) (CSE:

BLLG; FSE:7BL; OTC: BLAGF) is pleased to announce that further to its news release dated November 26, 2019, the

Company and Mag One Products Inc. (“MOPI”) and its wholly owned subsidiary, Mag One Operations Inc. (“Mag One”)

have signed a definitive earn-in and operating agreement (the “Agreement”) dated January 6, 2020. Pursuant to the

Agreement, the Company may acquire up to a 70% equity interest in Mag One by purchasing up to $5.25 million of shares

of Mag One, a wholly owned subsidiary of MOPI (the “Transaction”).

Mag One is a private company existing under the laws of Quebec that has an exclusive license with Tech Magnesium and is

currently testing its proprietary process for the production of pure magnesium metal (99.9% Mg) from mine tailings. Funds

invested by Blue Lagoon would allow Mag One to rapidly complete this phase of test work and move towards larger scale

pilot plant demonstration testing. Mag One has already done extensive pilot scale testing of its patent pending high purity

magnesium oxide (MgO) and amorphous silica (SiO2) process from these tailings and will use the funds provided by Blue

Lagoon to complete this work and begin engineering efforts towards a commercial scale demonstration facility.

Pursuant to the Agreement, Blue Lagoon may purchase a 50% interest in Mag One by making cash investments in Mag

One as follows: $100,000 upon the initial closing (the “Closing Date”) including stock exchange filings; $300,000 within 3

months of the Closing Date; $750,000 within 8 months of the Closing Date; $1.1 million within 12 months of the Closing

Date; and $1.5 million within 18 months of the Closing Date. Blue Lagoon may acquire an additional 20% interest in Mag

One, subject to MOPI obtaining shareholder approval, by making an additional payment of $1.5 million within 24 months

of the Closing Date. Closing of the Transaction is subject to various conditions, including completion of due diligence

investigations, receipt of all necessary corporate and regulatory approvals, and compliance with stock exchange

requirements.

Upon the Closing Date, the board of Mag One will be reconstituted to include two directors nominated by Mag One and

one director nominated by Blue Lagoon. Blue Lagoon may nominate an additional director upon earning a 50% interest in

Mag One, and thereafter may nominate an additional fifth director upon earning a 70% interest in Mag One.

The parties agreed to enter into a shareholder agreement prior to the consideration payment due 8 months from the Closing

Date. Mag One will be solely funded through investments by Blue Lagoon under the Agreement until it completes its 70%

earn-in, and thereafter each party will be responsible to fund its pro-rata share of operations or alternatively have its interest

diluted on a straight-line dilution basis. Any party whose interest is diluted below a 10% ownership interest in Mag One

will have its equity interest converted into a 1.5% gross revenue royalty.

For further information, please contact:

Rana Vig

President and Chief Executive Officer

Telephone: 604-218-4766

Email: [email protected]

The CSE has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Certain information contained herein constitutes “forward-looking information” under Canadian securities legislation. Forward-looking

information includes, but is not limited to, statements with respect to the completion of closing conditions including due diligence, the

execution of a shareholder agreement, and completion of the joint venture with Mag One. Generally, forward-looking information can be

identified by the use of forward-looking terminology such as “intends”, “believes”, “plans to”, “expects” or “it is expected”, or

variations of such words and phrases or statements that certain actions, events or results “will” occur. Forward-looking statements are

based on information as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other

factors that may cause the actual results, to be different, including due to: the receipt of all necessary regulatory approvals, the ability to

complete share purchase, capital expenditures and other costs, and financing and additional capital requirements. Readers should not

place undue reliance on forward-looking statements and forward looking information. Blue Lagoon does not undertake to update any

forward-looking statements or forward-looking information that are incorporated by reference herein, except as required by applicable

securities laws.