Blue Lagoon Provides Update On Transaction With Metal Mountain Resources
FSE: 7BL
CSE: BLLG
OTCQB: BLAGF
Blue Lagoon Provides Update on Transaction With
Metal Mountain Resources Inc.
March 3, 2020 – Vancouver, British Columbia – Blue Lagoon Resources Inc. (the “Company”) (CSE:
BLLG; FSE: 7BL; OTCQB: BLAGF) provides additional technical information regarding the mineral projects of
Metal Mountain Resources Inc. (“Metal Mountain”). The Company previously announced on February 27 that it
had entered into a binding letter agreement to acquire 100% of the outstanding shares of Metal Mountain, a
private British Columbia company.
Metal Mountain holds a 50.84% interest in Gavin Mines Inc. (“Gavin Mines”), which in turn holds a 100%
interest in the Dome Mountain Mine located near the town of Smithers in northwest British Columbia. Blue
Lagoon also has a binding letter of intent with AGC Investments Inc. (“AGC”), a private company which holds a
27.44% interest in Gavin Mines, whereby Blue Lagoon may acquire AGC’s interest on closing of the acquisition
of Metal Mountain.
With the acquisition of Metal Mountain’s 50.84% interest and AGC’s 27.44% interest, Blue Lagoon will hold a
total of 78.28% interest in the Dome Mountain Mine.
Additionally, Metal Mountain also holds a 100% interest in the Big Onion Property, a porphyry copper project
located 16 kilometres east of the town of Smithers and consists of 13 contiguous mineral claims comprising a
total area of 4,493 hectares. The company will provide additional information on the Big Onion project in
subsequent news releases.
DOME MOUNTAIN PROJECT INFO & HISTORICAL ESTIMATES
The Dome Mountain Project is the subject of a NI 43-101 technical report entitled Technical Report on the Dome
Mountain Gold-Silver Project dated April 2010, prepared by Gary Giroux, P. Eng., Giroux Consultants Ltd. for
Gavin Mines. The technical report provides the following historical resource estimate for the Boulder Vein
System based on 285 surface diamond drill holes and 37 underground diamond drill holes (the “2010 Historical
Resource Estimate”):
Historical Indicated Resource within the Mineralized Veins
Au
Cut-off
(g/t)
Tonnes >
Cut-off
(tonnes)
Grade>Cut-off Contained Metal
Au (g/t) Ag (g/t) Au (ozs) Ag (ozs)
4.00 143,000 14.76 72.83 67,900 334,800
5.00 138,000 15.10 73.93 67,000 328,000
6.00 133,000 15.46 75.36 66,100 322,200
Historical Inferred Resource within the Mineralized Veins
Au Cut-
off
(g/t)
Tonnes > Cut-
off (tonnes)
Grade>Cut-off Contained Metal
Au (g/t) Ag (g/t) Au (ozs) Ag (ozs)
4.00 173,000 12.43 57.03 69,100 317,200
5.00 154,000 13.42 60.63 66,500 300,200
6.00 137,000 14.43 64.49 63,500 284,000
This resource occurs principally above the 1290 level and has been adjusted to remove the volumes previously
mined. The 2010 Historical Resource Estimate is considered historical in nature by the Company, is provided for
background information purposes only, and is not a current resource estimate due to significant additional
exploration work conducted subsequent to the date of the report. A qualified person (as defined in NI 43-101) has
not done sufficient work to classify the historical estimate as a current mineral resource. The Company is not
treating the historical estimate as a current mineral resource.
Subsequent to the 2010 Historical Resource Estimate, Gavin Mines conducted 7,210 meters of infill drilling in
2016 to upgrade the inferred resource. Four new veins were discovered within the Boulder Vein System during
the 2016 drill program. The 2016 drilling program added 330 meters of strike length to the Boulder Vein which
remains open along strike to the west and at depth.
Gavin Mines engaged Roughstock Mining Services LLC of Bozeman, MT to prepare a non -43-101 resource
estimate for the Boulder Vein system for internal use, based on the additional data from the 2016 drill program, as
follows (the “2016 Historical Resource Estimate”):
Historical Dome Mountain Mine Indicated Resource at 3.42 g/t Cut-off (undiluted) as at December 30, 2017
Tonnes Grade (g/t) Grams Ounces
Boulder Vein 164,735 12.76 2,102,654 67,601
Boulder East Vein 8,736 22.22 194,137 6,241
TOTAL 173,471 13.24 2,296,791 73,843
Historical Dome Mountain Mine Inferred Resource at 3.42 g/t Cut-off (undiluted) as at December 30, 3017
Tonnes Grade (g/t) Grams Ounces
Boulder Vein 171,611 8.96 1,538,017 49,448
Boulder East Vein 166,852 8.17 1,362,590 43,808
Argillite Vein 75,486 12.97 979,050 31,477
Boulder HW Vein 46,079 7.62 351,222 11,292
TOTAL 480,028 9.20 4,230,879 136,025
Blue Lagoon does not consider the 2016 Historical Resource Estimate to be a current resource as defined in NI
43-101. While Blue Lagoon believes the information to be generally reliable, Blue Lagoon has conducted only
preliminary technical due diligence on the Dome Mountain Mine, and has not conducted the work necessary to
independently verify the resource estimate, and specifically has not conducted a comprehensive review of the drill
sample data used in the estimate, or other analysis necessary to confirm the cut-off grade and other factors used in
calculating the resource, including the method of calculation of the resource. Readers should not treat the 2016
Historical Resource Estimate as a current mineral resource. The historical estimate is a non-NI 43-101 estimate,
and as such was not prepared in compliance with NI 43 -101 and does not use the categories or procedures
required by CIM Best Practice Guidelines for Mineral Resources and Mineral Reserves or CIM definitions for
mineral resources.
MILLING AGREEMENT
In March 2017, Gavin Mines entered into a toll milling agreement with Nicola Mining Inc. to provide for offsite
milling and concentrating. Dome Mountain ore will be trucked and processed at this offsite mill owned by Nicola
Mining Inc. located in Merritt, B.C. which has a capacity of processing 250 tonnes per day. Mill recoveries are
based on a scoping level metallurgical program which was conducted on muck samples from the Dome Mountain
Mine in 2010 and a test run of 6,690 tonnes of material that was run through the Nicola mill in 2016 at a grade of
8.75 gram/ton, with a 95.2% gold recovery.
THE DOME MOUNTAIN MINE
The Dome Mountain Mine includes a past producing mine on tenures consisting of 42 contiguous mining claims
and one mining lease totaling 10,970 hectares, located approximately 38 kilometers east of the town of Smithers
in northwest British Columbia. The Dome Mountain area has a long history of exploration that resulted in the
discovery of numerous gold bearing quartz-carbonate veins. Gold mineralization was first located on the property
in the late 1800s and considerable surface and underground work was done in 1923 -24. Resumption of
exploration in the 1980s led to the discovery of the Boulder Vein system in 1985. Underground mining was
initiated in August 1991 by Timmins Nickel Inc. and its joint venture partner, Habsburg Resources Inc. and
ceased in May 1993. During this period 43,900 tonnes at an average grade of 12.0 grams per tonne gold were
reportedly mined from shrinkage stopes accessed from trackless drift developments on the 1290 and 1370 levels.
Expenditures on the mine by past operators, including Gavin Mines, Timmins and Noranda, have totaled in excess
of $68 million, $28 Million of which was spent by Gavin in the past 12 years. Mine permitting and significant
infrastructure construction and underground development was completed on the mine between 2010 and 2012,
including about 75% of the planned underground development necessary for commencing production from the
site. The Dome Mountain Project holds a Mining Permit and Environmental Management Act Permit (EMA)
providing for up to 75,000 tonnes annually.
The infrastructure and underground development completed during that period includes:
• Mine dry/office building
• Electrocoagulation water treatment plant
• Water and sewer for all surface facilities
• Pipelines system for mine water
• Mechanics shop
• Electrical work into the mine
• Fuel storage and distribution system
• Major earthwork projects completed
• Underground development
The scientific and technical data contained in this news release was prepared and reviewed by William Cronk, P.Geo., a
qualified person as defined in NI 43-101 and a consultant to the Company.
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.
Statement Regarding Forward-Looking Information: This release includes certain statements that may be deemed "forward-
looking statements". All statements in this release, other than statements of historical facts, that address events or
developments that Blue Lagoon Resources Inc. (the "Company") expects to occur, are forward-looking statements. Forward-
looking statements are statements that are not historical facts and are generally, but not always, identified by the words
"expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that
events or conditions "will", "would", "may", "could" or "should" occur. Although the Company believes the expectations
expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of
future performance and actual results may differ materially from those in the forward-looking statements. Factors that could
cause the actual results to differ materially from those in forward-looking statements include results of exploration activities
may not show quality and quantity necessary for further exploration and exploitation of minerals deposits, market prices, and
continued availability of capital and financing, permitting and other approvals, and general economic, market or business
conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or
developments may differ materially from those projected in the forward-looking statements. Forward-looking statements are
based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. Except as
required by applicable securities laws, the Company undertakes no obligation to update these forward-looking statements in
the event that management's beliefs, estimates or opinions, or other factors, should change.