Mining Co. Raises CA$4.8M in Multitranche Raise

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Blue Lagoon Resources Inc. (BLLG:CSE; BLAGF:OTCQB) has raised an additional CA$2.225 million (CA$2.225M) in gross proceeds from the issuance of up to 8,900,000 (8.9M) units at CA$0.25 apiece, it announced in a news release. Only existing shareholders and strategic investors were invited to participate.

These proceeds, in addition to the mining company's previously generated CA$2,646,750 in three tranches, will raise its total to CA$4,871,750.

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Each unit in this tranche consists of one common share of Blue Lagoon plus one-half of one common share purchase warrant. Each whole warrant may be exercised for one common share of Blue Lagoon at CA$0.35 apiece for a period of two years from the issuance date.

Blue Lagoon will spend some of the proceeds from this raise on completing the in-progress installation of a water treatment plant at its flagship Dome Mountain gold-silver project in British Columbia (B.C.). The company will spend the other portion for working capital needed to start the past-producing mine at the property.

Cash Flow on Horizon

Headquartered in Vancouver, B.C., Blue Lagoon Resources is working to become a cash-generating gold producer to deliver tangible monetary value to shareholders, state and local communities, according to the news release.

At Dome Mountain, a 21,541-hectare property encompassing the past-producing mine and 26 claims, the company is doing the final preparatory work for starting the mine and commencing underground gold production, to begin at 15,000 ounces (15 Koz) per year. Blue Lagoon has opted to proceed to production based on the existing mining infrastructure, past bulk sampling and processing activity and the established mineral resource. Gold recovery was determined to be 95% at 9 grams per ton (9 g/t).

"With gold prices recently surging past US$3,200 per ounce (US$3,200/oz), Blue Lagoon is entering production at an opportune time," noted a separate news release.

The Dome Mountain resource, calculated in 2022, is 45 Koz of gold (Au) and 250 Koz silver (Ag) in the Measured & Indicated category, 173 Koz Au and 876 Koz Ag, Indicated, and 16 Koz Au and 71 Koz Ag, Inferred, according to the company's website.

The current gold resource of 218 Koz at 9 g/t is from a single vein, in which blue sky potential for more than 1,000,000 ounces of high-grade gold was shown in the 50,000 meters drilled at the project since 2020, Plus 15 known high-grade gold veins and 90% of the property remain unexplored.

Dome Mountain is fully permitted, having received the requisite mining permit in February, providing for up to 55,000 tons of production annually. Since 2015, B.C. has only granted this permit to nine companies, and Blue Lagoon just became one of them.

As far as the CA$3M in remaining capex, to complete the water treatment plant and fund the first six weeks of operations, Blue Lagoon has the capital to cover it.

The developer has a toll milling agreement already in place with strategic investor Nicola Mining Inc. (NIM:TSX.V; HUSIF:OTCQB; HLIA:FSE) for it to process mineralized material from Dome Mountain. Along with Nicola, Blue Lagoon's two other strategic investors are Crescat Capital and Phoenix Gold Fund Ltd. All three participated in Blue Lagoon's capital raise.  

Gold in Melt-up Mode: Analyst

The gold market is "hot, hot, hot," described Dominic Frisby of The Flying Frisby newsletter and podcast on April 23.

Despite gold's US$100 correction on April 23, the gold bull market has "years to run" due to multiple fundamental reasons, wrote Brien Lundin of The Gold Newsletter on the same day. "So gold bugs and bulls should take the advice of that catchy tune: 'Don't worry, be happy!' This correction in gold was inevitable and desirable. And now we're back on firmer footing for more gains to come."

"We therefore stay long, and Blue Lagoon is a Buy on any approach to the lower rail of the uptrend channel," wrote Technical Analyst Clive Maund.

According to Technical Analyst Clive Maund, gold "is in melt-up mode due to an unprecedented confluence of economic and geopolitical factors." This gold bull market is still in its early stages as evidenced by the still depressed silver:gold ratio. As such, precious metals stocks should take off.

Jesse Colombo of The Bubble Report shared a similar sentiment on April 17. "If history is any guide, major gold breakouts like this don't fade quickly," he wrote. "They tend to kick off bull markets that last a decade or more."

Growth is forecasted for the global gold market through at least 2030 at a 5.1% compound annual growth rate, according to Research and Markets on March 14. By then, the market's size is projected to reach 6,300 tons (6.3 Kt), up from 4.7 Kt in 2024.

However, the market has a current undersupply of about 900 tons, and this is expected to increase to 1,200 tons (1.2 Kt) by Q4/25, wrote John Zadeh in an April 17. This growing supply deficit bodes well for higher gold prices.

In the DiscoveryAlert article, Zadeh pointed out that most major financial institutions recently raised their gold price targets for 2025. The forecast now of many is US$4,500/oz by Q1/26 or even sooner.

Technical Analyst AG Thorson also believes gold is in for a substantial long-term rally, possibly even surpassing US$8,000/oz by 2030E, he wrote in an April 18 article on FX Empire. However, he also thinks a pullback below US$3,000/oz is highly likely.

"I believe gold is nearing a major peak and is likely headed for a 20% correction that could unfold over the next three to six months," Thorson wrote. "That said, if silver surprises to the upside and breaks above US$35/oz in the coming days, the rallies in gold and mining stocks could extend beyond April."

Jana Kane, editor-in-chief of the LiteFinance trading blog, reported on April 21 that analysts' gold price forecasts for 2027 to 2030 generally are favorable. Their projections have the price landing somewhere between US$4,988.99 and US$5,194/oz by 2030.

Whereas longer-term forecasts, for 2040 to 2050, are less certain due to numerous factors, most analysts' gold price estimates remain bullish, between US$8,243 and US$10,000/oz during that period, Kane added.

Lundin highlighted on April 21 that even though gold's current ascent seems "unstoppable," most mining stocks have not started recognizing the yellow metals' bull market. The largest, most profitable gains have yet to be realized.

With the gold price soaring, now is the time to take or add to positions in mining stocks that either have not moved yet or have moved but still have a significant upleg ahead, Maund wrote on April 11.

The Catalysts: Steps To Production

Blue Lagoon has several potential stock-boosting events on the horizon, according to the news release.

Next month, the company is expected to have its water treatment plant at Dome Mountain finished and onstream, followed by the start of mining operations this July or August. With this timeline, cash flow would begin in September.

Stock Should Continue Higher

Blue Lagoon Resources' stock is expected to keep climbing despite being heavily overbought, due to gold's continuing bull run, but with periods of consolidation along the way, Maund wrote in an April 22 report on clivemaund.com. Further, this mining stock's bull market is still in the early stages.

"A big reason that it is likely to continue higher is that the dollar is verging on collapse as it heads towards losing its reserve currency status," Maund added. "This is a good backdrop against which quality gold stocks like Blue Lagoon should continue to advance."

The 8-year chart suggests Blue Lagoon will run at the resistance shown in the CA$0.65–CA$0.75 area before stopping to consolidate. Reaching this range would represent a 48–70% return from its current price. Also, the chart indicates the company's share price, over time, could easily climb to its high in the early 2020s of CA$2.10, marking a 377% uplift.

"We therefore stay long, and Blue Lagoon is a Buy on any approach to the lower rail of the uptrend channel," wrote Maund.

Ownership and Share Structure

According to Blue Lagoon Resources, insiders and founding shareholders own 14% of the company. Crescat Capital holds 8%, and Nicola and Phoenix Gold Fund each own 6% as strategic investors. 

The remaining 66% is in retail. 

Refinitiv reports that Blue Lagoon has 114.04M outstanding shares and 108.37M free float traded shares. Its market cap is CA$36.25M. Its 52-week range is CA$0.08–0.485 per share.

The company wanted to note that any production decision in advance of obtaining a feasibility study of mineral reserves demonstrating economic and technical viability of the project is associated with increased uncertainty and risk of failure