Mr. Rana Vig reports

BLUE LAGOON SEES POTENTIAL FOR 1M+ OUNCES GOLD ALONG BOULDER VEIN

Blue Lagoon Resources Inc. has provided a thorough interpretation of exploration results from recent work conducted at its 100-per-cent-owned Dome Mountain project, a short 50-minute drive from Smithers, B.C., and accessible year-round.

Potential of the Dome Mountain project

Interpretation of recent exploration results from Dome Mountain by the company's geologic team suggests the following:

• There is strong potential for defining over one million ounces of gold along the Boulder vein through systematic infill drilling.
• The recently discovered Flat Chance vein system and historic Forks-9800 zone provide possible opportunities for significant near-mine resource additions.

Historical assays from the Alpine area indicate good prospects for discovery of new high-grade veins.

Dome Mountain project

The Dome Mountain project covers a historical area of precious-metal-bearing veins centred on the past-producing Dome gold-silver mine which exploited the Boulder Main vein (1989 to 1992). The project area is predominantly underlain by the Lower to Middle Jurassic Hazelton group island arc assemblage. The Telkwa formation, at the base of the Hazelton group, is the thickest and most extensive formation. The Nilkitkwa formation conformably to unconformably overlies the Telkwa formation and is an important host for mineral occurrences.

Almost 90,000 metres of drilling in 596 drill holes have been completed on the property since 1985. Since 2020, the company has completed 48,974 metres of drilling in 187 drill holes.

Boulder vein system resource

The Boulder Main vein, as well as its subsidiary veins, are characterized by quartz with lesser carbonate and sulphide mineralization. Past deposit models considered the veins as mesothermal, but some characteristics of the deposit style suggest a quartz-carbonate-hosted, base-metal-rich gold-silver vein system. Quartz-carbonate veins lacking sulphides are typically barren with respect to gold and silver. Quartz occurs both as white and massive or as clear and translucent and associated with higher gold grades. Carbonate minerals (ankerite, siderite and calcite) occur as cream to beige crystals. Small-scale folds in the veins attest to continued movement after their formation. Sulphide minerals in the Boulder vein constitute approximately 10 per cent of the vein mineralogy but can range to over 50 per cent. In decreasing order of abundance, the sulphide minerals are pyrite (6 per cent), sphalerite (2.5 per cent), chalcopyrite (1 per cent) and galena-tetrahedrite-arsenopyrite (less than 1 per cent). Pyrite occurs as fine euhedral cubic crystals disseminated throughout the wall rock alteration and in quartz veins as blebs, stringers and massive selvages. In the upper portion of the Boulder Main vein gold values correlate well with zinc and/or galena. Recent deep intercepts also show increasing copper content. The overall carbonate content can rage as high as 30 per cent and underlies the unit as a natural pH buffer and non-acid-generating (NAG) system.

To date, the company has drilled 94 drill holes (25,275 metres) into the Boulder vein system since 2020. The current resource estimate includes drilling from the 2020 and 2021 phase 1 infill campaigns as well as historical drilling.

Through the initial programs of infill drilling the company was able to increase the total gold ounces in the indicated category by 145 per cent, or 102,582 ounces. In addition, 45,000 ounces of gold were moved into the measured category, which was a first for the project.

The two principal goals of the company for the Boulder vein system were:

• To infill drill in the previously reported inferred resource in order to increase the defined resource into an indicated and/or measured category;
• To explore for more Boulder-style mineralization on strike and down dip from the resource and outline the potential for a Blue Sky one Moz resource there.

Both goals have been met.

Boulder Main vein size potential

The Boulder Main vein resource has a strike length of 530 metres and 200 metres down dip. Drilling to date has tested strike in both directions and down dip another 200 metres and has successfully shown the Boulder vein mineralization continues for at least another 550 metres along strike (over 200 metres west and over 350 metres east) and over 200 metres down dip. Though sufficient infill drilling has not yet been completed to define the much larger resource, company geologists conclude that the drilling outlines potential for at least one million ounces gold and over four million ounces silver. In addition, deep holes at depth such as DM-22-273 showing increasing significance of copper mineralization (5.73 grams per tonne Au, 80.9 g/t Ag and 1.21 per cent Cu over 16.55 metres, including 5.65 metres returning 11.02 g/t Au, 115.8 g/t Ag and 2.31 per cent Cu (see news release dated Jan. 16, 2023)).

The next phase(s) of drilling will focus on expanding the known mineralization farther 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(s) would indicate the potential of an additional resource of over one Moz Au resulting in a total potential deposit resource of over two Moz 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.

With systematic drilling the company will show that the Boulder Main vein resources can be successfully improved to a world-class gold resource.

Flat Chance vein system provides opportunity for near-mine resource expansion

The Flat Chance vein was discovered in the Chance structural zone. This area is located less than a kilometre north of the Dome mine site. Drilling to date has defined a shallow-dipping, gold (plus or minus silver) vein-hosting structure approximately 100 metres below surface (see news release dated Sept. 19, 2022). A strike length of 400 metres and a down-dip extent of 400 metres have been defined by drilling (44 drill holes, 8,519 metres). Thickness of the vein and structural zone can vary from less than one metre to over five metres. Gold grades are typically in the one to three g/t Au range over the entire width, but high-grade intersections (such as DM-21-200, 22.12 g/t Au over 2.14 metres) are noted in multiple drill holes. Visible gold was observed in drill hole DM-21-206. The Flat Chance vein remains open to the west and north.

Within this area, another vein of different orientation was intersected at shallow depth (less than 20 metres) in drill hole DM-22-247. This vein returned very high gold grades of 126 g/t Au and 404 g/t Ag over 0.41 metre. Additional drilling here suggests the vein continues to at least 50 metres below surface.

Plans for stepout drilling and infill drilling at Flat Chance

Additional drilling is required in this area to fully assess the resource potential of the Flat Chance vein as well as additional veins in the area. A series of relatively short drill holes could expand and infill the area at 50-metre spacings or better as well as test the on-strike continuation of mineralization.

Forks-9800 zone provides further resource growth opportunity

The Forks vein was the first identified mineralization in the Dome Mountain area and was explored and mined utilizing a shaft and several adits (approximately 1923). Drilling in 1985 by Noranda defined a historical resource of 20,000 tons at 23.6 g/t Au. The mineralization in the 9800 zone demonstrated strong gold and silver grades and was briefly mined with 50.8 tonnes of ore shipped grading 30.17 g/t Au and 771.4 g/t Ag. These prospects are located approximately 500 metres southwest of the 1290 portal of the Dome mine.

Drilling throughout the area, both historically and recently, indicates a flat-lying, relatively shallow precious and base metal-enriched horizon occurring at the same stratigraphic level within the lower portion of the limy argillaceous siltstones of the Nilkitkwa formation. This horizon is recognized over a minimum of 250 metres length and 200 metres width. The horizon is variable in thickness with mineralized intersections ranging from 0.25 metre to five metres. It appears that the mineralization may be related to the Forks mineralization, which is hosted in a large breccia up to 12 metres thick, dipping shallow to the northeast. Sulphide mineralogy and lithology are also comparable with the Argillite vein, a splay off the Boulder Main vein, although no direct connection has been established yet between these occurrences.

Plans for drilling at Forks-9800 zone

Additional drilling is required in this area to fully assess the resource potential. A series of short (less than 50 metres) drill holes could expand and infill the area at 50-metre spacings or better. This drilling could be done utilizing either core or reverse circulation drilling on a grid pattern. Drilling is currently proposed on the southeast side of Federal Creek, but could be extended to the northwest side as historical drilling has indicated mineralization continues.

Alpine vein targets

In the Alpine area to the northwest of the Dome mine, numerous veins were identified in the early 1900s and developed by prospectors but limited to surface work or shallow adits. These veins are parallel to subparallel to each other and strike north-northwest with dipping moderately to steeply west. Veins are primarily quartz or quartz-carbonate veins hosted in volcaniclastics of the Hazelton group mineralized with pyrite and variable assemblages of arsenopyrite, chalcopyrite, galena and sphalerite. No drilling is recorded on any of these veins other than the Hawk vein. Multiple high-grade samples are reported from surface rock and trench samples collected along the extent of the veins.

The Ptarmigan and Gem veins have been traced on surface for over 300 metres and 400 metres, respectively. Chip sampling on the Ptarmigan vein has returned gold grades from one to 111 g/t Au from pyrite over widths of 0.08 to 0.50 metre. A grab sample also returned 119 g/t Au. Chip sampling on the Gem vein returned 4.30 to 47.10 g/t Au over sample widths of 0.25 metre to 1.20 metres. A grab sample on the vein returned 185 g/t Au and 408 g/t Ag.

Farther south, on the immediate north flank of Dome Mountain, the Raven vein has been traced for approximately 200 metres. This vein is narrower than the other veins, from 0.10 to 0.15 metre. Grades from chip sampling returned up to 15 g/t Au.

No historical results have been located for the Eagle vein.

The Hawk vein has been drilled with limited success. From the surface the vein exposure narrows with depth into a series of smaller sulphide-bearing quartz veinlets and stringers. Surface sampling of sulphide-rich (5 per cent to 35 per cent) vein material graded 27.1 g/t Au and 43.2 g/t Ag. Drilling in 1987 returned the best intersection of 13.95 g/t Au over 0.30 metre. A series of short drill holes was undertaken by the company in the fall of 2022, primarily as a test for use of a hand-portable drill rig. A one-metre intersection of vein returned 11.60 g/t Au.

Approximately 12 kilometres to the northwest of the Dome mine site, the McKendrick vein has been traced over 500 metres by surface trenching and rock sampling. Drilling in 1991 intersected 2.50 metres at 11.64 g/t Au and 36.9 g/t Ag. The company has not yet followed up on this target.

Plans to drill here will require helicopter access, which is being added to the drill permit. The Gem vein represents the most interesting target as it is a closely spaced pair of veins, both of which are well mineralized. Two to three drill sites spaced along the known strike, testing to 50 and 100 metres down dip, will quickly ascertain the viability of these veins. A similar plan is proposed for the Ptarmigan vein. The Raven and Eagle veins should be field examined to determine the suitability for testing with a drill.

The scientific and technical disclosure in this news release was approved by William Cronk, PGeo, a qualified person as defined in National Instrument 43-101 and a consultant to the company.

We seek Safe Harbor.