Mr. Rana Vig reports

BLUE LAGOON RECEIVES FINAL MINE PERMITS FOR ITS DOME MOUNTAIN GOLD PROJECT IN BRITISH COLUMBIA - POISED TO BECOME BCS NEXT GOLD PRODUCER

Blue Lagoon Resources Inc. has received its mining permit from the Ministry of Mining and Critical Minerals and its effluent/discharge permit from the Ministry of Environment and Parks for its 100-per-cent-owned Dome Mountain gold project, an all-year road accessible project located a short 50-minute drive from Smithers, B.C., Canada. The achievement of this milestone truly marks a transformative moment for the company as it transitions from an exploration-focused company to a near-term gold and silver producer.

"It is incredibly rare for a junior mining company to evolve from pure exploration into production, and, today, we proudly stand on the brink of that transformation," said Rana Vig, president and chief executive officer of Blue Lagoon Resources. "Securing the final mine permit is not just a milestone; it's a testament to the relentless dedication of our team, the strength of our partnerships, our extensive collaboration with Lake Babine Nation and our unwavering commitment to responsible resource development in our beautiful province. Blue Lagoon is now poised to become British Columbia's next gold producer, and this is just the beginning of an exciting new chapter for our company and our shareholders," he added.

Blue Lagoon's chief geologist, Bill Cronk, said: "What makes this accomplishment even more remarkable is that we are delivering to our shareholders one of only a handful of mining permits granted in British Columbia over the last decade. This speaks to the exceptional quality of the high-grade Dome Mountain gold project, our commitment to meeting the highest environmental and regulatory standards, and the trust we've earned from both the provincial government and local communities. It's an extraordinary achievement that positions Blue Lagoon Resources for lasting growth in one of the world's most mining-friendly jurisdictions."

Key highlights:

• Final mine permits secured -- authorizes full-scale underground mining operations at Dome Mountain, British Columbia; initial production is limited to 55,000 tonnes per year, with expected recovery of approximately 15,000 ounces gold per year;
• Operational readiness -- the company is preparing to initiate mining operations as early as July, 2025:
  • Infrastructure, equipment, technical staff/consultants, mining contractor and operational plans being finalized and put in place;
• Toll milling agreement -- the company holds an active toll milling agreement with Nicola Mining Inc. and will ship its mined mineralized material to Nicola Mining's milling facilities at Merritt, B.C., for processing;
• Near-term production -- the company is now focused on finishing last preparatory activities and tasks related to the safe and secure opening of Dome Mountain, including the required installation of the company's planned water treatment facility at site, expected to be completed within three months.

Valuable toll milling partnership

"We are proud to support Blue Lagoon Resources as they transition into production at the Dome Mountain gold project," said Peter Espig, president of Nicola Mining. "Our collaboration in 2021, which involved processing 5,000 tonnes of Dome Mountain material at our mill, provided both teams with invaluable operational insights. This hands-on experience helped optimize logistics, improve processing efficiency and fine-tune key aspects of the milling process. We look forward to continuing our partnership as Blue Lagoon embarks on this exciting new chapter as British Columbia's next gold producer."

Dome Mountain mineralized material from Nicola's primary crusher to its secondary crusher during testing phase in 2021

As the company transitions into production, its strategic focus will be on generating and investing cash from operations to self-finance further exploration across the expansive Dome Mountain property that has 15 known high-grade gold veins with 90 per cent of the nearly 21,000-hectare property yet to be explored (see the company's news release dated May 4, 2020).

This disciplined approach is designed to unlock the district-scale potential of the project while minimizing shareholder dilution. Additionally, the company will allocate funds toward infill drilling the Boulder vein to expand the known resource, improve resource classification and extend the mine's life, ensuring sustainable growth and long-term value creation for its shareholders.

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.

Dome Mountain gold project

The Dome Mountain project covers a historical area of high-grade precious-metal-bearing veins centred on the past-producing Dome Mountain 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 Boulder main vein, as well as its subsidiary veins, are characterized as steeply dipping, base-metal-rich, quartz-carbonate veins embodied within an overall alkali gold system (mesothermal). The overall carbonate content can range as high as 30 per cent and underlies the unit as a natural pH buffer and non-acid-generating (NAG) system. Near-term goals will include permitting the Argillite vein, which will add additional high-grade value to the overall mine plan.

Boulder vein system resource

To date, the company has drilled 94 drill holes (25,275 metres) into the Boulder vein system since 2020, but, historically, almost 90,000 metres of drilling have been drilled on the property since 1985. The current resource estimate includes drilling from the 2020 and 2021 phase 1 infill campaigns (Table 1) 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 current mineral resource statement (see news release dated Feb. 3, 2022) discloses a mineral resource as shown in an attached table.

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 downdip from the resource and outline the potential for a blue-sky one-million-plus-ounce 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 downdip another 200 metres and has successfully shown the Boulder vein mineralization continues for at least another 550 metres along strike (more than 200 metres west and more than 350 metres east) and more than 200 metres downdip. Though sufficient infill drilling has not yet been completed to define a much larger resource, company geologists conclude that the drilling outlines potential for at least one million ounces gold and over four million ounces silver, given the consistency in gold and silver grades. In addition, deep holes at depth such as DM-22-273 showing increasing significance of copper mineralization (5.73 grams per tonne gold, 80.9 grams per tonne silver and 1.21 per cent copper over 16.55 metres; including 5.65 metres returning 11.02 grams per tonne gold, 115.8 grams per tonne silver and 2.31 per cent copper (see news release dated Jan. 16, 2023). Note that the potential resource range described above is conceptual in nature, there has been insufficient drilling to define such a conceptual range, and it is uncertain if further exploration will result in a resource within that range. The conceptual range was determined based on a review of historical and company data described above.

The next phase(s) drilling will focus on expanding the known mineralization further along strike and at depth as well as infill drilling to add ounces to the growing resource. 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 downdip drilling in the next phase(s) would indicate the potential to add further gold ounces resulting in a total potential deposit resource of greater than one million ounces gold. Infill drilling would commence and be financed by funds generated from production of the Boulder vein.

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

Blue Lagoon looks forward to a new era for the overall development of the Dome Mountain gold project and the challenges ahead; but, most importantly, the company remains committed to the responsible development of Dome Mountain in harmony with the province, community and first nation interests.

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

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