Blue Lagoon Resources Inc. is progressing toward consistent mine production and regular deliveries of mineralized material to its milling partner, Nicola Mining Inc., following the holiday break. The company expects to achieve consistent production of approximately 100 tonnes per day by month-end at its Dome Mountain gold mine, positioning it to progress toward its fully permitted production level of 150 tonnes per day. During the early stages of ramping up underground mining, the company encountered operational constraints typical of starting and commissioning an underground mine, which have now largely been resolved or mitigated.
Underground mining operations are expected to increase with the introduction of a second production shift, enhancing productivity and operational efficiency. The company is constructing a fire assay laboratory facility expected to be fully operational by month-end and capable of processing a minimum of 40 samples per day. This will allow the mine to receive rapid and timely assay results to help with grade-control and operational decision making. Underground surveying capabilities have been strengthened with the addition of a LiDAR unit, improving accuracy, efficiency, and mine planning.
In December, the company shipped approximately 1,300 tonnes of mineralized material to its toll milling partner, Nicola Mining Inc., for which it received its first payment related to the sale of approximately 1,000 tonnes, as detailed in the press release of Dec 30, 2025. Approximately 150 tonnes of mineralized material is already stockpiled at Dome Mountain and ready for shipment, with trucking expected to commence this week. These shipments support continued processing activities and the establishment of a regular production and delivery cycle that underpins the company's transition toward consistent revenue generation.
The company also reports that several senior employees are being issued an aggregate of 116,884 common shares, subject to approval by the Canadian Securities Exchange. Additionally, the company received a $500,000 unsecured, interest-free loan from its president to bridge short-term working capital requirements prior to the receipt of initial production revenues. Pursuant to the loan agreement, the company will issue an aggregate of 151,515 bonus common shares to the lender at a price of $0.66 per share.
The company's production decision at Dome Mountain is not based on a feasibility study of mineral reserves demonstrating economic and technical viability, but rather on existing mining infrastructure, past bulk sampling and processing activity, and the established mineral resource. The company understands there is increased uncertainty and consequently a higher risk of failure when production is undertaken in advance of a feasibility study. This announcement matters because it demonstrates the company's operational progress toward becoming a revenue-generating gold producer while transparently acknowledging the significant technical and financial risks inherent in proceeding without a completed feasibility study, which could impact investor confidence and long-term project viability.
