Blue Lagoon's Underground Production Ramps Up

(TheNewswire)

January 5, 2026 – TheNewswire - Vancouver,British Columbia – Blue Lagoon ResourcesInc. (CSE: BLLG;OTCQB: BLAGF; FSE: 7BL) continues to progress towardconsistent mine production and regular deliveries of mineralizedmaterial to its milling partner, Nicola Mining Inc.

Following the holiday break, Dome Mountain has resumedproduction activity, which is set to increase as a result of severalnew operational measures detailed below. The mine is expecting toachieve consistent production of approximately 100 tonnes per day bymonth-end, positioning the Company to progress toward its fullypermitted production level of 150 tonnes per day.

As outlined in the Company’s President’s Update ofNovember 10, 2025, the early stages of ramping up underground miningat Dome Mountain experienced some timing delays. During this phase, anumber of operational constraints typical of starting andcommissioning an underground mine were encountered and our teamidentified and addressed these constraints. These constraints have nowlargely been resolved or mitigated and are no longer limiting ourunderground activities.

Operational Highlights

• Underground mining operations are expected toincrease with the introduction of asecond production shift, enhancingproductivity and operational efficiency. 

• Consistent production of 100 tonnes per day is expected to beachieved by month-end, positioning theCompany to progress toward its next planned production level of150 tonnes per day in the comingmonths 

• The Company is constructing a fire assay laboratoryfacility, expected to be fully operational by month-end and capable ofprocessing a minimum of 40 samples per day, allowing the mine toreceive rapid and timely assay results to help with grade-control andoperational decision making. 

• Underground surveying capabilities have been strengthened with theaddition of a LiDAR unit, improving accuracy,efficiency, and mine planning. 

• Ongoing staff training and certification programs continue to support safe, compliant, and efficientoperations. 

With the Christmas break concluded, the full operationsteam has returned to site and underground mining activities haveresumed. In December, the Company shipped approximately 1,300 tonnesof mineralized material to its toll milling partner, Nicola MiningInc., for which the Company received its first payment related to thesale of approximately 1,000 tonnes, (see press release of Dec 30,2025). The remaining 300 tonnes that were delivered to Nicola remainto be processed and settled. Approximately 150 tonnes of mineralizedmaterial is already stockpiled at Dome Mountain and ready forshipment, with trucking expected to commence this week. Theseshipments support continued processing activities and theestablishment of a regular production and delivery cycle thatunderpins the Company’s transition toward consistent revenuegeneration.

The Company also reports that several senior employeesare being issued an aggregate of 116,884 common shares. The shareissuance is subject to approval by the Canadian SecuritiesExchange.

Additionally, the Company received a $500,000unsecured, interest-free loan from its President to bridge short-termworking capital requirements prior to the receipt of initialproduction revenues. The loan is due on December 19, 2026, or payableearlier at the option of the Company. Pursuant to the loan agreement,the Company will issue an aggregate of 151,515 bonus common shares tothe lender, at a price of $0.66 per share, being the market price atthe time the loan agreement was entered into. The lender is a relatedparty to the Company and the loan constitutes a ‘related partytransaction’ pursuant to Multilateral Instrument 61-101 –Protection of Minority Security Holders in Special Transactions (“MI61-101”). The Company is relying on the exemptions from the formalvaluation requirements contained in section 5.5(b) of MI 61-101 andthe minority shareholder approval requirements contained in section5.7(1)(b) of MI 61-101.

For further information, pleasecontact:

Rana Vig

President and Chief Executive Officer

Telephone:  604-218-4766

Email: rana@bllg.ca

About Blue Lagoon ResourcesInc.

Blue Lagoon Resources Inc. (CSE: BLLG; FSE: 7BL; OTCQB:BLAGF) is a Canadian-based, well-funded, growth-oriented miningcompany producing from its 100% owned Dome Mountain Gold Mine nearSmithers, British Columbia. Led by a team with deep mining and financeexperience, the Company operates in one of the world’s mostattractive mining jurisdictions.

In February 2025, Blue Lagoon achieved a majormilestone with the granting of a full mining permit - one of only nineissued in British Columbia since 2015 - and has since commencedunderground mining operations. Mineralized material from Dome Mountainis processed under a long-term toll milling agreement with NicolaMining. Beginning in H1 2026, the Company plans to reinvest internallygenerated cash flow into near-mine and regional exploration to furtherexpand its resource base on its extensive property.

With a strong commitment to sustainability, community,and First Nation engagement, Blue Lagoon’s objective is to be aprofitable, cash-flowing gold producer while creating lasting valuefor shareholders and stakeholders alike.

The Company is not basing its production decision atDome Mountain on a feasibility study of mineral reserves demonstratingeconomic and technical viability. The production decision is based onhaving existing mining infrastructure, past bulk sampling andprocessing activity, and the established mineral resource.  TheCompany understands that there is increased uncertainty, andconsequently a higher risk of failure, when production is undertakenin advance of a feasibility study.

The CSE has not reviewed and doesnot accept responsibility for the adequacy or accuracy of thisrelease.

Forward-Looking Statement

This news release contains forward-looking statementswithin the meaning of applicable securities laws. Forward-lookingstatements include, but are not limited to, statements regardinganticipated underground production rates, the timing of mineralizedmaterial shipments, the introduction of additional production shifts,the readiness and capacity of the fire assay laboratory, and theCompany’s progression toward higher production levels.Forward-looking statements are based on management’s currentexpectations and assumptions regarding operating conditions, equipmentperformance, workforce availability, regulatory compliance, andthird-party service providers. Actual results may differ materiallydue to risks and uncertainties including operational delays,transportation or processing issues, equipment performance, laboravailability, and other risks disclosed in the Company’s publicfilings. Readers are cautioned not to place undue reliance onforward-looking statements. The Company undertakes no obligation toupdate forward-looking statements except as required by law.

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