Blue Lagoon hits commercial production at BC gold-silver project

Blue Lagoon Resources (CSE: BLLG) said it officially attained commercial production at its Dome Mountain gold and silver project in British Columbia.  

Underground mining rates exceeded 100 tonnes per day on average for more than 30 consecutive days, exceeding the threshold commonly used in the mining industry for commercial output status, Blue Lagoon said last week. 

Vancouver-based Blue Lagoon reopened Dome Mountain last year, more than 30 years after the last major exploration activity. At the time, it said it was planning to pursue additional permits to mine deeper zones below 1,290 metres and expand into the nearby Argillite Vein. 

Blue Lagoon acquired the project in 2020 and has since focused on drilling and developing the Boulder Vein system. Dome Mountain is located near Smithers, in the province’s northwest.

Equity investment

Dome Mountain is among a small number of newly permitted mining projects in British Columbia to successfully transition into active production in recent years.  Along with properties such as Osisko Development’s (TSXV: ODV; NYSE: ODV) Cariboo project in B.C. or Troilus Mining’s (TSX: TLG; US-OTC: CHXMF) namesake project in Quebec, it highlights increased efforts by companies to reopen mothballed mines to capitalize on high gold prices.

Under the company’s current mining permit, Dome Mountain is permitted to mine up to 55,000 tonnes annually. Blue Lagoon said it is targeting consistent production of 150 tonnes per day.  

Blue Lagoon also announced that offtake partner Ocean Partners Holdings is investing $3 million (US$2.1 million) in the company. The equity investment is priced at 90¢ per common share – equal to the closing market price of the company’s shares on May 15 and representing no discount to market. The equity position will consist solely of common shares and carries no warrants. 

“Achieving commercial production at Dome Mountain is the culmination of years of persistence, technical work, permitting success, and strong collaboration with our industry partners and the Lake Babine Nation,” Blue Lagoon CEO Rana Vig said in the statement.