Blue Lagoon Extends Milling Agreement With Nicola Mining to 10 Years

Blue Lagoon Resources Inc. has signed an amended and restated Mining and Milling Partnership agreement with Nicola Mining Inc., extending the partnership to a 10-year term. The agreement secures a long-term processing solution for mineralized material from the Company's recently permitted high-grade Dome Mountain Gold Project, located near Smithers, British Columbia. Nicola Mining operates a state-of-the-art, fully permitted mill and is also an equity shareholder of Blue Lagoon.

Today's announcement further strengthens the long-standing relationship between the two companies, building on Nicola's previously announced $2 million unsecured line of credit to Blue Lagoon on June 23, 2025. At that time, Nicola's CEO emphasized the shared vision and strategic alignment between the two companies - a sentiment that continues to be demonstrated through this 10-year toll milling extension. This strategic alignment provides confidence that Dome Mountain mineralized material will always be given priority access to mill capacity, even as Nicola services other clients.

Securing this long-term agreement with Nicola is a critical step in our transition from development to production, said Rana Vig, President & CEO of Blue Lagoon Resources. This 10-year commitment ensures Dome Mountain has a reliable and efficient pathway for processing mineralized material and concentrate sales, underscoring our ability to move quickly toward near-term cash flow as we work to expand our project, all without Company's dilution. Our partnership with Nicola has grown considerably over the past year, and this latest agreement is a testament to that strengthened relationship.

Peter Espig, CEO of Nicola Mining, said, We are extremely pleased to extend our agreement with Blue Lagoon. As both a mill operator and an equity holder in Blue Lagoon, we are fully aligned with the Company's success. Our $2 million line of credit, announced in June, together with today's milling agreement extension, further demonstrates Nicola's confidence in Blue Lagoon. Nicola is committed to processing Blue Lagoon mill feed and continues to make strategic investments to support further growth.

The amended agreement builds on the Company's recent milestones at Dome Mountain, including the commissioning of its water treatment plant and the commencement of underground blasting and mining operations. Together, these achievements highlight Blue Lagoon's readiness to deliver production in a responsible and efficient manner. The Company also announces that it has granted 3.5 million options to consultants and advisors of the Company. The options have an exercise price of $0.57, a five-year term and vest immediately.