Nicola Mining - makes an additional strategic investment in Blue Lagoon Resources
Our client Nicola Mining Inc. (NASDAQ: NICM) (TSXV: NIM) (FSE: HLIA) has announced that, together with Ocean Partners UK Limited, it has committed to a combined C$10 million financing for partner Blue Lagoon Resources (CSE: BLLG), with both parties putting in C$5 million.
Nicola Mining has a toll milling agreement with Blue Lagoon, with regular shipments being made from Blue Lagoon’s Dome Mountain Gold and Silver Project (located near Smithers, British Columbia) to Nicola’s Merritt Mill and Tailings Facility. Meanwhile, Ocean Partners is Blue Lagoon’s offtake partner.
Merritt Mill is a modern, recently upgraded, state-of-the-art 200 tonnes per day (tpd) facility, with over C$35 million invested to date, and the only facility permitted to process third-party gold and silver ores in British Columbia. Nicola Mining has a number of longstanding milling and profit share agreements with local mines, which are planned to take production up to nameplate capacity, which is currently being increased.
Nicola Mining’s project portfolio. Source: Company
Fundraising to advance Dome Mountain mine development
The funds raised will be used by Blue Lagoon to support the continued development and production ramp-up of Dome Mountain. The financing is expected to advance mine development activities necessary to increase production toward a targeted 150–200 tonnes per day. On 17th July Blue Lagoon announced it had received more than C$10 million in revenue from gold and silver sales from Dome Mountain and that underground mining production levels had risen to a consistent 125 tonnes per day, with a near-term production target of 150 tonnes per day.
Nicola’s investment was completed through a private placement at C$0.60 per share, and adds to a strategic investment of C$1 million made at C$0.14 per share in January 2024. Meanwhile, combined with a previously announced C$3.0 million investment, Ocean Partners has now committed C$8 million to Blue Lagoon. Collectively, Nicola and Ocean Partners have established a significant strategic equity position while providing capital intended to accelerate production growth.
Beyond the equity investment, the financing further strengthens the integrated relationship between mine development, concentrate marketing, and milling infrastructure. As Blue Lagoon advances production, Merritt Mill is expected to play an increasingly important role in supporting regional mining operations.
Rana Vig, President and CEO of Blue Lagoon, pointed to the significance of the investment, saying: "When your milling partner and your offtake partner - the two groups with the deepest visibility into your operation - both choose to invest at a premium to the 20-day VWAP with no warrants, that tells you something.”
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Nicola Mining is a corporate client of Optimo Research Ltd.
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