On December 1, Nicola Mining announced that it has received high grade gold and silver ore from Blue Lagoon Resources, Inc. We anticipate that Blue Lagoon should receive one check from Nicola in December totaling approximately $771,704 and generating $322,958 in cash flow, based on our model below, and based on 15 days of ore milling in December.
We believe that this December’s revenues and cash flows will be below normal estimates because of “infrastructure-related-ore” is first extracted before the high-grade 10 grams of gold (Gold Equivalent Grams) per ton output that Blue Lagoon’s NI 43-101 February 3, 2022 could lead one to forecast. On November 10th, Blue Lagoon announced that it began shipping ore to Nicola and that after four to six weeks, the ore quality will rise closer toward the 10 grams/ton estimate we have used in earlier models. In our model, we estimate 4 grams of gold per ton in December 2025 and 6 grams per ton in January 2026.
We have modeled Blue Lagoon Resources, Inc.’s estimated revenues and cash flows for December 2025 through December 2026. We also estimate the market value of those cash flows and revenues projections based on industry market capitalization multiples of 7 times cash flow and 3 times revenues. Based on nearly $30 million in cash flow and a 7 times cash flow multiple, we calculate a $210 market capitalization in 2026. Assuming 140 million shares outstanding, we estimate a $1.50 share price based on mining operations; however, a more aggressive approach would annualize the end-of-year cash flows and come up with a $300 million market capitalization at year end 2026. Then, assuming a fully diluted 170 million shares, a share price closer to $1.76/share could be attained based on mining operating cash flows in late 2026.
Blue Lagoon’s Potential Resource Value:
Blue Lagoon may be more of a resource play than a mining play. That is, Blue Lagoon’s valuation may be driven more by its resource potential than by its mining cash flows.
The real excitement in Blue Lagoon Resources Inc.’s share may be in its resource potential. We believe that Blue Lagoon will be drilling into the 18-kilometer unexplored strike of alkaline quartz gold starting in March of 2026. Quinton Hennigh PhD. strategic advisor Crescat Capital said in his DeepDive.ca interview in 2022 that Dome Mountain could be massive.
The chart below shows the 18-kilometer strike which one major, at the Beaver Creek Precious Metals Summit in September 2025, told Blue Lagoon they were very interested in seeing the drilling results for.
With only 10% of the property explored, if drilling results come in that suggest an additional one to ten million ounces of gold, valuations could soar well beyond the cash flows generated from mining. The 18-kilometer Chance Structural Zone strike, as well as numerous smaller targets, like Freegold Intrusion and Federal Zone, could all be areas which show additional resources that could grow this resource to district scale.
The slide below shows what market values could be associated with the infill drilling of the Boulder Vein System on the top gold block which could demonstrate up to one million ounces of gold in 2026. The Boulder Vein System’s value could grow to $200 to $500 million with drilling results that confirm one million ounces up from the 225,000 Measured and Indicated.
More importantly, we believe that as unexplored resources like the Chance Structural Zone are drilled and quantified in a NI 43-101 compliant manner, in the next three years, potential market capitalizations up to $4 billion could be realized if 10 million ounces are quantified and $400/ounce of gold in the ground is fair market value.
As drilling proceeds, starting in March 2026, strong exploration drilling results could show the potential scale of Blue Lagoon’s resource. Mike White of IBK Capital said on a recent Zoom call, that Blue Lagoon shares could rise to $3 to $4 up from the $1.50/share level we forecast based on $30 million in cash flow in 2026 from Boulder Vein mining operations.
This is an ideal time to accumulate shares before first revenues and cash flows are shown to the market. We have been modeling Blue Lagoon for over a year and believe we have a good understanding of the likely production and profitability of the mining and milling processes.
We estimate a potential triple in BLAGF shares by year end 2026 based on mining profitability — $30 million in cash flow 2026 and an industry multiple of 7x cash flow. More importantly, resource-based valuations could become a supercharged valuation driver-based Dome Mountain’s geology being similar to Porgera in Papua New Guinea with 30 million ounces of gold or Buritica in Columbia with 10 million ounces of gold.
Potential resource valuations based on magnetic imaging and drilling data since the NI 43-101 February 3, 2022 should be treated as speculative. It is only as the drilling is done that the real resource potential can be measured. What is exciting, however, is that expert geological investors like Mike White of IBK Capital and Quinton Hennigh, PhD of Crescat Capital view Dome Mountain as a potential district scale property. Hennigh in one video said, “I am not going to stick my neck out and say Blue Lagoon is another Porgera”. Porgera is 32-million-ounce resource in Papua New Guinea. Consequently, our aggressive $4 billion market capitalization order-of-magnitude estimate based on a prospective 10 million ounces measured and indicated of gold at $400/ounce, could be higher because there is a possibility that the property could host 20 million or 30 million ounces of gold.
Given overvalued US equity markets, a weak dollar and uniform strength in commodity metals, we see Blue Lagoon and a high-risk investment with 3 to 57-fold upside potential over the next three years. We believe that Blue Lagoon’s small market capitalization is due to minimal research coverage on its shares as most institutional investors do not invest in micro-capitalization shares.