Blue Lagoon Resources Inc. (CSE:BLLG) is on the verge of gold production, says Bob Moriarty
Bob Moriarty | October 29, 2020 | SmallCapPower: In my books and in my articles I try to write about things that my readers need to understand but others are not covering. I am not a parrot and you don’t need to hear the same thing from me you can find on two or three dozen other me-too sites so common in the resource space.
(The following is an article originally published on 321gold.com on October 16, 2020)
I don’t think small investors understand the giant advantage they have over the big funds. In the junior resource space, you can always take a few thousand-dollar position without moving the market. That’s important when both buying and when selling. For the most part, the funds enter positions by getting into private placements. That gives them a lot of leverage on price of the pp with the companies and commonly, the extra leverage via warrants. It’s uncommon but not unheard of for funds to buy in the open market and that tends to rocket share prices higher.
That’s all well and good for the funds and should you find a good fund manager and there are several out there, you have them and their staffs working for your benefit. Frankly, they almost always will know far more about a company and management than you will.
But the funds are like the Hotel California. They can check into a stock, they just can’t check out without killing the price. That’s what happened to funds in 2008 and 2015 when investors needed money to pay for margin calls on other investments began to demand redemption from the gold funds. In that case, small investors weren’t standing beneath a falling safe, they were standing under clumps of $100 bills being dropped to them by the actions of the funds.
Investors will always have a slight advantage over the funds because they have liquidity for their smaller trades while prices go up or down and the funds lack liquidity when trying to exit positions when everyone else is doing the same thing.
But all investors, big and small suffer from a lack of information. I have no real number for the number of Canadian juniors. It might be 800, it might be 1200. Don’t even get me started on the Aussieland juniors; they breed like rabbits over there.
I get paid because I write about a lot of juniors that have not shown up on the radarscope of investors. Obviously I write a whole lot more about the companies who advertise. Frankly I know a lot more about them. I get bombarded with requests from readers wanting to know about a particular stock so they write me. Many times I have to respond, “sorry, I don’t know them” because even someone who has been to 500 different project has missed many hundreds more.
And the bald fact that I write about a stock is not an unqualified “Buy this” signal any more than saying that I believe gold and silver will correct is a “Sell this” signal. I think investors can think well enough for themselves to understand when I am wildly bullish or just bored and need something to write about.
I’m not bored writing about Blue Lagoon Resources Inc. (CSE:BLLG). It has yet to show up on anyone’s radar but is a, well, call it a gold mine. Two old guys, now 83, spent $28 million over the last dozen years building infrastructure and preparing the Dome Mountain project for production of high-grade gold. Eventually, while the Exit sign wasn’t flashing, it was illuminated and they realized they needed to turn over the project to someone who could and would finish the last 1% of work necessary.
So in stepped Rana Vig, who picked up the mine for 13.52 million shares then valued at $2 a share. It’s an all-share deal. Over the years there has been over $68 million spent on the project. It has a mining permit in place for 75,000 tonnes a year and a toll milling agreement allowing for milling of 200 TPD or 73,000 tonnes a year. There are three amendments necessary to complete to get into production. Those will cost $1.5 million and take about four months. Work on those began three weeks ago.
The project comes with a historical 43-101 resource going back to 2017 consisting of about 240,000 ounces of gold and a million ounces of silver. It’s a high-grade mine. Noranda drilled 16 diamond holes and outlined a resource of 20,000 tonnes at 23.6 g/t gold. Maps of the high grade main vein show 1 ounce Au over 20 meters, 1.2 ounce Au over 30 meters and 19 ounce Au over 4 meters.
Rana Vig has raised $7.5 million for drilling, finishing the underground work in preparation for production and basic exploration to increase the resource. There is 5,000 tonnes of broken ore mined and ready to be shipped once the final permits come in. That is anticipated and production to commence in Q1 of 2021. Rana has filed for a 100-hole drill program starting in December that will total between 15,000 and 20,000 meters. Results are coming in from their latest drill program including up to 173 g/t gold.
Blue Lagoon is hardly a one trick pony. As part of the deal, they also picked up a low-grade but large copper project called the Big Onion and located only a 20-minute drive from Smithers, BC. The Big Onion carries a 43-101 resource of 750,000,000 pounds of copper at about 0.32% Cu. If the predictions of demand for copper for use in electric vehicles holds true, the Big Onion could turn into El Bigo Dealo.
I participated in the latest PP, Blue Lagoon is an advertiser and the numbers on the latest assay results convinced me to pick up a few more shares in the open market. For a company on the verge of production their market cap is cheap and once the rock starts getting shipped to the mill, the price of entry is going to go up.
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