Canada’s next gold mine could lead the way in organic growth
Whereas multi-million-ounce gold deposits are becoming increasingly difficult to find, there is still plenty of gold in the hills, according to one mining executive. However, producers have to engage in some creative thinking to extract it.
Smithers, British Columbia, will soon be home to Canada’s next gold mine as Blue Lagoon Resources is expected to start commercial production at its Dome Mountain project in the third quarter.
Recently, the company announced that it had passed its mine inspections and completed the construction of a water treatment facility as part of its environmental compliance plan. The company said the mine is expected to open in July.
Rana Vig, President and CEO, said that not only is Blue Lagoon on the cusp of commercial production as gold prices hold solid gains above $3,000 an ounce, but he also hopes his company can become a leader in a sector facing significant challenges.
He noted that what makes Blue Lagoon unique is the company’s commitment to production, as it has become a fully permitted mine in just five years. The underground mine is expected to produce 15,000 ounces of gold annually. While it will be a junior producer, Vig said the cash flow will allow the company to grow organically.
Blue Lagoon’s launch comes as the mining sector struggles to find larger deposits. According to a report published last year by S&P Global, since 2020, there have been only five major discoveries totaling 17 million ounces of gold. At the same time, none of the discoveries made in the last 10 years have made the list of the 30 largest gold discoveries.
In a world that continues to believe bigger is better, Vig said he hopes his company stands out for its flexibility and profitability.
While Blue Lagoon’s production will be limited, it has begun operations significantly earlier than many larger projects. Analysts note that it can take at least a decade to navigate regulatory hurdles before a mine begins production.
The company was able to avoid much of the red tape due to its unique, small-footprint approach. First, the mine is underground, which limits its environmental impact. Second, its location in Northern B.C. already provides access to essential infrastructure. Third, the gold ore will be milled off-site through an active toll-milling agreement with Nicola Mining.
