Hey man! So v1 stuff is pretty simple and fun! Cool bike!
First, there are only 3 wires from the stator, black, blue, and red.
I generally group it down to:
Black- lighting system
Red- kill switch and ignition system
Blue- stupid ground for the red wire why did they do this? Oh and it also runs the brake light system.
So as I stated, the blue wire actually works as a ground for the ignition. And it also runs your brake light. Which is why everyone says to check the break light blue, because if it’s blown the ignition system is not grounded because you know there is a break in the circuit and what not. I was told through hearsay that it was supposed to be a “safety feature” so you don’t ride without a brake light.
Try and disconnect the blue wire right off the magneto as soon as you can and ground it to test for spark. (I always re wire mine and just run them this way and use my black wire to run my brake lights but this takes a little change out whith what brake light switch you use)
Other important grounds are the kill switch itself and the HT coil, which is what your spark plug wire comes out of. It will either self ground via a metal mounting tab or have a short wire coming off of it Immediately just grounding itself to a metal spot. Make sure there is no corrosion for these ground points.
Good luck and return back