(TheNewswire)
Vancouver, BC - TheNewswire - August 8, 2023 - BaruGold Corp ( TSX.V:BARU ) ( OTC:BARUF ) (“ Baru ” and itssubsidiary PT. Tambang Mas Sangihe (“ TMS ”) or the“ Company ”) is happy to announce to shareholders that miningcontractor CV. Mahamu Hebat Sejahtera (the “Contractor”) hassigned a legally binding contract to operate and produce gold onSangihe Island.
There were no substantial changes between this contractsigned August 4, 2023 and the intent of the Memorandum ofUnderstanding, announced on August 3, 2023. However, in the interestof shareholders, the Company has decided to allocate the 65 ha inmultiple phases. In the Company’s estimation, exclusive operationswithin the entire mining concession was too significant a risk.
The Company will award subsequent land allocations in acompetitive process that will include other interested parties. Thisallocation method gives the Company greater control, assurance of theContractor’s legal and environmental compliance, and also the optionfor the Company to develop their own operation.
This first phase with the Contractor involves only 15ha of the 65 ha area. The Contractor will use their own capital tooperate and expand an existing mining operation. For the exclusivecontracting right within the prescribed area, the Contractor will paythe Company approximately CAD $670,000. The payment is based on boththe land area and estimated gold content. The payment will be asfollows:
i. IDR 1,000,000,000(CDN$88,000) (1) as the first payment to be paid at thetime of signing of the agreement as a non-refundable deposit
ii. IDR 3,250,000,000(CDN$286,000) (1) as the second payment to be paid when theContractor starts carrying activities on the land area.
IDR 3,250,000,000 (CDN$286,000) (1) as the thirdpayment to be paid 30 days after the second payment.
(1) At theconversion rate of the Bank of Canada on August 4, 2023 of IDR0.000088 to CDN$1.00
The Contractor will immediately begin operations byrestarting a recently producing gold mine within the contracted 15 ha.With all the equipment already on site, land cleared, and constructioncomplete, operations will start immediately. The Contractoranticipates the operation will begin generating cash flow within twomonths.
The Contractor is responsible for all operational,production and site remediation expenses. As the result of theirresponsibility for operational expenses, they will receive 65% of thetotal gross receipts from the sale of gold recovered. Under the termsof the agreement, the Company will receive 35% of the total grossreceipts from the sale of gold recovered.
The Company will supervise all activities andco-process the gold. The Company will be responsible for refining thegold and distributing the resulting funds. The Contractor must abideby the same environmental and reclamation standards required of theCompany by Indonesian law, including mercury prohibition.
The Company negotiated the phased allocation of landwith the Contractor. The $670,000 will be used for the Company’snear-term obligations. In addition, the area reduction has no impacton near-term cash flow as the Contractor can operate at maximumproduction capacity on 15 ha for the next 12 months. This contract for15 ha does not prevent the Company from opening or contracting outadditional worksites.
The Company retains complete control of the SangiheProject. The Company’s Contract of Work includes an area of 42,000ha, of which 23,000 ha is gold bearing.
In the event of a regulatory cessation of workoccurring prior to the due date for the second payment, the agreementshall be automatically terminated. In such an instance, both thesecond and third payments specified within the agreement will bedeemed non-payable.
Mr. Terry Filbert, CEO of Baru Gold, commented,“ This arrangement is a winfor the environment, the Company, and for Indonesia. By licensing apreviously unpermitted mine, the Company is raising the legalprotections for workers and forcing environmental protections andrehabilitation on Sangihe, including the clean-up of and prohibitionof mercury. Mining on Sangihe has a long history and this is the firsttime any mine on the island has followed environmental standards andprotections, including ecological restoration. The Company has theopportunity to achieve cash flow almost immediately, with no dilutionto shareholders. The local community will very quickly feel thedistribution of wealth. I look forward to being in production andbuilding long-lasting and productive relationships with the residentsof Sangihe and our new contractor.”
The Company is fully permitted and legally entitled tooperate, hire contractors and produce gold on Sangihe Island. We arecommitted to doing so in a safe manner, following environmentalregulations outlined in our Environmental Permit.
ABOUT SANGIHE GOLD PROJECT
The Sangihe Gold Project (“Sangihe”) is located on the Indonesianisland of Sangihe, off the northern coast of Sulawesi. Sangihe has anexisting National Instrument 43-101 inferred mineral resource of114,700 indicated and 105,000 inferred ounces of gold, as reported inthe Company's “Independent Technical Report on the Mineral ResourceEstimates of the Binebase and Bawone Deposits, Sangihe Project, NorthSulawesi, Indonesia” (May 30, 2017). Readers are cautioned thatmineral resources that are not mineral reserves do not havedemonstrated economic viability.
The Company intends to proceed to production without the benefit offirst establishing mineral reserves supported by a feasibility study.The Company cautions readers that the any production decision made bythe Company will not be based on a NI 43-101 feasibility study ofmineral reserves that demonstrates economic and technical viabilityand as such, there may be involved increased uncertainty and varioustechnological and economic risks
The Company's 70-percent interest in the Sangihe-mineral-tenementContract of Work (“CoW”) is held through PT. Tambang Mas Sangihe(“TMS”). The remaining 30-percent interest in TMS is held by threeIndonesian corporations. The term of the Sangihe CoW agreement is 30years upon commencement of the production phase of the project.
Baru has met all the requirements of the Indonesian government and hasbeen granted its environmental permit.
ABOUT BARU GOLD CORP.
Baru Gold Corporation is a dynamic junior gold developer with NI43-101 gold resources in Indonesia, one of the top ten gold producingcountries in the world. Based in Indonesia and North America, Baru’steam boasts extensive experience in starting and operating small-scalegold assets.
BA R U GO LD CORP
Per : “Terry Fil b er t ”
Terry F i lbe r t, D ire c tor
Preside n t & CEO
For invest o r conta c ts m o re in f or m ation, please c ontac t :
K ev i n Sh u m Invest o r Re l ations kevin@je m inicap i tal . c o m
647-725-3 8 88 ext 702
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