Baru Gold Corp (Baru Gold or The Company)(TSXV:BARU)|(OTC:BARUF)is pleased to announce that theMinistry of Energy and Mineral Resources (MoEMR)has upgraded its Sangihe Gold Project Contract of Work (CoW) to Operation Production status after a three month delay due to the Covid-19 pandemic in Indonesia.
This licence provides Baru Gold with the rights to operate precious metal mines on 42,000 hectares on Sangihe Island, of which only 10% of the area has been geologically explored to date. Exploration will be upgraded through a resource development drilling program and will be expanded to other areas of the CoW once production cashflow has been initiated.
The Company intends to proceed to production without the benefit of first establishing mineral reserves supported by a feasibility study.The Company cautions readers that any production decision made by the Company will not be based on a NI 43-101 feasibility study of mineral reserves that demonstrates economic and technical viability and as such, there may be involved increased uncertainty and various technological and economic risks such as the interpretation of drill results; the geology, grade and continuity of mineral deposits; the possibility that future exploration, development or mining results will not be consistent with our expectations; commodity and currency price fluctuation; failure to obtain adequate financing; regulatory, recovery rates, refinery costs, and other relevant conversion factors, permitting and licensing risks; general market and mining exploration risks and production and economic risks related to design and engineering, manufacturing, technological processes and test procedures and the risk that the projects output will not be salable at a price that will cover the projects operating and maintenance costs.
The existing CoW license for the Sangihe gold project is a 30-year license and under the recently issued 2020 mining regulations can be extended for 20 years. This CoW production status upgrade also gives the Company rights for refinery and export licences.
Mr. Terry Filbert, CEO of Baru, commented, Since 2017, I have been focused on bringing the Sangihe gold project into profitable cashflow production. After four long years we are now clear of obstacles to accomplish this goal.
I would like to thank theMoEMRfor their diligent support in expediting Baru Golds request to issue the production licence upgrade despite their office closure during this second wave of COVID-19 sweeping through Indonesia that has caused both government and administrative delays.
While waiting for the issuance of the licence upgrade, the Company has taken many steps to fast-track the heap leach construction target. We have mobilized our mining team to the site, started hiring local residents for the many construction and production positions, identified land acquisition targets required for the project, and undertaken steps to mitigate any environmental impact we may have on the island.
The recent appointment of Joe Keane as a director, with over 40 years of experience in heap leach technology, production, and mining processing systems from around the world, adds to the wealth of knowledge and experience the Company presently has, and will be instrumental in bringing the production online as quickly as possible.
Baru Gold is no longer a junior exploration company. The Company is moving towards generating cashflow from a self-sustaining operation. With its low cost of production and the rising price of gold, the Company expects its expanding profit margin will enable its expansion of the mines production and detailed exploration of the entire CoW. Targeted start up of the heap leach operation is mid-2021.
Frank Rocca, BAppSc. (Geology), MAusIMM, MAIG, Chief Geologist of Baru Gold Corp. is the Qualified Person as defined under NI 43-101 who has reviewed and approves the content of this release.
ABOUT SANGIHE GOLD PROJECT
The Sangihe Gold project is located on the island of Sangihe off the northern coast of Sulawesi and has an existing National Instrument 43-101 inferred mineral resource of 114,700 indicated and 105,000 inferred ounces of gold as reported in the Company’s “Independent Technical Report on the Mineral Resource Estimates of the Binebase and Bawone Deposits, Sangihe Project, North Sulawesi, Indonesia” dated May 10, 2017 by Ian TaylorMAusIMM(CP) and Anthony James Woodward MAusIMM, MAIG filed on SEDAR. Only 10% of the gold bearing area has been explored. The Company’s 70-percent interest in the Sangihe-mineral-tenement contract of work (“CoW”) is held in PT. Tambang Mas Sangihe (TMS). The remaining 30-percent interest in TMS is held by three Indonesian corporations. The term of the Sangihe CoW agreement is for 30 years upon commencement of the production phase of the project.