The Sangihe mineral tenement consists of one block covering the southern half of Sangihe Island, located between the northern tip of Sulawesi Island (Indonesia) and southern tip of Mindanao (Philippines). Credit: Baru Gold
Shares of Baru Gold (TSXV: BARU) plunged on Monday after the junior miner announced that both of its previously agreed investments would not go through, leaving it once again in search of funding for its flagship project in Indonesia.
Baru Gold closed Monday’s session down 23% to C$0.05 apiece, for a market capitalization of C$14.6 million ($10.2 million).
The first deal, signed in November 2024, would have seen Pt Arsari Tambang — part of Indonesia’s Arsari Group — become a stakeholder in the Sangihe gold project, which is held 70% by Baru Gold and the rest by other Indonesian groups. Under the agreement, Arsari Tambang could take up to a 25% interest in the project.
However, Baru said in a news release Monday that Arsari Tambang has now decided not to proceed with a definitive agreement.
The letter of intent (LOI) signed last month with a family office in Singapore, which would have seen Baru raise $35 million through a private placement, will also be scrapped. The Singaporean family office, which holds a portfolio of gold mines in Indonesia, had proposed to take up 60% of Baru Gold’s shares with this investment.
Management felt the investment proposal “was not in accordance with the original LOI, as there were issues between the timing of payments and the terms regarding changes in control,” Baru said in a statement.
As a result, the Vancouver-based miner will seek talks with other entities interested in a potential partnership.
Delayed gold project
For years, Baru Gold has been looking to bring the Sangihe gold project, situated on the Indonesian island of the same name, into production.
The property has a gold-bearing area of approximately 250 sq. km, of which only 10% has been explored. A small zone of 0.65 sq. km is being targeted for initial production, within which an NI 43-101-compliant resource of 200,000 oz. of gold and 3 million oz. of silver was recently estimated.
The Sangihe project area was first discovered and primitively explored in 1986. PT Mears Soputan Mining and its JV partner Muswellbrook conducted various work on the project up until 1993, including a 5,000-metre drill program on the Binebase and Bawone prospects that exposed gold mineralization on surface.
In 2007, Baru Gold, then known as East Asia, and its local partners received approvals and exploration permits from the Indonesian government and were granted the contract of work for 420 sq. km. covering the Sangihe project.
The company initially had targeted first production by 2022, but the project was delayed by both legal and logistics challenges.
