Baru Gold Corp has announced that the Ministry of Energy and Mineral Resources (MoEMR) has upgraded its Sangihe Gold Project contract of work (CoW) to operation production status after a 3 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 ha. 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 programme 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 that any production decision made 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 project’s output will not be saleable at a price that will cover the project’s 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.
Terry Filbert, CEO of Baru, commented: “Since 2017, I have been focused on bringing the Sangihe gold project into profitable cashflow production. After 4 long years we are now clear of obstacles to accomplish this goal.”
“I would like to thank the MoEMR for their diligent support in expediting Baru Gold’s 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. It has mobilised 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 it 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, it 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.
Read the article online at: https://www.globalminingreview.com/exploration-development/05022021/baru-gold-corp-receives-production-licence-update/