Baru Gold Corp has wrapped up an oversubscribed private placement, raising C$118,999.99. The placement involved the issue of 3,966,666 units priced at C$0.03 each.
The proceeds will be channelled into bringing the Sangihe Gold Project, on the Indonesian island of Sangihe, into production.
About the placement
Each unit consists of one common share in Baru Gold and one transferable common share purchase warrant, exercisable for one share at C$0.05 for the first year and C$0.10 for the second year.
It's worth noting that an insider of the company participated in the private placement, contributing some C$46,000 or about 40% of the offering.
The contribution qualifies as a ‘related party transaction’ under the relevant legislation but is exempt from formal valuation and minority shareholder approval requirements because it falls below the 25% threshold of the company's market capitalisation.
The company is currently engaged with three potential individuals or institutions regarding a larger financing. One potential institutional investor has completed the due diligence process and entered the contract and terms stage of negotiations.
Baru Gold is committed to finalising the negotiations as soon as possible. The other two interested parties are still in the due diligence phase.
About the Sangihe Gold Project
The Sangihe Gold Project holds an inferred mineral resource of 114,700 indicated and 105,000 inferred ounces of gold.
Baru Gold intends to proceed with production without first establishing mineral reserves supported by a feasibility study. It holds a 70% interest in the Sangihe mineral tenement contract of work through PT. Tambang Mas Sangihe, with the remaining 30% interest held by three Indonesian corporations.
Baru Gold has met all the requirements of the Indonesian government, obtaining its environmental permit and approval for the project's upgrade to construction and production.