Baru Gold Corp is currently pursuing two methods of financing to bring its Sangihe project in Indonesia into production, the company said in an investor update released Monday.
The first is a C$20 million gold prepayment loan led by an Asia-based investment and banking advisory firm. Baru is currently negotiating such a gold loan with several international institutions in Indonesia and elsewhere. The second method is a non-brokered private placement.
The interested parties are already mining precious metals or coal, provide mine services, or have substantial experience investing within Indonesia, the company said. Thus far, there has been more interest in the project than initially expected.
The gold loan is perhaps particularly attractive to coal miners in the country, who want to increase their exposure to gold as coal prices have fallen. The Sangihe project offers proven ore reserves and additional opportunities identified in a completed structural study and planned drilling program.
“I am delighted with the investment banking firm and thrilled with the discussions we are having on the gold-forward loan,” CEO Terry Filbert said in a statement. “The investment banking firm has a range, depth, and scope of contacts that has allowed us to expand our financing network to include the type of investor that we have not been able to connect with previously. Our ongoing negotiations are constructive and positive.”
Baru is targeting the end of May to conclude negotiations.
Notably, Baru also said it has declined several offers for acquisition.
