BARISAN Gold has entered into a preliminary agreement with a prominent Indonesian group to jointly advance Barisan’s Indonesian properties. Under the terms of the agreement, the Indonesian group will take an 80% equity interest in both of Barisan’s Indonesian subsidiaries.
Barisan’s remaining 20% equity interest will be fully carried by the new partner until the issuance of a mining licence at the company’s project(s) in Indonesia.
It will become the Indonesian group’s sole responsibility to carry out exploration, feasibility study activities and permitting required prior to the issuance of a mining licence. Upon receiving the licence, Barisan will have the option to fund its 20% share or be further diluted to 5%, in which case its 5% interest will become free carried.
The new partner is a well-established Indonesian conglomerate with operations in real estate and agriculture amongst others. They are fully-financed and have a strong team on hand that will combine with Barisan’s Indonesian staff to carry the projects through the next phase of permitting, exploration and feasibility studies.
The new partner has already advanced significant capital to Barisan’s Indonesian subsidiaries in order for them to carry-on permitting activities ahead of restarting operations.
“It is with great excitement that we announce this partnership,” said Barisan Gold’s CEO Alex Granger. “This deal secures Barisan a direct path to production at its world-class Indonesian projects.
“In the current climate, owning a significant equity interest in a world-class mining project whereby you do not have to contribute anything financially is of great value. That, combined with attracting a strong local partner which removes any risks associated with operating in a challenging country, is of equal importance.
“Barisan Gold has been canvasing the market for almost 12 months seeking financial solutions for advancement of its high-quality Indonesian assets. Of all the alternatives identified during this process, we believe this transaction represents the best value for shareholders. It represents a significant premium to the implied value of the Indonesian assets as reflected in the current share price of Barisan Gold.”
In order to fund its share of expenses prior to closing the transaction, Barisan has raised C$500,000 in a non-brokered private placement. “Certain directors and officers purchased a significant portion of the placement, which is likely to be the final opportunity for investors to participate in a placement ahead of the issuance of mining licences some years down the road.”