Revised: Barisan Gold Secures Local Indonesian Partner to Advance Indonesian Projects to Production
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct. 2, 2015) - Barisan Gold Corp. (TSX VENTURE:BG) is pleased to announce that it has entered into a preliminary agreement with PT Insignia Adimulia, 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, with Barisan Gold maintaining a 20% equity interest. Barisan Gold's 20% equity interest will be fully carried by the new partner until the issuance of a mining license at the Company's project(s) in Indonesia. It will become the Indonesian Group's sole responsibility to carry exploration activities, feasibility study activities and permitting activities required prior to the application and successful issuance of a mining license. Upon the issuance of the mining license, Barisan Gold will have the option to either fund its 20% share or be further diluted to 5%, in which case its 5% equity interest will become free carried.
"It is with great excitement that we announce this partnership today", commented Alex Granger, Chief Executive Officer of Barisan Gold. "This deal secures Barisan a direct path to production at its Indonesian mining projects. In the current climate, owning a significant equity interest in a 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."
Benefits to Barisan Gold and its shareholders include:
- Potential reduction of Indonesian political risk through the association with a strong prominent Indonesian group that is well connected in-country and has decades of experience handling government permitting processes;
- Potential reduction of financing risk as Barisan Gold's remaining 20% equity interest is fully financed by the new partner;
- Immediate restart of operations in Indonesia; and
- Exponential value accretion to Barisan Gold shareholders versus self-financing the development of our mineral projects at in current market environment.
The new Indonesian 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 our current Indonesian staff to carry our Indonesian projects through the next phase of permitting, exploration and feasibility studies.
The new partner has agreed to fund Barisan Gold's Indonesian subsidiaries during the approval period of the transaction on an interest free basis. At closing of the transaction, Barisan Gold will be responsible to reimburse PT Insignia Adimulia for these expenses.
"Barisan Gold has been canvasing the market for almost 12 months seeking financial solutions for the advancement of its high-quality Indonesian assets", continued Alex Granger, Chief Executive Officer of Barisan Gold. "Of all the alternatives identified during this process, we believe this transaction represents the best value for our shareholders. The transaction represents a significant premium to the implied value of the Indonesian assets as reflected in the current share price of Barisan Gold." Shareholders will have the opportunity to vote and approve the transaction at the upcoming annual general meeting.
In order to fund the Indonesian subsidiaries' expenses prior to the closing of the transaction, Barisan Gold will be raising a non-brokered private placement of approximately $500,000. Certain directors and officers have committed to purchase a significant portion of the private placement.
The transaction is expected to close within 90 days, subject to the satisfactory completion of the conditions in the agreement, which includes purchaser due diligence, completion of the private placement, Indonesian government approvals, joint venture partners and creditor approvals, Barisan shareholders' approval and TSX Venture Exchange approval.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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About Barisan Gold Corporation
Barisan Gold (TSX VENTURE:BG) is a Canadian-based minerals exploration company listed on the TSX Venture Exchange under the symbol "BG". The Company is engaged in the exploration, acquisition and development of mineral properties in Indonesia. Barisan Gold currently owns and operates two gold and gold-copper properties in Indonesia's Aceh Province on the northern tip of Sumatra Island, namely the Barisan gold-copper porphyry belt and the Abong epithermal gold project. Barisan Gold currently has 45,161,183 shares outstanding.
