CEO's 2020 Report to Shareholders
We started off 2020 with an optimistic but challenging year ahead. As most of our loyal longterm shareholders are aware, from when I signed on board with Tocqueville's recommendations 2017, it has not been an easy task turning around the former $700 million plus market cap high potential explorer in Indonesia which had fallen as low as $800K in valuation due to misallocation of resources, disagreement between major investors, and general market malaise.
Fortunately, through the difficult years we were able to keep the core team going. Mining professionals such as Mr. Frank Rocca who previously worked on both the Sangihe and Miwah projects for the Company, allowed the Company to keep core knowledge and expertise on ground intact.
While working in country on this project, I was supported by our Indonesia country managers and local residents, Mr. Todotua Pasaribu and Mr. Garry Kielenstyn, who both manage the day to day operations and deliverables on the Indonesian subsidiary, Tambang Mas Sangihe, which holds the Company's 70% interest in the Sangihe project. Both of these individual have extensive in-country experience in the mining sector. In North America, it has largely been myself and Ms. Karen Dyzckowski, who recently accepted the Chief Financial Officer role after serving as Controller and handling administration for the last 15 plus years.
2020 Q1, we started off with very little cash on hand and over $3 million in legacy liabilities, and a market which was soft for venture mining but with promising spots for near-term producers. We formulated a game plan to raise a limited capital of $2 million to boot strap up Sangihe and concurrently pursue the AMDAL. The past due dead rent property taxes were to be deferred and negotiated. We were able to sign on the support of a loyal group of retail investors and market advisor firm Jemini Capital to accomplish these goals.
In April 2020, we closed a small financing of $300,000 to turn around things and give Jemini Capital the marketing it needed to get our story out of the dark. This resulted in their raising the funding required to complete the license we as as construction to our first pour targeted for first half of 2021.
The COVID-19 pandemic and SARS 2.0 has put a pause on things obviously. But from the ashes and terrors of the pandemic, gold became in vogue again. We saw a renewed interest in the capital markets side and with COVID-19, various in-person meetings in Indonesia advanced faster with virtual meetings.
In August 2020, EAS was granted the AMDAL environmental permit, which we had been applying for since 2018.
Once Jemini Capital launched the Company's marketing program, and with gold climbing from $1,650 to over $2,000 an ounce at that time, our share price rose from C$0.04 to C$0.24 per share in a few short months. Concurrent to this, warrants from previous lower price financing rounds were being exercised and accelerated, which saw EAS receive more than $1 million from warrant exercises. This allowed us to complete the license requirements without waiting to complete a private placement as previously planned.
Right after the AMDAL, we commenced application for an operation license which in combination with Contract of Work will provide EAS with over 30+ years of operational right. In September 2020, we announced a $2.5 million financing of which a lead order took $2 million, and the financing was subsequently expanded to $4.4 million.
At the time of writing, the Company has over $5 million in cash and is anxious to get to work on constructing the Sangihe gold 100,000 ton heap leach pad. This is sufficient to cover our dead tax and past tax liabilities, the initial land acquisition as well as the construction of the heap leach pad itself. This start-up operation will get us into a cashflow position and give us many options to raise further funds in a non-dilutive fundraising. With this start, we can expand operations and complete the exploration infill drilling program planned for the BineBase/Bowone corridor which should expand mine life in both production capacity and mine life by potentially adding the 835,000 inferred ounces (NI43-101 report 2010) into indicated and measured.
Lastly, as a tribute to the beautiful country of Indonesia and the Company anticipating being one of the newest emerging gold producers, East Asia Minerals changed its name to Baru Gold Corp.
Baru in Bahasa (local dialect) means new.
This name change signifies a new direction, a new blessing, and a renewed focus on continuing to persevere and create value for our shareholders. I invite you to contact me and my team directly as we appreciate each single dollar of investment you make in BARU:TSX-V as we advance to cashflow at Sangihe and hopefully beyond in 2021.
Chairman and CEO