A company owned by the younger brother of Indonesian President Prabowo Subianto, Hashim Djojohadikusumo, is reported to acquire a 10-percent share or equity stake in PT Tambang Mas Sangihe (TMS), a gold mining company operating in Sangihe Island, North Sulawesi.
A statement by Baru Gold, parent company of PT TMS, said the company has signed a non-binding letter of intent with PT Arsari Tambang Sangihe, stipulating the latter as a strategic equity partner and investor.
“PT Arsari Tambang will acquire the shares from PT TMS ’s existing shareholder, a private Indonesian corporation. The private corporation is and will remain an existing shareholder of PT TMS,” Terry Filbert, CEO of Baru Gold, said in a statement on Tuesday, November 26, 2024.
Baru Gold’s 70 percent of shares in PT TMS remains unchanged and this 10 percent stake is non-dilutive to Baru shareholders.
In the agreement, PT TMS will grant PT Arsari Tambang a five-year Option to subscribe for additional 15-percent equity stake in PT TMS. The option is exercisable until the fifth anniversary date from the date the company secures approval for a Production Operation Status from the Ministry of Energy and Mineral Resources (ESDM).
The option price is based on the valuation of PT TMS at the time of the exercise. The valuation of PT TMS will be determined by a Toronto Stock Exchange (TSXV)-approved business and natural resource valuator. This estimate will be based on resource estimates from the company’s two Sangihe reports and other geological evidence.
If the 15 percent option is fully exercised, Baru’s stake in PT TMS will reduce from 70 percent to 59.5 percent. Although slightly dilutive to shareholders, Baru Gold will continue to hold more than 50 percent of PT TMS and the funds obtained from the investment will be used as working capital to expand operations and accelerate value for shareholders.
The partnership is meant to enable the company to obtain the necessary resources and expertise to commence production, further assist in obtaining funding to start its gold production and support the exploration drilling necessary to identify all available resources on Sangihe Island.
Hashim named President Commissioner
In the statement, Baru Gold also said that Hashim will join the Board of Commissioners of PT TMS as President Commissioner. Hashim is Founder and Chairman of Arsari Group.
“Hashim is an entrepreneur with a long track record of success in international and Indonesian markets. Hashim has distinguished himself as a philanthropist in environmental conservation and Indonesian cultural heritage preservation. Hashim’s ecologically focused initiatives include the backing of programs to save the orangutan and honey bears of Kalimantan and improving the welfare of the wild elephant population of Sumatra. Hashim also has deep familial ties in North Sulawesi, where Sangihe Island is located,“ it said.
Terry Filbert said having Hashim as President Commissioner, all shareholders of PT TMS will benefit from the support of PT Arsari Tambang and Hashim’s expansive knowledge and experience.
The Sangihe Gold Project managed by TMS is located on the Indonesian island of Sangihe, off the northern coast of Sulawesi. Sangihe has two existing National Instrument 43-101 reports, with over 1 million oz of gold resource identified.
Environmentalists allege the mining concession, which covers more than half of Sangihe Island − the main island in the group − is a threat to ancient forests, at least 10 species of birds and water supplies for residents. Local activists and communities have staged protests against the gold mining project for a long time.
