Mr. Terry Filbert reports

CHIEF PROSECUTOR DECLARES SANGIHE PRIORITY FOR ILLEGAL MINING ENFORCEMENT; PROSECUTORIAL ACTION INTENSIFIES

Baru Gold Corp. and its subsidiary Pt Tambang Mas Sangihe have noted the chief prosecutor of North Sulawesi has designated Sangihe Island a priority target for enforcement of illegal mining following a failed, large-scale mobilization by illegal miners.

Failed illegal mining mobilization

From Nov. 5, 2025, to May 18, 2026, Sangihe Island experienced a resurgence of illegal mining. The mobilization was undertaken and supervised by foreign nationals, with support from Indonesians from outside of Sangihe and local day labourers. All illegal operations have since ceased.

Until this recent attempted mobilization, there has not been significant illegal mining on Sangihe since November, 2024.

The mobilization of equipment was larger and more aggressive than the company has ever seen.

The foreign nationals were using over 20 excavators to build and prepare processing facilities capable of producing approximately $20-million every 60 days. The work was being undertaken in the exclusive mining concession of the company under the false pretence of a local co-operative mine.

Unfortunately, the failed mobilization destroyed an additional section of protected forest and area of mangroves. Tragically, a local Sangihe resident also died while improperly transporting cyanide, a reagent used in gold processing. So far, at least four Sangihe residents have died undertaking illegal gold mining on Sangihe Island.

Company management estimate the failed mobilization resulted in a net loss of approximately $3.5-million to the illegal miners.

Enforcement developments

The chief prosecutor of North Sulawesi, Jacob Hendrik Pattipeilohy, visited Sangihe Island and toured the illegal mining site with members of his enforcement team on May 18.

All illegal mining stopped the day of the site inspection, and there has been no further activity.

During the visit, the chief prosecutor designated Sangihe Island as a priority target for illegal mining enforcement. He further reported that he had a moral and legal obligation to ensure enforcement as President Prabowo had given a direct order to crack down on illegal mining.

The chief prosecutor of North Sulawesi is the senior law enforcement official responsible for overseeing criminal prosecutions, co-ordinating legal enforcement activities, and supervising prosecutorial offices across the province, including matters related to corruption, illegal mining, public order and protection of state interests.

In public comments, Mr. Pattipeilohy specifically stated that a non-negotiable starting point was the complete end of illegal mining, criticized the lack of police enforcement and emphasized the importance of the integrity of law enforcement officers.

The chief prosecutor also stated his intentions was to pursue criminal charges from offenders, seek damages equal to the gold previously illegally mined and pursue additional financial penalties to fund land remediation. The company intends to provide documentation and records that will assist in calculating the financial damages they seek to recover.

The North Sulawesi High Prosecutor's Office appears to be working toward dismantling the network that is facilitating the illegal mining on Sangihe Island.

Company management understands that four foreign nationals alleged to be key orchestrators of the illegal mining are detained in prison and that a multiagency investigation is under way. In addition, multiple excavators and an assortment of heavy equipment have been impounded and are in police custody.

TMS management and staff have tirelessly worked and is continuously liaising with multiple national enforcement agencies to end the illegal mining on Sangihe.

As enforcement and investigation of the illegal mining network is continuing, further planned actions and details cannot be shared. The company anticipates additional arrests.

Terrence Filbert, chairman and chief executive officer of Baru Gold, commented: "The persistence of illegal mining on Sangihe Island underscores the local community's desire for the economic benefits that come from mining operations. There are few employment opportunities on Sangihe, and I can understand the appeal of even limited work. However, the economic benefits to locals are largely limited to low-paid, unsafe day labour.

"In contrast, our company has paid millions of dollars in local and national taxes, has a comprehensive community and social improvement program, pays workers good wages with comprehensive benefits, and has significant plans for infrastructure development and improvement on Sangihe Island. In addition, we hold a valid environmental permit and are legally required and responsible for environmental reclamation."

Ending illegal mining requires the start of the company's production operations

Recently, company management met with the senior leadership of the Ministry of Energy and Mineral Resources and the director of special crimes in the National Police of Indonesia. The intention of the meeting was to co-ordinate methods to end illegal mining.

A key conclusion reached during the meeting was that the only enduring way to end illegal mining is for a legal mining operation to begin, and the parties in attendance agreed to act expeditiously to support this objective.

About Sangihe gold project

The Sangihe gold project is located on the Indonesian island of Sangihe, off the northern coast of Sulawesi with a gold-bearing area of approximately 25,000 hectares. Sangihe has an existing National Instrument 43-101 report suitable for mining planning and production schedules for an area within the 65-hectare area targeted for initial production. See the company's "Independent Technical Report on the Updated Mineral Resource Estimates of the Binebase and Bawone Deposits, Sangihe Project, North Sulawesi, Indonesia" (Mining Associates Pty. Ltd., Feb. 1, 2025). Only 10 per cent of the gold-bearing area has been explored.

Readers are cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability. The company intends to proceed to production without the benefit of first establishing mineral reserves supported by a feasibility study. The company cautions readers that the any production decision made by the company will not be based on a National Instrument 43-101 feasibility study of mineral reserves that demonstrates economic and technical viability, and, as such, there may be involved increased uncertainty and various technological and economic risks.

The company's 70-per-cent interest in the Sangihe-mineral-tenement contract of work is held through Pt Tambang Mas Sangihe. The remaining 30-per-cent interest in TMS is held by other Indonesian corporations. The term of the Sangihe CoW agreement is 30 years upon commencement of the production phase of the project. Baru has met all the requirements of the Indonesian government and has been granted its environmental permit.

About Baru Gold Corp.

Baru Gold is a dynamic junior gold developer with NI 43-101 gold resources in Indonesia, one of the top-10 gold producing countries in the world. Based in Indonesia and North America, Baru has a team that boasts extensive experience in starting and operating small-scale gold assets.

We seek Safe Harbor.