Mr. Terrence Filbert reports

BARU GOLD PROVIDES UPDATE ON SANGIHE PROJECT APPROVAL AND LEGAL ACTION AGAINST ILLEGAL MINING OPERATORS AND LANDOWNERS

Baru Gold Corp. and its subsidiary, PT. Tambang Mas Sangihe (TMS), wish to update shareholders on progress in bringing the Sangihe gold project into production operations, recent legal actions targeting industrial-scale illegal mining and continuing engagement with Indonesian authorities.

Application for production operations awaiting ministerial approval

Since the news release on Sept. 8, 2026, the company has sought and again received multiple confirmations from Indonesia's Ministry of Energy and Mineral Resources (ESDM) that all requirements have been met by the company and the application is complete.

The company has been further reassured that the application for production operations has been recommended for approval by all committees, the letter of approval is drafted and awaiting the final signature from the minister of ESDM. This signature will complete the application.

Management remains focused on securing the outstanding approval and advancing the Sangihe gold project toward production operations. The company being in production is the only solution to end illegal mining on Sangihe Island, and is essential for establishing a regulated, accountable and sustainable framework for mineral development that will benefit all residents and contribute to the broader Indonesian economy.

Legal action against industrial-scale illegal mining operators

As previously announced, Sangihe faced a resurgence of illegal mining activity involving over 50 excavators and other heavy machinery with large-scale mineral processing facilities openly operating. In response, the company is pleased to announce it has filed five civil lawsuits against key individuals involved in these industrial-scale illegal mining operations on its mining concession.

The lawsuits are directed at the illegal mine operators and landowners orchestrating the industrial-scale illegal mining, rather than ordinary workers seeking daily wages.

The claims seek total damages of $74.58-million (Canadian) (951.44 billion Indonesian rupiahs), comprising:

• $35.38-million (Canadian) (451.44 billion Indonesian rupiahs) in material damages, representing the value of gold and silver stolen from the State of Indonesia;
• $39.2-million (500 billion Indonesian rupiahs) in immaterial damages, reflecting the broader harm to the company.

The company's material damages draw on historical geological exploration data, drilling results, geological modelling and metallurgical studies before the illegal mining activities started in 2021. These records have been compared with changes in terrain identified through a recent lidar (light detection and ranging) drone survey to calculate the amount of precious metals removed.

The illegal mining operations have been occurring on the company's concession for the last five years. The company estimates that 95 per cent of the drilled resources are still untouched.

The five principal illegal mine operators named in the proceedings face claims totalling $35.38-million (Canadian) (451.44 billion Indonesian rupiahs) for the theft of mineral wealth. The company notes that only two of the five principal illegal mine operators actually reside on Sangihe Island. The stolen mineral wealth is broken down as follows:

• Lukas Lumape and six landowners: $12.50-million (Canadian) (159.51 billion Indonesian rupiahs);
• Dicky Marvel Makagansa: $7.71-million (Canadian) (98.35 billion Indonesian rupiahs);
• Rifandy Andika Malib: $7.49-million (Canadian) (95.58 billion Indonesian rupiahs);
• Mardy Alfa Posumah: $5.19-million (Canadian) (66.16 billion Indonesian rupiahs);
• Irvan Mamadoa Ogelang: $2.50-million (Canadian) (31.84 billion Indonesian rupiahs).

Since filing the lawsuits, several landowners named in the lawsuits have approached the company for negotiated settlements. Discussions regarding potential agreements are continuing. These discussions include arrangements for the transfer of their relevant land interests to the company to avoid further legal exposure.

The company confirms that it already controls sufficient land to commence production operations. Any resulting land acquisitions would expand the company's landholdings.

Cooperation With Indonesian authorities

TMS has submitted reports and supporting data to ESDM to assist the authorities in investigating illegal mining activities on Sangihe Island for criminal investigation.

ESDM's enforcement personnel have visited the island to gather additional evidence of illegal mining and document current conditions. The company has also received information that Sangihe is receiving specific and special attention by ESDM's enforcement department, with further enforcement measures anticipated.

Through its engagement with ESDM, the company has consistently emphasized that enforcement alone will not provide a lasting solution. Illegal miners cannot operate while a regulated operator is working and so the only lasting solution is to approve the company's application for production operations.

A fully operational, legally authorised mine would provide a regulated framework for employment, operational safety, environmental management and accountability, while allowing Indonesia to benefit from the responsible development of its mineral resources.

Illegal mining operators protest against legal proceedings

Against the backdrop of the company's lawsuits, continuing investigations, anticipated enforcement measures and progress in obtaining the approval to begin production operations, several of the defendants and related individuals have participated in a protest on Sangihe Island demanding the right to continue mining within the company's concession. As part of their protest, the defendants also provided formal oral and written statements to the local government demanding the continuation of the very illegal mining activity they stand accused of undertaking.

It is the company's view the protests, public statements and written documents amount to confessions by the defendants. Such evidence should considerably shorten the continuing legal proceedings and investigations against them.

There are approximately 200 illegal miners working on Sangihe -- including day labourers and smugglers of hazardous chemicals -- with 100 attending the protest. These illegal miners deliberately referred to themselves as traditional or artisanal miners to downplay the depth of the destruction they have caused. The reality is their operations use over 50 excavators to undertake extensive excavation. Their operations use mercury, processing ponds with hazardous chemicals and mineral processing facilities without any environmental or safety controls.

Despite stealing $35.38-million (451.44 billion Indonesian rupiahs) wealth of Indonesia for themselves and paying no taxes or contributions to the state, the defendants also requested the Sangihe government use public funds to pay for their legal fees. This request for legal assistance is particularly egregious as the local government has struggled to secure sufficient funding to supply essential medicines, maintain critical infrastructure and sustain consistent electricity generation. Requesting the use of these limited public resources for their personal legal defence further demonstrates the defendants complete lack of regard for the other 130,000 people on Sangihe not enriching themselves through documented criminal activity.

These small group of illegal miners have caused permanent social and environmental destruction for the other 130,000 residents on Sangihe. In 2026, on average, illegal mining operations have been linked to one death every month. Just last week, three people from Sangihe died in two separate accidents -- two miners died from suspected inhalation of acid fumes and the third was a priest that fell into a mine pit. The 11 defendants have never paid any compensation to the families of the victims. The negative effect these few individuals are having on the Sangihe environment, wildlife and local population are immeasurable.

Terrence Filbert, president and chief executive officer of Baru Gold, commented: "Our legal actions are focused on the individuals we believe are responsible for organizing, controlling or facilitating these industrial-scale illegal activities-not on the local workers who receive a subsistence wage income.

"Once TMS commences operations, the benefits will extend well beyond direct mining employment. Jobs, procurement, supporting businesses, tourism, government revenues and increased economic activity can help ensure that all 130,000 residents of Sangihe have the opportunity to benefit from the island's mineral resources.

"The contrast between these illegal operations and our company is stark. A small number of illegal operators have extracted $36-million for themselves, while local workers face dangerous conditions and death while the wider community bears the consequences of irreversible environmental damage. The people of Sangihe deserve a lawful, properly regulated mining industry that creates opportunity without sacrificing their life or their environment.

"In the last year, we have spent $2.4-million (30 billion Indonesian rupiahs) in meeting ESDM's technical requirements and paying the tax obligations required to receive our approval to begin production operations. We are ready to operate within the regulatory framework and put millions of dollars more into the local economy, all while being held accountable to Indonesia's social, economic and environmental laws and standards."

About the 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 (ha). Sangihe has an existing National Instrument 43-101 report suitable for mining planning and production schedules for an area within the 65 ha 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 an NI 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 (CoW) is held through TMS. 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's team of mining and finance professionals boasts extensive experience in starting and operating small-scale gold and coal assets. Baru is positioned to become Indonesia's next gold producer.

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