Banro says DRC gold mine will cost $410m

26th January 2009

By: Liezel Hill


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TORONTO ( – Toronto-based Banro Corporation could produce a total of 2,62-million ounces of gold over 15 years from its Twangiza project, in the Democratic Republic of Congo, the firm said on Monday.

According to a just-completed feasibility study, the mine will cost $409,6-million, including a $38,9-million contingency, which is an improvement on the capital estimate of $432,5-million in the July 2008 prefeasibility study.

Banro will now begin discussions with potential strategic partners and project finance lenders, including both multilateral agencies and commercial banks, the firm said on Monday.

“We are very pleased with the robustness of the Twangiza project as demonstrated by this feasibility study,” said president and CEO Mike Prinsloo.

“On the back of this outcome and the further upside which the neighbouring deposits on the Twangiza property offer to increase the oxide and transitional resources, we will now actively seek a strategic partner to assist us in adding ounces and to further strengthen the Twangiza project economics through to development of this openpit project."

The company also plans to refine the feasibility study numbers, and expects that the capital cost of the project will decline further.

"Banro believes that contractor rates, civil and earthwork rates, steel prices, diesel prices and transport costs will become more favourable compared to the inputs to this study," Prinsloo commented.

The capital expenditure figures do not include $133,8-million for a planned 30-MW hydroelectric scheme to power the operation, which Banro plans to fund separately.

“We will seek third-party funding for all or part of the hydro electric power plant, which will be repaid on a kWh rate over the first ten years of the project,” Prinsloo said.

Although the initial costs to build the hydro plant will be higher than for diesel power generation, operating costs will be significantly lower, (especially processing power costs) resulting in cost savings over the life of the project, Banro said.

According to the feasibility study, the mine will produce an average of 319 962 oz/y of gold for the first three years of operation, at average total operating cash costs of $274/oz.

Banro shares rose 3,33% on Monday, to C$1,55 apiece by 15:51 in Toronto.

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Edited by Liezel Hill


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