Banro’s DRC operations not affected by rebel action

TORONTO (miningweekly.com) – Central Africa-focused Banro on Wednesday said its operations in the east of the Democratic Republic of Congo (DRC) were unaffected by a current flare-up of security issues around the city of Goma.

On Tuesday, the M23 group of rebels, who defected from the DRC military, drove the army out of Goma, in North Kivu, vowing to "liberate" the DRC. Newswire Reuters reported that the rebels had sought talks with President Joseph Kabila, opposition figures and human rights organisations to address popular complaints, prior to taking Goma, but that the request was refused. The president has since said he would look into M23's grievances.

Banro said the rebels’ presence in Goma had “clearly” raised the stakes for government to engage with them peacefully in order to resolve their concerns, which it understood was mainly about conditions and pay.

“At this time there are talks taking place at heads-of-government level between the countries making up the Great Lakes Conference, which include the DRC president,” the company said.

Banro's operations are located 200 km south-west of Goma.

The company said it had a number of alternative supply routes at its disposal should the current borders dividing the countries in the region be affected.

The Canada-based miner is focused on production from the Twangiza mine and the development of three additional, wholly owned gold projects, each with mining licences, along the 210-km-long Twangiza-Namoya gold belt, in the South Kivu and Maniema provinces of the country.

Meanwhile, the company said an expansion of its Twangiza operation was under way, targeting production of about 10 000 oz/m by the fourth quarter 2013. Production currently stood at just under 8 000 oz/m.

The Namoya project development was also reported to be on track for commissioning in mid-2013 with the project at peak activity and capital expenditure (capex). About 48% of the estimated $178-million capital had been spent with the remaining capex peaking early in the first quarter of 2013.

Banro said the project’s capital budget had increased from the first estimates of about $150-million and in combination with lower-than-expected early production at Twangiza and the near-term capital intensity for Namoya's development, the company had been forced to arrange nondilutive funding for up to $43-million, which could be drawn over the next six months.

"In light of the significant potential for increasing mineral resources and reserves in areas where Banro has or will have infrastructure, we believe the focus on brownfields expansion at Twangiza and Namoya will significantly increase shareholder value and meet our targeted production profile in a shorter timeframe, at lower levels of capital expenditure. This will also allow us more time to fully assess the exploration projects, which have yielded excellent results to date," Banro CEO Simon Village said.

The company’s stock shed 5.86% of its value to close at C$2.89 apiece on Wednesday.