BANRO CORP

Best quarter since Banro began producing: 38,236 ounces from the two mines, Twangiza 29,445 (98,184 for 2014, up 19% on 2013's 82,591) and Namoya 8,791. Twangiza still had not reached the 120,000 ounces a year promised for 2012, and Namoya's agglomeration drum - needed to fix the fines problem - was still in transit to site.

quarterly activities report

Namoya's ore carried far more fine material than expected - beyond the capacity of parts of the wet circuit - so the plant needed modifying and peak production would be delayed, though gold kept coming from the gravity and heap-leach circuits. The chairman said grade and metallurgy were as expected; it was the material handling that was wrong.

production update

Declared Namoya's first mineral reserve - 1.34 million proven and probable ounces, 73% of its 1.83 million measured and indicated ounces - lifting group reserves 53% to 2.36 million ounces at US$1,200 gold. Against that, Twangiza's reserve fell 33% to 1.03 million ounces (20.2% from the lower gold price, 6.5% depletion, 6.3% higher costs), group measured and indicated resources fell from 10.18 to 8.35 million ounces and inferred from 7.01 to 5.32 million, with Lugushwa's inferred resource cut 27.6%.

resource reserve update

Closed the US$40m preferred share placement into the Namoya and Twangiza Barbados subsidiaries, exchangeable into Banro shares.

capital raising announcement

Announced US$40m of convertible preferred shares to be issued by a subsidiary, paying an 8% cumulative cash dividend and maturing 1 June 2017, with Gramercy Funds Management committing to the whole amount. The stated purpose - resolving near-term liquidity constraints and repaying bank loans - is the first admission of a funding squeeze.

capital raising announcement

Poured the first 320 ounces at Namoya on 30 December during hot commissioning of the heap-leach circuit - about a year later than the Q1 2013 commissioning promised when the notes were sold in March 2012. Banro said the second mine would take it from under 100,000 ounces a year to a target of more than 225,000.

production update

Closed the offering: C$67.8m of common shares at C$1.35, US$2.9m of Series A preference shares and US$30.0m of subsidiary preferred shares, all for Namoya development and working capital.

capital raising announcement

Priced the financing plan, which had grown well beyond the February package and now included common equity: 50,218,634 shares at C$1.35 for C$67.8m, 116,000 gold-linked Series A preference shares at US$25.00 for US$2.9m, and a concurrent US$30.0m private placement of Barbados subsidiary preferred shares. The "non-dilutive" preferred-only plan of February had become a substantial common-share issue.

capital raising announcement

Arranged up to US$90m without issuing common shares: US$40m of gold-linked preferred shares to BlackRock World Mining Trust, expandable to US$60m, plus US$30m of credit facilities from two African commercial banks. Management framed it as funding growth without diluting the capital structure.

capital raising announcement

Group measured and indicated resources rose 41% to 10.18 million ounces and inferred 56% to 7.01 million ounces, with the oxide and free-milling portion - the material Banro can actually treat by heap leach and CIL - up 45% to 4.17 million M&I ounces. At Namoya, M&I rose 17.7% to 1.86 million ounces.

resource reserve update

Declared commercial production at Twangiza from 1 September 2012, three years after the decision to build and eleven months after first gold, and started planning a plant expansion. Namoya was still on schedule for a mid-2013 start.

production update

Twangiza had averaged about 60% of rated plant capacity because the No. 1 Ball Mill motor was down, with excessive vibration traced to an inadequate support frame. Commercial production slipped to Q3 2012 and full ramp-up was targeted a month later, though the mine stayed cash-flow positive.

production update

Closed the US$175m senior secured note issue at 10% due March 2017. Twangiza had produced 14,795 ounces to that point and poured 7,441 ounces in February, with commercial production expected by the end of Q1 2012 and 10,000 ounces a month by April; Namoya was targeted for commissioning in Q1 2013 and about 11,500 ounces a month by the end of Q2 2013.

debt financing

Raised the debt offering by US$50m to US$175m: senior secured notes at 10% maturing 1 March 2017, with 48 warrants per US$1,000 unit - 8.4 million warrants exercisable at US$6.65 for five years. Proceeds go to Namoya construction, repaying an existing credit facility, and work on a hydro power option for the belt.

debt financing

Announced plans for a brokered private placement of up to US$125m of units, each made up of US$1,000 of senior notes due 2017 and one share purchase warrant. Proceeds were to fund development of the Namoya project and general corporate purposes, with closing expected in late February 2012.

debt financing

Updated economic assessment for Namoya Phase 1, a gravity and heap-leach operation on oxide and transitional ore: 122,000 ounces a year for the first five years at US$464 an ounce cash cost, US$148m to build, a 71.3% after-tax return and a US$366m net present value at US$1,500 gold with a ten-month payback.

resource reserve update

Lifted measured and indicated resources at Namoya, the second mine on the belt, 39% to 1.58 million ounces (24.77 Mt at 1.99 g/t, 0.4 g/t cut-off), with 440,000 inferred ounces (9.47 Mt at 1.44 g/t). The ounce count rose on far more tonnes at a lower grade: the January 2011 estimate was 14.58 Mt at 2.43 g/t.

resource reserve update

Poured first gold at Twangiza in South Kivu province, the first new commercial gold mine in the Democratic Republic of the Congo in more than half a century, two years after the board decided to build it. Management guided to about 120,000 ounces a year in 2012.

production update

Infill drilling at Namoya for the feasibility study returned 28.30 m at 2.78 g/t, 11.76 m at 6.44 g/t and 9.34 m at 7.56 g/t gold, none of it in the January 2011 resource estimate. Namoya was then being tabled for production in Q1 2013, with the feasibility study due December 2011 and construction from Q1 2012.

drilling result

Signed a non-binding memorandum of understanding with China Gold International Resources to negotiate a joint venture over Twangiza Phase 2 and a related hydro power project, potentially extending to the rest of the belt. It never became a definitive agreement in the record that follows; Banro funded the belt itself, with 10% notes a year later.

material agreement

Twangiza Phase 1 construction on schedule for commercial production in Q4 2011 and fully funded: US$94m of cash at 1 April against a US$209m capital budget including a US$13.5m contingency, about US$25m more than the cost to complete. Plant and civils 86% done, whole mine 60%.

production update

Pre-feasibility study on the Twangiza gold project in South Kivu: a mine averaging 345,125 ounces a year in its first three years and 195,772 over its life, at cash costs of US$212 an ounce falling out to US$345, with a post-tax net present value of US$352m and a 20.5% return. The authors recommended progressing to a bankable feasibility study and flagged that much of the indicated resource rested on relatively wide-spaced data needing infill drilling to firm up the early mine schedule.

resource reserve update