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Banro weighs up corporate future Posted: Tue, 13 Nov 2007 [miningmx.com] -- BANRO Corporation, which is digging for gold in the Congo, is assessing whether it should be sold or forge a partnership, possibly with a Toronto-listed firm. It is also discussing whether it could embark on an acquisition strategy of its own. RBC Capital Markets has been appointed to study Banro’s options ahead of financing and developing two $500m projects it has in the north-eastern Congo. The results of the study should be known early in the new year, said CEO Mike Prinsloo. The mines could produce between 600,000 and 800,000 oz of gold from the start of 2011 at a cash cost of $216/oz, with payback in just over two years. Some 11 million oz of resources are contained in four exploration prospects in north-eastern Congo. Prinsloo wants Banro’s board to choose independence, but much depends on the firm’s shareholders and whether they will tolerate dilution of their shares post-financing. Formerly of Gold Fields, Prinsloo has the task of developing Banro’s opencast Congo mines which are located in remote terrain. The projects are scattered over steep-sided hills and far south from the main town of Bukavu on the shore of Lake Kivu. This makes logistics difficult. Three major gold companies have visited the sites, but Prinsloo declined to be drawn on what transpired. Confidentiality agreements are in place. One of the visitors was quite aggressive in its approach and Banro decided to throw open the process to see what else is out there by appointing RBC to investigate options. “To engage in that process you need to create a scenario that gives everyone a fair chance, and so we have engaged RBC to see what options are open to the company, financing options. Are there parties out there who would be interested in partnering us or assist us in developing the projects?” “If, on the way towards a bankable feasibility and construction one of the majors comes along and says we want to assist you, that’s great,” Prinsloo told Miningmx. “Each mining permit is in a separate company, so you can do different things with different projects and you don’t necessarily have to sell the company.” “One of the options would be to become an acquisitor and find a company with cash or producing assets. That’s what we’ve asked RBC to tell us,” Prinsloo said. There are just 39 million shares in issue and the stock is held by relatively few shareholders. Institutions hold 80% of the stock. Capital Research holds 22% alone and ACTIS another eight percent. Some shareholders have been holding Banro stock since 1996 and want to realise value, without having to wait four more years before the projects are in production. Some are reluctant about diluting their holding to finance the project. Click Here to subscribe to our daily newsletter
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