Simon Village, chairman of Banro & BRC DiamondCore
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Door opened on Banro's DRC gold projects
David McKay
Posted: Tue, 15 Aug 2006

[miningmx.com] -- BANRO CORPORATION has given its clearest indication yet that a portion of its developing gold resources could be thrown open to partners, possibly from the start of next year.

“For a junior exploration firm to develop all three projects would be a big ask,” says Banro chairman Simon Village.

Banro has about 8m oz of gold resources from the 210km-long Twangiza-Namoya gold belt in the east of the Democratic Republic of Congo (DRC). Though five drilling rigs are currently deployed on three projects Banro intends to add two more core rigs by year-end.

“The beauty of bringing in a developer is that we can focus on the rest of the gold belt,” says Village. “We’re not a one-trick pony.” The Twangiza-Namoya gold belt has historical output of 2,4m oz. Banro has 13 exploration permits covering an area of 2 600sq km.

As of end-May, Banro's share price had corrected about 15% after racing up to C$14 from just under C$10/share in January. Village says selling is to investors unable to participate in the recent capital-raising in which Banro raised just more than C$50m (3,93m shares at C$12,80/share), enough to complete feasibility studies on its projects.
We’re not a one-trick pony
“We’re now fully financed for our exploration but before that investors wanted to know what the end-game was because we only had financing until year-end,” says Village. “We’re now able to conduct our full feasibilities so there are no questions.”

Share issues are quite rare for Banro relative to other exploration stocks. The company has only twice before offered small parcels of shares, both in private placements. Even now, after the general share issue, there are only 41,7m shares in issue, fully diluted. “We’re very well positioned,” Village says.

Banro’s properties would be of interest to a number of gold majors with a track record of operating in Africa. For example, AngloGold Ashanti is developing gold properties in north-eastern DRC. A major attraction of Banro’s properties is that it has 100% control, which removes some of the risk of state interference. Okimo, the state-owned gold company, recently urged private sector companies it was operating with to lift their rate of activity.

“By year-end we’ll know what the scope and size of capital will be needed for the projects,” Village says. “In parallel with the feasibility reports we’ll also consider our options. It’s likely to be a combination of things, but the bottom line is we’ll retrieve the best value for shareholders.”

There may also be corporate activity concerning Banro’s 36% interest in DRC Diamonds, an alluvial diamond firm listed on Toronto’s Venture Exchange.

Says Village: “With the reintroduction of De Beers and BHP Billiton in the DRC – and a few other alluvial diamond companies, such as Clifford Elphick (former E Oppenheimer & Son adviser, now CEO of GEM Diamonds) – I just felt it was too early to flip out of DRC Diamonds.”