Simon Village, chairman of Banro & BRC DiamondCore
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» Door opened on Banro's DRC gold projects
» Banro Corp. considers share issue


Banro Corp. put up for sale
Brendan Ryan
Posted: Wed, 26 Sep 2007

[miningmx.com] -- CANADIAN gold explorer Banro Corporation, which has four gold projects in the Democratic Republic of Congo (DRC), is up for sale.

According to sources at the Denver Gold Forum, the TSX and AMEX-listed company has retained Canadian investment bank RBC Capital Markets to run the bidding and due diligence process.

Banro chairman Simon Village declined to comment when approached for confirmation after a “break out” lunch where he had provided an update on the company’s prospects.

Banro has just appointed former Gold Fields executive Mike Prinsloo as CEO.

During question time at the lunch, Village – a former Johannesburg-based analyst – had danced carefully around questions from analysts and fund managers repeatedly raising the issue of management selling Banro or bringing in a partner.

In reply to one analyst Village said that management would: “Over the next 12 months look at all the options in discussions with our investors” and he told another that: “Management is currently looking at opportunities for funding.” He told a third questioner that: “We would not advocate putting up a sign at this stage saying that Banro is for sale.”

Said Village: ”Up until now we have not been in a position of strength to be able to sit down and negotiate a deal.”

Banro’s projects are located in the north-east of the DRC sitting south-west of the border with Rwanda and Burundi.

The two most advanced projects are Twangiza and Namoya. Village said prefeasibility studies on both would be completed in the first quarter of 2008 and bankable feasibility studies would be done by the third quarter of 2008.

Twangiza currently has a total resource estimated at 6.24 million oz of gold. Planning at this stage is for a mine producing 300,000 oz/year over a life of about 13 years at an average cost of $275/oz over the life-of-mine. Namoya is a much smaller deposit with a resource of 1.35 million oz at this stage and forecast average costs of $235/oz over the anticipated life-of-mine.

Village said the preferred route would be to develop Twangiza and Namoya in parallel.
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He estimated capital costs at about $500m of which $100m would be spent on developing small hydropower projects to supply the mines with electricity. “Ideally, the hydropower projects would be developed independently,” he commented.

Banro management owns 8% of the company with institutions holding 80% and retail investors the balance of 12% of the equity.

Village is also chairman of BRC Diamond Corporation - a TSX-listed diamond exploration company with alluvial diamond projects in the DRC - which is currently in the process of merging with JSE-listed Diamond Core Resources.