UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 or
15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
For the month of April, 2015.
Commission File Number 001-32399
BANRO CORPORATION
(Translation of registrants name into English)
1 First Canadian Place
100 King Street West, Suite
7070
Toronto, Ontario, Canada
M5X 1E3
(Address of
principal executive offices)
Indicate by check mark whether the registrant files or will
file annual reports under cover Form 20-F or Form 40-F
Form 20-F [X] Form 40-F
[ ]
Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]
Note: Regulation S-T Rule 101(b)(1) only permits the
submission in paper of a Form 6-K if submitted solely to provide an attached
annual report to security holders.
Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]
Note: Regulation S-T Rule 101(b)(7) only permits the
submission in paper of a Form 6-K if submitted to furnish a report or other
document that the registrant foreign private issuer must furnish and make public
under the laws of the jurisdiction in which the registrant is incorporated,
domiciled or legally organized (the registrants home country), or under the
rules of the home country exchange on which the registrants securities are
traded, as long as the report or other document is not a press release, is not
required to be and has not been distributed to the registrants security
holders, and, if discussing a material event, has already been the subject of a
Form 6-K submission or other Commission filing on EDGAR.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
|
BANRO CORPORATION |
|
|
|
/s/ Kevin Jennings |
Date: April 7, 2015 |
Kevin Jennings |
|
Chief Financial Officer
|
-2-
INDEX TO EXHIBITS
-3-
|
|
PRESS RELEASE |
Banro Announces Year End 2014 Financial Results
Toronto, Canada April 6, 2015 Banro Corporation
("Banro" or the "Company") (NYSE MKT - "BAA"; TSX - "BAA") today announced its
financial and operating results for the full year 2014 and fourth quarter 2014.
FINANCIAL HIGHLIGHTS
|
Record 2014 revenue of $125.4 million, a 12% increase
over 2013 ($111.8 million); Q4 2014 revenue of $35 million, a 30% increase
over the previous years quarter |
|
Gross earnings from operations of $29.4
million, a 55% increase over 2013 ($19 million) |
|
Twangiza EBITDA of $44.8 million vs 2013 of
$34.3 million for a 31% improvement |
|
$90+ million financing signed subsequent to
year end |
OPERATIONAL HIGHLIGHTS
|
Production increase by 19% to 98,184 ounces of gold in
2014 (82,591 ounces in 2013); 29,445 ounces in Q4 2014 (22,858 ounces in
Q4 2013) |
|
In 2014, 101,225 ounces of gold were sold at an average
price of $1,239 (80,497 ounces of gold were sold at an average price of
$1,389 per ounce in 2013) |
|
2014 cash costs per ounce at Twangiza decreased 18% to
$683 per ounce from $836 per ounce in 2013. AISC of $781 per ounce for
full year 2014 |
|
Cash costs for Q4 were $592 per ounce as the Twangiza
plant delivered 91% of steady state ounce production over a stabilized
cost structure. The second half of 2014 cash cost of $605 per ounce showed
strong evidence of consistent financial performance.
|
PROJECT HIGHLIGHTS
|
Namoya receives agglomeration drum on site in
early January and continues to ramp up |
|
Exploration focused on near mine resource
opportunities and value creation to current operations
|
All dollar amounts in this press release are expressed in
thousands of dollars and, unless otherwise specified, in United States dollars.
''Combined with Q1 2015 production, it is gratifying to receive
three consistent quarters of production from Twangiza after the upgrade project
at very competitive cash costs with the promise of incremental improvements as
the operation optimizes at design capacity, commented Banro CEO and President
John Clarke.
The table below provides the summary of financial and operating
results for the years ended December 31, 2014 and 2013 as well as the fourth quarter of 2014 and
2013.
(I) FINANCIAL
|
Q4 2014 |
Q4 2013 |
Change % |
|
2014 |
2013 |
Change % |
Selected Financial Data |
|
|
|
|
|
|
|
Revenues |
35,178 |
27,022 |
30% |
|
125,436 |
111,808 |
12% |
Total
mine operating expenses1 |
(24,782) |
(23,661) |
5% |
|
(96,045) |
(92,857) |
3% |
Gross
earnings from operations |
10,396 |
3,361 |
209% |
|
29,391 |
18,951 |
55% |
Net
income |
272 |
2,086 |
(87%) |
|
320 |
1,630 |
(80%) |
Basic net earnings per share ($/share) |
0.00 |
0.01 |
(100%) |
|
0.00 |
0.01 |
(100%) |
Key Operating Statistics |
|
|
|
|
|
|
|
Average gold price received ($/oz) |
1,202 |
1,264 |
(5%) |
|
1,239 |
1,389 |
(11%) |
Gold
sales (oz) |
29,264 |
21,379 |
37% |
|
101,225 |
80,497 |
26% |
Gold
production (oz) |
29,445 |
22,858 |
29% |
|
98,184 |
82,591 |
19% |
All-in
sustaining cost per ounce ($/oz)2 |
689 |
899 |
(23%) |
|
781 |
1,067 |
(27%) |
Cash
cost per ounce ($/oz)2 |
592 |
813 |
(27%) |
|
683 |
836 |
(18%) |
Gold margin ($/oz)2 |
610 |
451 |
35% |
|
556 |
553 |
1% |
Financial Position |
|
|
|
|
|
|
|
Cash
and cash equivalents |
1,002 |
4,452 |
|
|
1,002 |
4,452 |
|
Gold
bullion inventory at market value3 |
2,834 |
6,281 |
|
|
2,834 |
6,281 |
|
Total
assets |
887,482 |
822,033 |
|
|
887,482 |
822,033 |
|
Long term debt |
200,921 |
158,599 |
|
|
200,921 |
158,599 |
|
(1) Includes depletion and depreciation.
(2) All-in
sustaining cost per ounce, cash cost per ounce and gold margin are non-IFRS
measures. Refer to the non-IFRS measures section of this press release for
additional information.
(3) This represents 2,350 ounces of gold bullion
inventory shown at the December 31, 2014 closing market price of $1,206 per
ounce of gold.
|
Revenues for the year ended December 31, 2014 were
$125,436, a 12% increase compared to the prior year of $111,808. During
2014, ounces of gold sold increased by 26% to 101,225 ounces compared to
sales of 80,497 ounces during 2013. The average gold price per ounce sold
during 2014 was $1,239 compared to an average price of $1,389 per ounce
obtained during 2013. Revenues for the fourth quarter of 2014 were $35,178
compared with revenue of $27,022 for the fourth quarter of 2013.
|
|
|
|
Mine operating expenses, including depletion and
depreciation, for the year ended December 31, 2014 were $96,054 compared
to the prior year of $91,739. The increase in costs was due to increased
milling throughput of 33%, for a total of 1,358,726 tonnes, following the
commissioning of the plant upgrade and the completion of the sheltered
Run-of-Mine (ROM) Pad sheltered storage. These costs were partially
offset by lower mining tonnes moved to achieve planned ore production.
Mine operating expenses, including depletion and depreciation, for the
fourth quarter of 2014 were $24,782 compared to $23,661 for the same
period in 2013. Production costs for the fourth quarter of 2014 were
$17,316 compared to $17,379 in the fourth quarter of 2013. |
|
|
|
Gross earnings from operations for the year ended
December 31, 2014 was $29,391, and $20,069 for 2013. The 12% higher gold
sales with only a corresponding 3% increase in mine operating expenses
translated into improved gross margins to 23%. The gross earnings increase
was partially offset by the decrease in revenue per ounce, pushing the
overall gold margin per ounce downward from $574 per ounce in 2013 to $535
per ounce in 2014. |
|
|
|
Cash costs per ounce on a production basis for 2014 were
$683 per ounce of gold (compared to $836 per ounce of gold for 2013). Cash
costs for 2014 were lower than the prior year as a result
of increased mine and plant productivity as Twangiza progressed
forward towards steady state production levels and normalized production costs
in line with life of mine expectations during the second half of the year. Cash
costs per ounce for the fourth quarter of 2014 were $592 compared to $813 in the
fourth quarter of 2013. Refer to the non-International Financial Reporting
Standards (IFRS) measures section of this press release for additional
information. |
2
|
During the second half of 2014 (H2), the Twangiza
operations reached operating levels consistent with steady state
production levels. Costs at the increased productivity levels remained
consistent with those incurred during the first half of 2014 (H1),
contributing to a decrease in cash costs per ounce of 23%. |
|
|
|
All-in sustaining costs declined in the current year to
$781 per ounce (compared to $1,067 per ounce of gold for 2013) driven by
lower cash costs and lower levels of sustaining capital expenditures in
the period. |
|
|
|
In February 2015, the Company signed definitive
agreements for a financing transaction of up to $100 million (refer to
subsequent events below). With the completion of these transactions, the
Company expects to extinguish certain debt instruments which would result
in the long-term debt of the Company returning to levels consistent with
December 31, 2013. |
(II) OPERATIONAL
- TWANGIZA
|
During 2014, Twangiza recorded one loss time
injury (LTI) in the first quarter and subsequently progressed through
the remainder of the year with no incidents noted, achieving over 5
million LTI free hours. |
|
|
|
During 2014, the plant at the Twangiza Mine processed
1,358,726 tonnes of ore (compared to 1,023,981 tonnes during 2013)
achieving 80% of the design capacity for the year, but 90% of design
capacity in H2 of 2014 as the plant expansion increasing the capacity from
1.3 million tonnes per annum (Mtpa) to 1.7 Mtpa was completed in the
second quarter. Ore was processed at an indicated head grade of 2.70g/t Au
(compared to 2.98 g/t Au during 2013) with a recovery rate of 83.0%
(compared to 83.8% during 2013) to produce 98,184 (compared to 82,591
during 2013) ounces of gold. |
|
|
|
The Run-of-Mine (ROM) Pad sheltered storage area was
completed prior to the commencement of the rainy season in the third
quarter, providing 40,000 tonnes of dry material storage capacity to
ensure the availability of sufficient tonnes of acceptable moisture
content to the processing plant. This upgrade contributed to the
throughput levels achieved during the year and is expected to continue to
secure the improved throughput of the processing plant. |
|
|
|
Through the third quarter of the year, site management
focused on securing ore delivery and throughput levels along with the
completion of the plant upgrade. Following the achievements made in the
third quarter on these priorities, site managements focus moved from the
expansion mode to delivering incremental operational efficiencies.
|
(III) MINE UNDER
CONSTRUCTION NAMOYA
Mine Under Construction -
Investment |
2014 |
Change |
2013 |
|
($000's) |
(%) |
($000's) |
Additions1 |
77,055 |
(54%) |
166,978 |
Balance as at December 31 |
414,258 |
23% |
337,203 |
(1) 2014 net of pre-commercial revenue of $21,687.
3
|
During 2014, the Namoya Mine produced 18,282 ounces of
gold from a total of 565,350 tonnes of ore, stacked and sprayed on the
heap leach pads and processed through the Carbon-In-Leach (CIL) circuit,
at an indicated head grade of 2.13 g/t Au. |
|
|
|
At the Namoya Mine, following the completion of
construction of the hybrid gravity/CIL and heap leach processing plant in
the second quarter of 2014, wet commissioning identified that the CIL
circuit was hampered by the quantity of fines content in the ore, as it
exceeded the design capacity. Management, along with internal expertise
and external consultants, evaluated the issues identified. The Company
determined that the optimal plan of action was through the acquisition of
an agglomeration drum to run the mine as an agglomerated heap leach
operation while pursuing options to best utilize the CIL plant to process
the fines material. An agglomeration drum was procured in the fourth
quarter of 2014 and installed in January 2015. |
|
|
|
With the commissioning of the agglomeration drum in the
first quarter of 2015, Namoyas focus is on ore delivery in order to
increase the stacking rate towards commercial levels as well as optimizing
the stacking process with the agglomerated heap leach in order to improve
percolation and gold extraction. Management will continually assess the
optimal utilization of the CIL circuit as ongoing ore extraction enhances
expectation with respect to fines content and the heap leach circuit is
optimized. |
(IV) EXPLORATION
|
Throughout 2014, as the Company focused on the
development at Namoya and incremental operational achievements at
Twangiza, exploration activities were limited to low level exploration and
ground maintenance activities in the Twangiza Regional (Mufwa), Kamituga,
Lugushwa and Namoya projects. Exploration activities mainly involved
geological mapping, channel and trench sampling, rock chips sampling,
limited orientation IP survey work as well as the analysis of geological
results from field work carried out in prior periods.
|
(V) CORPORATE
DEVELOPMENT
|
In February 2014, the Company completed a $40 million
financing through a non-brokered private placement (the "Private
Placement") involving the issuance of preferred shares of two of the
Company's subsidiaries. The preferred shares issued under the Private
Placement pay an 8% cumulative preferential cash dividend, payable
quarterly, and mature on June 1, 2017. At the option of the holders and at
any time before the maturity date, the holders will be entitled to
exchange their preferred shares into 63 million common shares of the
Company at a strike price of $0.5673 per common share. |
|
|
|
In March 2014, the Company renegotiated for the remaining
principal of its $10 million loan from Banque Commerciale du Congo
(BCDC) to be repayable in monthly installments of $500 compared to the
original repayment terms of ten equal monthly installments of $1 million.
|
|
|
|
In May 2014, the Company renegotiated the terms of its
$15 million facility with Ecobank to be repayable in four equal quarterly
payments commencing May 30, 2015, with the subsequent three quarterly
payments occurring in August 2015, November 2015, and February 2016. The
Ecobank facility was originally repayable in four equal quarterly payments
commencing May 30, 2014. |
|
|
|
In August 2014, the Company closed a liquidity backstop
facility through the private placement of securities comprised of senior
secured notes and warrants for gross proceeds of up to $35 million
(subsequently increased to $37 million). As of the date of this press
release, the Company has drawn the maximum amount available under the facility. A
portion of the proceeds from the initial notes issued under the facility were
used for the repayment of certain bank loans in the DRC totaling $12.8 million. |
4
(VI) SUBSEQUENT
EVENTS
|
In February 2015, the Company signed definitive
agreements for two gold forward sale transactions relating to the Twangiza
mine and a gold streaming transaction relating to the Namoya mine,
providing total gross proceeds to the Company of $100 million. Each of the
two forward sale transactions provide for the prepayment by the purchaser
of $20 million for its purchase of 22,248 ounces of gold from the Twangiza
mine, with the gold deliverable over three years, at 618 ounces per month.
The first $20 million forward sale closed on February 27, 2015. The second
$20 million forward sale is expected to close in April. The forward sales
may be terminated at any time upon payment to the purchaser of a one-time
termination amount that would result in the purchaser receiving an
internal rate of return of 20%. The terms of the forward sales also
include a gold floor price mechanism whereby, if the gold price falls
below $1,100 per ounce in any month, additional ounces are deliverable to
ensure a realized gold price of $1,100 per ounce for that month. The
streaming transaction provides for the payment by the purchaser of a
deposit in the amount of $60 million and the delivery to the purchaser
over time of 10% of the life-of-mine gold production from the Namoya mine
(or any other projects located within 20 kilometres from the current
Namoya gold mine). The ongoing payments to Namoya upon delivery of the
gold are $150 per ounce. The streaming transaction is expected to close in
April 2015. |
|
|
|
The completion of the second US$20 million Twangiza
forward sale and the Namoya streaming transaction is subject to certain
amendments being made to the Company's Note Indenture and related
Collateral Trust Agreement. These amendments require the consent of the
holders of a majority of the aggregate principal amount of the Notes
outstanding under the Note Indenture. Pursuant to a consent solicitation
process carried out by the Company, the Company received consents from
Note holders representing approximately 89% of the outstanding principal
amount of the Notes. |
|
|
|
In March 2015, the Company and Banro Group (Barbados)
Limited declared and paid a dividend in relation to the gold linked
preferred shares issued in 2013 of $0.57 per Banro Series A Share and
Barbados Preferred Share. |
OUTLOOK
Banro Guidance |
2015 |
Twangiza (oz),
full year |
100,000 to 110,000 |
Namoya
(oz)2, full year including pre-commercial production |
90,000 to 100,000 |
|
|
Twangiza cash cost
per ounce ($US/oz)1 |
650 to 750 |
Namoya cash cost
per ounce ($US/oz)1,2 |
725 to 825 |
(1) Cash cost per ounce is a non-GAAP measure. Refer to
the non-GAAP measures section of this press release for additional
information.
(2) The Namoya ounces include pre-commercial
production of 30,000 to 35,000 ounces. Cash cost above only takes into
consideration Namoya in commercial production, i.e. H2 2015
5
In consideration of potentially depressed gold prices in the
foreseeable future and the Companys intent to replace and grow depleted ounces,
the Company has developed several key objectives for 2015. These objectives are
aimed at increasing gold production while containing costs, and increasing the
Companys Mineral Resources to potentially prolong the life of its mines thereby
increasing shareholder value. These objectives include:
|
Completing the installation and commissioning of the
agglomeration drum at the Namoya Mine in the first quarter of 2015 with a
target of achieving commercial production early in the third quarter of
2015; |
|
Ramp up to steady production at Namoya with a focus on
the heap leach operations and utilizing the CIL for enhanced recoveries on
higher grade fine ore and improve the quality of heap leach material;
|
|
Maintain steady state production levels at
Twangiza while continuing to optimize the plant and rationalize costs;
|
|
Mine plan optimization of Twangizas current
reserves and measured and indicated resources; and |
|
Focusing exploration initiatives on identifying high
value near-mine targets to enhance near term production and replace
Mineral Resources through near-mine delineation drilling at Namoya and
Twangiza while undertaking limited, but focused regional exploration at
Kamituga and Lugushwa. |
The Companys capital expenditure forecast for 2015 as compared
to 2014 is set out below:
Project |
2015 |
Change |
2014 |
|
($000's) |
(%) |
($000's) |
Twangiza
Mine1 |
19,000 |
35% |
14,026 |
Namoya
Mine1 |
4,000 |
100% |
- |
Exploration |
5,000 |
(59%) |
12,219 |
(1) Comprises sustaining capital expenditures for the
year.
|
Twangiza capital expenditures forecast for 2015 consist
primarily of sustaining capital, including the continued construction of
the Tailings Management Facility (TMF) and upgrades to the mobile fleet.
The capital expenditures for Twangiza in 2014 consisted mainly of
sustaining capital relating to the construction of the TMF as well as the
completion of the plant expansion project. |
|
Namoya capital expenditures forecast for 2015 consists
primarily of sustaining capital and does not include pre-commercial
operating expenses being capitalized for accounting purposes. The Company
will need to refurbish and/or replace elements of the old mining fleet
that were purchased to facilitate the construction of the mine, purchase
critical spares to provide operational security for the new plant, and
continue the scheduled buildup of the walls of the TMF. |
|
Exploration expenditures, which are capitalized
under the Companys accounting policy, are expected to decrease by 59%
from 2014 expenditures. |
6
TWANGIZA MINE
During the first half of 2014, the Twangiza Mine focused on the
completion of the plant expansion project, improving ore delivery and throughput
levels in line with the upgraded design capacity of 1.7 Mtpa. Following ore
delivery and throughput achievements during the third quarter, whereby 90% of
the upgraded design capacity on an annualized rate was achieved, site
managements focus shifted to incremental operational efficiencies. Production
during the year included two consecutive quarters of record production as well
as numerous record setting months with December 2014 production reaching 11,549
ounces. These operational milestones were a result of the successful plant
expansion activities including the ROM Pad sheltered storage which effectively
mitigated the adverse impact that the rainfall associated with the wet season
has previously had on operating performance.
TWANGIZA MINE |
2014 |
H2 2014 |
H1 2014 |
|
2013 |
Prior Year |
|
|
|
|
|
|
Change % |
Gold sales (oz) |
101,225 |
56,261 |
44,964 |
|
80,497 |
26% |
Gold produced (oz) |
98,184 |
56,616 |
41,568 |
|
82,591 |
19% |
Material mined (t) |
3,595,645 |
1,996,373 |
1,599,272 |
|
4,116,657 |
(13%) |
Ore mined (t)1 |
1,927,744 |
1,146,144 |
781,600 |
|
1,758,972 |
10% |
Valley fill mined (t) |
49,854 |
- |
49,854 |
|
- |
100% |
Waste mined (t) |
1,618,047 |
850,229 |
767,818 |
|
2,357,685 |
(31%) |
Strip ratio (t:t)2 |
0.84 |
0.74 |
0.98 |
|
1.35 |
(38%) |
Ore milled (t)1 |
1,358,726 |
765,381 |
593,345 |
|
1,023,981 |
33% |
Head grade (g/t)3 |
2.70 |
2.80 |
2.56 |
|
2.98 |
(9%) |
Recovery (%) |
83.00 |
81.81 |
84.59 |
|
83.80 |
(1%) |
Cash cost per ounce ($US/oz)4 |
683 |
605 |
781 |
|
836 |
(18%) |
(1) The difference between ore mined and ore milled is,
generally, the result of the stockpiling of lower grade ore.
(2) Strip ratio
is calculated as waste mined divided by ore mined.
(3) Head grade refers to
the indicated grade of ore milled.
(4) Cash cost per ounce is a non-IFRS
measure. Refer to the non-IFRS measures section of this press release for
additional information.
In H2 2014, with the completion of the plant expansion
activities, Twangiza increased productivity levels towards steady state
operations. The steady state operating productivity has allowed Twangiza to
reduce cash costs by 23% from $781/oz in H1 2014 to $605/oz in H2 2014. The
improved operating results are driven by the ability for the operations to
increase mining and milling productivity, a 25% and 29% increase in tonnage,
respectively, while maintaining similar gross expenditures. Going forward,
Twangiza will continue to focus on achieving incremental efficiencies through
process optimization to further enhance the steady state operations.
Gross spending and unit costs for 2014 full year and fourth
quarter in comparison to 2013 are as follows:
Mine Operating Costs |
(In '000s) |
Cost per tonne
Milled ($/t) |
|
2014 |
Q4 2014 |
2013 |
Q4 2013 |
2014 |
Q4 2014 |
2013 |
Q4 2013 |
Mining Costs |
15,742 |
4,600 |
15,039 |
5,079 |
11.6 |
12.4 |
14.7 |
18.0 |
Processing Costs |
35,119 |
9,415 |
32,479 |
8,432 |
25.8 |
25.4 |
31.7 |
29.8 |
Overhead |
19,390 |
6,298 |
21,542 |
6,041 |
14.3 |
17.0 |
21.0 |
21.4 |
Inventory Adjustments |
(1,103) |
(2,997) |
(1,755) |
(2,173) |
(0.8) |
(8.1) |
(1.7)
|
(7.7) |
Total Mine operating cost |
69,148 |
17,316 |
67,305 |
17,379 |
50.9 |
46.7 |
65.7
|
61.5 |
Total tonnes milled (tonnes) |
1,358,726 |
370,881 |
1,023,981 |
282,831 |
|
|
|
|
7
Gross spending and unit costs for 2014 full year in comparison
to 2013 full year are as follows:
Mine Operating Costs |
(In '000s) |
Cost per tonne
Milled ($/t) |
|
|
|
|
|
|
Change |
|
2014 |
2013 |
Change % |
2014 |
2013 |
% |
Mining Costs |
15,742 |
15,039 |
5% |
11.6 |
14.7 |
(21%)
|
Processing Costs |
35,119 |
32,479 |
8% |
25.8 |
31.7 |
(19%)
|
Overhead |
19,390 |
21,542 |
(10%) |
14.3 |
21.0 |
(32%)
|
Inventory Adjustments |
(1,103) |
(1,755) |
(37%) |
(0.8) |
(1.7)
|
(53%) |
Total Mine operating cost |
69,148 |
67,305 |
3%
|
50.9 |
65.7
|
(23%) |
Total tonnes milled (tonnes) |
1,358,726 |
1,023,981 |
33%
|
|
|
|
Mining
A total of 1,027,311 tonnes of material (Q3 2013 1,168,875
tonnes) were mined during the three month period ended September 30, 2014. Total
ore mined was 589,288 tonnes (Q3 2013 494,535 tonnes). The strip ratio for the
third quarter of 2014 fell to 0.74 as compared to 1.36 during the corresponding
period in 2013 in accordance with the mine schedule which drove the mining cost
per tonne milled from $14.9 to $8.7 per tonne.
Processing & Engineering
For the year ended December 31, 2014, the plant at the Twangiza
Mine processed 1,358,726 tonnes of ore (2013 1,023,981 tonnes), representing a
33% increase over the prior year. Increased throughput levels reduced the
processing cost per tonne milled from $31.7 per tonne to $25.9 per tonne or a
decrease of 18%. Throughput in the second half of 2014, following the completion
of the plant expansion, increased to over 90% of the upgraded design capacity.
Improved mill productivity was assisted by dryer weather conditions than the
previous year, and dryer material available aided by the new sheltered ROM
storage area along with improvements in pre-screening and ore crushing circuits.
Recoveries during the year decreased marginally compared to the prior year to an
average rate of 83.0% (2013 83.8%) driven mainly by the processing of lower
head grade ore. With the achievement of design throughput levels following the
expansion, site management focus transferred to incremental operational
efficiencies to increase throughput on a consistent basis and improve
recoveries. The processing costs were $2.7 million higher compared to 2013 as a
result of the 33% increase in throughput, partially offset by lower consumption
of mill consumables per tonne processed.
Twangiza Plant Optimization and Expansion
The Twangiza plant upgrade was completed at the end of April
2014, expanding the plant throughput capacity to 1.7 Mtpa. The upgrade was
commissioned during the second quarter of 2014, enabling the plant throughput to
ramp up to over 90% of design throughput. Site management continues to optimize
the plant in order to incrementally increase the benefits from upgrade program.
Sustaining Capital Activities
Throughout 2014, project capital at Twangiza totaling $9,945
included plant expansion activities, ROM Pad roofing, mobile mine equipment and
the Tailings Management Facility (TMF). Capital spending decreased throughout the year as the plant expansion activities
were completed including the ROM Pad roofing.
8
During 2014 and subsequently up to the date of this press
release, the following progress was made in the key areas indicated below with
respect to sustaining capital activities at the Twangiza Mine:
|
ROM Pad Roofing |
|
The ROM Pad roofing was completed during the third
quarter of 2014, successfully mitigating the impact of weather conditions
during the wet season in the fourth quarter. |
|
|
|
TMF |
|
The Phase 3 and 3.5 lifts of the TMF were completed in
the third and fourth quarters of 2014, respectively. Due to the impact of
adverse weather conditions, limited work on the TMF was carried out during
the first four months of the year after which work continued at levels
more consistent with managements plan allowing for the completion of the
aforementioned lifts. |
Cash Cost and All-in sustaining costs
Cash costs per ounce for the fourth quarter of 2014 were
significantly lower than the prior year period, primarily due to increased sales
of 7,893 ounces or 37%, due to increased production over the fourth quarter of
2013, while gross spending decreased slightly as a result of achieved
operational efficiencies. The all-in sustaining costs decreased from $1,202 in
Q4 2013 to $689 per ounce in Q4 2014, mainly due to the lower cash costs as well
as contributions from reduced capital expenditures in the fourth quarter of
2014.
Cash Cost per ounce sold |
($US/ounce) |
($US/ounce)
|
|
|
|
|
|
|
Change |
|
2014 |
2013 |
Change % |
2014 |
2013 |
% |
Mining
Costs |
156 |
187 |
(17%) |
157 |
238 |
(34%) |
Processing Costs |
347 |
403 |
(14%) |
322 |
394 |
(18%) |
Overhead |
190 |
268 |
(29%) |
209 |
283 |
(26%) |
Inventory Adjustments |
(9) |
(22) |
(59%) |
(96) |
(102) |
(6%) |
Total cash costs per ounce |
683 |
836 |
(18%) |
592 |
813 |
(27%) |
Total ounces sold (ounces) |
101,233 |
80,497 |
26% |
29,272 |
21,379 |
37% |
All-in sustaining costs per ounce |
781 |
1,067 |
(27%) |
689 |
1,202 |
(43%) |
NAMOYA - MINE UNDER
CONSTRUCTION
During the first half of 2014, Namoya development activity
progressed towards the completion of construction of the hybrid plant and the
subsequent commissioning. During the hot commissioning activities, the Company
identified that the Namoya hybrid CIL/heap leach plant was unable to run at
design capacity as the percentage of fine material was found to be higher than
expected, and as such, higher than the hybrid plant was designed to process.
During the third quarter of 2014, management worked with internal expertise and
external consultants in order to evaluate, assess and determine a remediation
plan to address the issues identified during the hot commissioning stage and
best utilize the Namoya Mine. The Company determined that the most appropriate
course of action was the addition of a traditional agglomeration drum to the
existing circuit while continuing to evaluate the most optimal manner to utilize
the CIL circuit. During the fourth quarter of 2014, a lightly used agglomeration
drum was procured and transported into the region with delivery to site
occurring in early January 2015. This procurement significantly reduced the time
requirements of procuring and shipping a new drum for Namoya which is estimated
to have taken in excess of 12 months. Processing continued at Namoya during the procurement process through the stacking of
semi-agglomerated material through the addition of cement on the transport
conveyors to the stacker.
9
The agglomeration drum was installed and successfully
commissioned at the beginning of February 2015. Stacking levels are expected to
increase to up to 190,000 tonnes per month following the ramp up towards
commercial production levels.
Mining continued at the Seketi and Mwendamboko pits throughout
2014 comprising 2,745,530 tonnes of material of which 1,103,611 tonnes were ore
at a strip ratio of 1.49. Management slowed down mining activities during the
third quarter due to a lower achievable feed rate through the wet scrubbing
circuit. During the fourth quarter, mining activities returned to levels more
consistent with the first two quarters, mining 343,753 tonnes of ore at a strip
ratio of 1.08 for total material of 715,012 tonnes. In addition to the
continuation of mining activities at more normal levels during the fourth
quarter of 2014, the mining fleet began activities for the opening of the Kakula
pit for grade control and mining activities in 2015.
Additions to Mine under Construction during 2014 consisted of
the completion construction, costs associated with initial commissioning
activities, work performed in the determination of the optimal remediation plan
as well as pre-commercial operating losses due to the mine operating at levels
which are below break-even. There were no significant capital amounts spent on
project construction or on the acquisition of new property, plant and equipment
in the second half of the year, with the exception of costs associated with the
agglomeration drum.
During 2014, the Namoya mine produced 18,282 ounces of gold
from a total of 565,350 tonnes of ore, stacked and sprayed on the heap leach
pads and processed through the CIL circuit, at an indicated head grade of 2.13
g/t Au. During the fourth quarter of 2014, Namoya produced 8,791 ounces through
the stacking of 218,248 tonnes of semi-agglomerated material on the heap leach
pads. The CIL circuit was not utilized during the fourth quarter as managements
main focus remained on the heap leach operation. Namoyas production will
continue to benefit incrementally from the increasing stacking rates that are
being achieved as the heap leach curve progresses toward steady state operating
levels.
EXPLORATION
Consistent with the Companys focus on cash flow management
during the completion of development at Namoya and the expansion activities at
Twangiza, exploration work during the year 2014 was comprised of low level
exploration and ground maintenance activities in the Twangiza Regional (Mufwa),
Kamituga, Lugushwa and Namoya projects. Low level exploration activities
included geological mapping, channel and trench sampling, rock chip sampling and
limited orientation induced polarization survey works.
To support the Twangiza and Namoya operations, near term
exploration will focus on the following:
|
Deliver sufficient drilling to allow mine operations to
define a mineable high grade reserve at the Filon B target at Namoya to
incorporate incremental ounce production for 2015; |
|
Development and execution of the drill program
to covert inferred and indicated resources to reserves within the existing
open pits; |
|
Delineate resources from beneath current open
pits for underground mine production; and |
|
Delineate resources from identified targets
within a 5 kilometres radius of the current operations.
|
Qualified Person
Daniel K. Bansah, the Company's Head of Projects and Operations
and a "qualified person" as such term is defined in National Instrument 43-101,
has approved the technical information in this press release.
NON-IFRS MEASURES
Management uses cash cost, all-in sustaining cost, gold margin
and EBITDA to monitor financial performance and provide additional information
to investors and analysts. These metrics do not have a standard definition under
IFRS and should not be considered in isolation or as a substitute for measures
of performance prepared in accordance with IFRS. As these
metrics do not have a standardized meaning, it may not be comparable to similar
measures provided by other companies. However, the methodology used by the
Company to determine cash cost per ounce is based on a standard developed by the
Gold Institute, which was an association which included gold mining
organizations, amongst others, from around the world.
10
The Company defines cash cost, as recommended by the Gold
Institute standard, as all direct costs that the Company incurs relating to mine
production, transport and refinery costs, general and administrative costs,
movement in production inventories and ore stockpiles, less depreciation and
depletion. Cash cost per ounce is determined on a sales basis.
Cash Cost |
2014 |
Q4 2014 |
|
2013 |
Q4 2013 |
|
($000's) |
($000's) |
|
($000's) |
($000's) |
Mine operating expenses |
96,045 |
24,782 |
|
92,857 |
23,661 |
Less: Depletion
and depreciation |
(26,897) |
(7,466) |
|
(25,552) |
(6,282) |
Total cash costs |
69,148 |
17,316 |
|
67,305 |
17,379 |
Gold sales (oz)
|
101,225 |
29,264 |
|
80,497 |
21,379 |
Cash cost per ounce ($/oz) |
683 |
592 |
|
836 |
813 |
The Company defines all-in sustaining costs as all direct costs
that the Company incurs relating to mine production, transport and refinery
costs, general and administrative costs, movement in production inventories and
ore stockpiles, less depreciation and depletion plus all sustaining capital
costs (excluding exploration). All-in sustaining cost per ounce is determined on
a sales basis.
All-In Sustaining Cost |
2014 |
Q4 2014 |
|
2013 |
Q4 2013 |
|
($000's) |
($000's) |
|
($000's) |
($000's) |
Mine operating expenses |
96,045 |
24,782 |
|
92,857 |
23,661 |
Less: Depletion
and depreciation |
(26,897) |
(7,466) |
|
(25,552) |
(6,282) |
Total cash costs |
69,148 |
17,316 |
|
67,305 |
17,379 |
Sustaining capital
|
9,945 |
2,844 |
|
18,586 |
1,838
|
All-in sustaining cash costs |
79,093 |
20,160 |
|
85,891 |
19,217 |
Gold sales (oz)
|
101,225 |
29,264 |
|
80,497 |
21,379 |
All-in sustaining cash cost per ounce ($/oz) |
781 |
689 |
|
1,067 |
899 |
The Company defines gold margin as the difference between the
cash cost per ounce disclosed and the average price per ounce of gold sold
during the reporting period.
Banro calculates EBITDA as net income or loss for the period
excluding: interest, income tax expense, and depreciation and amortization.
EBITDA is intended to provide additional information to investors and analysts.
It does not have any standardized meaning prescribed by IFRS and should not be
considered in isolation or as a substitute for measures of performance prepared
in accordance with IFRS. EBITDA excludes the impact of cash costs of financing
activities and taxes, and the effects of changes in operating working capital
balances, and therefore is not necessarily indicative of operating profit or
cash flow from operations as determined under IFRS. Other companies may
calculate EBITDA differently. A reconciliation between net profit for the period
and EBITDA is presented below:
EBITDA |
2014 |
2013 |
2012 |
|
($000's) |
($000's) |
($000's) |
Net income/(loss) |
320 |
1,630 |
(4,561) |
Interest |
17,488 |
7,061 |
1,070 |
Taxes |
- |
- |
- |
Depletion and depreciation |
26,985 |
25,603 |
8,096
|
EBITDA |
44,793 |
34,294 |
4,605 |
11
Year End 2014 Financial Results Conference Call Information
Banro will host a conference call at 11:00AM EST on April 7,
2015. Please use the following dial in numbers:
Year End 2014 Financial Results Conference Call Information
Toll Free (North America): |
+1-877-291-4570 |
Toronto Local & International: |
+1 647-788-4919 |
Year End 2014 Financial Results Conference Call REPLAY
Toll Free Replay Call (North America): |
+1 800-585-8367 |
Conf ID: |
18833539 |
Toronto Local & International: |
+1 416-621-4642 |
Conf ID: |
18833539 |
The conference call replay will be available from 2:00PM EST on
April 7, 2015 until 11:59PM EST on April 21, 2015.
For further information regarding this conference call, please
contact Banro Investor Relations or visit the Company website,
www.banro.com.
Banro Corporation is a Canadian gold mining
company focused on production from the Twangiza mine, which began commercial
production September 1, 2012, and completion of its second gold mine at Namoya
located approximately 200 kilometres southwest of the Twangiza gold mine. The
Companys longer term objectives include the development of two additional
major, wholly-owned gold projects, Lugushwa and Kamituga. The four projects,
each of which has a mining license, are located along the 210 kilometre long
Twangiza-Namoya gold belt in the South Kivu and Maniema provinces of the
Democratic Republic of the Congo (the DRC). Led by a proven management team
with extensive gold and African experience, the initial focus of the Company is
on the mining of oxide material, which has a low capital intensity to develop
but also attracts a lower technical and financial risk to the Company. All
business activities are followed in a socially and environmentally responsible
manner.
Cautionary Note to U.S. Investors
The United States Securities and Exchange Commission (the
"SEC") permits U.S. mining companies, in their filings with the SEC, to disclose
only those mineral deposits that a company can economically and legally extract
or produce. Certain terms are used by the Company, such as "Measured",
"Indicated", and "Inferred" "Resources", that the SEC guidelines strictly
prohibit U.S. registered companies from including in their filings with the SEC.
U.S. Investors are urged to consider closely the disclosure in the Company's
Form 20-F Registration Statement, File No. 001-32399, which may be secured from
the Company, or from the SEC's website at
http://www.sec.gov/edgar.shtml.
Cautionary Note Concerning Mineral Resource and Mineral
Reserve Estimates
The Companys Mineral Resource and Mineral Reserve figures
are estimates and no assurances can be given that the indicated levels of gold
will be produced. Such estimates are expressions of judgment based on knowledge,
mining experience, analysis of drilling results and industry practices. Valid
estimates made at a given time may significantly change when new information
becomes available. While the Company believes that Mineral Resource and Mineral
Reserve estimates are well established, by their nature Mineral Resource and
Mineral Reserve estimates are imprecise and depend, to a certain extent, upon
statistical inferences which may ultimately prove unreliable.
Mineral Resources that are not Mineral Reserves do not have
demonstrated economic viability. There is no certainty that Mineral Resources
can be upgraded to Mineral Reserves through continued exploration.
Due to the uncertainty that may be attached to Inferred
Mineral Resources, it cannot be assumed that all or any part of an Inferred
Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource
as a result of continued exploration. Confidence in the estimate is insufficient
to allow meaningful application of the technical and economic parameters to
enable an evaluation of economic viability worthy of public disclosure (except
in certain limited circumstances). Inferred Mineral Resources are excluded from estimates forming the basis of a feasibility study.
12
Cautionary Note Concerning Forward-Looking
Statements
This press release contains forward-looking statements. All
statements, other than statements of historical fact, that address activities,
events or developments that the Company believes, expects or anticipates will or
may occur in the future (including, without limitation, statements regarding
estimates and/or assumptions in respect of the closing of the Twangiza gold
forward sale and Namoya stream transactions, future gold production (including
the timing thereof), costs, cash flow and gold recoveries, Mineral Resource and Mineral Reserve estimates, potential
Mineral Resources and Mineral Reserves and the Companys development and
exploration plans and objectives) are forward-looking statements. These
forward-looking statements reflect the current expectations or beliefs of the
Company based on information currently available to the Company. Forward-looking
statements are subject to a number of risks and uncertainties that may cause the
actual results of the Company to differ materially from those discussed in the
forward-looking statements, and even if such actual results are realized or
substantially realized, there can be no assurance that they will have the
expected consequences to, or effects on the Company. Factors that could cause
actual results or events to differ materially from current expectations include,
among other things: failure to complete the Twangiza gold forward sale and
Namoya stream transactions; uncertainty of estimates of capital and operating
costs, production estimates and estimated economic return of the Companys
projects; the possibility that actual circumstances will differ from the
estimates and assumptions used in the economic studies of the Companys
projects; failure to establish estimated mineral resources and mineral reserves
(the Companys mineral resource and mineral reserve figures are estimates and no
assurance can be given that the intended levels of gold will be produced);
fluctuations in gold prices and currency exchange rates; inflation; gold
recoveries being less than those indicated by the metallurgical testwork carried
out to date (there can be no assurance that gold recoveries in small scale
laboratory tests will be duplicated in large tests under on-site conditions or
during production); uncertainties relating to the availability and costs of
financing needed in the future; changes in equity markets; political
developments in the DRC; lack of infrastructure; failure to procure or maintain,
or delays in procuring or maintaining, permits and approvals; lack of
availability at a reasonable cost or at all, of plants, equipment or labour;
inability to attract and retain key management and personnel; changes to
regulations affecting the Company's activities; the uncertainties involved in
interpreting drilling results and other geological data; and the other risks
disclosed under the heading "Risk Factors" and elsewhere in the Company's annual
report on Form 20-F dated April 6, 2015 filed on SEDAR at www.sedar.com and
EDGAR at www.sec.gov. Any forward-looking statement speaks only as of the date
on which it is made and, except as may be required by applicable securities
laws, the Company disclaims any intent or obligation to update any
forward-looking statement, whether as a result of new information, future events
or results or otherwise. Although the Company believes that the assumptions
inherent in the forward-looking statements are reasonable, forward-looking
statements are not guarantees of future performance and accordingly undue
reliance should not be put on such statements due to the inherent uncertainty
therein.
For further information, please visit our website at
www.banro.com, or contact:
Joel Friedman, Manager, Finance,
+1
(416) 366-3396
+1-800-714-7938, Ext. 3396
info@banro.com
13
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