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 May, 2015.

Commission File Number 001-32399

BANRO CORPORATION
(Translation of registrant’s 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 registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s 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 registrant’s 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: May 13, 2015 Kevin Jennings
    Chief Financial Officer

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INDEX TO EXHIBITS

99.1 Interim Condensed Consolidated Financial Statements for the period ended March 31, 2015
99.2 Management's Discussion and Analysis for the period ended March 31, 2015
99.3 Certification of Chief Executive Officer
99.4 Certification of Chief Financial Officer

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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2015

(Expressed in U.S. dollars)

(Unaudited)



Banro Corporation
CONTENTS

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  
   
Interim Condensed Consolidated Statements of Financial Position 3
   
Interim Condensed Consolidated Statements of Comprehensive Income/(Loss) 4
   
Interim Condensed Consolidated Statements of Changes in Equity 5
   
Interim Condensed Consolidated Statements of Cash Flow 6

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  
   
1. Corporate information 7
     
2. Basis of preparation 7
     
3. Summary of significant accounting policies, estimates and judgments 8
     
4. Subsidiaries 9
     
5. Cash and cash equivalents 9
     
6. Trade and other receivables 9
     
7. Prepaid expenses and deposits 10
     
8. Inventories 10
     
9. Long-term investment 10
     
10. Property, plant and equipment 12
     
11. Exploration and evaluation assets 13
     
12. Mine under construction 13
     
13. Trade and other payables 13
     
14. Deferred revenue 14
     
15. Bank loans 14
     
16. Employee retention allowance 14
     
17. Derivative Instruments 15
     
18. Provision for closure and reclamation 16
     
19. Long-term debt 16
     
20. Preference shares 18
     
21. Share capital 20
     
22. Share-based payments 21
     
23. Commitments and contingencies 23
     
24. Related party transactions 24
     
25. Segmented reporting 24
     
26. Production costs 27
     
27. General and administrative expenses 27
     
28. Finance expenses 28
     
29. Other charges and provisions, net 28
     
30. Put options 28
     
31. Financial risk management objectives and policies 28
     
32. Cash flows 33
     
33. Events after the reporting period 34

Page 2 of 34



Banro Corporation
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Expressed in thousands of U.S. dollars) (unaudited)

          March 31,     December 31,  
    Notes              
          2015     2014  
        $   $  

ASSETS

                 

 Current Assets

                 

     Cash and cash equivalents

  5     3,024     1,002  

     Trade and other receivables

  6     6,643     7,261  

     Prepaid expenses and deposits

  7     9,542     6,164  

     Current portion of inventories

  8     28,527     28,893  

 

        47,736     43,320  

 Non-Current Assets

                 

     Long-term investment

  9     256     1,061  

     Property, plant and equipment

  10     288,434     295,010  

     Exploration and evaluation

  11     132,167     129,959  

     Non-current portion of inventories

  8     4,178     3,874  

     Mine under construction

  12     430,718     414,258  

 

        855,753     844,162  

TOTAL ASSETS

        903,489     887,482  

 

                 

LIABILITIES AND SHAREHOLDERS' EQUITY

                 

 Current Liabilities

                 

     Trade and other payables

  13     75,238     86,396  

     Deferred revenue

  14     -     3,000  

     Current portion of bank loans

  15     18,628     17,123  

     Employee retention allowance

  16     3,558     3,405  

     Current portion of derivative instruments - mark-to-market

  17     9,310     1,393  

 

        106,734     111,317  

 Non-Current Liabilities

                 

     Non-current portion of bank loans

  15     -     3,869  

     Provision for closure and reclamation

  18     7,941     7,755  

     Non-current portion of derivative instruments - mark-to-market

  17     13,567     -  

     Long-term debt

  19     204,055     200,921  

     Preference shares

  20     72,204     71,116  

 

        297,767     283,661  

Total Liabilities

        404,501     394,978  

 

                 

Shareholders' Equity

                 

     Share capital

  21     518,615     518,615  

     Warrants

  21b     13,356     13,356  

     Contributed surplus

  22     43,035     42,526  

     Accumulated other comprehensive (loss)/income

        (425 )   380  

     Deficit

        (75,593 )   (82,373 )

 

        498,988     492,504  

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

        903,489     887,482  

 

                 

Commitments and contingencies

  23              

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

Page 3 of 34



Banro Corporation
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
(Expressed in thousands of U.S. dollars) (unaudited)

          For the three months ended  
    Notes     March 31, 2015     March 31, 2014  
        $   $  
Operating revenue         41,003     30,439  
                   
Operating expenses                  
     Production costs   26     (17,895 )   (20,007 )
     Depletion and depreciation   10     (6,386 )   (4,391 )
Total mine operating expenses         (24,281 )   (24,398 )
                   
Gross earnings from operations         16,722     6,041  
                   
General and administrative   27     (2,787 )   (1,466 )
Share-based payments   22     (403 )   (61 )
Other charges and provisions, net   29     (744 )   (1,903 )
Net income from operations         12,788     2,611  
                   
Finance expenses   28     (6,055 )   (3,325 )
Foreign exchange gain         46     8  
Interest income         1     2  
Net income/(loss)         6,780     (704 )
                   
Items that may be reclassified to profit or loss:                  
Foreign currency translation differences of foreign investment in associate   9     -     (51 )
Fair value loss on available-for-sale financial asset   9     (805 )   -  
Total comprehensive income/(loss)         5,975     (755 )
                   
Income/(loss) per share                  
     Basic   21c     0.03     (0.00 )
     Diluted   21c     0.03     (0.00 )
                   
Weighted average number of common shares outstanding                  
     Basic   21c     252,101     252,101  
     Diluted   21c     252,221     252,101  

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

Page 4 of 34



Banro Corporation
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Expressed in thousands of U.S dollars) (unaudited)

          Share capital                                      
          Number of                       Currency     Available-           Total  
    Notes     common                 Contributed     Translation     for-sale           Shareholders'  
          shares     Amount     Warrants     Surplus     Adjustment     asset     Deficit     Equity  
          (in thousands)   $   $   $   $   $   $   $  

Balance as at January 1, 2014

        252,101     518,615     13,356     41,793     (87 )   -     (82,693 )   490,984  

Net loss for the period

        -     -     -     -     -     -     (704 )   (704 )

Share-based payments

  22     -     -     -     127     -     -     -     127  

Foreign currency translation differences of foreign investment in associate

  9     -     -     -     -     (51 )   -     -     (51 )

Balance as at March 31, 2014

        252,101     518,615     13,356     41,920     (138 )   -     (83,397 )   490,356  

Net income for the period

        -     -     -     -     -     -     1,024     1,024  

Share-based payments

  22     -     -     -     620     -     -     -     620  

Long-term investment

  9     -     -     -     (14 )   110     -     -     96  

Foreign currency translation differences of foreign investment in associate

  9     -     -     -     -     28     -     -     28  

Fair value gain on available-for-sale financial asset

  9     -     -     -     -     -     380     -     380  

Balance as at December 31, 2014

        252,101     518,615     13,356     42,526     -     380     (82,373 )   492,504  

Net income for the period

        -     -     -     -     -     -     6,780     6,780  

Share-based payments

  22     -     -     -     509     -     -     -     509  

Fair value loss on available-for-sale financial asset

  9     -     -     -     -     -     (805 )   -     (805 )

Balance as at March 31, 2015

        252,101     518,615     13,356     43,035     -     (425 )   (75,593 )   498,988  

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

Page 5 of 34



Banro Corporation
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Expressed in thousands of U.S dollars) (unaudited)

          For the three months ended  
    Notes     March 31, 2015     March 31, 2014  
        $   $  

Cash flows from operating activities

                 

Net income/(loss) for the period

        6,780     (704 )

Adjustments for:

                 

     Recognition of deferred revenue

  14     (3,000 )   (7,369 )

     Depletion and depreciation

  10     6,411     4,405  

     Unrealized foreign exchange loss/(gain)

        16     (81 )

     Share-based payments

  22     403     61  

     Employee retention allowance

  16     154     155  

     Finance expense excluding bank charges, net of interest income

  28     5,518     2,990  

     Accretion on closure and reclamation

  18     186     155  

     Other charges and provisions, net

  29     744     1,903  

Interest paid

        (1,372 )   (1,772 )

Interest received

        -     2  

Operating cash flows before working capital adjustments

        15,840     (255 )

Working capital adjustments

  32     (8,152 )   723  

Net cash flows provided by operating activities

        7,688     468  

 

                 

Cash flows from investing activities

                 

Acquisition of property, plant, and equipment

  10     (2,235 )   (4,571 )

Exploration and evaluation expenditures and associated working capital movements

  11     (3,505 )   (3,890 )

Expenditures on mine under construction and associated working capital movements, net of pre-production revenue

  12     (6,822 )   (10,772 )

Interest paid

        (8,348 )   (8,370 )

Advances - Long-term investment

  9     -     (1 )

Net cash used in investing activities

        (20,910 )   (27,604 )

 

                 

Cash flows from financing activities

                 

Bank overdraft

  13     (1,280 )   3,764  

Net proceeds from derivative liabilities

  17     19,700     -  

Net proceeds from shares issuance

  20, 21     -     39,096  

Payment of dividends

  20     (750 )   (737 )

Net proceeds from (repayments of) bank loans

  15     (2,364 )   (1,996 )

Net cash provided by financing activities

        15,306     40,127  

 

                 

Effect of foreign exchange on cash and cash equivalents

        (62 )   (10 )

Net increase in cash and cash equivalents

        2,022     12,981  

Cash and cash equivalents, beginning of the period

        1,002     4,452  

Cash and cash equivalents, end of the period

        3,024     17,433  

Other cash flow items and non-cash transactions (Note 32)

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

Page 6 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

1. CORPORATE INFORMATION

Banro Corporation’s business focus is the exploration, development and production of mineral properties in the Democratic Republic of the Congo (the “Congo”). Banro Corporation (the “Company”) was continued under the Canada Business Corporations Act on April 2, 2004. The Company was previously governed by the Ontario Business Corporations Act.

These interim condensed consolidated financial statements as at and for the three months ended March 31, 2015 include the accounts of the Company and of its wholly-owned subsidiary incorporated in the United States, Banro American Resources Inc., as well as its subsidiary in the Congo, Banro Hydro SARL, and its subsidiary in Barbados, Banro Group (Barbados) Limited. The Company is a publicly traded company whose outstanding common shares are listed for trading on the Toronto Stock Exchange and on the NYSE MKT LLC. The head office of the Company is located at 1 First Canadian Place, 100 King St. West, Suite 7070, Toronto, Ontario, M5X 1E3, Canada.

2. BASIS OF PREPARATION

a) Statement of compliance

These interim condensed consolidated financial statements as at and for the three months ended March 31, 2015, including comparatives, have been prepared in accordance with International Accounting Standards (“IAS”) 34 ‘Interim Financial Reporting’ (“IAS 34”) using accounting policies consistent with the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). The disclosure contained in these interim condensed consolidated financial statements does not include all the requirements in IFRS. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the Company’s annual consolidated financial statements as at and for the year ended December 31, 2014, which includes information necessary to understand the Company’s business and financial statement presentation. Certain comparative figures have been reclassified and aggregated to conform to the current period’s presentation. Royalties of $304 have been reclassified from General and Administrative expense to Production Costs; Share of loss from investment in associate of $17 and Loss on change in fair value of derivative financial instruments of $1,886 have been reclassified to Other Charges and Provisions, net; and Transaction Costs of $904, Interest and Bank Charges of $1,684, and Dividends paid on Preferred Shares of $737 are now presented as Finance Expenses.

The date the Company’s Board of Directors approved these interim condensed consolidated financial statements was May 13, 2015.

b) Continuation of Business

These interim condensed consolidated financial statements have been prepared on a going concern basis, under the historical cost basis, except for certain financial instruments which are presented at fair value.

The Company earned net income of $6,780 for the three months ended March 31, 2015 (three months ended March 31, 2014 – net loss of $704) and as at March 31, 2015 had a working capital deficit of $58,998 (December 31, 2014 - $67,997).

The Company’s ability to continue operations in the normal course of business is dependent on several factors, including its ability to secure additional funding. Management is exploring all available options to secure additional funding, including forward sale agreements, equity financing and strategic partnerships. In addition, the recoverability of the amount shown for exploration and evaluation assets is dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain financing to continue to perform exploration activity or complete the development of the properties where necessary, or alternatively, upon the Company’s ability to recover its incurred costs through a disposition of its interests, all of which are uncertain.

In the event the Company is unable to identify recoverable resources, receive the necessary permitting, or arrange appropriate financing, the carrying value of the Company’s assets and liabilities could be subject to material adjustment. Furthermore, market conditions may raise substantial doubt on the Company’s ability to continue as a going concern.

These interim condensed consolidated financial statements do not include any additional adjustments to the recoverability and classification of recorded asset amounts, classification of liabilities and changes to the statements of comprehensive income/(loss) that might be necessary if the Company was unable to continue as a going concern.

Page 7 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, ESTIMATES AND JUDGMENTS

These interim condensed consolidated financial statements have been prepared using the same accounting policies and methods of computation as presented in Note 3 of the annual consolidated financial statements of the Company as at and for the year ended December 31, 2014, except for those newly adopted accounting standards noted below.

a) Newly Applied Accounting Standards

The following amended standards were applied as of January 1, 2015:

  IFRS 8, “Operating Segments” (amendment); and
  IAS 24, “Related Party Disclosures” (amendment).

The adoption of these amended standards did not have a significant impact on the Company’s interim condensed consolidated financial statements.

b) Accounting Standards Issued But Not Yet Effective

The Company has reviewed new and revised accounting pronouncements that have been issued but are not yet effective and determined that the following may have an impact on the Company:

IFRS 9, Financial instruments (“IFRS 9”) was issued by the IASB on July 24, 2014 and will replace IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 is intended to reduce the complexity for the classification, measurement, and impairment of financial instruments. The mandatory effective date is for annual periods beginning on or after January 1, 2018. The Company is evaluating the impact of this standard on its consolidated financial statements.

Amendments to IFRS 10, Consolidated Financial Statements (“IFRS 10”), IFRS 12 Disclosure of Interests in Other Entities (“IFRS 12”), and IAS 28 Investments in Associates and Joint Ventures (“IAS 28”) were published by the IASB in December 2014. The amendments define the application of the consolidation exception for investment entities. They are effective for annual periods beginning on or after January 1, 2016. The Company is evaluating the impact of these standards but does not expect these standards to have a material impact on its consolidated financial statements.

IFRS 15, Revenue from Contracts with Customers (“IFRS 15”) was issued by the IASB on May 28, 2014 and will replace IAS 18 Revenue and IAS 11 Construction Contracts and related interpretations. IFRS 15 provides a more detailed framework for the timing of revenue recognition and increased requirements for disclosure of revenue. IFRS 15 uses a control-based approach to recognize revenue which is a change from the risk and reward approach under the current standard. The mandatory effective date is for annual periods beginning on or after January 1, 2018. The Company is evaluating the impact of this standard on its consolidated financial statements.

Amendments to IAS 1, Presentation of Financial Statements (“IAS 1”) were issued by the IASB in December 2014. The amendments clarify principles for the presentation and materiality consideration for the financial statements and notes to improve understandability and comparability. The amendments to IAS 1 are effective for annual periods beginning on or after January 1, 2016. The Company is evaluating the impact of this standard on its consolidated financial statements.

Amendments to IAS 16, Property, Plant and Equipment (“IAS 16”) were issued by the IASB in May 2014. The amendments prohibit the use of a revenue-based depreciation method for property, plant and equipment as it is not reflective of the economic benefits of using the asset. They clarify that the depreciation method applied should reflect the expected pattern of consumption of the future economic benefits of the asset. The amendments to IAS 16 are effective for annual periods beginning on or after January 1, 2016. The Company does not expect the standard to have a material impact on its consolidated financial statements.

Amendments to IAS 38 Intangible Assets (“IAS 38”) were issued by the IASB in May 2014. The amendments prohibit the use of a revenue-based depreciation method for intangible assets. Exceptions are allowed where the asset is expressed as a measure of revenue or revenue and consumption of economic benefits for the asset are highly correlated. The amendments to IAS 38 are effective for annual periods beginning on or after January 1, 2016. The Company is evaluating the impact of this standard but does not expect the standard to have a material impact on its consolidated financial statements.

Page 8 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

4. SUBSIDIARIES

The following table lists subsidiaries of the Company:

Name of Subsidiary Place of Incorporation Proportion of Beneficial Common
Share Ownership Interest
Principal Activity
Twangiza Mining SA1 Congo 100% Mining
Namoya Mining SA1 Congo 100% Mining
Lugushwa Mining SA1 Congo 100% Mining
Kamituga Mining SA1 Congo 100% Mining
Banro Congo Mining SA1 Congo 100% Mining
Banro Hydro SARL Congo 100% Inactive
Banro American Resources Inc. United States of America 100% Inactive
Twangiza (Barbados) Limited Barbados 100% Holding and Financing
Namoya (Barbados) Limited Barbados 100% Holding and Financing
Lugushwa (Barbados) Limited Barbados 100% Holding
Kamituga (Barbados) Limited Barbados 100% Holding
Banro Congo (Barbados) Limited Barbados 100% Holding
Banro Group (Barbados) Limited Barbados 100% Holding and Financing

1 During the three months ended September 30, 2014, these entities were reincorporated as "SA" entities in the Congo as per changes in the country's corporate laws.

5. CASH AND CASH EQUIVALENTS

    March 31,     December 31,  
    2015     2014  
    $     $  
Cash   2,827     786  
Cash equivalents   197     216  
    3,024     1,002  

Cash and cash equivalents of the Company include cash on hand, deposits held at financial institutions, and other short-term, highly liquid investments with original maturities of three months or less that is readily convertible to known amounts of cash.

6. TRADE AND OTHER RECEIVABLES

    March 31,     December 31,  
    2015     2014  
  $   $  
Advances to employees   246     211  
VAT receivable   6,160     6,797  
Other receivables   237     253  
    6,643     7,261  

As at March 31, 2015, there was no allowance on the value-added taxes (“VAT”) or advances to employees as all amounts are expected to be fully recovered (December 31, 2014 - $nil).

Page 9 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

7. PREPAID EXPENSES AND DEPOSITS

  March 31,     December 31,  
  2015     2014  
$   $  
Supplier prepayments and deposits - Twangiza   4,896     3,066  
Supplier prepayments and deposits - Namoya   3,126     1,959  
Prepaid insurance and rent   1,520     1,139  
    9,542     6,164  

8. INVENTORIES

    March 31,     December 31,  
    2015     2014  
  $   $  
Ore in stockpiles   1,151     709  
Gold in process   512     723  
Gold bullion   3,195     2,143  
Mine operating supplies   23,669     25,318  
Total current portion   28,527     28,893  
             
Non-current ore in stockpiles1   4,178     3,874  
Total non-current portion   4,178     3,874  
             
Total   32,705     32,767  

1 Includes low-grade material not scheduled for processing within the next twelve months.

During the three months ended March 31, 2015, the Company recognized $17,895 (three months ended March 31, 2014 - $20,007) of parts and supplies inventory as an expense within production costs in the interim condensed consolidated statement of comprehensive income/(loss).

9. LONG-TERM INVESTMENT

The Company’s investment in Delrand Resources Limited (“Delrand”), which met the definition of an associate of the Company until May 2014, is classified as an available for sale financial asset as at March 31, 2015 and December 31, 2014, and is summarized as follows:

    March 31, 2015     December 31, 2014  
Delrand Resources Limited            
             
Percentage of ownership interest   7.06%     7.06%  
Common shares held   1,539     1,539  
Total investment $  256   $  1,061  

Delrand, a publicly listed entity on the Toronto Stock Exchange and the JSE Limited in South Africa, is involved in the acquisition and exploration of mineral properties in the Congo. It has an annual reporting date of June 30.

Page 10 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

The fair value of the Company’s investment in Delrand, based on the closing price of Delrand’s shares on the Toronto Stock Exchange as at March 31, 2015, is $256 (December 31, 2014 - $1,061). For the three months ended March 31, 2015, the Company's fair value loss of $805 was reflected in other comprehensive income/(loss) (three months ended March 31, 2014 – share of loss in the results of Delrand of $17 was included in the interim condensed statement of comprehensive income/(loss) and a loss from foreign currency translation differences of foreign investment in associate of $51 reflected in other comprehensive income/(loss)).

Page 11 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

10. PROPERTY, PLANT AND EQUIPMENT

The Company’s property, plant and equipment are summarized as follows:

    Mining assets     Construction
in progress
    Plant and
equipment
    Total  
  $ $ $ $
I) Cost                        
         Balance as at January 1, 2014 54,771 35,293 276,596 366,660
         Additions   -     14,249     4,421     18,670  
         Transfers - (48,010 ) 48,010 -
         Disposals   -     -     (1,619 )   (1,619 )
     Balance as at December 31, 2014 54,771 1,532 327,408 383,711
         Additions   -     1,204     1,031     2,235  
     Balance as at March 31, 2015 54,771 2,736 328,439 385,946
                         
II) Accumulated Depreciation        
         Balance as at January 1, 2014   12,750     -     41,805     54,555  
         Depreciation for the year - - 27,914 27,914
         Depletion for the year   7,698     -     -     7,698  
         Disposals - - (1,466 ) (1,466 )
     Balance as at December 31, 2014   20,448     -     68,253     88,701  
         Depreciation for the period - - 7,381 7,381
         Depletion for the period   1,430     -     -     1,430  
     Balance as at March 31, 2015 21,878 - 75,634 97,512
                         
III) Carrying amounts        
         Balance as at December 31, 2014   34,323     1,532     259,155     295,010  
         Balance as at March 31, 2015 32,893 2,736 252,805 288,434

During the three months ended March 31, 2015 and 2014, no assets were disposed of. The Company’s property, plant and equipment in the Congo are pledged as security.

Page 12 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

11. EXPLORATION AND EVALUATION ASSETS

The following table summarizes the Company’s tangible exploration and evaluation expenditures with respect to its five properties in the Congo:

                            Banro        
    Twangiza     Namoya     Luguswha     Kamituga     Congo     Total  
                            Mining        
Cost $   $   $   $   $   $  
Balance as at January 1, 2014   28,595     15,051     50,270     21,002     2,802     117,720  
 Additions   2,431     1,792     3,163     3,408     1,425     12,219  
Balance as at December 31, 2014   31,026     16,843     53,433     24,410     4,227     129,939  
 Additions   368     284     609     610     337     2,208  
Balance as at March 31, 2015   31,394     17,127     54,042     25,020     4,564     132,147  

There is approximately $20 of intangible exploration and evaluation expenditures as at March 31, 2015 (December 31, 2014 - $20). The intangible exploration and evaluation expenditures, representing mineral rights held by Banro Congo Mining, have not been included in the table above.

12. MINE UNDER CONSTRUCTION

Development expenditures with respect to the construction of the Company’s Namoya mine are as follows:

    Namoya Mine  
Cost $  
Balance as at January 1, 2014   337,203  
Additions   98,742  
Pre-commercial production revenue   (21,687 )
Balance as at December 31, 2014   414,258  
Additions   27,943  
Pre-commercial production revenue   (11,483 )
Balance as at March 31, 2015   430,718  

Mines under construction are not depreciated until construction is completed. This is signified by the formal commissioning of a mine for production. Revenues realized before commencement of commercial production (“pre-commercial production revenue”) are recorded as a reduction of the respective mining asset. A capitalization rate of 10.2% was used for general borrowings.

13. TRADE AND OTHER PAYABLES

    March 31,     December 31,  
    2015     2014  
  $   $  
Bank overdrafts   2,373     3,653  
Accounts payable   66,821     70,358  
Accrued liabilities   6,044     12,385  
    75,238     86,396  

Page 13 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

Accounts payable and accrued liabilities are mainly comprised of amounts outstanding for purchases relating to exploration, development, and production activities and amounts payable for professional services. The credit term period for purchases typically ranges from 30 to 120 days.

14. DEFERRED REVENUE

In October 2014, the Company entered into a prepayment arrangement with Auramet International, LLC (“Auramet”) (the organization through which the Company currently sells gold produced from its mines) for $6,000 to deliver a total of 5,228 ounces of gold in equal monthly deliveries of 1,307 ounces from November 2014 to February 2015. As per the agreement, the Company delivered gold in November and December 2014 with a remaining balance of $3,000 for the delivery of 2,614 ounces as of December 31, 2014. The Company delivered 1,307 ounces each in January and February 2015.

Deferred revenue of $7,369 as at December 31, 2013, represented a prepayment arrangement for the delivery of 6,250 ounces of gold to Auramet in January 2014.

As at March 31, 2015, all deliveries on the Company’s deferred revenue arrangements were completed.

In determining the appropriate recognition and presentation of the deferred revenue, the Company made judgments with regards to the arrangement with Auramet including the Company’s quantity and timing of expected future production, intent of the arrangement, and the option to settle in cash.

15. BANK LOANS

During the three months ended March 31, 2015, the Company made repayments on outstanding bank loans as per the terms of the loan agreements.

  $  
Balance at January 1, 2014   42,500  
Withdrawals   3,000  
Renegotiation Fee   106  
Repayments   (24,614 )
Balance at December 31, 2014   20,992  
Repayments   (2,364 )
Balance at March 31, 2015   18,628  

The Company has accrued interest on the credit facilities of $106 as of March 31, 2015 (December 31, 2014 - $154) under accrued liabilities in its interim condensed consolidated statement of financial position. The Company has recorded interest expense of $nil, for the three months ended March 31, 2015 (March 31, 2014 - $341) and $434 was recorded in mine under construction for the three months ended March 31, 2015 (March 31, 2014 - $504) in relation to the bank loans.

16. EMPLOYEE RETENTION ALLOWANCE

The Company has an employee retention incentive plan under which an amount equal to one-month salary per year of service is accrued to each qualified employee up to a maximum of 10 months (or 10 years of service with the Company). To qualify for this retention allowance, an employee must complete two years of service with the Company. The full amount of retention allowance accumulated by a particular employee is paid out when the employee is no longer employed with the Company, unless there is a termination due to misconduct, in which case the retention allowance is forfeited. There is uncertainty about the timing of these outflows but with the information available and assumption that eligible employees will not be terminated due to misconduct, as at March 31, 2015, the Company had accrued a liability of $3,558 (December 31, 2014 - $3,405).

The following table summarizes information about changes to the Company’s employee retention allowance during the three months ended March 31, 2015.

Page 14 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

  $  
Balance as at January 1, 2014   2,777  
Additions   899  
Forfeitures   (92 )
Payments to employees   (179 )
Balance as at December 31, 2014   3,405  
Additions   268  
Forfeitures   (42 )
Payments to employees   (73 )
Balance as at March 31, 2015   3,558  

17. DERIVATIVE INSTRUMENTS

  a) Gold Prepayment Arrangement

In February 2015, the Company closed a gold forward sale agreement relating to the Twangiza mine. The agreement provided for the prepayment by the purchaser of $20,000 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 forward sale 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 sale 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 Company has classified the obligation under the agreement as a financial instrument at fair value through profit or loss based on the intent, terms and nature of the agreement. Transaction costs of $300 were expensed to the interim condensed consolidated statement of comprehensive income/(loss). As at March 31, 2015, a fair value of $20,351 was included in derivative instruments and a loss of $351 relating to the revaluation of the instrument was reflected in the interim condensed consolidated statement of comprehensive income/(loss). The Company has classified $13,567 as non-current based on the expected timing of extinguishing the instrument.

In February 2015, the Company closed a gold prepayment arrangement with Auramet for $3,000 to deliver 840 ounces each for three consecutive months. The Company classified the obligation under the agreement as a financial instrument at fair value through profit or loss based on the intent, terms and nature of the agreement. The first delivery was made in March 2015. As at March 31, 2015, the liability to deliver the remaining 1,680 ounces was recorded as a derivative instrument at a fair value of $1,994 and a loss of $2 relating to the revaluation of the instrument was reflected in the interim condensed consolidated statement of comprehensive income/(loss).

As at December 31 2014, the Company had an outstanding obligation, valued at $1,291, for the delivery of 535 ounces per month in January and February 2015. As of March 31, 2015, the Company had delivered all ounces for this arrangement and a fair value loss of $111 on this obligation was reflected in the interim condensed consolidated statement of comprehensive income/(loss).

  b) Call Options

In connection with the gold prepayment arrangement in February 2015, the Company issued call options for the purchase of 6,000 ounces of gold in September 2015 at a price of $1,300 per ounce. The call options were initially recognized at their fair value of $96 and subsequently revalued as at March 31, 2015 to $50. During the three months ended March 31, 2015, the Company reflected an unrealized fair value gain of $46 on these call options in the interim condensed consolidated statement of comprehensive income/(loss) (March 31, 2014 - $nil).

As at March 31, 2015, the Company has outstanding call options for the purchase of 1,250 ounces of gold per month for 4 months starting in June 2015 at a price of $1,400 per ounce. The call options were revalued as at March 31, 2015 to $3 (December 31, 2014 - $16). During the three months ended March 31, 2015, the Company reflected an unrealized fair value gain of $13 on these call options in the interim condensed consolidated statement of comprehensive income/(loss) (March 31, 2014 - $nil).

  c) Warrants to Purchase Common Shares

On August 18, 2014, warrants were issued as a part of a debt facility arranged by the Company (see Note 19). The warrants entitle the holders thereof to acquire 13.3 million common shares of the Company at a price of Cdn$0.269 per share for a period of 3 years, expiring August 18, 2017. As at March 31, 2015, all warrants issued were outstanding. For the three months ended March 31, 2015, the Company reflected a fair value loss on the revaluation of these warrants of $393 in the statement of comprehensive income/(loss) (March 31, 2014 - $nil). As of March 31, 2015, the Company recorded a fair value derivative liability of $479 (December 31, 2014 - $86).

Page 15 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

18. PROVISION FOR CLOSURE AND RECLAMATION

The Company recognizes a provision related to its constructive and legal obligations in the Congo to restore its properties. The cost of this obligation is determined based on the expected future level of activity and costs related to decommissioning the mines and restoring the properties. The provision for the Twangiza mine is calculated at the net present value of the estimated future undiscounted cash flows using an interest rate of 9.57%, a mine life of 10 years, and estimated future undiscounted liability of $9,060 (December 31, 2014 - $9,060). The provision for the Namoya mine is calculated at the net present value of the future estimated undiscounted liability using an interest rate of 9.57%, a mine life of 10 years, and estimated future undiscounted liability of $10,281 (December 31, 2014 - $10,281). For the three months ended March 31, 2015, the Company recorded an accretion expense of $186 (March 31, 2014 - $18) in the interim condensed consolidated statement of comprehensive income/(loss). As at March 31, 2015, the Company recorded a provision for mine rehabilitation of $7,941 (December 31, 2014 - $7,755).

    Twangiza     Namoya        
                Total  
    Mine     Mine        
  $   $   $  
Balance at January 1, 2014   2,023     2,195     4,218  
Change in discount rate   1,371     1,557     2,928  
Unwinding of the discount rate   293     327     620  
Addition/(decrease) in obligation   (54 )   43     (11 )
Balance at December 31, 2014   3,633     4,122     7,755  
Unwinding of the discount rate   87     99     186  
Balance at March 31, 2015   3,720     4,221     7,941  

19. LONG-TERM DEBT

On August 18, 2014, the Company closed a liquidity backstop facility (the “Facility”) for gross aggregate proceeds of up to $35,000. The Facility provides for the issuance by the Company of two classes of notes, defined as Priority Lien Notes and Parity Lien Notes, as well as common share purchase warrants of the Company (see Note 17c). The notes mature on July 31, 2016, but may be prepaid at any time in whole or in part without penalty. The notes bear initial interest rates of 10% and 15% for the Priority Lien Notes and Parity Lien Notes, respectively, accruing and payable monthly in arrears, with semi-annual step up provisions in interest to as high as 20% and 25% for the Priority Lien Notes and Parity Lien Notes, respectively, seven months before expiry. Any interest payable on or before July 31, 2015 may be capitalized monthly by the Company by adding the accrued interest to the outstanding principal of the notes. The interest rate applicable to any such capitalized interest will be 2% higher.

On August 18, 2014, the Company drew down under the Facility a total of $27,700 ($19,700 in Priority Lien Notes and $8,000 in Parity Lien Notes). On August 29, 2014, the Company drew down under the Facility an additional $3,000 (evidenced by Priority Lien Notes). The monthly interest payable on the notes from August 31 to December 31 was capitalized. On October 17, 2014, the Company drew down the remaining balance of $4,300 in Priority Lien Notes. On December 9, 2014, the Facility was amended to increase the aggregate proceeds limit to $37,000 and the Company drew down an additional $2,000 in Parity Lien Notes.

The Company recognized the long-term debt portion of the securities issued under the Facility, at a fair value of $36,640 less transaction costs of $1,143, in its interim condensed consolidated statement of financial position. As a portion of the proceeds from the Facility is attributable to the construction of the Namoya mine, the Company will capitalize 100% of borrowing costs for the $2,000 in Parity Lien Notes and the related portion of all other borrowing costs calculated using a rate of 21.91% . As at March 31, 2015, the fair value of the long-term debt approximates its carrying value. For the three months ended March 31, 2015, the Company capitalized borrowing costs of $505 (March 31, 2014 – $nil) to Mine under Construction and recognized $1,361 (March 31, 2014 - $nil) of borrowing costs under finance expense in its interim condensed consolidated statement of comprehensive income/(loss). As of March 31, 2015, the Company included capitalized interest on the outstanding principal of $4,235 (December 31, 2014 - $2,369) under long-term debt in its interim condensed consolidated statement of financial position as the capitalized interest will remain outstanding until the date of extinguishment, in whole or part.

Page 16 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

On March 2, 2012, the Company closed a debt offering for gross proceeds of $175,000 (the ‘‘Offering’’). A total of 175,000 units (the ‘‘Units’’) of the Company were issued. Each Unit consisted of $1 principal amount of notes (“the Notes”) and 48 common share purchase warrants (“the Warrants”) of the Company. The Notes will mature March 1, 2017 and bear interest at a rate of 10%, accruing and payable semi-annually in arrears on March 1 and September 1 of each year. Each Warrant entitles the holder thereof to acquire one common share of the Company at a price of $6.65 for a period of five years, expiring March 1, 2017.

The Company recognized the long-term debt portion of the Units, at its fair value of $160,959 less transaction costs of $9,197, in its interim condensed consolidated statement of financial position. The residual value of $14,041 less $789 in transaction costs has been attributed to the Warrants. As a portion of the proceeds from the Offering is attributable to the construction of the Namoya mine, the Company will capitalize the related portion, 88%, of all borrowing costs. As at March 31, 2015, the fair value of the long-term debt is $86,625 (December 31, 2014 - $113,750) which is valued using a market approach. For the three months ended March 31, 2015, the Company capitalized borrowing costs of $4,955 (March 31, 2014 – $4,819) to Mine under Construction and recognized $617 (March 31, 2014 - $670) of borrowing costs under finance expense in its interim condensed consolidated statement of comprehensive income/(loss). As of March 31, 2015, the Company included accrued interest on the long-term debt of $1,458 (December 31, 2014 - $5,833) under accrued liabilities in its interim condensed consolidated statement of financial position.

The Company has complied with its long-term debt covenants as at March 31, 2015.

    Offering     Facility     Total  
  $   $   $  
Balance at January 1, 2014   158,599     -     158,599  
                   
Debt issued   -     35,497     35,497  
Accretion and capitalized interest   4,456     2,369     6,825  
Balance at December 31, 2014   163,055     37,866     200,921  
                   
Accretion and capitalized interest   1,268     1,866     3,134  
Balance at March 31, 2015   164,323     39,732     204,055  

The table below details the timing of payments for principal and interest on the long-term debt:

          Payments due by period  
          Less than     One to three     Three to four     After four  
    Total     one year     years     years     years  
  $   $   $   $   $  
Offering debt   175,000     -     175,000     -     -  
Offering debt interest   35,000     17,500     17,500     -     -  
Facility debt   37,000     -     37,000     -     -  
Facility debt interest   13,848     5,265     8,583     -     -  

Page 17 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

20. PREFERENCE SHARES

  a) Authorized

The Company may issue preference shares at any time and from time to time in one or more series with designations, rights, privileges, restrictions and conditions fixed by the board of directors. The preference shares of each series shall be ranked on a parity with the preference shares of every other series and are entitled to priority over the common shares and any other shares of the Company ranking junior to the preference shares, with respect to priority in payment of dividends and the return of capital and the distribution of assets of the Company in the event of liquidation, dissolution or winding up of the Company.

  b) Issued

On April 25, 2013 (the “Closing Date”), the Company issued 116,000 series A preference shares of the Company at a price of $25 per series A preference share (“Series A Shares”) and 1,200,000 preferred shares of a subsidiary (“Subco”) of the Company (the “Subco Shares”) combined with 1,200,000 associated series B preference shares (“Series B Shares”) of the Company at a price of $25 per combined Subco Share and Series B Share, for gross aggregate proceeds of $32,900. Collectively, the Series A Shares and Subco Shares are referred to as the “Preference Shares”.

Quarterly preferential cumulative cash dividends will accrue and, if, as and when declared by the applicable board of directors are payable on the last day of each of March, June, September and December in each year from the date of issuance. The amount of dividends that will accrue on the Preference Shares on any dividend payment date shall be an amount per share equal to the product obtained by multiplying (i) the Dividend Liquidation Preference (as defined below) on such dividend payment date by (ii) the quotient obtained by dividing (A) the Production Schedule Yield (as defined below) on such dividend payment date by (B) four.

The “Dividend Liquidation Preference” of a Preference Share on any dividend payment date means an amount equal to (i) the simple average of the afternoon London Gold Fix price per troy ounce for each trading day during the three month period ending on the immediately preceding dividend payment date multiplied by (ii) 0.017501.

The “Production Schedule Yield” means for any dividend payment date the percentage rate appearing under the heading “Annual Dividend Yield” in the table below corresponding to the Monthly Production Level for such dividend payment date (where Monthly Production Level for any dividend payment date refers to the average monthly production level during the three-month period ending on the immediately preceding dividend payment date).

Monthly Production Annual Dividend
     Level (ounces) Yield (%)
< 8,001 10.00
8,001 - 9,000 10.50
9,001 - 10,000 11.00
10,001 - 11,000 11.50
11,001 - 12,000 12.00
12,001 - 13,000 12.50
13,001 - 14,000 13.00
14,001 - 15,000 13.50
15,001 - 16,000 14.00
16,001 - 17,000 14.50
> 17,000 15.00

The Preference Shares are not redeemable at the option of the Company or Subco, as applicable, until the later of (i) the first date on which the Company and its subsidiaries have achieved total cumulative gold production of 800,000 ounces from and including the Closing Date and (ii) the date that is five years from the Closing Date.

Page 18 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

Commencing on the first day after the date that is five years from the Closing Date, for so long as the Company and its subsidiaries have achieved total cumulative gold production that is less than 800,000 ounces from the Closing Date, each holder of the Preference Shares will have the option at any time to require the Company or Subco, as applicable, to redeem all or a part of its Preference Shares.

Commencing on the tenth anniversary of the Closing Date, each holder of a Preference Share will have the option at any time to require the Company or Subco, as applicable, to redeem the Preference Shares legally available for such purpose.

The Series B Shares were issued for a nominal price and are held by the sole holder of all of the Subco Shares. The terms of the Series B Shares provide that, in the event that two quarterly dividend payments (whether or not consecutive) on the Subco Shares or the Series A Shares shall have accrued and been unpaid, the holders of the Series B Shares will be entitled to notice of, and to attend, at each annual and special meeting of shareholders or action by written consent at which directors of the Company will be elected and will be entitled to a separate class vote, together with the holders of the Series A Shares and the holders of any other series of shares of the Company ranking on a parity with such Series B Shares or Series A Shares either as to dividends or the distribution of assets upon liquidation, dissolution or winding up and upon which like voting rights have been conferred and are exercisable to elect two members to the board of directors of the Company (each a "Preferred Holder Director") until dividends on the Subco Shares or Series A Shares have been paid in full or declared and set apart in trust for payment (whereupon such right shall cease unless and until another quarterly dividend payment on the Subco Shares or Series A Shares shall have accrued and been unpaid).

The Company has classified the Preference Shares as financial instruments measured at fair value through profit or loss for reporting purposes given that the shares contain an embedded derivative since they may possibly be redeemed at the option of the holder at a future date at a value based on future circumstances. The Preference Shares are revalued at each reporting date, with a gain or loss reported in the Company’s interim condensed consolidated statement of comprehensive income/(loss). On issuance, the Company recognized the Preference Shares at their fair value of $32,900 in its interim condensed consolidated statement of financial position. As at March 31, 2015, the Company has recognized the Preference Shares at their fair value of $33,120 (December 31, 2014 - $32,626). For the three months ended March 31, 2015, a loss of $395 was recorded in the statement of comprehensive income/(loss) for the change in fair value of the derivative financial liability (March 31, 2014 – loss of $1,877). The fair value of the Preference Shares was obtained by using a market approach. On December 31, 2014 and March 31, 2015, the Company and Subco elected not to declare a dividend on the Preference Shares. As at March 31, 2015, accrued dividends of $849 was included in the Preference Shares balance (December 31, 2014 - $1,590). During the three months ended March 31, 2015, dividends of $750 relating to the three-month period ended September 30, 2014 were declared and paid. For the three months ended March 31, 2015, $142 of dividends was capitalized to mine under construction (three months ended March 31, 2014 - $nil).

In February 2014, the Company completed a $40,000 financing through a non-brokered private placement (the "Private Placement") involving the issuance of preferred shares (collectively, the “Private Placement Preferred Shares”) of two of the Company's subsidiaries (Namoya (Barbados) Limited and Twangiza (Barbados) Limited). The Private Placement Preferred Shares 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 Private Placement Preferred Shares into 63 million common shares of the Company at a strike price of $0.5673 per common share. A portion of the proceeds from the Private Placement were used towards the completion of the Namoya Mine; therefore, a portion of the dividends accrued and paid were capitalized to mine under construction. The first four dividend payments on the Private Placement Preferred Shares may be deferred by the Company and accumulated at an annual rate of 10%. The dividend payments due on September 2, 2014, December 1, 2014 and March 1, 2015 were deferred.

The Company has elected to classify the Private Placement Preferred Shares as financial instruments measured at fair value through profit or loss for reporting purposes given that the shares comprise multiple embedded derivatives. The Private Placement Preferred Shares are revalued at each reporting date, with a gain or loss reported in the Company’s interim condensed consolidated statement of comprehensive income/(loss). On issuance, the Company recognized the Private Placement Preferred Shares at their fair value of $40,000 in its interim condensed consolidated statement of financial position. As at March 31, 2015, the Company has recognized the Private Placement Preferred Shares at their fair value of $39,084 (December 31, 2014 - $38,490). For the three months ended March 31, 2015, a gain of $449 was included in the interim condensed consolidated statement of comprehensive income/(loss) for the change in fair value of the derivative financial liability (March 31, 2014 – loss of $94). The fair value of the Private Placement Preferred Shares was obtained by using a market approach. As at March 31, 2015, capitalized dividends of $3,634 were included in the Private Placement Preferred Shares balance of $39,084 (December 31, 2014 – capitalized dividends of $2,591). For the three months ended March 31, 2015, dividends of $342 were capitalized to mine under construction (March 31, 2014 - $nil) and dividend expense of $701 was reflected in the interim condensed consolidated statement of comprehensive income/(loss).

Page 19 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

Issued and outstanding preference/preferred shares are as follows (number of shares in thousands):

    Number of        
    Shares     Fair Value  
    (in thousands)   $  
Series A Preference Shares            
Balance as at January 1, 2014   116     2,466  
Accrued cumulative dividends   -     140  
Change in fair value during the year   -     271  
Balance as at December 31, 2014   116     2,877  
Divident payments   -     (66 )
Accrued cumulative dividends   -     75  
Change in fair value during the period   -     35  
Balance as at March 31, 2015   116     2,921  
             
Subco Shares*            
Balance as at January 1, 2014   1,200     25,506  
Accrued cumulative dividends   -     1,450  
Change in fair value during the year   -     2,793  
Balance as at December 31, 2014   1,200     29,749  
Divident payments   -     (684 )
Accrued cumulative dividends   -     774  
Change in fair value during the period   -     360  
Balance as at March 31, 2015   1,200     30,199  
             
Namoya Barbados Private Placement Preferred Shares            
Issued on February 28, 2014   20     20,000  
Issued as dividends-in-kind   1     -  
Change in fair value during the year   -     (755 )
Balance as at December 31, 2014   21     19,245  
Issued as dividends-in-kind   1        
Change in fair value during the period   -     297  
Balance as at March 31, 2015   22     19,542  
             
Twangiza Barbados Private Placement Preferred Shares            
Issued on February 28, 2014   20     20,000  
Issued as dividends-in-kind   1     -  
Change in fair value during the year   -     (755 )
Balance as at December 31, 2014   21     19,245  
Issued as dividends-in-kind   1     -  
Change in fair value during the period   -     297  
Balance as at March 31, 2015   22     19,542  
             
Total Balance as at December 31, 2014         71,116  
Total Balance as at March 31, 2015         72,204  

*There are another 1,200 series B preference shares of the Company associated with the Subco Shares.

21. SHARE CAPITAL

  a) Authorized

The authorized share capital of the Company consists of an unlimited number of common shares and an unlimited number of preference shares, issuable in series, with no par value. All share, option and warrant amounts are presented in thousands.

The holders of common shares are entitled to receive notice of and to attend all meetings of the shareholders of the Company and shall have one vote for each common share held at all meetings of shareholders of the Company, except for meetings at which only holders of another specified class or series of shares are entitled to vote separately as a class or series. Subject to the prior rights of the holders of the preference shares or any other share ranking senior to the common shares, the holders of the common shares are entitled to (a) receive any dividend as and when declared by the board of directors, out of the assets of the Company properly applicable to payment of dividends, in such amount and in such form as the board of directors may from time to time determine, and (b) receive the remaining property of the Company in the event of any liquidation, dissolution or winding up of the Company.

Page 20 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

The Company may issue preference shares at any time and from time to time in one or more series with designation, rights, privileges, restrictions and conditions fixed by the board of directors. The preference shares of each series are ranked on parity with the preference shares of every series and are entitled to priority over the common shares and any other shares of the Company ranking junior to the preference shares, with respect to priority in payment of dividends and the return of capital and the distribution of assets of the Company in the event of liquidation, dissolution or winding up of the Company.

As of March 31, 2015, the Company had 252,101 common shares issued and outstanding (December 31, 2014 – 252,101).

    Number of shares        
    (in thousands)     Amount  
Balance as at Jan 1, 2014   252,101   $  518,615  
             
Balance as at December 31, 2014   252,101   $  518,615  
             
Balance as at March 31, 2015   252,101   $  518,615  

  b) Share purchase warrants (in thousands)

As part of the Offering disclosed in Note 19, the Company issued to the investors 8,400 Warrants, each of which is exercisable to acquire one common share of the Company at a price of $6.65 until March 1, 2017. As of March 31, 2015, the Company had 8,400 Warrants outstanding (December 31, 2014 – 8,400).

In April 2013, the Company issued 735 broker warrants each of which is exercisable to acquire one common share of the Company at a price of Cdn$3.25 until February 24, 2015. As of March 31, 2015, none of these warrants were outstanding (December 31, 2014 – 735).

On August 18, 2014, warrants were issued as a part of a debt facility arranged by the Company (see Note 19). The warrants entitle the holders thereof to acquire 13.3 million common shares of the Company at a price of Cdn$0.269 per share for a period of 3 years, expiring August 18, 2017.

  c) Income/(loss) per share

Income/(loss) per share was calculated on the basis of the weighted average number of common shares outstanding for the three months ended March 31, 2015, amounting to 252,101 (three months ended March 31, 2014 – 252,101) common shares. Diluted income/(loss) per share was calculated using the treasury stock method. The diluted weighted average number of common shares outstanding for the three months ended March 31, 2015 is 252,221 common shares (March 31, 2014 – 252,101).

22. SHARE-BASED PAYMENTS

  a) Stock option plan

The Company has an incentive Stock Option Plan under which non-transferable options to purchase common shares of the Company may be granted to directors, officers, employees or service providers of the Company or any of its subsidiaries. No amounts are paid or payable by the recipient on receipt of the option, and the exercise of the options granted is not dependent on any performance-based criteria. In accordance with these programs, options are exercisable at a price not less than the closing market price of the shares on the day prior to the grant date.

Options granted typically have a contractual life of five years from the date of grant. Options granted during 2015 had a vesting schedule of one-third of the options vesting on the grant date, one-third on the 12 month anniversary, and the remaining third on the 24 month anniversary.

Page 21 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

The following tables summarize information about stock options (option numbers in thousands):

For the three months ended March 31, 2015:

                                        Weighted              
                During the Period                 average              
Exercise Price Range   Opening                             Closing           Vested &        
                                        remaining           Unvested  
(Cdn$)   Balance                             Balance           Exercisable        
          Granted     Exercised     Forfeiture     Expired           contractual              
                                        life (years)              
0.18 - 0.79   -     9,910     -     -           9,910     4.81     3,304     6,606  
0.80 - 1.00   5,690     -     -     (30 )   -     5,660     3.91     2,873     2,787  
1.01 - 2.35   1,935     -     -     (701 )   (277 )   957     0.43     957     -  
2.36 - 4.75   7,921     -     -     (1,085 )   -     6,836     1.81     6,836     -  
    15,546     9,910     -     (1,816 )   (277 )   23,363     3.54     13,970     9,393  
Weighted Average Exercise Price (Cdn$)   2.89     0.20         3.63     2.31     1.68         2.55     0.39  

For the three months ended March 31, 2014:

                                        Weighted              
          During the Period           average              
Exercise Price Range                                 Closing           Vested &        
    Opening Balance                                   remaining           Unvested  
(Cdn$)                                 Balance           Exercisable        
          Granted     Exercised     Forfeiture     Expired           contractual              
                                        life (years)              
0.80 - 1.00   -     -     -     -     -     -     -     -     -  
1.01 - 2.35   6,651     60     -     (180 )   (1,740 )   4,791     3.19     2,082     2,709  
2.36 - 4.75   8,985     -     -     (488 )   -     8,497     2.82     8,398     99  
    15,636     60     -     (668 )   (1,740 )   13,288     2.94     10,480     2,808  
Weighted Average Exercise Price (Cdn$)   3.26     1.00         3.56     2.15     3.38         3.99     1.12  

The fair value at grant date is determined using a Black-Scholes option pricing model that takes into account the exercise price based on the historic share price movement, the term of the stock option, the expected life based on past experience, the share price at grant date, expected price volatility of the underlying share based on the historical weekly share price, the expected dividend yield and the risk free interest rate as per the Bank of Canada for the term of the stock option.

There were 9,910 stock options granted during the three months ended March 31, 2015. The assessed fair value, using the Black-Scholes option pricing model, of stock options granted during the three months ended March 31, 2015 was a weighted average Cdn$0.20 per stock option.

The model inputs for stock options granted during the three months ended March 31, 2015 and year ended December 31, 2014:

Year ended   March 31, 2015     December 31, 2014  
Risk free interest rate   0.46 - 1.00%     1.05 - 1.10%  
Expected life   3 years     3 years  
Annualized volatility   85.64 - 85.87%     75.99 - 76.27%  
Dividend yield   0.00%     0.00%  
Forfeiture rate   2.00%     2.00%  
Grant date fair value $ 0.09 - $0.11   $ 0.16 - $0.27  

During the three months ended March 31, 2015, the Company recognized in the interim condensed consolidated statement of comprehensive income/(loss) an expense of $403 (March 31, 2014 – $61) representing the fair value at the date of grant of stock options previously granted to employees, directors and officers under the Company’s Stock Option Plan. In addition, an amount of $106 for the three months ended March 31, 2015, respectively, (March 31, 2014 – $63) related to stock options issued to employees of the Company’s subsidiaries in the Congo was capitalized to the exploration and evaluation asset and to mine under construction.

Page 22 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

These amounts were credited accordingly to contributed surplus in the interim condensed consolidated statements of financial position.

  b) Share Appreciation Rights Plan

In June 2013, the Company established an incentive Share Appreciation Rights (“SARs”) Plan under which non-transferable cash-settled SARs may be granted to directors, officers, or employees of the Company or any of its subsidiaries. No amounts are paid or payable by the recipient on receipt of the SAR, and the exercise of the SARs granted is not dependent on any performance-based criteria.

Under this SARs Plan, all of the SARs granted to date vest on the 12 month anniversary of their grant date. SARs granted to date have a contractual life of two years from the date of grant.

The following tables summarize information about SARs (number of SARS in thousands)-:

                                        Weighted              
          During the Period           average              
Exercise Price Range                                 Closing           Vested &        
    Opening Balance                                   remaining           Unvested  
(Cdn$)                                 Balance           Exercisable        
          Granted     Exercised     Forfeiture     Expired           contractual              
                                        life (years)              
$2.30   500     -     -     -     -     500     0.20     500     -  
    500     -     -     -     -     500     0.20     500     -  
Weighted Average Exercise Price (Cdn$)   2.30     -     -     -     -     2.30     -     2.30     -  

The model inputs and grant date fair value for SARs outstanding as at March 31, 2015 included:

Risk free interest rate   1.09%  
Expected life   1 year  
Annualized volatility   69.61%  
Dividend yield   0.00%  
Forfeiture rate   2.00%  
Grant date fair value   0.1880  

The fair value at grant date and at each reporting date is determined using a Black-Scholes option pricing model. The expected price volatility is based on the historic volatility (based on the remaining life of the SARs), adjusted for any expected changes to future volatility due to publicly available information.

During the three months ended March 31, 2015, the Company recognized in the interim condensed consolidated statement of comprehensive income/(loss) a change in fair value of $nil, (March 31, 2014 - $3) representing the fair value at the date of grant of SARs, less changes in fair value, previously granted under the Company’s SARs Plan.

23. COMMITMENTS AND CONTINGENCIES

The Company has entered into a number of leases for buildings with renewal terms whereby the lease agreements can be extended based on market prices at the time of renewal. There are no restrictions placed upon the lessee by entering into these leases.

The Company's future minimum operating lease commitments for office premises as at March 31, 2015 are as follows:

Page 23 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

2015 $  609  
2016   615  
2017   436  
                                                      $  1,660  

The Company is committed to the payment of surface fees and taxes on its 14 exploration permits. The surface fees and taxes are required to be paid annually under the Congo Mining Code in order to keep exploration permits in good standing.

In addition to the above matters, the Company and its subsidiaries are also subject to routine legal proceedings and tax audits. The Company does not believe that the outcome of any of these matters, individually or in aggregate, would have a material effect on its consolidated income/(loss), cash flow or financial position.

24. RELATED PARTY TRANSACTIONS

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation, and are not disclosed in this note.

  a) Key Management Remuneration

The Company’s related parties include key management. Key management includes directors (executive and non-executive), the Chief Executive Officer (“CEO”), the Chief Financial Officer, and the Vice Presidents reporting directly to the CEO. The remuneration of the key management of the Company as defined above, during the three months ended March 31, 2015 and 2014 was as follows:

    Three months ended  
    March 31,     March 31,  
    2015     2014  
  $   $  
Short-term employee benefits   1,170     647  
Other benefits   20     16  
Employee retention allowance   63     46  
Settlement   -     2,325  
    1,253     3,034  

As of March 31, 2015, the Company had an outstanding balance of $1,292 owed as a part of the 2013 settlement with the former CEO. It is payable in monthly installments expiring in the second quarter of 2016.

During the three months ended March 31, 2015, directors fees of $58 (three months ended March 31, 2014 - $92) were incurred for non-executive directors of the Company. As of March 31, 2015, $81 was included in accrued liabilities as a payable to three directors (December 31, 2014 - $86).

25. SEGMENTED REPORTING

The Company has three reportable segments: mining operations, mineral exploration, and the development of precious metal projects in the Congo. The operations of the Company are located in two geographic locations: Canada and the Congo. The Company’s corporate head office is located in Canada and is not an operating segment. All of the Company’s operating revenues are earned from production in the Congo and its mining, exploration and development projects are located in the Congo. All of the Company’s revenues from the sale of gold bullion in the Congo are to a single customer.

Page 24 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

For the three months ended   Mining                          
March 31, 2015   Operations     Exploration     Development     Corporate     Total  
  $   $   $   $   $  
Operating revenue   41,003     -     -     -     41,003  
Total mine operating expenses   (24,281 )   -     -     -     (24,281 )
Gross earnings from operations   16,722     -     -     -     16,722  
                               
General and administrative   (1,133 )   -     -     (1,654 )   (2,787 )
Share-based payments   (60 )   -     -     (343 )   (403 )
Other charges and provisions   (464 )   -     -     (280 )   (744 )
Net income/(loss) from operations   15,065     -     -     (2,277 )   12,788  
                               
Finance expenses   (492 )   -     (98 )   (5,465 )   (6,055 )
Foreign exchange (loss)/gain   (17 )   -     -     63     46  
Interest income   -     -     -     1     1  
Net income/(loss)   14,556     -     (98 )   (7,678 )   6,780  
                               
Gross capital expenditures   1,825     2,208     28,352     -     32,385  

For the three months ended   Mining                          
March 31, 2014   Operations     Exploration     Development     Corporate     Total  
  $   $   $   $   $  
Operating revenue   30,439     -     -     -     30,439  
Total mine operating expenses   (24,398 )   -     -     -     (24,398 )
Gross earnings from operations   6,041     -     -     -     6,041  
                               
General and administrative   (21 )   -     -     (1,445 )   (1,466 )
Share-based payments   48     -     -     (109 )   (61 )
Other charges and provisions   -     -     -     (1,903 )   (1,903 )
Net income/(loss) from operations   6,068     -     -     (3,457 )   2,611  
                               
Finance expenses   (1,072 )         -     (2,253 )   (3,325 )
Foreign exchange gain   -     -     -     8     8  
Interest income   -     -     -     2     2  
Net income/(loss)   4,996     -     -     (5,700 )   (704 )
                               
Gross capital expenditures   3,349     4,600     21,751     13     29,713  

Certain items from the Company’s statements of financial position are as follows:

Page 25 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

March 31, 2015   Mining                          
    Operations     Exploration     Development     Corporate     Total  
  $   $   $   $   $  
Total non-current assets   276,605     132,603     446,122     423     855,753  
Total assets   313,353     134,022     454,496     1,618     903,489  
Provision for closure and reclamation   (3,720 )   -     (4,221 )   -     (7,941 )
Long-term debt   -     -     -     (204,055 )   (204,055 )

December 31, 2014   Mining                          
    Operations     Exploration     Development     Corporate     Total  
  $   $   $   $   $  
Total non-current assets   281,278     130,464     431,167     1,253     844,162  
Total assets   315,599     131,313     438,241     2,329     887,482  
Provision for closure and reclamation   (3,633 )   -     (4,122 )   -     (7,755 )
Long-term debt   -     -     -     (200,921 )   (200,921 )
Long-term portion of bank loans   -     -     (3,869 )   -     (3,869 )

Page 26 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

Geographic segmentation of non-current assets is as follows:

March 31, 2015                                    
    Property, Plant and       Mine Under     Exploration and     Long-term     Inventory        
    Equipment     Construction     Evaluation     Investment           Total  
  $   $   $   $   $   $  
Congo   288,267     430,718     132,167     -     4,178     855,330  
Canada   167     -     -     256     -     423  
    288,434     430,718     132,167     256     4,178     855,753  

December 31, 2014                                    
    Property, Plant and     Mine Under     Exploration and     Long-term     Inventory        
    Equipment     Construction     Evaluation     Investment           Total  
  $   $   $   $   $   $  
Congo   294,818     414,258     129,959     -     3,874     842,909  
Canada   192     -     -     1,061     -     1,253  
    295,010     414,258     129,959     1,061     3,874     844,162  

26. PRODUCTION COSTS

Production costs for the Company’s Twangiza Mine for the three months ended March 31, 2015 and 2014 are as follows:

    For the three months ended  
    March 31,     March 31,  
    2015     2014  
  $   $  
Raw materials and consumables   (9,311 )   (8,309 )
Salaries   (4,011 )   (3,496 )
Contractors   (2,948 )   (3,178 )
Other overhead   (2,867 )   (2,267 )
Inventory adjustments   1,242     (2,757 )
    (17,895 )   (20,007 )

27. GENERAL AND ADMINISTRATIVE EXPENSES

    For the three months ended  
    March 31,     March 31,  
    2015     2014  
  $   $  
Salaries and employee benefits   (858 )   (727 )
Consulting, management, and professional fees   (188 )   (124 )
Office and sundry   (519 )   (395 )
Congo corporate office   (960 )   -  
Depreciation   (24 )   (14 )
Other   (238 )   (206 )
    (2,787 )   (1,466 )

Page 27 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

28. FINANCE EXPENSES

          For the three months ended  
          March 31,     March 31,  
    Note              
          2015     2014  
        $   $  
Dividends on Preference Shares   20     (707 )   (737 )
Dividends on Private Placement Preferred Shares   20     (701 )   -  
Transaction costs   19, 20     (1,297 )   (904 )
Interest and bank charges         (3,164 )   (1,611 )
Accretion   18     (186 )   (73 )
          (6,055 )   (3,325 )

29. OTHER CHARGES AND PROVISIONS, NET

    For the three months ended  
    March 31, 2015     March 31, 2014  
  $   $  
Loss on change in fair value of financial instruments   (744 )   (1,886 )
Share of loss from investment in associate   -     (17 )
    (744 )   (1,903 )

30. PUT OPTIONS

In March 2014, the Company purchased 54,000 European put options (“the Put Options”) with a strike price of $1,200 per ounce of gold with six monthly expiries starting from March 31, 2014 through to August 31, 2014. The Company classified the Put Options as financial assets at fair value through profit or loss for reporting purposes given that the Put Options are a derivative financial instrument as their value corresponds to the price of gold. On issuance, the Company recognized the Put Options at their fair value of $701 in its interim condensed consolidated statement of financial position. For the three months ended March 31, 2014, a gain of $85 was included in the interim condensed consolidated statement of comprehensive income/(loss) for the change in fair value of the derivative financial instruments. The fair value of the Put Options was obtained by using a quoted market price. All of the Put Options expired unexercised during the year ended December 31, 2014.

31. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

a) Fair value of financial assets and liabilities

The interim condensed consolidated statements of financial position carrying amounts for cash and cash equivalents, trade and other receivables, bank loans, and trade and other payables approximate fair value due to their short-term nature.

Fair value hierarchy

The following provides a description of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;
     

Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

Page 28 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

  Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The fair values of financial assets and liabilities carried at amortized cost (excluding the Offering) are approximated by their carrying values.

The following table provides information about financial assets and liabilities measured at fair value in the statement of financial position and categorized by level according to the significance of the inputs used in making the measurements:

            March 31, 2015        
      Quoted prices in active     Significant other observable     Significant other  
      markets for identical assets     inputs     unobservable inputs  
      (Level 1)   (Level 2)   (Level 3)
    $   $   $  
  Financial assets                  
  Long-term investment   256     -     -  
                     
  Financial liabilities                  
  Derivative instruments - mark-to-market   -     22,877     -  
  Preference Shares   -     33,120     -  
  Private Placement Preferred Shares   -     39,084     -  

            December 31, 2014        
      Quoted prices in active     Significant other observable     Significant other  
      markets for identical assets     inputs     unobservable inputs  
      (Level 1)   (Level 2)   (Level 3)
    $   $   $  
  Financial assets                  
  Long-term investment   1,061     -     -  
                     
  Financial liabilities                  
  Derivative instruments - mark-to-market   -     1,393     -  
  Preference Shares   -     32,626     -  
  Private Placement Preferred Shares   -     38,490     -  

b) Risk Management Policies

The Company is sensitive to changes in commodity prices and foreign-exchange. The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. Although the Company has the ability to address its price-related exposures through the use of options, futures and forward contracts, it currently does not typically enter into such arrangements.

c) Foreign Currency Risk

Foreign currency risk is the risk that a variation in exchange rates between the United States dollar and Canadian dollar or other foreign currencies will affect the Company’s operations and financial results. A portion of the Company’s transactions are denominated in Canadian dollars, Congolese francs, South African rand, British pounds, Australian dollars and European Euros. The Company is also exposed to the impact of currency fluctuations on its monetary assets and liabilities. Significant foreign exchange gains or losses are reflected as a separate component of the interim condensed consolidated statement of comprehensive income/(loss). The Company does not use derivative instruments to reduce its exposure to foreign currency risk.

The following table indicates the impact of foreign currency exchange risk on net working capital as at March 31, 2015. The table below also provides a sensitivity analysis of a 10 percent strengthening of the US dollar against foreign currencies as identified which would have increased (decreased) the Company’s net income/(loss) by the amounts shown in the table below. A 10 percent weakening of the US dollar against the same foreign currencies would have had the equal but opposite effect as at March 31, 2015.

Page 29 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

      Canadian     South African     Congolese     British     Australian     European  
      Dollar     Rand     Franc     Pound     Dollar     Euro  
      CDN$     ZAR     CDF   £     AUD     EUR  
 

Cash and cash equivalents

  (18 )   3,627     88,863     -     -     -  
 

Short-term investments

  272     -     -     -     -     -  
 

Prepaid expenses

  205     -     -     -     -     -  
 

Accounts payable

  (7,255 )   (77,216 )   (512,779 )   (419 )   (184 )   (536 )
 

Retention allowance

  (1,013 )   -     -     -     -     -  
 

Total foreign currency financial assets and liabilities

  (7,809 )   (73,589 )   (423,916 )   (419 )   (184 )   (536 )
 

Foreign exchange rate at March 31, 2015

  0.7895     0.0827     0.0011     1.4834     0.7689     1.0850  
 

Total foreign currency financial assets and liabilities in US $

  (6,165 )   (6,086 )   (466 )   (622 )   (141 )   (582 )
 

Impact of a 10% variance of the US $ on net income

  (617 )   (609 )   (47 )   (62 )   (14 )   (58 )

d) Credit Risk

Credit risk is the risk that a third party might fail to fulfill its performance obligations under the terms of a financial instrument. Financial instruments, which are potentially subject to credit risk for the Company, consist primarily of cash and cash equivalents and trade and other receivables. Cash and cash equivalents are maintained with several financial institutions of reputable credit and may be redeemed upon demand. Cash and cash equivalents are held in Canada and the Congo. The sale of goods exposes the Company to the risk of non-payment by customers. The Company manages this risk by monitoring the creditworthiness of its customers. It is therefore the Company’s opinion that such credit risk is subject to normal industry risks and is considered minimal.

The Company limits its exposure to credit risk on investments by investing only in securities rated R1 (the highest rating) by credit rating agencies such as the DBRS (Dominion Bond Rating Service). Management continuously monitors the fair value of its investments to determine potential credit exposures. Short-term excess cash is invested in R1 rated investments including money market funds, bankers’ acceptances and other highly rated short-term investment instruments. Any credit risk exposure on cash balances is considered negligible as the Company places deposits only with major established banks in the countries in which it carries on operations. The Company does not have any short-term investments.

The carrying amount of financial assets represents the maximum credit exposure. The Company’s gross credit exposure at March 31, 2015 and December 31, 2014 is as follows:

      March 31,     December 31,  
      2015     2014  
    $   $  
  Cash and cash equivalents   3,024     1,002  
  Trade and other receivables   6,643     7,261  
      9,667     8,263  

Page 30 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

e) Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company attempts to ensure that there is sufficient cash to meet its liabilities when they are due and manages this risk by regularly evaluating its liquid financial resources to fund current and long-term obligations and to meet its capital commitments in a cost-effective manner. Temporary surplus funds of the Company are invested in short-term investments. The Company arranges the portfolio so that securities mature approximately when funds are needed. The key to success in managing liquidity is the degree of certainty in the cash flow projections. If future cash flows are fairly uncertain, the liquidity risk increases. The Company’s liquidity requirements are met through a variety of sources, including cash and cash equivalents, existing credit facilities and capital markets. Should the Company experience further production shortfalls at Twangiza, delays in ramp up at Namoya, equipment breakdowns, or delays in completion schedules, or should the price of gold decrease further, the Company may need to further examine funding options. The Company has the following financial obligations, excluding preferred shares classified as financial liabilities:

  March 31, 2015         Payments due by period  
      Total     Less than one year     One to three years     Three to four years     After four years  
    $   $   $   $   $  
  Trade and other payables   75,238     75,238     -     -     -  
  Long-term debt, including interest   260,848     22,765     238,083     -     -  
  Bank loans   18,628     18,628     -     -     -  
  Derivative instruments   22,877     9,310     13,567     -     -  

  December 31, 2014         Payments due by period  
      Total     Less than one year     One to three years     Three to four years     After four years  
    $   $   $   $   $  
  Trade and other payables   86,396     86,396     -     -     -  
  Long-term debt, including interest   269,598     20,464     249,134     -     -  
  Bank loans   20,992     17,123     3,869     -     -  
  Derivative instruments   1,393     1,393     -     -     -  
  Deferred revenue   3,000     3,000     -     -     -  

f) Mineral Property Risk

The Company’s operations in the Congo are exposed to various levels of political risk and uncertainties, including political and economic instability, government regulations relating to exploration and mining, military repression and civil disorder, all or any of which may have a material adverse impact on the Company’s activities or may result in impairment or loss of part or all of the Company's assets. In recent years, the Congo has experienced two wars and significant political unrest. Operating in the Congo may make it more difficult for the Company to obtain any required financing because of the perceived investment risk.

g) Market Risk

Market risk is the potential for financial loss from adverse changes in underlying market factors, including foreign-exchange rates, commodity prices, interest rate and share based payment costs.

h) Commodity Price Risk

The price of gold has fluctuated widely. The future direction of the price of gold will depend on numerous factors beyond the Company's control including international, economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates, global or regional consumption patterns, speculative activities and increased production due to new extraction developments and improved extraction and production methods. The effect of these factors on the price of gold, and therefore on the economic viability of the Company's properties, cannot accurately be predicted. To date the Company has not adopted specific strategies for controlling the impact of fluctuations in the price of gold. The following table demonstrates the impact of a 10% weakening in the spot price of gold:

Page 31 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

      Three months ended  
      March 31, 2015     March 31, 2014  
  Net income   6,780     (704 )
  Impact of a 10% weakening of the spot price of gold   (4,100 )   (3,044 )
  Net income/(loss) after impact   2,680     (3,748 )

i) Title Risk

Title to mineral properties involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyancing history characteristic of many mining properties. Although the Company has investigated title to all of its mineral properties for which it holds concessions or other mineral licenses, the Company cannot give any assurance that title to such properties will not be challenged or impugned and cannot be certain that it will have valid title to its mineral properties. The Company relies on title opinions by legal counsel who base such opinions on the laws of countries in which the Company operates.

j) Capital Management

The Company manages its bank overdraft, net of cash, bank loans, preference shares, long-term debt, common shares, warrants and stock options as capital. The Company’s policy is to maintain a sufficient capital base in order to meet its short term obligations and at the same time preserve investors’ confidence required to sustain future development of the business.

      March 31,     December 31,  
      2015     2014  
    $   $  
  Bank overdraft, net of cash   (651 )   2,651  
  Short-term bank loans   18,628     17,123  
  Long-term bank loans   -     3,869  
  Preference shares   72,204     71,116  
  Long term debt   204,055     200,921  
  Share capital   518,615     518,615  
  Warrants   13,356     13,356  
  Contributed surplus   43,035     42,526  
  Deficit   (75,593 )   (82,373 )
      793,649     787,804  

Page 32 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

32. CASH FLOWS

a) Operating Cash Flows – Working Capital Adjustments

      For the three months ended  
      March 31, 2015     March 31, 2014  
    $   $  
  Trade and other receivables   590     (488 )
  Prepaid expenses and deposits   (3,379 )   1,907  
  Inventories   409     4,219  
  Trade and other payables   (6,304 )   (4,862 )
  Employee retention allowance   (58 )   (53 )
  Derivative instruments - mark-to-market   590     -  
      (8,152 )   723  

b) Investing Cash Flows – Non-Cash Additions

            For the three months ended  
      Notes     March 31, 2015     March 31, 2014  
          $   $  
  Exploration and evaluation                  
     Depreciation   10     173     222  
     Share-based payments   22     83     38  
     Employee retention allowance   16     29     56  
                     
  Mine under construction                  
     Depreciation   10     1,881     1,866  
     Share-based payments   22     23     25  
     Employee retention allowance   16     93     56  
     Accrued interest   15     1,892     2,425  

Page 33 of 34



Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at and for the three months ended March 31, 2015
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)

c) Financing Cash Flows – Issuance Proceeds and Costs

      For the three months ended  
  Gross proceeds   March 31, 2015     March 31, 2014  
    $   $  
  Derivative instruments   20,000     -  
  Preference shares   -     40,000  
      20,000     40,000  

      For the three months ended  
  Issuance costs   March 31, 2015     March 31, 2014  
    $   $  
  Derivative instruments   300     -  
  Preference shares   -     904  
      300     904  

33. EVENTS AFTER THE REPORTING PERIOD

In April 2015, the Company closed the $70 million balance of its previously announced financings, such balance involving a second gold forward sale transaction relating to the Twangiza mine and a gold streaming transaction relating to the Namoya mine. The forward sale transaction provides 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 forward sale 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 sale 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 gold streaming transaction provides for the payment by the purchaser of a deposit of $50 million for the delivery to the purchaser of 8.33% 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.

Page 34 of 34





MANAGEMENTS DISCUSSION AND ANALYSIS
FOR THE FIRST QUARTER OF 2015



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

The following management’s discussion and analysis ("MD&A"), which is dated as of May 13, 2015, provides a review of the activities, results of operations and financial condition of Banro Corporation (“Banro” or the "Company") as at and for the three-month period ended March 31, 2015 as well as an outlook for the Company based on a defined strategy. This MD&A should be read in conjunction with the unaudited interim condensed consolidated financial statements of the Company as at and for the three-month period ended March 31, 2015 (the “Interim Financial Statements”) together with the MD&A and audited consolidated financial statements of the Company as at and for the year ended December 31, 2014 (the “Annual Financial Statements”). All dollar amounts in this MD&A are expressed in thousands of dollars and, unless otherwise specified, in United States dollars (the Company’s financial statements are prepared in United States dollars). All share, share option and warrant amounts (except per share amounts) are presented in thousands. Additional information relating to the Company, including the Company's annual report on Form 20-F dated April 6, 2015, is available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

FORWARD-LOOKING STATEMENTS

The following MD&A 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 costs, cash flows, future gold production (including the timing thereof), Mineral Resource and Mineral Reserve estimates, potential mineralization, exploration results and future plans and objectives of the Company) 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, uncertainty of estimates of capital and operating costs, production estimates and estimated economic return, the possibility that actual circumstances will differ from the estimates and assumptions used in the economic studies of the Company's projects, failure to establish estimated Mineral Resources or Mineral Reserves (the Company's Mineral Resource and Mineral Reserve figures are estimates and no assurances can be given that the indicated levels of gold will be produced), the possibility that future exploration results will not be consistent with the Company's expectations, changes in world gold markets and equity markets, political developments in the Democratic Republic of the Congo (the "DRC"), uncertainties relating to the availability and costs of financing needed in the future, fluctuations in currency exchange rates, inflation, 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 on 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.

Page 2 of 26



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

CONTENT

FORWARD-LOOKING STATEMENTS 2
   
Core Business 4
   
First Quarter of 2015 Highlights 4
   
Twangiza Mine 7
   
Namoya - Mine under Construction 8
   
Exploration 9
   
Selected Financial Results 11
   
Summary of Quarterly Results 14
   
Liquidity and Capital Resources 15
   
Contractual Obligations 16
   
Related Party Transactions 16
   
Critical Accounting Estimates 16
   
Newly Applied Accounting Standards 19
   
Accounting Standards Issued But Not Yet Effective 19
   
Financial Instruments 20
   
Risks and Uncertainties 20
   
Outstanding Share Data 22
   
Disclosure Controls and Procedures 23
   
Internal Control Over Financial Reporting 23
   
Non-IFRS Measures 25
   
Cautionary Note to U.S. Investors Regarding Reserve and Resource Estimates 26

Page 3 of 26



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

CORE BUSINESS

Banro is a Canadian gold mining company focused on production from the Twangiza mine, which began commercial production on September 1, 2012, and the commissioning of and production from its second gold mine at Namoya located approximately 200 kilometres southwest of the Twangiza gold mine. The Company’s 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 DRC. The Company also undertakes exploration activities at its DRC properties with the objective of delineating additional oxide and free-milling mineral resources. As well, the Company’s DRC subsidiary, Banro Congo Mining SA, holds title to 14 exploration permits covering ground located between and contiguous to the Company’s Twangiza, Kamituga and Lugushwa properties, covering an area of 2,638 square kilometers.

Led by a proven management team with extensive gold and African experience, the initial focus of the Company is on the mining of gold from oxide and free-milling 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.

For the purpose of this document, cash costs, all-in-sustaining costs, gold margin and EBITDA are non-International Financial Reporting Standards (“Non-IFRS”) measures. Refer to the Non-IFRS section of this MD&A for additional information.

FIRST QUARTER OF 2015 HIGHLIGHTS

(I) FINANCIAL

The table below provides a summary of financial and operating results for the three month periods ended March 31, 2015 and 2014, as well as the fourth quarter of 2014:

    Q1 2015     Q1 2014     Q4 2014  
Selected Financial Data                  
Revenues   41,003     30,439     35,178  
Total mine operating expenses1   (24,281 )   (24,398 )   (24,782 )
Gross earnings from operations   16,722     6,041     10,396  
Net income/(loss)   6,780     (704 )   272  
Basic net earnings/(loss) per share ($/share)   0.03     (0.00 )   0.00  
Key Operating Statistics                  
Average gold price received ($/oz)   1,208     1,246     1,202  
Gold sales (oz)   33,956     24,427     29,264  
Gold production (oz)   35,943     20,137     29,445  
All-in sustaining cost per ounce ($/oz)   581     865     689  
Cash cost per ounce ($/oz)   527     819     592  
Gold margin ($/oz)3   681     427     610  
Financial Position                  
Cash and cash equivalents   3,024     17,433     1,002  
Gold bullion inventory at market value2   4,922     1,231     2,834  
Total assets   903,489     852,574     887,482  
Long term debt   204,055     159,713     200,921  

(1) Includes depletion and depreciation.
(2) This represents 4,147 ounces of gold bullion inventory, with a total cost of $770 per ounce, shown at the March 31, 2015 closing market price of $1,187 per ounce of gold.

Revenues for the three months ended March 31, 2015 were $41,003, a 35% increase compared to the prior year’s quarter of $30,439. During the first quarter of 2015, ounces of gold sold increased by 39% to 33,956 ounces compared to sales of 24,427 ounces during the first quarter of 2014. The average gold price per ounce sold in the period was $1,208 compared to an average price of $1,246 per ounce obtained during the corresponding prior year period.

Page 4 of 26



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

Mine operating expenses, including depletion and depreciation, for the three months ended March 31, 2015 were $24,281 compared to the prior year of $24,398. The decrease in costs was due to increased milling throughput of 70%, for a total of 428,844 tonnes, representing an annualized rate of 101% of the 1.7 million tonnes per annum (“Mtpa”) design capacity. Improved mining and processing productivity resulted in significant year over year unit cost reductions as gross spending was contained.

 

Gross earnings from operations for the three months ended March 31, 2015 was $16,722 compared to $6,041 in 2014. The 35% higher gold sales with a corresponding 0.5% decrease in mine operating expenses translated into improving gross margins to 41%. The gross earnings increase was partially offset by the decrease in revenue per ounce, resulting in a gold margin per ounce increase from $427 per ounce in Q1 2014 to $681 per ounce in Q1 2015.

 

Cash costs per ounce on a sales basis for the first quarter of 2015 were $527 per ounce of gold (compared to $819 per ounce of gold for Q1 2014). Cash costs for first quarter of 2015 were lower than the prior year quarter as a result of increased mine and plant productivity as Twangiza achieved steady state production levels and normalized production costs in line with life of mine expectations.

 

All-in sustaining costs declined in the current quarter to $581 per ounce (compared to $865 per ounce of gold in Q1 2014) driven by lower cash costs in the period.

 

In February 2015, the Company signed definitive agreements for financing transactions of $90 million and closed the first tranche of $20 million (refer to corporate development below). The $70 million remainder of the financing transactions were closed in April 2015 (refer to subsequent events below). With the completion of these transactions in April 2015, the Company has extinguished certain debt instruments and improved its financial leverage.

(II) OPERATIONAL - TWANGIZA

During the first quarter of 2015, Twangiza was loss time injury (“LTI”) free, progressing to over one year and 6 million LTI free hours since the last recorded LTI.
   

During the first quarter of 2015, the plant at the Twangiza Mine processed 428,844 tonnes of ore (compared to 252,691 tonnes during the first quarter of 2014) achieving 101% of design capacity. This improvement was due to better management of the seasonal weather conditions and the full benefit of the upgrade project that was completed in Q3 of 2014. Ore was processed during the first quarter of 2015 at an indicated head grade of 3.21g/t Au (compared to 2.73 g/t Au during the first quarter of 2014) with a recovery rate of 80.7% (compared to 84.97% during the first quarter of 2014) to produce 35,943 (compared to 20,137 during the first quarter of 2014) ounces of gold.

   

During the first quarter of 2015, Twangiza processed up to 28% of transition material to assist with the feed blend, even though this material is not included in the Company’s mineral reserves.


Page 5 of 26



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

(III) MINE UNDER CONSTRUCTION NAMOYA

  Mine Under Construction - Investment   Q1 2015     Change     Q4 2014  
      ($000's )   (%)     ($000's )
  Additions1   16,460     1%     16,372  
  Balance as at March 31   430,718     4%     414,258  

(1) Net of pre-commercial revenue of $11,483 and $10,007 in Q1 2015 and Q4 2014, respectively.

During the first quarter of 2015, the Namoya Mine produced 9,254 ounces of gold from a total of 255,323 tonnes of ore, stacked and sprayed on the heap leach pads, at an indicated head grade of 1.97 g/t Au. Now that the financing has been completed, the mine fleet can be expanded to increase the waste stripping and ore mining to meet the planned stacking rates required for commercial production.

   

With the commissioning of the agglomeration drum in the first quarter of 2015, Namoya’s 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 Carbon-In- Leach (“CIL”) circuit as ongoing ore extraction enhances expectation with respect to fines content and the heap leach circuit is optimized.

(IV) EXPLORATION

Consistent with 2014, during the first quarter of 2015, exploration activities were limited as the Company focused on the development at Namoya and incremental operational achievements at Twangiza.

(V) CORPORATE DEVELOPMENT

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 $90 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 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 $50 million and the delivery to the purchaser over time of 8.33% 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.

(VI) SUBSEQUENT EVENTS

On April 30, 2015, the Company closed the second $20 million forward sale and the $50 million gold streaming transactions, as described above. In connection with the closing of these financing transactions, the Company extinguished all of the outstanding backstop facility notes issued in the third and fourth quarter of 2014.

Page 6 of 26



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

TWANGIZA MINE

During the first quarter of 2015, the Twangiza Mine achieved its third consecutive quarter of record production as the site continued to benefit from the plant expansion activities completed in 2014 while focusing on incremental operational efficiencies. These efficiencies allowed for the continuous improvement of ore delivery and throughput levels to achieve 101% of the upgraded design capacity of 1.7 Mtpa. Management plans, over the next 2 quarters, to continue to debottleneck the process to ensure this capacity can be maintained permanently, before pursuing higher targets. Twangiza processed up to 28% of transition material to assist with the ore blend, even though this material is not included in the Company’s mineral reserves. The transition material performed well when mixed with the oxide reserves and hence provided the basis for some non-oxide material to be incorporated into the on-going updated NI 43-101 reserves and resources statement.

TWANGIZA MINE Q1 2015 Q4 2014 Prior Quarter Q1 2014 Prior Year
      Change %   Change %
Gold sales (oz) 33,956 29,264 16% 24,427 39%
Gold produced (oz) 35,943 29,445 22% 20,137 78%
Material mined (t) 975,716 969,062 1% 727,423 34%
Ore mined (t)1 632,264 556,856 14% 296,324 113%
Valley fill mined (t) - - - 49,854 (100%)
Waste mined (t) 343,452 412,206 (17%) 381,245 (10%)
Strip ratio (t:t)2 0.54 0.74 (27%) 1.29 (58%)
Ore milled (t)1 428,844 370,881 16% 252,691 70%
Head grade (g/t)3 3.21 3.01 7% 2.73 18%
Recovery (%) 80.70 81.40 (1%) 84.97 (5%)
Cash cost per ounce ($US/oz) 527 592 (11%) 819 (36%)

(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.

In the first quarter of 2015, Twangiza achieved production levels above the 2015 monthly average production guidance of 9,000 ounces per month. Cash costs during the quarter were consistent with the fourth quarter of 2014 and represented a 36% reduction from the first quarter of 2014. Similar to H2 2014, the improved operating results continue to be driven by the ability for the operations to increase mining and milling productivity, a 34% and 70% increase in tonnage compared to the same prior year period, respectively, while maintaining similar gross expenditures.

Gross spending and unit costs for Q1 2015 in comparison to Q4 2014 and Q1 2014 are as follows:

Mine Operating Costs (In '000s) Cost per tonne Milled ($/t)
  Q1 2015 Q4 2014 Q1 2014 Q1 2015 Q4 2014 Q1 2014
Mining Costs 4,503 4,600 4,653            10.5          12.4 18.4
Processing Costs 9,679 9,415 8,122            22.6          25.4 32.1
Overhead 4,955 6,105 4,742            11.6          16.5 18.8
Inventory Adjustments (1,242) (2,804) 2,490            (2.9)          (7.6) 9.9
Total Mine operating cost 17,895 17,316 20,007            41.8          46.7 79.2
Total tonnes milled (tonnes) 428,844 370,881 252,691      

Page 7 of 26



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

Mining

A total of 975,716 tonnes of material (Q1 2014 – 727,423 tonnes) were mined during the three month period ended March 31, 2015. Total ore mined was 632,264 tonnes (Q1 2014 – 296,324 tonnes). The strip ratio for the quarter decrease to 0.54 as compared to 1.29 during the first quarter of 2014 in accordance with the mine schedule which decreased the mining cost per tonne milled from $18.4 to $10.5 per tonne, or a decrease of 43%.

Processing & Engineering

For the three month period ended March 31, 2015, the plant at the Twangiza Mine processed 428,844 tonnes of ore (2014 – 252,691 tonnes), representing a 70% increase over the prior year period, as the operations exceeded the annualized rate of 1.7 Mtpa. Increased throughput levels reduced the processing cost per tonne milled from $32.1 per tonne to $22.6 per tonne, representing a decrease of 30%. The mill productivity achieved in the current period represented a continuation, as well as additional incremental improvements, of the operational achievements made in H2 2014. Recoveries during the period decreased compared from the corresponding prior year period to an average rate of 80.7% (2014 – 84.97%) . Activities underway to improve the recoveries include optimizing the crushing and grinding to appropriate fineness, reagent consumption levels, and leach tank residency time. Site management continues to focus on incremental operational efficiencies to consistently maintain increased throughput rates and improve recoveries. The processing costs were $1.6 million higher compared to Q1 2014 as a result of the 70% increase in throughput, partially offset by lower power costs per tonne due to lower realized diesel prices. Due to the nature of the processing costs, economies of scale allow the operation to benefit significantly from the increased throughput and production rates.

Sustaining Capital Activities

Following the completion of the plant expansion activities in 2014, capital spending at Twangiza is focused on upgrades to the mobile fleet and continued construction of the Tailings Management Facility (“TMF”). Mobile fleet upgrades during the quarter included the replacement of critical components to extend the life of the existing fleet. The TMF construction continued at lower activity levels, with activity levels expected to increase during the dryer periods of the second and third quarter of 2015.

Cash cost and All-in sustaining cost

Cash costs per ounce for the first quarter of 2015 were significantly lower than the prior year period, primarily due to increased sales of 9,529 ounces or 39%, due to increased production over the first quarter of 2014, while gross spending increased slightly as a result of higher throughput in line with the design capacity of the mill. The all-in sustaining cost decreased from $865 in Q1 2014 to $581 per ounce in Q1 2015, primarily due to the lower cash cost.

Cash Cost per ounce sold ($US/ounce)
  Q1 2015 Q4 2014 Q1 2014
Mining Costs 133 157 190
Processing Costs 285 322 333
Overhead 146 209 194
Inventory Adjustments (37) (96) 102
Total cash costs per ounce 527 592 819
Total ounces sold (ounces) 33,956 29,264 24,427
All-in sustaining costs per ounce 581 689 865

Page 8 of 26



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

NAMOYA - MINE UNDER CONSTRUCTION

During the first quarter of 2015, the key objective for Namoya management was to position the operation to reach commercial production levels by H2 2015. The agglomeration drum that was procured in late 2014, was commissioned by the in-house team ahead of schedule on January 27, 2015. The commissioning of the agglomeration drum will be followed by activities to de-bottleneck the heap leach operation including increasing the speed and capacity of the conveyor system as well as activities to prepare and improve the CIL plant.

As a result of the delay in the financing, the original ramp-up plans were modified including the pre-stripping of the Kakula reserve pit earlier than planned in order to open up more mining faces to improve flexibility in mine scheduling and provide additional time for the delivery of the mobile truck fleet that would commence waste stripping activities. With the procurement of additional mobile fleet, the 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 as well as the newly opened Kakula pit during the first quarter of 2015 comprising 702,793 tonnes of material of which 178,800 tonnes were ore at a strip ratio of 2.93. The strip ratio increased in the current period as a result of increased waste material mined in order to provide access to ore in the Kakula pit.

Additions to Mine under Construction during the first quarter of 2015 consisted of the costs associated with the completion of the agglomeration drum, costs associated with commissioning activities, as well as pre-commercial operating losses due to the mine operating at levels which are below break-even. The costs associated with the agglomeration drum represent the only significant capital amounts spent on project construction during the period.

During the first quarter of 2015, the Namoya mine produced 9,254 ounces of gold from a total of 255,323 tonnes of ore, stacked and sprayed on the heap leach pads, at an indicated head grade of 1.97 g/t Au. Ore stacked during the period was comprised of semi-agglomerated material prior to the commissioning of the agglomeration drum, followed by material that was processed through the agglomeration drum. Stacking levels during the quarter were impacted by processing shutdowns surrounding the installation and commissioning of the drum and the availability of mobile fleet to mine waste. The CIL circuit was not utilized during the first quarter of 2015 as the Company’s focus and resources were targeted on the progression of the heap leach operation, however, small scale project activities were carried out on the CIL plant in order to assess the circuit needs and associated timelines to incrementally contribute to production. Namoya’s production will continue to benefit incrementally from the increasing stacking rates that are being achieved and as the heap leach curve progresses toward steady state operating levels.

EXPLORATION

Consistent with the Company’s focus on cash flow management during the completion of development at Namoya as well as the seasonality of exploration activities in the DRC, exploration activities during the first quarter of 2015 was comprised of desktop project and target prioritization reviews in preparation of the 2015 field work, in addition to ground maintenance activities.

As previously reported, 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 convert inferred and indicated resources to higher confidence resources and mineral reserves within the existing open pits; and
Delineate resources from identified targets within a 5 kilometre radius of the current operations.

Page 9 of 26


Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

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 MD&A.

Page 10 of 26



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

SELECTED FINANCIAL RESULTS

Selected Financial Data Q1 2015 Q1 2014 Q4 2014
       
Revenues ($000's) 41,003 30,439 35,178
Production costs ($000's) (17,895) (20,007) (17,316)
Depletion and depreciation ($000's) (6,386) (4,391) (7,466)
Gross earnings from operations ($000's) 16,722 6,041 10,396
       
General & administration ($000's) (2,787) (1,466) (4,135)
Finance expenses ($000's) (6,055) (3,325) (4,522)
Net income/(loss) ($000's) 6,780 (704) 3,750
EBITDA ($000's) 18,895 6,846 15,566
Basic net earnings/(loss) per share ($/share) 0.03 (0.00) 0.01

Revenues

Revenues increased $10.6M, or 35%, in the three months ended March 31, 2015 as compared to the corresponding period of 2014 as a result of a 39% increase in gold ounces sold, partially offset by lower average realized gold prices. The average gold price received on ounces sold in Q1 2015 was $1,208 per ounce compared to $1,246 per ounce received in Q1 2014. The average realized gold price was lower than the average spot price as a result of the timing of gold sales such that there were increased levels of gold sales when the market price was more depressed.

Production costs by element

Production Costs Q1 2015 Q1 2014 Change $/oz Sold
  ($000's) ($000's) (%) Q1 2015 Q1 2014 Change %
Raw materials and consumables 5,416 4,051 34% 160 166 (4%)
Diesel 3,895 4,258 (9%) 115 174 (34%)
Salaries 4,011 3,496 15% 118 143 (17%)
Contractors 2,948 3,178 (7%) 87 130 (33%)
Other overhead 2,867 2,267 26% 84 93 (10%)
Inventory adjustments (1,242) 2,757 (145%)              (37) 113 (133%)
Total production costs 17,895 20,007 (11%) 527 819 (36%)

Production costs, excluding inventory adjustments, for the three months ended March 31, 2015 increased 11% from the same prior year period, as a result of increased mine and mill productivity, however, as a result of improved operating efficiencies the per unit costs decreased. Details of changes in production cost categories are included below:

Raw materials and consumables

Raw materials and consumables increased by 34% in the three month period ended March 31, 2015 as compared to the corresponding period in 2014 as a result of increased mine and mill productivity of 34% and 70%, respectively. While the gross spending on raw materials and consumables increased during the period, the cost per ounce sold decreased by 4% due to the benefits of increased throughput. During the first quarter of 2014, the plant expansion was in progress and the operation was not yet increasing productivity levels towards the upgraded design capacity.

Diesel

Diesel costs decreased 9% during the three month period ended March 31, 2015 as compared to the corresponding period in 2014 as a result of favorable market conditions. As a result of the decrease in the cost of diesel coupled with the aforementioned increases in mine and mill productivity, on a per ounce sold basis diesel decreased 34% from Q1 2014 to Q1 2015.

Page 11 of 26



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

Salaries

Salaries increased 15% in the three months ended March 31, 2015 compared to the corresponding period of 2014 primarily due to the increase in the scale of the operational activities as a result of the completion of the plant upgrade in 2014 as well as the impact of using increased levels of internal resources in the place of certain contractors and normal course inflationary increases. On a per ounce sold basis, salaries decreased 17% as a result of operational efficiencies with the increased levels of productivity.

Contractors

Contractors decreased 7% in the three month period ended March 31, 2015 compared to the corresponding period of 2014 as a result of using increased levels of internal resources in place of certain contractors. On a per ounce sold basis, contractors decreased 33% as a result of operational efficiencies with the increased levels of productivity.

Other overhead

Other overhead expense, which includes on-site administrative sundry costs, IT expenses, human resources expenditures, camp costs and travel and camp costs, increased 26% in the three month period ended March 31, 2015 compared to the corresponding period of 2014 as a result of the increased levels of production and the resulting sales.

Inventory adjustments

Inventory adjustments decreased in the three month period ended March 31, 2015 compared to the corresponding period of 2014 as a result of increases in ore stockpile inventory and higher gold bullion inventory levels compared to a drawdown of gold bullion in the prior year period.

General and administrative expenses

The table below provides the general and administrative expenses for the three month periods ended March 31, 2015 and 2014.

General & administrative expenses Q1 2015 Q1 2014 Change $/oz Sold
  ($000's) ($000's) (%) Q1 2015 Q1 2014 Change %
Salaries and employee benefits 858 727 18% 25 30 (17%)
Consulting, management, and professional fees 188 124 52% 6 5 20%
Office and sundry 519 395 31% 15 16 (6%)
DRC corporate office 960 - - 28 - 100%
Depreciation 24 14 71% 1 1 0%
Other 238 206 16% 7 8 (13%)
General and administrative expenses 2,787 1,466 90% 82 60 37%
             
Other charges & provisions 744 1,903 (61%) 22 78 (72%)

General and administrative expenses increased to $2,787 for the three months ended March 31, 2015, as compared to $1,466 for the corresponding period in 2014. Details of changes in the general and administrative expenses category are as follows:

Salaries and employee benefits

Salaries and employee benefits increased 18% in the three months ended March 31, 2015 as compared to the corresponding period in 2014 as a result of the impact of increased number of personnel coupled with the impact of year over year inflationary increases.

Consulting, management, and professional fees

Consulting, management, and professional fees, which include mainly legal and auditing fees, increased to $188 for the three months ended March 31, 2015, compared to $124 for the corresponding period of 2014, as a result of increased costs related to financing activities.

Page 12 of 26



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

Office and Sundry

Office and sundry increased to $519 for the three months ended March 31, 2015, compared to $395 for the corresponding period of 2014, as a result of the additional costs associated with government fees.

DRC corporate office

The DRC corporate office provides in-country support for the operations. For the three months ended March 31, 2015, DRC regional office support expenses were $960. The increase in the expense was due to support resources now focusing more on the requirements of mine operations as opposed to exploration activities in the corresponding prior year period.

Other expenses

Other general and administrative expenses include travel and promotion expenses relating to being a publicly traded company and contributions to the Banro Foundation.

Other charges and provisions

Other charges and provisions were $744 for the three months ended March 31, 2015 compared to $1,903 in the corresponding period of 2014, predominately representing the fair value losses on financial instruments.

Finance expenses

Finance expenses increased significantly in the three months ended March 31, 2015 compared to the corresponding period of 2014 as a result of increases in interest and dividends due to changes in the capital structure of the Company during 2014 including the issuance of preferred shares and notes as well as increases in transaction costs associated with the financing activities carried out during the period.

Net income

The Company’s net income for the three months ended March 31, 2015 was $6,780 as compared to a loss of $704 in the prior year period. The net income is a result of increased gross earnings from operations as revenues increased with a limited corresponding increase in production costs, partially offset by increases in general and administrative and finance expenses.

EBITDA

EBITDA for the three months ended March 31, 2015 increased 176% compared to the prior year period, from $6,846 to $18,895, primarily due to an increase in gold ounces sold while operating expenses were contained, partially offset by increased corporate costs.

EXPLORATION AND DEVELOPMENT PROJECT EXPENDITURES

Exploration and evaluation expenditures

The Company incurred exploration and evaluation expenditures of $2,208 in the three months ended March 31, 2015, a decrease of 51% compared to the same prior year period, capitalized as exploration and evaluation assets in the Company’s consolidated statement of financial position. The allocation of such exploration and evaluation expenditures by project was as follows:

Exploration and evaluation expenditu Q1 2015 Q1 2014 Change
  ($000's) ($000's) (%)
Twangiza project 368 1,305 (72%)
Namoya project 284 491 (42%)
Lugushwa project 609 1,258 (52%)
Kamituga project 610 1,436 (58%)
Banro Congo Mining SARL 337 62 444%
  2,208 4,552 (51%)

Page 13 of 26



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

As a part of managing costs across the Company, exploration work has been reduced and some support activities redirected to assist the operations as the Company transitions primarily to an operations focused company in the near term.

Mine development expenditures

During Q1 2015, the Company incurred development expenditures of $16,460 (Q1 2014 - $20,645), net of pre-production revenue of $11,483 (Q1 2014 - $4,051), with respect to the development of the Namoya mine, which are capitalized in the consolidated statement of financial position as mine under construction asset.

Mine Development Expenditures Q1 2015 Q1 2014 Change
  ($000's) ($000's) %
Mine development expenditures 27,943      24,696 13%
Pre-commercial production revenue (11,483)        (4,051) 183%
 Net expenditures 16,460      20,645 (20%)

Mine development expenditures relate to project capital, pre-operating expenses and capitalized interest. Included in the $16,460 of mine development expenditures is $1,881 of depreciation and $6,709 of capitalized interest. Pre-commercial production revenue at Namoya consists of revenue from the sale of 9,441 ounces of gold sold at an average price of $1,216 per ounce.

SUMMARY OF QUARTERLY RESULTS

The following table sets out certain unaudited interim consolidated financial information of the Company for each of the last eight quarters, beginning with the first quarter of 2015. This financial information has been prepared using accounting policies consistent with International Accounting Standard (“IAS”) 34 Interim Financial Reporting issued by IASB.

  Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014 Q4 2013 Q3 2013 Q2 2013
                 
Revenues 41,003 35,178 33,285 26,534 30,439 27,022 27,133 24,484
Gross earnings from operations 16,722 10,396 8,093 4,291 6,041 3,090 2,950 2,288
Net income/(loss) 6,780 272 3,750 (2,998) (704) 2,086 (3,671) (3,054)
Earnings/(loss) per share, basic ($/share) 0.03 0.00 0.01 (0.01) (0.00) 0.01 (0.01) (0.01)
Earnings/(loss) per share, diluted ($/share) 0.03 0.00 0.01 (0.01) (0.00) 0.01 (0.01) (0.01)

The Company recorded revenue of $41,003 for the three month period ended March 31, 2015 and a net income of $6,780. Revenue and gross earnings from operations for the three month period ended March 31, 2015 were higher than the prior quarter due to an increase in productivity resulting in a reduction in unit costs and an increase in ounces of gold sold from improved production at Twangiza. The increase in net income was driven by increased gross earnings from operations being partially offset by increased general and administrative and finance costs.

The Company recorded revenue of $35,178 for the three month period ended December 31, 2014 and a net income of $272. Revenue and gross earnings from operations for the three month period ended December 31, 2014 were higher than the prior quarter due to an increase in productivity resulting in a reduction in unit costs and an increase in ounces of gold sold from improved production at Twangiza. The decrease in net income in the fourth quarter was driven by increased finance costs and losses from the re-valuation of financial instruments.

The Company recorded revenue of $33,285 for the three month period ended September 30, 2014 and a net income of $3,750. Revenue and gross earnings from operations for the three month period ended September 30, 2014 were higher than the prior quarter due to there being approximately 6,460 more ounces of gold sold in the third quarter of 2014 from improved production at Twangiza. Increase in net income in the third quarter was driven by higher gross earnings from operations, and gains from the re-valuation of financial instruments partially offset by higher general and administrative expenses and interest costs.

Page 14 of 26



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

The Company recorded revenue of $26,534 for the three month period ended June 30, 2014 and a net loss of $2,998. Revenue and gross earnings from operations for the three month period ended June 30, 2014 were lower than the prior quarter due to there being approximately 4,000 more ounces of gold sold in Q1 2014 due to gold produced in December 2013 and sold in January 2014. In addition to the lower gross earnings from operations, increased general and administrative expenses were incurred as a result of increased legal and shareholder services that resulted from dissident shareholder nominations for the election of directors, which were subsequently withdrawn, in connection with the annual shareholders’ meeting.

The Company recorded revenue of $30,439 for the three month period ended March 31, 2014 and a net loss of $704. Revenue and gross earnings from operations for the three months ended March 31, 2014 were higher than the prior quarter due to there being approximately 4,000 more ounces of gold sold in Q1 2014 as compared to Q4 2013. Although revenue was higher during the quarter, transactions costs, dividends on preferred shares, and a loss on the change in the fair value of preferred shares were all expenses that contributed to the net loss of $704 for the quarter.

The Company recorded revenues of $27,022 for the three month period ended December 31, 2013 and net income of $2,086. Revenue and gross earnings from operations for the three months ended December 31, 2013 remained consistent with revenues and gross earnings from operations incurred during the three-month period ended September 30, 2013 even though the gold price declined during the fourth quarter as the Company sold more ounces of gold during the fourth quarter. The net profit recognized in the fourth quarter was driven by a gain on a change in the fair value of preferred shares as compared to the third quarter of 2013.

The Company recorded revenues of $27,133 for the three month period ended September 30, 2013, compared to $24,484 for the second quarter of 2013. The increase in revenue was primarily a result of greater ounces sold as compared to the prior quarter. The net loss for the third quarter of 2013 was driven by a $3,248 loss on change in fair value of the Company’s issued preference shares during the third quarter. Further adding to the net loss recorded in the third quarter was the higher mining-related costs, including fuel and replacement parts, from the Twangiza mine as compared to prior quarters.

LIQUIDITY AND CAPITAL RESOURCES

As at March 31, 2015, the Company had cash and cash equivalents of $3,024 compared to cash and cash equivalents of $1,002 as at December 31, 2014. As a result of the minimal liquidity available as at December 31, 2014, and the Company’s need to continue to fund operations until production from Namoya reaches commercial production levels, it was necessary to carry out a further financing of $20 million in February 2015 in the form of a gold forward sale.

During the three months ended March 31, 2015, the Company spent $3,505 in cash for exploration and evaluation expenditures and $6,822 in cash (net of pre-production revenue) for the development of the Namoya mine (compared to $3,890 spent on exploration and evaluation expenditures and $10,722 spent on the development of the Namoya mine during Q1 2014). In addition, during Q1 2015, the Company spent $2,235 on capital assets (compared to $4,571 spent during Q1 2014) to carry on its projects in the DRC.

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 $90 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 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 $50 million and the delivery to the purchaser over time of 8.33% 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. On April 30, 2015, the Company closed the second $20 million forward sale and the $50 million gold streaming transactions, as described above. In connection with the closing of these financing transactions, the Company extinguished of all the outstanding backstop facility notes issued in the third and fourth quarter of 2014.

Based on the revenues expected to be generated from the Company’s Twangiza and Namoya mines, together with the Company’s cash on hand, and the financing transactions executed in February and April 2015, the Company expects to have access to sufficient funds to carry out its proposed 2015 operating and capital budgets for the Twangiza and Namoya mines and for corporate overhead. If at any time during the year it becomes apparent that there may be a strain on the Company’s cash flows, the Company may elect to defer non-essential capital expenditures to a future year.

Page 15 of 26



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

As a result of restrictive covenants in the Indenture under which the Company’s outstanding Notes were issued, the Company’s ability to incur additional debt is currently limited. Should the Company experience production shortfalls at Twangiza, delays in ramp up at Namoya, suspension or delays in the receipt of goods and services, equipment breakdowns, or should the price of gold decrease further, the Company may need to further examine funding options.

CONTRACTUAL OBLIGATIONS

The Company’s contractual obligations as at March 31, 2015 are described in the following table:

Contractual Obligations Payments due by period
    Less than one One to three Four to five
  Total year years years
  ($000's) ($000's) ($000's) ($000's)
Operating leases 523 343 180 -
Bank loans 18,628 18,628 - -
Derivative instruments 22,877 9,310 13,567 -
Long-term debt - 2012 Offering 175,000 - 175,000 -
Interest on long-term debt - 2012 Offering 35,000 17,500 17,500 -
Long-term debt - 2014 Facility 37,000 - 37,000 -
Interest on long-term debt - 2014 Facility 13,848 5,265 8,583 -

RELATED PARTY TRANSACTIONS

The Company’s related parties include key management. Key management includes directors (executive and non-executive), the Chief Executive Officer (“CEO”), the Chief Financial Officer, and the Vice Presidents reporting directly to the CEO. The remuneration of the key management of the Company as defined above, during the three months ended March 31, 2015 and 2014 was as follows:

    Three months ended March 31,  
    2015     2014  
    ($000's)     ($000's)
Short-term employee benefits   1,170     647  
Other benefits   20     16  
Employee retention allowance   63     46  
Settlement   -     2,325  
    1,253     3,034  

During the three months ended March 31, 2015, directors fees of $58 (three months ended March 31, 2014 - $92) were incurred for non-executive directors of the Company. As of March 31, 2015, $81 was included in accrued liabilities as a payable to three directors (December 31, 2014 - $86).

CRITICAL ACCOUNTING ESTIMATES

The preparation of the Interim Financial Statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Information about critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the Company’s Interim Financial Statements included the following:

Page 16 of 26



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

Provision for closure and reclamation

The Company’s operation is subject to environmental regulations in the DRC. Upon establishment of commercial viability of a site, the Company estimates the cost to restore the site following the completion of commercial activities and depletion of reserves. These future obligations are estimated by taking into consideration closure plans, known environmental impacts, and internal and external studies, which estimate the activities and costs that will be carried out to meet the decommissioning and environmental rehabilitation obligations. The Company records a liability and a corresponding asset for the present value of the estimated costs of legal and constructive obligations for future mine rehabilitation. During the mine rehabilitation process, there will be a probable outflow of resources required to settle the obligation and a reliable estimate can be made of those obligations. The present value is determined based on current market assessments using the risk-free rate of borrowing which is approximated by the yield of government bonds with a maturity similar to that of the mine life. The discounted liability is adjusted at the end of each period with the passage of time. The provision represents management’s best estimate of the present value of the future mine rehabilitation costs, which may not be incurred for several years or decades, and, as such, actual expenditures may vary from the amount currently estimated. The decommissioning and environmental rehabilitation cost estimates could change due to amendments in laws and regulations in the DRC. Additionally, actual estimated costs may differ from those projected as a result of an increase over time of actual remediation costs, a change in the timing for utilization of reserves and the potential for increasingly stringent environmental regulatory requirements.

Impairment

Assets, including property, plant and equipment, exploration and evaluation and mine under construction, are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts exceed their recoverable amounts, which is the higher of fair value less cost to sell and value in use. The assessment of the recoverable amounts often requires estimates and assumptions such as discount rates, exchange rates, commodity prices, rehabilitation and restoration costs, future capital requirements and future operating performance. Changes in such estimates could impact recoverable values of these assets. Estimates are reviewed regularly by management.

Mineral reserve and resource estimates

Mineral reserves and resources are estimates of the amount of ore that can be economically and legally extracted from the Company’s mineral properties. The Company estimates its mineral reserves and mineral resources based on information compiled by appropriately qualified persons relating to the geological data on the size, depth and shape of the ore body. This exercise requires complex geological judgments to interpret the data. The estimation of recoverable reserves is based upon factors such as commodity prices, future capital requirements, and production costs along with geological assumptions and judgments made in estimating the size and grade of the ore body. Changes in the reserve or resource estimates may impact upon the carrying value of exploration and evaluation assets, mine under construction assets, property, plant and equipment, recognition of deferred tax assets, and expenses.

Share-based payment transactions

The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value at grant date is determined using a Black-Scholes option pricing model that takes into account the exercise price based on the historic share price movement, the term of the stock option, the expected life based on past experience, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate as per the Bank of Canada for the term of the stock option.

The model inputs for stock options granted during the three months ended March 31, 2015 included:

  March 31, 2015
Risk free interest rate 0.46% - 1.00%
Expected life 3 years
Annualized volatility 85.64 - 85.87%
Dividend yield 0.00%
Forfeiture rate 2.00%
Grant date fair value $0.09 - $0.11

Page 17 of 26



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

Depreciation of mining assets

The Company applies the units of production method for amortization of its mine assets in commercial production based on reserve ore tons mined. These calculations require the use of estimates and assumptions. Significant judgment is required in assessing the available reserves to be amortized under this method. Factors that are considered in determining reserves are the economic feasibility of the reserves, expected life of the project and proven and probable mineral reserves, the complexity of metallurgy, markets and future developments. Estimates of proven and probable reserves are prepared by experts in extraction, geology and reserve determination. When these factors change or become known in the future, such differences will impact pre-tax profit and carrying value of assets.

Depreciation of property, plant and equipment

Each property, plant and equipment life, which is assessed annually, is assessed for both its physical life limitations and the economic recoverable reserves of the property at which the asset is located. For those assets depreciated on a straight-line basis, management estimates the useful life of the assets. These assessments require the use of estimates and assumptions including market conditions at the end of the assets useful life. Asset useful lives and residual values are re-evaluated annually.

Commercial production

Prior to reaching pre-determined levels of operating capacity intended by management, costs incurred are capitalized as part of mines under construction and proceeds from sales are offset against capitalized costs. Depletion of capitalized costs for mining properties begins when pre-determined levels of operating capacity intended by management have been reached. Management considers several factors in determining when a mining property has reached levels of operating capacity intended by management, including:

  when the mine is substantially complete and ready for its intended use;
  the ability to produce a saleable product;
  the ability to sustain ongoing production at a steady or increasing level;
  the mine has reached a level of pre-determined percentage of design capacity;
  mineral recoveries are at or near the expected production level; and
  the completion of a reasonable period of testing of the mine plant and equipment.

The results of operations of the Company during the periods presented in the Company’s consolidated financial statements have been impacted by management’s determination that its Twangiza mine had reached the commercial production phase on September 1, 2012. When a mine development project moves into the production stage, the capitalization of certain mine development and construction costs ceases. Subsequent costs are either regarded as forming part of the cost of inventory or expensed. However, any costs relating to mining asset additions or improvements, underground mine development or mineable reserve development are assessed to determine whether capitalization is appropriate.

Provisions and contingencies

The amount recognized as provision, including legal, contractual, constructive and other exposures or obligations, is the best estimate of the consideration required to settle the related liability, including any related interest charges, taking into account the risks and uncertainties surrounding the obligation. In addition, contingencies will only be resolved when one or more future events occur or fail to occur. Therefore assessment of contingencies inherently involves the exercise of significant judgment and estimates of the outcome of future events. The Company assesses its liabilities and contingencies based upon the best information available, relevant laws and other appropriate requirements.

Exploration and evaluation expenditure

The application of the Company’s accounting policy for exploration and evaluation expenditure requires judgment in determining whether it is likely that future economic benefits will flow to the Company, which may be based on assumptions about future events or circumstances. Estimates and assumptions made may change if new information becomes available. There are a few circumstances that would warrant a test for impairment, which include: the expiry of the right to explore, substantive expenditure on further exploration is not planned, exploration for and evaluation of the mineral resources in the area have not led to discovery of commercially viable quantities, and/or sufficient data exists to show that the carrying amount of the asset is unlikely to be recovered in full from successful development or by sale. If information becomes available suggesting impairment, the amount capitalized is written off in the consolidated statement of comprehensive income/(loss) during the period the new information becomes available.

Page 18 of 26



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

Income taxes

The Company is subject to income taxes in various jurisdictions and subject to various rates and rules of taxation. Significant judgment is required in determining the provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Company recognizes liabilities for anticipated tax audit issues based on the Company’s current understanding of the tax law. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred tax provisions in the period in which such determination is made.

In addition, the Company has recognized deferred tax assets relating to tax losses carried forward to the extent there is sufficient taxable income relating to the same taxation authority and the same subsidiary against which the unused tax losses can be utilized. However, future realization of the tax losses also depends on the ability of the entity to satisfy certain tests at the time the losses are recouped, including current and future economic conditions, production rates and production costs.

Functional and presentation currency

Judgment is required to determine the functional currency of the parent and its subsidiaries. These judgments are continuously evaluated and are based on management’s experience and knowledge of the relevant facts and circumstances.

NEWLY APPLIED ACCOUNTING STANDARDS

The following amended standards were applied as of January 1, 2015:

  IFRS 8, “Operating Segments” (amendment); and
  IAS 24, “Related Party Disclosures” (amendment).

The adoption of these amended standards did not have a significant impact on the Company’s Interim Financial Statements.

ACCOUNTING STANDARDS ISSUED BUT NOT YET EFFECTIVE

The Company has reviewed new and revised accounting pronouncements that have been issued but are not yet effective and determined that the following may have an impact on the Company:

IFRS 9, Financial instruments (“IFRS 9”) was issued by the IASB on July 24, 2014 and will replace IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 is intended to reduce the complexity for the classification, measurement, and impairment of financial instruments. The mandatory effective date is for annual periods beginning on or after January 1, 2018. The Company is evaluating the impact of this standard on its consolidated financial statements.

Amendments to IFRS 10, Consolidated Financial Statements (“IFRS 10”), IFRS 12 Disclosure of Interests in Other Entities (“IFRS 12”), and IAS 28 Investments in Associates and Joint Ventures (“IAS 28”) were published by the IASB in December 2014. The amendments define the application of the consolidation exception for investment entities. These are effective for annual periods beginning on or after January 1, 2016. The Company is evaluating the impact of these standards but does not expect these standards to have a material impact on its consolidated financial statements.

IFRS 15, Revenue from Contracts with Customers (“IFRS 15”) was issued by the IASB on May 28, 2014 and will replace IAS 18 Revenue and IAS 11 Construction Contracts and related interpretations. IFRS 15 provides a more detailed framework for the timing of revenue recognition and increased requirements for disclosure of revenue. IFRS 15 uses a control-based approach to recognize revenue which is a change from the risk and reward approach under the current standard. The mandatory effective date is for annual periods beginning on or after January 1, 2018. The Company is evaluating the impact of this standard on its consolidated financial statements.

Amendments to IAS 1, Presentation of Financial Statements (“IAS 1”) were issued by the IASB in December 2014. The amendments clarify principles for the presentation and materiality consideration for the financial statements and notes to improve understandability and comparability. The amendments to IAS 1 are effective for annual periods beginning on or after January 1, 2016. The Company is evaluating the impact of this standard on its consolidated financial statements.

Page 19 of 26



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

Amendments to IAS 16, Property, Plant and Equipment (“IAS 16”) were issued by the IASB in May 2014. The amendments prohibit the use of a revenue-based depreciation method for property, plant and equipment as it is not reflective of the economic benefits of using the asset. They clarify that the depreciation method applied should reflect the expected pattern of consumption of the future economic benefits of the asset. The amendments to IAS 16 are effective for annual periods beginning on or after January 1, 2016. The Company does not expect the standard to have a material impact on its consolidated financial statements.

Amendments to IAS 38 Intangible Assets (“IAS 38”) were issued by the IASB in May 2014. The amendments prohibit the use of a revenue-based depreciation method for intangible assets. Exceptions are allowed where the asset is expressed as a measure of revenue or revenue and consumption of economic benefits for the asset are highly correlated. The amendments to IAS 38 are effective for annual periods beginning on or after January 1, 2016. The Company is evaluating the impact of this standard but does not expect the standard to have a material impact on its consolidated financial statements.

FINANCIAL INSTRUMENTS

Fair value of financial assets and liabilities

The consolidated statements of financial position carrying amounts for cash and cash equivalents, trade and other receivables, bank loans, and trade and other payables approximate fair value due to their short-term nature.

Fair value hierarchy

The following provides a description of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;
   

Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

   

Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The fair values of financial assets and liabilities carried at amortized cost (excluding “Notes” as defined below) are approximated by their carrying values.

RISKS AND UNCERTAINTIES

The Company is subject to a number of risks and uncertainties that could significantly impact its operations and future prospects. The following discussion pertains to certain principal risks and uncertainties but is not, by its nature, all inclusive.

Risk Management Policies

The Company is sensitive to changes in commodity prices and foreign-exchange. The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. Although the Company has the ability to address its price-related exposures through the use of options, futures and forward contracts, it currently does not typically enter into such arrangements.

Foreign Currency Risk

Foreign currency risk is the risk that a variation in exchange rates between the United States dollar and Canadian dollar or other foreign currencies will affect the Company’s operations and financial results. A portion of the Company’s transactions are denominated in Canadian dollars, Congolese francs, South African rand, British pounds, Australian dollars and European Euros. The Company is also exposed to the impact of currency fluctuations on its monetary assets and liabilities. Significant foreign exchange gains or losses are reflected as a separate component of the interim condensed consolidated statement of comprehensive income/(loss). The Company does not use derivative instruments to reduce its exposure to foreign currency risk. See Note 31(c) of the Interim Financial Statements for additional details.

Page 20 of 26



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

Credit Risk

Credit risk is the risk that a third party might fail to fulfill its performance obligations under the terms of a financial instrument. Financial instruments, which are potentially subject to credit risk for the Company, consist primarily of cash and cash equivalents and trade and other receivables. Cash and cash equivalents are maintained with several financial institutions of reputable credit and may be redeemed upon demand. Cash and cash equivalents are held in Canada and the DRC. The sale of goods exposes the Company to the risk of non-payment by customers. The Company manages this risk by monitoring the creditworthiness of its customers. It is therefore the Company’s opinion that such credit risk is subject to normal industry risks and is considered minimal.

Any credit risk exposure on cash balances is considered negligible as the Company places deposits only with major established banks in the countries in which it carries on operations.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company attempts to ensure that there is sufficient cash to meet its liabilities when they are due and manages this risk by regularly evaluating its liquid financial resources to fund current and long-term obligations and to meet its capital commitments in a cost-effective manner. Temporary surplus funds of the Company are invested in short-term investments. The Company arranges the portfolio so that securities mature approximately when funds are needed. The key to success in managing liquidity is the degree of certainty in the cash flow projections. If future cash flows are fairly uncertain, the liquidity risk increases. The Company’s liquidity requirements are met through a variety of sources, including cash and cash equivalents, existing credit facilities and capital markets. Should the Company experience further production shortfalls at Twangiza, delays in ramp up at Namoya, equipment breakdowns, or delays in completion schedules, or should the price of gold decrease further, the Company may need to further examine funding options. See Note 31(e) of the Interim Financial Statements for additional details.

Market Risk

Market risk is the potential for financial loss from adverse changes in underlying market factors, including foreign-exchange rates, commodity prices, interest rate and share based payment costs.

Foreign Operations and Political Risk

The Company’s operations in the DRC are exposed to various levels of political risk and uncertainties, including political and economic instability, government regulations relating to exploration and mining, military repression and civil disorder, all or any of which may have a material adverse impact on the Company’s activities or may result in impairment or loss of part or all of the Company's assets. In recent years, the DRC has experienced two wars and significant political unrest. Operating in the DRC may make it more difficult for the Company to obtain required financing because of the perceived investment risk.

Access to Capital Markets and Indebtedness Obligation Risk

In March 2012, the Company closed a $175,000 debt financing, which included the issuance by the Company of $175,000 aggregate principal amount of senior secured notes (“Notes”) with an interest rate of 10% and a maturity date of March 1, 2017. As a result of this financing, together with additional debt financings carried out during 2013 and 2014, the Company has a significant amount of indebtedness. The Company and certain of its subsidiaries also have financial obligations with respect to outstanding preferred shares. The Company’s high level of indebtedness and preferred share obligations could have important adverse consequences, including: limiting the Company’s ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements; requiring a substantial portion of the Company’s cash flows to be dedicated to debt service payments and preferred share dividends instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, acquisitions and other general corporate purposes; increasing the Company’s vulnerability to general adverse economic and industry conditions; limiting the Company’s flexibility in planning for and reacting to changes in the industry in which it competes; placing the Company at a disadvantage compared to other, less leveraged competitors; and increasing the cost of borrowing.

Banro’s inability to generate sufficient cash flows to satisfy its debt obligations would materially and adversely affect the Company’s financial position and results of operations. If the Company cannot make scheduled payments on its debt, the Company will be in default and holders of the debt could declare all outstanding principal and interest to be due and payable, and the Company could be forced into bankruptcy or liquidation.

The Indenture under which the Notes were issued contains a number of restrictive covenants that impose significant operating and financial restrictions on the Company and may limit the Company’s ability to engage in acts that may be in its long-term best interest. A breach of the covenants under this Indenture could result in an event of default. In the event the Noteholders accelerate the repayment of the Company’s indebtedness, Banro may not have sufficient assets to repay that indebtedness. As a result of these restrictions, Banro may be: limited in how it conducts its business; unable to raise additional debt or equity financing to operate during general economic or business downturns; or unable to compete effectively or to take advantage of new business opportunities. These restrictions may affect the Company’s ability to grow in accordance with its strategy.

Page 21 of 26



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

Exploration and Development Risk

Certain of the Company's properties are in the exploration or development stage only and have not commenced commercial production. The Company currently does not generate income from properties under exploration and development. The exploration and development of mineral deposits involve significant financial risks over a significant period of time, which even a combination of careful evaluation, experience and knowledge may not eliminate. Few properties which are explored are ultimately developed into producing mines. Major expenditures are required to establish reserves by drilling and to construct mining and processing facilities at a site. It is impossible to ensure that the Company's exploration or development programs will result in a profitable commercial mining operation.

Mineral Reserve and Mineral Resources Estimates Risk

The Company's mineral resources and mineral reserves are estimates and no assurance 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 the resource and reserve estimates for its properties are well established, by their nature resource and reserve estimates are imprecise and depend, to a certain extent, upon statistical inferences, which may ultimately prove unreliable. If such estimates are inaccurate or are reduced in the future, this could have a material adverse impact on the Company. In addition, there can be no assurance that gold recoveries or other metal recoveries in small-scale laboratory tests will be duplicated in larger scale tests under on-site conditions or during production.

Environmental, Health and Safety Risk

The Company’s mining operation, exploration and development activities are subject to extensive laws and regulations governing the protection of the environment, waste disposal, worker safety and other related hazards and risks normally incident to gold mining operations, exploration and development, any of which could result in damage to life or property, environmental damage and possible legal liability for any or all damage. A breach of such laws and regulations may result in significant fines and penalties. The Company intends to fully comply with all environmental and safety regulation applicable in the DRC and comply with prudent international standards.

Commodity Price Risk

The price of gold has fluctuated widely. The future direction of the price of gold will depend on numerous factors beyond the Company's control including international, economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates, global or regional consumption patterns, speculative activities and increased production due to new extraction developments and improved extraction and production methods. The effect of these factors on the price of gold, and therefore on the economic viability of the Company's properties, cannot accurately be predicted. To date the Company has not adopted specific strategies for controlling the impact of fluctuations in the price of gold.

Reference is made to the Company's annual report on Form 20-F dated April 6, 2015 for additional risk factor disclosure (a copy of such document can be obtained from SEDAR at www.sedar.com and EDGAR at www.sec.gov).

OUTSTANDING SHARE DATA

The authorized share capital of the Company consists of an unlimited number of common shares and an unlimited number of preference shares, issuable in series. As at May 13, 2015, the Company had outstanding 252,151 common shares, 116 series A preference shares, 1,200 series B preference shares, stock options to purchase an aggregate of 23,016 common shares, 8,400 warrants (with each such warrant entitling the holder to purchase one common share of the Company at a price of $6.65 until March 1, 2017), additional warrants entitling the holders to purchase a total of 13,300 common shares of the Company at a price of Cdn$0.269 per share until August 18, 2017. Reference is also made to the private placement completed in February 2014, pursuant to which preferred shares of two subsidiaries of the Company were issued. At the option of the holders of such preferred shares and at any time before the maturity date of such preferred shares of June 1, 2017, the holders are entitled to exchange their preferred shares into 63,000 common shares of the Company at a strike price of $0.5673 per common share.

Page 22 of 26



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

DISCLOSURE CONTROLS AND PROCEDURES

Management is responsible for establishing and maintaining adequate internal controls over disclosure controls and procedures, as defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings of the Canadian Securities Administrators and Rules 13a-15(e) and Rule 15d-15(e) under the United States Exchange Act of 1934, as amended. Disclosure controls and procedures are designed to provide reasonable assurance that all relevant information is gathered and reported to senior management, including the Company’s Chief Executive Officer and Chief Financial Officer, on a timely basis so that appropriate decisions can be made regarding public disclosure. As at December 31, 2014 management of the Company, with the participation of the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as required by Canadian securities laws. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that, as of December 31, 2014, the disclosure controls and procedures were ineffective due to the identification of a material weakness in the information technology general controls (“ITGC”) and in the controls over financial reporting relating to the preparation and review of the statement of cash flow and sufficiency of documentary evidence supporting the precision of review over the completeness and accuracy of inputs, assumptions and formulas included in the impairment models, as discussed in the internal control over financial reporting section below. As such, there is a possibility that the internal control over financial reporting will fail to detect a material misstatement in the financial statements on a timely basis.

INTERNAL CONTROL OVER FINANCIAL REPORTING

Internal controls have been designed to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. As at December 31, 2014, the Company’s Chief Executive Officer and Chief Financial Officer evaluated or caused to be evaluated under their supervision the effectiveness of the Company’s internal control over financial reporting. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework of 1992. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that, as of December 31, 2014, there was a material weakness in ITGC and in the internal controls over financial reporting relating to the preparation and review of the statement of cash flow and sufficiency of documentary evidence supporting the precision of review over the completeness and accuracy of inputs, assumptions and formulas included in the impairment models.

With respect to ITGC, in H1 of 2014, the Company embarked on SAP implementation that was fully operational by Q3 2014. The intention of the system implementation was to improve the business processes on both an operational control basis and ITGC basis. Due to limited resources and change in personnel responsible for the SAP implementation, the Company focused its efforts on system implementation and training but fell short of properly implementing the new ITGC features in H2 of 2014, which has been deemed a material weakness due to ineffective controls over access security and change management resulting in a potential impact on the reliability of information produced by the system. Management has hired external consultants to ensure that the ITGC will be operating effectively by H2 2015.

With respect to internal controls in 2014 over the preparation and review of the statement of cash flow, it came to management’s attention that the accounting treatment of a deferred revenue transaction first accounted for in 2013 should have been classified in the consolidated statement of cash flow as operating and investing activities instead of financing activities. The Company restated the statement of cash flow as disclosed in note 34 of the 2014 Annual Financial Statements. As a result, the Company concluded that a material weakness in internal controls over the preparation and review of the statement of cash flow existed given the application of this inappropriate accounting treatment in 2014. In the third quarter of 2014, the Company added two additional chartered professional accountants to the finance team with extensive experience in IFRS with major publicly traded companies in the mining industry. Management believes that the enhanced finance team is capable of addressing the preparation and review of the statement of cash flow.

With respect to internal controls in 2014 over the sufficiency of documentary evidence supporting the precision of review over the completeness and accuracy of inputs, assumptions and formulas included in the impairment models, it came to management’s attention that the level of documentary evidence supporting the precision of the review was insufficient to appropriately evidence the precision to which management reviewed the impairment models. During the relevant reporting period, management’s key focus in performing the impairment analysis was on ensuring that the information included in the models was complete and accurate in order to ensure appropriate conclusions were reached for financial reporting. As no issues were identified with respect to the inputs, assumptions and formulas that would change the conclusions reached in the impairment models, management intends to enhance the level of documentation maintained in the review process in relevant reporting periods through the establishment of enhanced standard documentation procedures.

Page 23 of 26



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

The Company is required under Canadian securities laws to disclose herein any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent interim period that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. Refer to the discussion above for the Company’s remediation plan with respect to material weaknesses identified in 2014.

It should be noted that a control system, including the Company’s disclosure controls and procedures system and internal control over financial reporting system, no matter how well conceived, can provide only reasonable, but not absolute, assurance that the objective of the control system will be met and it should not be expected that the Company’s disclosure controls and procedures system and internal control over financial reporting will prevent or detect all reporting deficiencies whether caused by either error or fraud.

Page 24 of 26



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

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.

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   Q1 2015     Q1 2014     Q4 2014  
    ($000's)   ($000's)   ($000's)
Mine operating expenses   24,281     24,398     24,782  
Less: Depletion and depreciation   (6,386 )   (4,391 )   (7,466 )
Total cash costs   17,895     20,007     17,316  
Gold sales (oz)   33,956     24,427     29,264  
Cash cost per ounce ($/oz)   527     819     592  

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   Q1 2015     Q1 2014     Q4 2014  
    ($000's)   ($000's)   ($000's)
Mine operating expenses   24,281     24,398     24,782  
Less: Depletion and depreciation   (6,386 )   (4,391 )   (7,466 )
Total cash costs   17,895     20,007     17,316  
Sustaining capital   1,825     1,130     2,844  
All-in cash costs   19,720     21,137     20,160  
Gold sales (oz)   33,956     24,427     29,264  
All-in cash cost per ounce ($/oz)   581     865     689  

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   Q1 2015     Q1 2014     Q4 2014  
    ($000's)   ($000's)     ($000's)
Net income/(loss)   6,780     (704 )   3,750  
Interest   5,704     2,990     4,775  
Taxes   -     -     -  
Depletion and depreciation   6,411     4,560     7,041  
EBITDA   18,895     6,846     15,566  

Page 25 of 26



Banro Corporation
MANAGEMENTS DISCUSSION AND ANALYSIS - FIRST QUARTER 2015

CAUTIONARY NOTE TO U.S. INVESTORS REGARDING RESERVE AND RESOURCE ESTIMATES

This MD&A has been prepared in accordance with the requirements of securities laws in effect in Canada, which differ from the requirements of U.S. securities laws. Without limiting the foregoing, the Company uses the terms "measured", "indicated" and "inferred" resources. U.S. investors are advised that, while such terms are recognized and required by Canadian securities laws, the U.S. Securities and Exchange Commission (the "SEC") does not recognize them. Under U.S. standards, mineralization may not be classified as a "reserve" unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. U.S. investors are cautioned not to assume that all or any part of measured or indicated resources will ever be converted into reserves. Further, "inferred resources" have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. It cannot be assumed that all or any part of the "inferred resources" will ever be upgraded to a higher category. Therefore, U.S. investors are also cautioned not to assume that all or any part of the inferred resources exist, or that they can be mined legally or economically. Disclosure of "contained ounces" is permitted disclosure under Canadian regulations, however, the SEC normally only permits issuers to report mineral deposits that do not constitute "reserves" as in place tonnage and grade without reference to unit measures. Accordingly, information concerning descriptions of mineralization and resources disclosed by the Company, may not be comparable to information made public by U.S. companies subject to the reporting and disclosure requirements of the SEC.

National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") is a rule of the Canadian Securities Administrators which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Unless otherwise indicated, the Company’s reserve and resource estimates have been prepared in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum Classification System. These standards differ significantly from the requirements of the SEC, and reserve and resource information disclosed by the Company may not be comparable to similar information disclosed by U.S. companies. One consequence of these differences is that "reserves" calculated in accordance with Canadian standards may not be "reserves" under the SEC standards.

U.S. investors are urged to consider closely the disclosure in the Company's Form 20-F Annual Report (File No. 001-32399), which may be secured from the Company, or from the SEC's website at http://www.sec.gov

Page 26 of 26





FORM 52-109F2
CERTIFICATION OF INTERIM FILINGS
FULL CERTIFICATE

I, John Clarke, Chief Executive Officer and President of Banro Corporation, certify the following: 1. Review: I have reviewed the interim financial report and interim MD&A (together, the "interim filings") of Banro Corporation (the "issuer") for the interim period ended March 31, 2015.

2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4. Responsibility: The issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, for the issuer.

5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer(s) and I have, as at the end of the period covered by the interim filings

  (a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

       
  (i)

material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

       
  (ii)

information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

       
  (b)

designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP.

5.1 Control framework: The control framework the issuer's other certifying officer(s) and I used to design the issuer's ICFR is Internal Control – Integrated Framework (1992) issued by The Committee of Sponsoring Organizations of the Treadway Commission.

5.2 N/A. 5.3 N/A.

6. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer's ICFR that occurred during the period beginning on January 1, 2015 and ended on March 31, 2015 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.

Date: May 13, 2015.

(signed) "John Clarke"                                
Name: John Clarke
Title: Chief Executive Officer and President





FORM 52-109F2
CERTIFICATION OF INTERIM FILINGS
FULL CERTIFICATE

I, Kevin Jennings, Chief Financial Officer of Banro Corporation, certify the following:

1. Review: I have reviewed the interim financial report and interim MD&A (together, the "interim filings") of Banro Corporation (the "issuer") for the interim period ended March 31, 2015.

2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4. Responsibility: The issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, for the issuer.

5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer(s) and I have, as at the end of the period covered by the interim filings

  (a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

       
  (i)

material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

       
  (ii)

information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

       
  (b)

designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP.

5.1 Control framework: The control framework the issuer's other certifying officer(s) and I used to design the issuer's ICFR is Internal Control – Integrated Framework (1992) issued by The Committee of Sponsoring Organizations of the Treadway Commission.

5.2 N/A. 5.3 N/A.

6. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer's ICFR that occurred during the period beginning on January 1, 2015 and ended on March 31, 2015 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.

Date: May 13, 2015.

(signed) "Kevin Jennings"                       
Name: Kevin Jennings
Title: Chief Financial Officer


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