Banro responds to statements regarding status of properties applied for
March 21 2007 - 9:00AM
PR Newswire (US)
TORONTO, March 21 /PRNewswire-FirstCall/ -- Banro Corporation
("Banro" or the "Company") (AMEX - "BAA"; TSX - "BAA") wishes to
clarify some confusion created in the market-place as a result of
public statements made by La Quinta Resources Corporation ("La
Quinta") (TSX-V - "LAQ") regarding properties located in the
Democratic Republic of the Congo (the "DRC"). The most recent such
statements were set out in a press release of La Quinta issued on
March 14, 2007. The Company's four gold projects, Twangiza,
Lugushwa, Namoya and Kamituga, consist of a total of 13
exploitation permits 100% owned by wholly-owned DRC subsidiaries of
the Company. The Company has a dispute with La Quinta regarding
properties that the Company has applied for located between the
Company's Lugushwa and Namoya projects. This dispute therefore does
not in any way affect the Company's four projects, the titles to
which are not in question. The dispute also does not affect in any
way the 14 exploration permits that were recently acquired by the
Company, which are located between the Twangiza and Kamituga
projects and between the Kamituga and Lugushwa projects (see the
Company's press release dated March 8, 2007). Background on Dispute
--------------------- In 2003, shortly after implementation of the
New Mining Code, the Company's wholly-owned subsidiary, Banro Congo
Mining SARL ("Banro Congo"), submitted applications for 23
exploration permits ("PRs") covering ground (the "Disputed New
Ground") between the Company's Lugushwa and Namoya projects. Soon
after filing these applications, the Company was advised that WB
Kasai Congo SPRL, a private DRC company, would be claiming priority
to the Disputed New Ground based on applications for ZERs (Zone de
Researches Exclusive) filed under the Old Mining Code in 1999.
However, subsequent searches by the Company's DRC counsel and
reviews of Mining Journals and Cadastre Miniere records failed to
yield evidence of these ZERs registered in the name of WB Kasai
Congo SPRL. WB Kasai Congo SPRL subsequently approached the Company
in 2005 seeking to joint venture the Disputed New Ground. To
address the possibility that WB Kasai Congo SPRL would be
successful in its claim for priority, the Company decided to enter
into an agreement with WB Kasai Congo SPRL regarding the Disputed
New Ground. An agreement was signed in September 2005 between Banro
Congo and WB Kasai Congo SPRL requiring Banro Congo to pay
approximately US$113,000 over a 4 year period in addition to
providing management and capital to develop the potential of the
Disputed New Ground. The agreement contemplated that Banro Congo
would hold 85% of the joint venture, with WB Kasai Congo SPRL
holding 15%. The agreement was subject to WB Kasai Congo SPRL
obtaining title to its PR applications. WB Kasai Congo SPRL
subsequently repudiated its agreement with Banro Congo, and entered
into an agreement with La Quinta, the validity of which Banro
disputes. WB Kasai Congo SPRL proceeded with a lawsuit against
Banro Congo, and has obtained a preliminary judgment in the DRC.
This judgment, referred to in La Quinta's press release of March
14, is from a Congolese Commercial Court granting a US$200,000
award against Banro Congo for damages, essentially for obtaining a
benefit on the value of WB Kasai Congo SPRL's PRs. The Company's
DRC counsel finds the damages award puzzling as WB Kasai Congo SPRL
was not in possession of title certificates during the period in
question. Further, the Company's DRC counsel is of the opinion that
the judgment was ambiguous when it failed to conclude that the
agreement between WB Kasai Congo SPRL and Banro Congo was null and
void. The Company will be appealing the judgment. The Company has
been advised that the Ministry of Mines and Cadastre Miniere are
currently reviewing the circumstances of WB Kasai Congo SPRL's
applications for title to the Disputed New Ground. A decision is
expected shortly. The Company believes it has valid claims to the
Disputed New Ground, and is pursuing its legal rights in both
Canada and the DRC. Banro is a Canadian-based gold exploration
company focused on the development of four major, wholly-owned gold
projects along the 210 kilometre-long Twangiza-Namoya gold belt in
the South Kivu and Maniema provinces of the DRC. Led by a proven
management team with extensive gold and African experience, Banro's
strategy is to unlock shareholder value by increasing and
developing its significant gold assets in a socially and
environmentally responsible manner. DATASOURCE: Banro Corporation
CONTACT: please visit our website at http://www.banro.com/, or
contact: Peter Cowley, President and C.E.O., United Kingdom, Tel:
(44) 790-454-0856; Arnold T. Kondrat, Executive Vice-President,
Toronto, Ontario, or Martin Jones, Vice-President, Corporate
Development, Toronto, Ontario, Tel: (416) 366-2221 or
1-800-714-7938
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