TORONTO, July 30 /PRNewswire-FirstCall/ -- Banro Corporation
("Banro" or the "Company") (AMEX - "BAA"; TSX - "BAA") is pleased
to announce completion of its Preliminary Assessment of its
wholly-owned Twangiza project, located on the Twangiza-Namoya gold
belt in the Democratic Republic of the Congo (the "DRC").
Highlights include: - Average annual production of 317,500 ounces
of gold per annum during initial 7 years of operations (average
260,300 ounces of gold per annum over the currently defined 13 year
mine life). - Operating total cash costs of US$215 per ounce for
the initial 7 year mine life (average US$257 per ounce over 13 year
mine life). - Project post tax net present value ("NPV") of US$511
million based on a 5% discount rate and a gold price of US$600 per
ounce. - Project post tax internal rate of return ("IRR") of 33%,
with a 2.6 year payback on project capital expenditures from the
start of production. - Project net cash flow after tax and capital
spending of US$791 million. The Preliminary Assessment has been
prepared with input from a number of independent consultants
including SRK Consulting, Cardiff (mining and environmental), SGS
Lakefield, Johannesburg (metallurgical testwork), Knight Piesold
Ltd., Vancouver (power) and SENET, Johannesburg (processing and
infrastructure). SENET also undertook the preliminary economic
valuation and report compilation. "The results of this Preliminary
Assessment, which highlight the robust economics of our Twangiza
project, are extremely encouraging," said Peter Cowley, Banro's
President and CEO. "Twangiza has the potential to generate
significant cash flow based on its projected low cash operating
costs. Our focus now is on further improving Twangiza's economics
by expanding the resource base, optimizing various aspects of the
project, especially the processing route, completing feasibility
studies and moving Twangiza along the development path and up the
value curve. The very positive results from Twangiza, when combined
with the previously announced Namoya project results, indicate the
potential for production of plus 500,000 ounces per year of gold
from these two projects and the generation of very significant cash
flows." Cautionary Statement: The Preliminary Assessment of
Twangiza is preliminary in nature and includes Inferred Mineral
Resources that are considered too speculative geologically to have
the economic considerations applied to them that would enable them
to be categorized as Mineral Reserves. There is no certainty that
the conclusions reached in the Preliminary Assessment will be
realized. Mineral Resources that are not Mineral Reserves do not
have demonstrated economic viability. Twangiza Project Overview The
Twangiza project is located in the South Kivu Province of the DRC,
45 kilometres to the south-southeast of Bukavu, the provincial
capital. The Twangiza property consists of six exploitation permits
totalling 1,164 square kilometers that are wholly-owned by Banro,
indirectly through a DRC subsidiary, Twangiza Mining sarl. Twangiza
is situated at the northeastern end of the Twangiza-Namoya gold
belt. The current exploration commenced in October 2005 and to date
125 diamond drill holes have been completed, together with
extensive re-sampling of old mine adits, along the 5.2 kilometre
long, north trending mineralized trend, which hosts the two
principal deposits of Twangiza Main and Twangiza North. Gold
mineralization is hosted in sediments (mudstones and siltstones)
that have been intruded by a series of feldspar porphyry sills
along the hinge of a major anticlinal structure. Exploration is
continuing with four diamond rigs on the property. Mineral
Resources The Twangiza project's attributed Mineral Resources have
been derived from resource drilling and assays received before June
2007 and are as reported in the Company's press release dated June
13, 2007. These Mineral Resource estimates were prepared in
accordance with National Instrument 43-101 based on information
compiled by Banro's Mineral Resources Manager, Daniel Bansah, who
is a "qualified person" as such term is defined in National
Instrument 43-101. Table I below summarises the current Mineral
Resource estimates at Twangiza. Table I
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Mineral Resource Category Tonnes Grade Ounces
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(g/t Au)
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Measured 14,510,000 2.82 1,313,400
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Indicated 31,460,000 1.81 1,832,800
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Measured & Indicated 45,970,000 2.13 3,146,200
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Inferred 47,474,000 2.02 3,088,100
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(Using a 1.0 g/t Au cut-off). Table II below summarises the Mineral
Resources at Twangiza in terms of oxide, transitional and fresh
rock (sulfide) categories. Table II
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Material Type Measured & Indicated Inferred
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Tonnes Grade Ounces Tonnes Grade Ounces
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(g/t Au) (g/t Au)
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Oxide 13,080,000 2.72 1,143,900 5,121,000 3.37 555,100
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Transitional 11,356,000 2.32 846,100 3,845,000 3.05 377,100
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Fresh (Sulfide) 21,534,000 1.67 1,156,200 38,508,000 1.74 2,155,900
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Total 45,970,000 2.13 3,146,200 47,474,000 2.02 3,088,100
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(Using a 1.0 g/t Au cut-off). The above Mineral Resources are found
within three deposits: Twangiza Main, which contains 84% of the
total Mineral Resources; Twangiza North, which contains 14% of the
total Mineral Resources; and the transported Twangiza Main "Valley
Fill" deposit, which contains 2% of the total Mineral Resources.
Mine Plan SRK Consulting (UK) Ltd. (Cardiff office) undertook a
mine plan based on Banro's Measured, Indicated and Inferred Mineral
Resources delineated to date. Pit optimizations were undertaken on
the two principal deposits at Twangiza based on the following
parameters: Gold price: ...................US$600 per ounce Diesel
fuel price: ............US$0.89/litre Mining dilution:
..............5% at zero grade Mining recovery: ..............95%
Pit slopes: ...................minus 40 to 50 degrees Metallurgical
recovery: .......Oxide sediment and feldspar porphyry: 91%
Transitional feldspar porphyry: 81% Transitional sediment: 38%
Fresh feldspar porphyry: 91% Fresh sediment: 54% The following
Mineral Resources were estimated to be contained in an engineered
pit design, optimum for the hydroelectric power alternative:
Twangiza Open Pit Mineral Resources
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Au Tonnes (g/t) Ounces Strip Ratio
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Oxide 21,236,600 2.49 1,700,100
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Transitional 12,405,900 2.73 1,088,900
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Fresh Rock 33,067,400 1.69 1,796,700
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Total 66,709,900 2.14 4,585,700 3.17
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Economic open pit cut-off grades are estimated at 0.57 g/t Au for
oxide, 0.70 g/t Au for the transitional porphyry, 1.49 g/t Au for
the transitional sediment, 0.67 g/t Au for the fresh porphyry and
1.10 g/t Au for the fresh rock sediment ore type. Preliminary pit
optimization studies were also determined for a diesel fuelled
power alternative and resulted in estimated open pit mineable
resources of 54,879,400 tonnes grading 2.20 g/t Au (equivalent to
3,881,700 ounces of gold). The mine schedule proposes the
sequential mining of oxides, transitional and fresh rock ores from
the open pits. Processing Metallurgical testwork, including
recovery and comminution studies on representative, composite drill
core samples, has been undertaken for the oxide, transitional and
fresh rock (sulfide) ore categories by SGS Lakefield in
Johannesburg and are continuing. The results indicate that the
oxide sediments and porphyry, transitional and fresh rock feldspar
porphyry host rock are non-refractory while the transitional and
fresh rock sediments are refractory. Metallurgical results to date
indicate the following metallurgical recoveries for the various ore
types: Feldspar Porphyry and Sediment Oxides: 91% Transitional
Feldspar Porphyry: 84% Transitional Sediment: 38% Fresh Feldspar
Porphyry: 90% Fresh Sediment: 54% Based on this testwork, SENET of
Johannesburg scoped a conventional Gravity-CIL (carbon-in-leach)
processing facility with annual throughput of 5.0 million tonnes
per annum, resulting in a currently defined mine life of 13 years.
Metallurgical testwork is continuing on alternative processing
routes to optimize the extraction of gold from the refractory ores
(i.e. bio-oxidation) in the transitional and fresh sediment ore
types. Power Studies have been undertaken using hydroelectric and
diesel power sources for the Twangiza project. Although capital
costs are higher for the hydroelectric alternative, operating
costs, especially processing power costs, are significantly lower
and subsequent project economics are better than a diesel powered
generation alternative. Back up diesel power for essential
processing plant equipment has been included in the project's
capital cost. Knight Piesold Ltd. of Vancouver undertook studies on
a number of potential hydroelectric sites along the Twangiza-Namoya
belt. Follow-up site investigations including the installation of
flow gauges and detailed hydrology studies are ongoing as part of
the feasibility studies. The hydroelectric power scheme also has
the potential to obtain carbon credits that could reduce capital
costs for this power alternative. Capital Costs and Infrastructure
The following table summarizes estimated capital costs for the
Twangiza project, as estimated by the independent consultants, and
include preliminary discussions with equipment providers and also
knowledge gained from current projects in Africa. Costs currently
assume an owner-operated mining fleet. Additionally, an assumption
is made that a dedicated hydro-electric facility would be developed
by Banro utilizing one of the sites selected by the Company's
consultant hydrologist, Knight Piesold Ltd. Twangiza Project
Capital Costs
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Mining US$ million
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Plant & Equipment 57.59
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Haul Roads 4.56
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Prestrip 15.13
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Other 1.38
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Process Plant
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Earthworks and Civil 14.29
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Mechanical, Structural & Piping 57.31
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Electrical & Instrumentation 7.90
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Tailings Dam 5.44
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Other 14.56
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Infrastructure
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Power Plant (hydro electric power) 54.84
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Buildings and Accommodation Facilities 7.59
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Access Roads 6.51
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Vehicles and Mobile Plant 2.61
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Other 1.45
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Owner's Costs 9.70
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Other (EPCM, transport, etc.) 44.19
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Contingency 42.42
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Total Project Initial Capital Costs 347.47
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Ongoing Capital 32.82
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Operating Costs The following operating costs were estimated and
incorporated into the financial analysis: Total Operating Costs for
Initial 7 years -----------------------------------------
----------------------------------------- Ore Tonne Ore Tonne
----------------------------------------- (US$/tonne) (US$/ounce)
----------------------------------------- Mining 6.62 104.25
----------------------------------------- Processing 5.31 83.55
----------------------------------------- G & A 1.58 24.92
----------------------------------------- Refining 0.13 2.07
----------------------------------------- Total 13.64 214.79
----------------------------------------- Life of Mine Total
Operating Costs ----------------------------------
----------------------------------------- Ore Tonne Ore Tonne
----------------------------------------- (US$/tonne) (US$/ounce)
----------------------------------------- Mining 5.95 114.21
----------------------------------------- Processing 5.73 110.01
----------------------------------------- G & A 1.58 30.40
----------------------------------------- Refining 0.11 2.07
----------------------------------------- Total 13.37 256.69
----------------------------------------- The estimated total open
pit mine operating cost of US$5.95 per tonne of ore is equivalent
to US$1.45 per tonne of material moved. Project Economics and
Financial Analysis SENET has produced a cash flow valuation model
for the Twangiza project based upon the geological and engineering
work completed to date and incorporating the hydroelectric power
source. The financial model also reflects the favourable fiscal
aspects of the Mining Convention governing the Twangiza project,
which include 100% equity interest and a 10 year tax holiday from
the start of production. An administrative tax of 5% for the
importation of plant, machinery and consumables has been included
in the projected capital and operating costs. The Base Case was
developed using a long-term gold price of US$600 per ounce.
Calculated sensitivities show the significant upside leverage to
gold prices and robust nature of the projected economics to
operating assumptions. Gold Price Senstivities
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Gold Price IRR NPV (US$ M)
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US$/oz (%) 0% 5% 10%
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550 28 622 389 238
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600 33 791 511 330
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650 39 960 632 422
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Other Senstivities
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Capital Costs
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+ 10% 29 753 475 297
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- 10% 38 829 546 363
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Operating Costs
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+ 10% 31 704 450 286
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- 10% 36 878 571 374
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The above financial analysis does not take into account ongoing
exploration, feasibility, financing, interest or working capital
costs. Project economics were also run for the diesel power
alternative. This resulted in the following: - Average annual
production of 312,500 ounces of gold per annum during initial 7
years of operations (average 268,900 ounces of gold per annum over
11 year mine life). - Initial capital costs of US$299.19 million
and ongoing capital of US $27.70 million. - Operating cash costs of
US$293 per ounce for the initial 7 years (average US$331 per ounce
over mine life). - Project post tax NPV of US$312 million based on
a 5% discount rate and a gold price of US$600 per ounce. - Project
post tax IRR of 29%, with a 2.7 year payback on project capital
expenditures from the start of production. - Project net cash flow
after tax and capital spending of US$480 million. Accessibility and
Transport SENET has undertaken preliminary analysis of access
routes to the Twangiza project for plant and equipment as well as
ongoing production materials and consumables. Access to site is
available predominantly by rail from Dar es Salaam on the coast in
Tanzania or via road from Mombassa in Kenya. The national road (N2)
running from Bukavu to Kasongo will pass within approximately 24 km
of the project. This road is currently being upgraded through a
World Bank initiative. Environmental and Social Aspects SRK
Consulting is implementing a pre-feasibility, environmental base
line study at Twangiza which will include ecological, hydrological
and socio-economic assessments. There are a number of settlements
in and around the mine project area that could provide labour for
the operation. Project Opportunities Banro is actively pursuing a
number of alternatives for enhancing and increasing the economics
and financial returns relating to the Twangiza project. These
include delineating additional resources at Twangiza within
economic hauling distances, optimizing the mine plan schedule,
optimizing process recoveries for the various ore types and
targeting new near surface prospects within the Twangiza project
area. Development Timetable Banro is currently working toward
completion of a formal pre-feasibility study by the end of 2007.
This will largely involve the inclusion of a further resource
update, pit optimization and engineering studies including the
incorporation of further metallurgical and geotechnical
investigations. Banro has also initiated baseline environmental
studies. It is expected that the pre-feasibility work will progress
directly to a definitive, full feasibility study with completion
targeted for the second half of 2008. During this period, Banro
intends to initiate discussions with potential project finance
lenders, including both multilateral agencies and commercial banks.
Full details of the Twangiza Preliminary Assessment in the form of
a National Instrument 43-101 technical report will be filed on
SEDAR within the next 45 days. Additional information with respect
to the Twangiza project is contained in the technical report of
Michael B. Skead (who is the Company's Vice President, Exploration
and a "qualified person" as such term is defined in National
Instrument 43-101) dated March 6, 2007, and entitled "Fourth NI
43-101 Technical Report, Twangiza Project, South Kivu Province,
Democratic Republic of the Congo." A copy of this report can be
obtained from SEDAR at http://www.sedar.com/. Qualified Person
---------------- The Preliminary Assessment of Twangiza was
prepared under the supervision of James Hollywood, Managing
Director of SENET and a "qualified person", as such term is defined
in National Instrument 43-101. Mr. Hollywood has reviewed and
approved the contents of this press release. 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. Cautionary Note to U.S. Investors
--------------------------------- The United States Securities and
Exchange Commission (the "SEC") permits U.S. mining companies, in
their filings with the SEC, to disclose only those mineral deposits
that a company can economically and legally extract or produce.
Certain terms are used by the Company, such as "measured",
"indicated", and "inferred" "resources", that the SEC guidelines
strictly prohibit U.S. registered companies from including in their
filings with the SEC. U.S. Investors are urged to consider closely
the disclosure in the Company's Form 40-F Registration Statement,
File # 001-32399, which may be secured from the Company, or from
the SEC's website at http://www.sec.gov/edgar.shtml. Cautionary
Note Concerning Forward-Looking Statements
----------------------------------------------------- This press
release contains forward-looking statements. All statements, other
than statements of historical fact, that address activities, events
or developments that the Company believes, expects or anticipates
will or may occur in the future (including, without limitation,
statements regarding estimates and/or assumptions in respect of
production, revenue, cash flow and costs, estimated Twangiza
project economics, mineral resource estimates, potential
mineralization, potential mineral resources and the Company's
exploration and development plans and objectives with respect to
its Twangiza project) 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 Twangiza Preliminary Assessment and mine
plan; failure to establish estimated mineral resources;
fluctuations in gold prices and currency exchange rates; inflation;
gold recoveries for Twangiza being less than those indicated by the
metallurgical testwork carried out to date (there can be no
assurance that gold recoveries in small scale laboratory tests will
be duplicated in large tests under on-site conditions or during
production); changes in equity markets; political developments in
the DRC; changes to regulations affecting the Company's activities;
uncertainties relating to the availability and costs of financing
needed in the future; 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 information form dated March 30, 2007 filed on
SEDAR at http://www.sedar.com/. 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. Cautionary Note Concerning
Resource Estimates ---------------------------------------------
The mineral resource figures referred to in this press release are
estimates and no assurances can be given that the indicated levels
of gold will be produced. Such estimates are expressions of
judgment based on knowledge, mining experience, analysis of
drilling results and industry practices. Valid estimates made at a
given time may significantly change when new information becomes
available. While the Company believes that the resource estimates
included in this press release are well established, by their
nature resource 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.
Due to the uncertainty that may be attached to inferred mineral
resources, it cannot be assumed that all or any part of an inferred
mineral resource will be upgraded to an indicated or measured
mineral resource as a result of continued exploration. Confidence
in the estimate is insufficient to allow meaningful application of
the technical and economic parameters to enable an evaluation of
economic viability worthy of public disclosure, except in the case
of the Preliminary Assessment. Inferred mineral resources are
excluded from estimates forming the basis of a feasibility study.
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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