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 August, 2015.
Commission File Number 001-32399
BANRO CORPORATION
(Translation of registrants name into English)
1 First Canadian Place
100 King Street West, Suite
7070
Toronto, Ontario, Canada
M5X 1E3
(Address of
principal executive offices)
Indicate by check mark whether the registrant files or will
file annual reports under cover Form 20-F or Form 40-F
Form 20-F
[X] Form 40-F [ ]
Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]
Note: Regulation S-T Rule 101(b)(1) only permits the
submission in paper of a Form 6-K if submitted solely to provide an attached
annual report to security holders.
Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]
Note: Regulation S-T Rule 101(b)(7) only permits the
submission in paper of a Form 6-K if submitted to furnish a report or other
document that the registrant foreign private issuer must furnish and make public
under the laws of the jurisdiction in which the registrant is incorporated,
domiciled or legally organized (the registrants home country), or under the
rules of the home country exchange on which the registrants securities are
traded, as long as the report or other document is not a press release, is not
required to be and has not been distributed to the registrants security
holders, and, if discussing a material event, has already been the subject of a
Form 6-K submission or other Commission filing on EDGAR.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
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BANRO CORPORATION |
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/s/ Kevin Jennings |
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Date: August 27, 2015 |
Kevin Jennings |
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Chief Financial Officer |
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-2-
INDEX TO EXHIBITS
FORM 51-102F3 - MATERIAL CHANGE REPORT
1. |
Name and Address of
Company |
Banro Corporation
1 First Canadian
Place
Suite 7070, 100 King Street West
Toronto, Ontario
M5X 1E3
2. |
Date of Material Change |
August 12, 2015.
The news release (the "News
Release") attached hereto as Schedule "A" was issued through Marketwired on
August 12, 2015.
4. |
Summary of Material Change |
See the attached News Release, which
News Release is incorporated herein.
5. |
Full Description of Material
Change |
|
5.1 |
Full Description of Material
Change |
See the attached News Release, which
News Release is incorporated herein.
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5.2 |
Disclosure for Restructuring
Transactions |
Not applicable.
6. |
Reliance on subsection 7.1(2) of National Instrument
51-102 |
Not applicable.
Not applicable.
Geoffrey Farr (Vice President, General
Counsel and Corporate Secretary) - (416) 366-2221.
August 22, 2015.
Schedule "A"
Banro Announces Q2 2015 Financial Results;
Achieves
Record Quarterly and Half-Year Revenues
Toronto, Canada August 12, 2015 Banro Corporation
("Banro" or the "Company") (NYSE MKT - "BAA"; TSX - "BAA") today announced its
financial and operating results for the second quarter of 2015.
FINANCIAL HIGHLIGHTS
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Record Q2 2015 revenues of $42.6 million, a 61% increase
over Q2 2014 revenues of $26.5 million; and record H1 2015 revenues of
$83.6 million, compared with $57 million in the comparable period in 2014
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Record EBITDA of $34 million in H1 2015, a 210% increase
over H1 2014 ($11 million) |
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35,665 gold ounces sold in Q2 2015, representing a 74%
increase over the same period in 2014 |
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Gross earnings from operations of $15 million in Q2 2015,
a 239% increase over Q2 2014 ($4 million) |
OPERATIONAL HIGHLIGHTS
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Twangiza continues to outperform expectations, resulting
in a 60% increase in gold production to 34,325 ounces from Q2 2014
production of 21,431 ounces |
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Twangiza increases the proportion of non-oxide material
processed to an average of 43% in Q2 2015 |
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H1 2015 cash costs per ounce at Twangiza decreased 30% to
$558 per ounce from $794 per ounce in H1 2014 |
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H1 2015 AISC of $643 per ounce, a 29% decrease from H1
2014 of $902 per ounce |
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As reported in the Companys June 8, 2015 press release,
Twangiza Reserves increased 59%, extending the mine life utilizing the
existing plant to 14 years |
PROJECT HIGHLIGHTS
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Namoya continues to increase stacked commercial
production in Q3 2015 material as it progresses on schedule to achieving
|
All dollar amounts in this press release are expressed in
thousands of dollars and, unless otherwise specified, in United States dollars.
''With the completion of Q2 2015, Twangiza has achieved a new
level of consistent steady state performance with strong gold production while
processing an increasing proportion of non-oxide material. This operating
performance with the additional reserves has improved the flexibility of the
operation throughout the current gold environment. Meanwhile, Namoya remains on
target to achieve commercial production in the third quarter. Stacked material
continues to increase as a result of the enhancements made in Q1. The focus is
now shifting to ore delivery, which will receive a significant boost with the
receipt of the larger mining fleet due to arrive shortly on site, commented
Banro CEO and President John Clarke.
A-2
The table below provides a summary of financial and operating
results for the three and six-month periods ended June 30, 2015, and
corresponding periods in 2014 as well as the first quarter of 2015:
(I) FINANCIAL
|
Q2 2015 |
Q2 2014 |
Q1 2015 |
|
H1 20154 |
H1 20144 |
Selected
Financial Data |
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Revenues |
42,597 |
26,534 |
41,003 |
|
83,600 |
56,973 |
Total mine operating
expenses1 |
(28,068) |
(22,242) |
(24,281) |
|
(52,349) |
(46,640) |
Gross earnings from
operations |
14,529 |
4,292 |
16,722 |
|
31,251 |
10,333 |
Net income/(loss)
before impairment charge2 |
1,534 |
(2,998) |
6,780 |
|
8,314 |
(3,702) |
Net (loss)/income
|
(48,666) |
(2,998) |
6,780 |
|
(41,886) |
(3,702) |
Basic net (loss)/earnings per share ($/share) |
(0.19) |
(0.01) |
0.03 |
|
(0.17) |
(0.01) |
Key Operating Statistics |
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Average gold price
received ($/oz) |
1,194 |
1,292 |
1,208 |
|
1,201 |
1,267 |
Gold sales (oz) |
35,665 |
20,537 |
33,956 |
|
69,621 |
44,964 |
Gold production (oz)
|
34,325 |
21,431 |
35,943 |
|
70,268 |
41,568 |
All-in sustaining
cost per ounce ($/oz) |
701 |
945 |
581 |
|
643 |
902 |
Cash cost per ounce
($/oz) |
587 |
764 |
527 |
|
558 |
794 |
Gold margin ($/oz) |
607 |
528 |
681 |
|
643 |
473 |
Financial Position |
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Cash and cash
equivalents |
9,270 |
6,460 |
3,024 |
|
9,270 |
6,460 |
Gold bullion
inventory at market value3 |
1,875 |
2,476 |
4,922 |
|
1,875 |
2,476 |
Total assets |
879,510 |
861,162 |
903,489 |
|
879,510 |
861,162 |
Long term debt |
165,591 |
160,827 |
204,055 |
|
165,591 |
160,827 |
(1) |
Includes depletion and depreciation. |
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(2) |
An impairment charge of $50,200 was recognized in Q2
2015. Refer to the Namoya - Mine Under Construction section below for
additional information. |
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(3) |
This represents 1,601 ounces of gold bullion inventory,
with a total cost of $877 per ounce, shown at the June 30, 2015 closing
market price of $1,171 per ounce of gold. |
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(4) |
For the purposes herein, "H1 2015" refers to the six
month period ended June 30, 2015 and "H1 2014" refers to the six month
period ended June 30, 2014. |
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Revenues during the three and six-month periods ended
June 30, 2015 were $42,597 and $83,600, respectively, compared with
revenues of $26,534 and $56,973, respectively, for the corresponding
periods in 2014. During the second quarter of 2015, ounces of gold sold
increased by 74% to 35,665 ounces compared to sales of 20,537 ounces
during the second quarter of 2014. The average gold price per ounce sold
in the quarter was $1,194 compared to an average price of $1,292 per ounce
obtained during the corresponding prior year period. |
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Mine operating expenses, including depletion and
depreciation, for the three and six-month periods ended June 30, 2015 were
$28,068 and $52,349, respectively, compared to $22,242 and $46,640 for the
respective three and six-month periods ended June 30, 2014. The increase
in costs during the 2015 three and six month periods was due to higher
depreciation and depletion as a result of increased production and
expansion assets commissioned in mid-2014, and increased milling
throughput, for a total of 428,661 tonnes and 857,505 tonnes,
respectively, compared to 340,654 and 593,344, respectively in the
corresponding prior year periods. Additionally, the timing of production
versus gold sales and the resulting inventory adjustment impacted the mine
operating expenses. |
A-3
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Gross earnings from operations for the respective three
and six-month periods ended June 30, 2015, were $14,529 and $31,251,
respectively, compared to $4,292 and $10,333, respectively, for the
corresponding periods of 2014. The 74% higher gold sales during Q2 2015
compared to Q2 2014, with a corresponding 26% increase in mine operating
expenses translated into improving gross margins by over 238%. The gross
earnings increase was partially offset by the decrease in revenue per
ounce, resulting in a gold margin per ounce increase from $528 per ounce
in the second quarter of 2014 to $607 per ounce in the second quarter of
2015. |
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Cash costs on a sales basis for H1 2015 were $558 per
ounce, a reduction of 30% from $794 per ounce in H1 2014. Cash costs per
ounce on a sales basis for the second quarter of 2015 were $587 per ounce
of gold (compared to $764 per ounce of gold for the second quarter of 2014
and $527 per ounce for the first quarter of 2015). Cash costs for the
second quarter of 2015 were lower than the prior year quarter as a result
of continued levels of increased productivity at Twangiza. Consistent with
the first quarter of 2015, Twangiza maintained steady state production
levels and normalized production costs in line with life of mine
expectations as well as benefits from the reductions in diesel pricing.
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All-in sustaining costs were $643 per ounce for H1 2015,
a 29% reduction from $902 per ounce in H1 2014. All-in sustaining costs
were $701 per ounce for the second quarter of 2015 (compared to $945 per
ounce of gold for the second quarter of 2014 and $581 per ounce for the
first quarter of 2015). |
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In April 2015, the Company closed the remaining $70
million of the $90 million financing, the agreements for which were signed
in the first quarter of 2015 (refer to corporate development below). With
the completion of these transactions in April 2015, the Company replaced
short- term debt with longer term facilities and improved its financial
leverage. |
(II) OPERATIONAL
- TWANGIZA
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During the second quarter of 2015, Twangiza was loss time
injury (LTI) free, progressing to over eighteen months and 7.5 million
LTI free hours since the last recorded LTI. |
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During the second quarter of 2015, the plant at the
Twangiza Mine processed 428,661 tonnes of ore (compared to 340,654 tonnes
during the second quarter of 2014 and 428,844 tonnes in the first quarter
2015), maintaining the first quarter of 2015 achievement of 101% of design
capacity. Ongoing debottlenecking and incremental process improvements
allowed for throughput levels to be maintained while increasing the
proportion of non-oxide material to an average of 43% for the quarter. Ore
was processed during the second quarter of 2015 at an indicated head grade
of 3.01 g/t Au (compared to 2.44 g/t Au during the second quarter of 2014
and 3.21 g/t Au during the first quarter of 2015) with a recovery rate of
82.2% (compared to 84.3% during the second quarter of 2014 and 80.7% in
first quarter 2015) to produce 34,325 ounces (compared to 21,431 ounces
during the second quarter of 2014 and 35,943 ounces in first quarter 2015)
of gold. |
A-4
(III) MINE UNDER
CONSTRUCTION NAMOYA
Mine Under Construction - Investment |
Q2 2015 |
Change |
Q2 2014 |
|
($000's) |
(%) |
($000's) |
Additions1 |
15,847 |
(30%) |
22,557 |
Impairment2 |
(50,200) |
100% |
- |
Balance as at June 30 |
396,365 |
4% |
380,405 |
(1) |
Net of pre-commercial revenue of $11,705 and $6,411 in Q2
2015 and Q2 2014, respectively. |
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(2) |
Refer to the Namoya - Mine Under Construction section
below for additional information. |
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During the second quarter of 2015, the Namoya Mine
produced 10,525 ounces of gold from a total of 330,267 tonnes of ore,
stacked and sprayed on the heap leach pads, at an indicated head grade of
1.53 g/t Au. Stacking levels at the beginning of the second quarter
decreased substantially from those achieved in March 2015, as a result of
the impact of modifying the mine plan to allow for earlier access to the
Kakula reserve pit as well as the adverse impact of unseasonably high
rains on the delivery of materials and supplies. |
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During the second half of June and early July, Namoya
achieved stacking rates in excess of 5,000 tonnes per day ("tpd") leading
to material stacked in July of 151,026 tonnes. Further improvements are
expected in August and September. Namoyas focus is on ore delivery in
order to support the increases in 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. |
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For the third quarter of 2015, Namoya is preparing for
the delivery of the CAT 777 mining fleet additions in early September and
commissioning in phases starting in September. The Namoya Summit has been
cleared for delineation and is planned to be ready for production
activities during the fourth quarter of 2015. |
(IV) EXPLORATION
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Consistent with the first quarter of 2015, exploration
activities in the second quarter of 2015 were limited as the Company
focused on development at Namoya and incremental operational achievements
at Twangiza. Target drilling has commenced for the Namoya Summit related
targets in the third quarter of 2015. |
(V) CORPORATE
DEVELOPMENT
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|
In April 2015, the Company closed the second $20 million
forward sale and the $50 million gold streaming transactions, which had
been signed in February 2015. 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 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. |
A-5
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In April 2015, the Company closed a $10 million forward
sale to finance the purchase of the expanded mobile fleet. The forward
sale transaction provides for the prepayment by the purchaser of $10
million for its purchase of 9,508 ounces of gold from the Twangiza mine,
with the gold deliverable over two years, at 396 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 13%. The terms also include a gold
floor price mechanism whereby, if the gold price falls below $1,150 per
ounce in any month, additional ounces are deliverable to ensure a realized
gold price of $1,150 per ounce for that month. |
TWANGIZA MINE
Twangiza focused on debottlenecking during the second quarter
of 2015, and incrementally improved the processing of ore with the ongoing
blending of non-oxide material. This focus allowed for the operation to maintain
throughput at the annualized design capacity of 1.7 Mtpa, while increasing the
proportion of non-oxide material to an average of 43% for the quarter. The
increase in mineral reserves (see Banros June 8, 2015 press release), together
with the plant's success in maintaining annualized throughput levels through two
consecutive quarters, provides confidence in the plant's ability to maintain
current performance levels. Similar to the first quarter, mine productivity
allowed for the availability of high grade ore in addition to appropriate
blending of oxide and non-oxide material. Twangiza management will continue to
focus on process optimization to secure reliable throughput levels that can be
maintained through the rainy season.
TWANGIZA MINE |
Q2 2015 |
Q1 2015 |
Prior Quarter |
Q2 2014 |
Prior Year |
|
|
|
Change % |
|
Change % |
Gold sales (oz) |
35,665 |
33,956 |
5% |
20,537 |
74% |
Gold produced (oz) |
34,325 |
35,943 |
(5%) |
21,431 |
60% |
Material mined (t) |
770,162 |
975,716 |
(21%) |
871,849 |
(12%) |
Ore mined (t)1 |
548,175 |
632,264 |
(13%) |
485,276 |
13% |
Valley fill mined (t) |
- |
- |
- |
- |
- |
Waste mined (t) |
221,987 |
343,452 |
(35%) |
386,573 |
(43%) |
Strip ratio (t:t)2 |
0.41 |
0.54 |
(25%) |
0.80 |
(49%) |
Ore milled (t)1 |
428,661 |
428,844 |
(0%) |
340,654 |
26% |
Head grade (g/t Au)3 |
3.01 |
3.21 |
(6%) |
2.44 |
23% |
Recovery (%) |
82.20 |
80.7 |
2% |
84.30 |
(2%) |
Cash cost per ounce ($US/oz) |
587 |
527 |
11% |
764 |
(23%) |
(1) |
The difference between ore mined and ore milled is,
generally, the result of the stockpiling of lower grade ore. |
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|
(2) |
Strip ratio is calculated as waste mined divided by ore
mined. |
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(3) |
Head grade refers to the indicated grade of ore
milled. |
A-6
In the second 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 11% higher than the first quarter of
2015 and represented a 23% reduction from the second quarter of 2014. Similar to
recent quarters, the improved operating results continue to be driven by the
ability for the operations to achieve design production levels throughout the
operations. Mill throughput was the most significant contributor which had a 26%
increase in tonnage compared to the same prior year period with gross spending
on processing only increasing by approximately 3%.
Gross spending and unit costs for Q2 2015 in comparison to Q1
2015 and Q2 2014 are as follows:
Mine Operating Costs |
(In '000s) |
Cost per tonne Milled
($/t) |
|
Q2 2015 |
Q1 2015 |
Q2 2014 |
Q2 2015 |
Q1 2015 |
Q2 2014 |
Mining Costs |
4,495 |
4,503 |
3,060 |
10.5 |
10.5 |
9.0
|
Processing Costs |
9,252 |
9,679 |
8,999 |
21.6 |
22.6 |
26.4
|
Overhead |
5,269 |
4,955 |
4,412 |
12.3 |
11.6 |
13.0
|
Inventory Adjustments |
1,927 |
(1,242) |
(774)
|
4.5 |
(2.9)
|
(2.3) |
Total mine operating cost |
20,943 |
17,895 |
15,697 |
48.9 |
41.8
|
46.1 |
Total tonnes milled (tonnes) |
428,661 |
428,844 |
340,654 |
|
|
|
Mining
A total of 770,162 tonnes of material (Q2 2014 871,849
tonnes) were mined during the three month period ended June 30, 2015. Total ore
mined was 548,175 tonnes (Q2 2014 485,276 tonnes). The strip ratio for the
second quarter of 2015 decreased to 0.41 as compared to 0.8 during the second
quarter of 2014 in accordance with the mine schedule. The mining cost per tonne
milled during the second quarter of 2015 remained consistent with the first
quarter of 2015 at $10.5 per tonne milled.
Processing & Engineering
For the three month period ended June 30, 2015, the plant at
the Twangiza Mine processed 428,661 tonnes of ore (Q2 2014 340,654 tonnes),
representing a 26% increase over the prior year period, as the operations
continued to exceed the annualized rate of 1.7 Mtpa. Increased throughput levels
reduced the processing cost per tonne milled from $26.4 per tonne to $21.6 per
tonne, representing a decrease of 18%. The Twangiza plant once again displayed
its operational capability by running above design capacity and successfully
processing an increasing proportion of non-oxide material (43% of total Q2 2015
feed). Recoveries of 82.2% during the period decreased compared to the
corresponding prior year of 84.3% . As the plant processed increased levels of
non-oxide material, site management continues to carry out activities to improve
the recoveries. The processing costs were $0.25 million higher compared to Q2
2014 as a result of the 26% increase in throughput, partially offset by lower
power costs per tonne due to lower realized diesel prices. Economies of scale
allow the operation to benefit significantly from the increased throughput and
production rates.
Sustaining Capital Activities
Capital spending at Twangiza was 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 of the existing fleet. TMF construction continued at
increasing activity levels, with activity levels expected to increase during the
third quarter of 2015 based on the availability of appropriate waste material
from mining activities.
A-7
Cash cost and All-in sustaining cost
Cash costs per ounce for the second quarter of 2015 were
significantly lower than the prior year period, primarily due to increased sales
of 15,128 ounces or 74%, due to increased production over the second 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 $945 in Q2 2014 to $701 per ounce in Q2 2015, primarily due to
the lower cash cost as well as lower sustaining capital per ounce.
Cash Cost per ounce sold |
|
($US/ounce) |
|
|
Q2 2015 |
Q1 2015 |
Q2 2014 |
Mining Costs |
126 |
133 |
149
|
Processing Costs |
259 |
285 |
438
|
Overhead |
148 |
146 |
215
|
Inventory Adjustments |
54 |
(37)
|
(38) |
Total cash costs per ounce |
587 |
527
|
764 |
Total ounces sold (ounces) |
35,665 |
33,956 |
20,537 |
All-in sustaining costs per ounce |
701 |
581
|
945 |
NAMOYA - MINE UNDER
CONSTRUCTION
During the second quarter of 2015, Namoya continued to ramp up
towards commercial production levels. The modification in the mine plan late in
the first quarter impacted ore availability early in the second quarter as the
mine fleet focused on waste removal in order to allow for increased access to
mining faces when the first additions to the mobile fleet were commissioned in
late May. This contributed to a decrease in the stacking level in April to
57,211 tonnes, which subsequently increased to 130,974 tonnes in May and 142,082
tonnes in June. The significant decrease in stacking levels from March's 103,163
tonnes to April was also driven by the adverse impact of unseasonably high rains
which interrupted supply routes and the ability to deliver procured materials
and supplies. The availability of ore from mining activities and the available
medium grade stockpile material resulted in the stacking of ore with an average
grade of 1.53 g/t Au. Based on current mining activities, the proportion of
fines content has decreased, allowing for improvement in the quality of
agglomerated material. The CIL circuit was not utilized during the second
quarter of 2015 as the focus of the operations continues to be the improvements
to the heap leach processing circuit. Site management is continuing to implement
process modifications and upgrades, which are resulting in significant progress
toward steady-state operating levels. Namoya poured 3,114 ounces in April, 3,315
ounces in May and 4,096 ounces in June, for a second quarter 2015 total of
10,525 ounces of gold.
During the second half of June and early July, Namoya achieved
stacking rates in excess of 5,000 tonnes per day ("tpd") leading to material
stacked in July of 151,026 tonnes. Further improvements are expected in August
and September. As Namoya progresses through the third quarter of 2015, the
contributions from the second stage of the additional mobile fleet, and delivery
of the currently procured third stage, will allow the operation to advance more
quickly with a number of mining activities, including waste stripping which was
re-sequenced following the delay in financing. The resulting improvement in ore
access in multiple pits, will support continuous increases in stacking rates
following the currently commissioned process upgrades early in the third
quarter.
Heap leach operations require several months of continuous
percolation to fully recover the leachable gold. Thus, the process advancements
from the second quarter, together with ongoing improvements to the heap leach
circuit, are projected to result in monthly gold production of approximately
9,000 ounces once steady-state operating levels are achieved during Q4 2015.
A-8
During the second quarter of 2015, the Company recorded an
impairment charge totalling $50.2 million against the Namoya Mine Under
Construction balance in its interim condensed financial statements, resulting in
a net balance of $396 million as at June 30, 2015. As at June 30, 2015, the
impairment charges in relation to the Namoya Mine, represent approximately 5% of
the Companys pre-impairment total assets and approximately 11% of the
pre-impairment Mine Under Construction balance.
The impairment charge recorded was due to the aggregate adverse
impact of the deterioration of the long term gold price outlook, the Namoya
stream, and the build-up of capitalized borrowing costs (interest and dividends
directly attributable to the construction of the asset) and pre-commercial
operating losses from the extended ramp up due to the delay in financing and the
redesign of the plant.
Under International Financial Reporting Standards (IFRS), in
addition to the project development and the associated exploration and
evaluation costs, the Mine Under Construction balance includes borrowing costs,
depreciation and pre-commercial operating losses. Prior to the recognition of
impairment charges, as at June 30, 2015, the Mine Under Construction balance
included over $70 million of borrowing costs, $20 million of depreciation and
approximately $28 million of pre-commercial operating losses. The recorded $50.2
million impairment charge was less than the amount of the above indirect project
development costs, indicating that the Namoya project development costs are
recoverable under the prevailing market conditions.
EXPLORATION
Consistent with the Companys 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 second
quarter of 2015 involved the provision of support by the geological teams for
production related activities at the two mine sites, the use of small teams
focused on new oxide target generation activities in Lugushwa and Kamituga as a
follow up to the Q1 target prioritization reviews and 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 full delineation of
mineable material for the Namoya Summit - Filon B targets at Namoya;
|
|
|
|
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. |
Qualified Person
Daniel K. Bansah, the Company's Head of Projects and Operations
and a "Qualified Person" as such term is defined in National Instrument 43-101,
has approved the technical information in this press release.
NON-IFRS MEASURES
Management uses cash cost, all-in sustaining cost, gold margin
and EBITDA to monitor financial performance and provide additional information
to investors and analysts. These metrics do not have a standard definition under
IFRS and should not be considered in isolation or as a substitute for measures
of performance prepared in accordance with IFRS. As these metrics do not have a
standardized meaning, it may not be comparable to similar measures provided by
other companies. However, the methodology used by the Company to determine cash
cost per ounce is based on a standard developed by the Gold Institute, which was an
association which included gold mining organizations, amongst others, from
around the world.
A-9
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 |
Q2 2015 |
Q2 2014 |
Q1 2015 |
|
H1 2015 |
H1 2014 |
|
($000's) |
($000's) |
($000's) |
|
($000's) |
($000's) |
Mine operating expenses |
28,068 |
22,242 |
24,281 |
|
52,349 |
46,640 |
Less: Depletion
and depreciation |
(7,125) |
(6,545) |
(6,386) |
|
(13,511) |
(10,936) |
Total cash costs |
20,943 |
15,697 |
17,895 |
|
38,838 |
35,704 |
Gold sales (oz)
|
35,665 |
20,537 |
33,956 |
|
69,621 |
44,964 |
Cash cost per ounce ($/oz) |
587 |
764 |
527 |
|
558 |
794 |
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 |
Q2 2015 |
Q2 2014 |
Q1 2015 |
|
H1 2015 |
H1 2014 |
|
($000's) |
($000's) |
($000's) |
|
($000's) |
($000's) |
Mine operating expenses |
28,068 |
22,242 |
24,281 |
|
52,349 |
46,640 |
Less: Depletion
and depreciation |
(7,125) |
(6,545) |
(6,386) |
|
(13,511) |
(10,936) |
Total cash costs |
20,943 |
15,697 |
17,895 |
|
38,838 |
35,704 |
Sustaining capital
|
4,074 |
3,709
|
1,825
|
|
5,899 |
4,839
|
All-in cash costs |
25,017 |
19,406 |
19,720 |
|
44,737 |
40,543 |
Gold sales (oz)
|
35,665 |
20,537 |
33,956 |
|
69,621 |
44,964 |
All-in cash cost per ounce ($/oz) |
701 |
945 |
581 |
|
643 |
902 |
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 |
Q2 2015 |
Q2 2014 |
Q1 2015 |
|
H1 2015 |
H1 2014 |
|
($000's) |
($000's) |
($000's) |
|
($000's) |
($000's) |
Net (loss)/income |
(48,666) |
(2,998) |
6,780 |
|
(41,886) |
(3,702) |
Interest and Financing Costs |
6,035 |
1,322 |
5,704 |
|
11,739 |
3,563 |
Taxes |
- |
- |
- |
|
- |
- |
Depletion and depreciation |
7,148 |
6,562 |
6,411 |
|
13,559 |
10,967 |
Impairment |
50,200 |
- |
- |
|
50,200 |
-
|
EBITDA |
14,717 |
4,886 |
18,895 |
|
33,612 |
10,828 |
A-10
Q2 2015 Financial Results Conference Call Information
Banro will host a conference call at 11:00AM EST on August
13, 2015. Please use the following dial in numbers:
Q2 2015 Financial Results Conference Call Information
Toll Free (North America): |
+1 877-291-4570 |
Conf ID: 12020850 |
Toronto Local & International: |
+1 647-788-4919 |
Conf ID: 12020850 |
Q2 2015 Financial Results Conference Call REPLAY
Toll Free Replay Call (North America): |
+1 800-585-8367 |
Conf ID: 12020850 |
Toronto Local & International: |
+1 416-621-4642 |
Conf ID: 12020850 |
The conference call replay will be available from 2:00PM EST on
August 13, 2015 until 11:59 PM EST on August 27, 2015.
For further information regarding this conference call, please
contact Banro Investor Relations or visit the Company website,
www.banro.com.
Banro Corporation is a Canadian gold mining
company focused on production from the Twangiza mine, which began commercial
production September 1, 2012, and completion of its second gold mine at Namoya
located approximately 200 kilometres southwest of the Twangiza gold mine. The
Companys longer term objectives include the development of two additional
major, wholly-owned gold projects, Lugushwa and Kamituga. The four projects,
each of which has a mining license, are located along the 210 kilometre long
Twangiza-Namoya gold belt in the South Kivu and Maniema provinces of the
Democratic Republic of the Congo (the DRC). All business activities are
followed in a socially and environmentally responsible manner.
Cautionary Note to U.S. Investors
The United States Securities and Exchange Commission (the
"SEC") permits U.S. mining companies, in their filings with the SEC, to disclose
only those mineral deposits that a company can economically and legally extract
or produce. Certain terms are used by the Company, such as "Measured",
"Indicated", and "Inferred" "Resources", that the SEC guidelines strictly
prohibit U.S. registered companies from including in their filings with the SEC.
U.S. Investors are urged to consider closely the disclosure in the Company's
Form 20-F Registration Statement, File No. 001-32399, which may be secured from
the Company, or from the SEC's website at
http://www.sec.gov/edgar.shtml.
Cautionary Note Concerning 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 future gold production (including the
timing thereof), costs, cash flow and gold recoveries, mine life, Mineral
Resource and Mineral Reserve estimates, potential Mineral Resources and Mineral
Reserves and the Companys production, development and exploration plans and
objectives) are forward-looking statements. These forward-looking statements
reflect the current expectations or beliefs of the Company based on information
currently available to the Company. Forward-looking statements are subject to a
number of risks and uncertainties that may cause the actual results of the
Company to differ materially from those discussed in the forward-looking
statements, and even if such actual results are realized or substantially
realized, there can be no assurance that they will have the expected
consequences to, or effects on the Company. Factors that could cause actual
results or events to differ materially from current expectations include, among
other things: uncertainty of estimates of capital and operating costs,
production estimates and estimated economic return of the Companys
projects; the possibility that actual circumstances will differ from the
estimates and assumptions used in the economic studies of the Companys
projects; failure to establish estimated mineral resources and mineral reserves
(the Companys mineral resource and mineral reserve figures are estimates and no
assurance can be given that the intended levels of gold will be produced);
fluctuations in gold prices and currency exchange rates; inflation; gold
recoveries being less than those indicated by the metallurgical testwork carried
out to date (there can be no assurance that gold recoveries in small scale
laboratory tests will be duplicated in large tests under on-site conditions or
during production); uncertainties relating to the availability and costs of
financing needed in the future; changes in equity markets; political
developments in the DRC; lack of infrastructure; failure to procure or maintain,
or delays in procuring or maintaining, permits and approvals; lack of
availability at a reasonable cost or at all, of plants, equipment or labour;
inability to attract and retain key management and personnel; changes to
regulations affecting the Company's activities; the uncertainties involved in
interpreting drilling results and other geological data; and the other risks
disclosed under the heading "Risk Factors" and elsewhere in the Company's annual
report on Form 20-F dated April 6, 2015 filed on SEDAR at www.sedar.com and
EDGAR at www.sec.gov. Any forward-looking statement speaks only as of the date
on which it is made and, except as may be required by applicable securities
laws, the Company disclaims any intent or obligation to update any
forward-looking statement, whether as a result of new information, future events
or results or otherwise. Although the Company believes that the assumptions
inherent in the forward-looking statements are reasonable, forward-looking
statements are not guarantees of future performance and accordingly undue
reliance should not be put on such statements due to the inherent uncertainty
therein.
A-11
For further information, please visit our website at
www.banro.com, or contact:
Martin Jones
+1 (416) 366-2221, Ext.
3213
+1-800-714-7938, Ext. 3213
info@banro.com
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