Banro – punches well above its weight for a gold explorer

first_imgSouth of Lake Kivu, DRC, Banro has exemplary exploration and development programs underway in terms of both technical excellence and integration into the regions and communities involved. John Chadwick visited and saw a, perhaps, unique situation, a 210-km long gold belt controlled by one junior exploration (moving into mining) company. On such a resource one would normally find a major or two and any number of juniors. Banro also boasts scoping study Internal Rates of Return (IRR) on its two most advanced projects that are probably the envy of the industry – both well over 30% with paybacks well below three years. Many in the industry will be happy with IRRs of around 15%.Many mining companies currently with operations in the Democratic Republic of Congo are having problems with their licences or are nervous of their future. Not so Banro, and deservedly so. With over 11 Moz (and surely much more to come) on its four projects on the Twangiza-Namoya gold belt in the east of DRC, Banro describes itself as having “the passion of a junior and the assets of a major.” This seems very accurate. With four gold projects to date (including all but proving two mines), and more to come, 100% equity and no title reviews, first gold production is likely by 2010 from a single 5-8 Mt/y mine. Banro is also very competently managing the great, but not insurmountable, logistics challenges of the region.Its tremendous assets are not just one of the last great known undeveloped gold belts on the African continent, but also a remarkable group of people, which all in the company recognise, and a community development program that would put many a major to shame, let alone any junior. Unlike some companies operating on the continent that are top heavy in non-African expatriates, Banro is a very ‘African’ company. President Peter Cowley is a geologist with over 35 years international experience, mainly in Africa. Prior to joining Banro in 2004, he was Managing Director of Ashanti Exploration (now part of AngloGold Ashanti) where he managed exploration activities throughout Africa. He played a major role in the discovery and development of the Geita mine in Tanzania. He also engendered tremendous loyalty among his staff there and the testament to this is the Tanzanian and Ghanaian geologists now found in Banro’s main operations office in Bukavu and out in the field managing the four projects (in order of project progress) at Twangiza, Namoya, Lugushwa and Kamituga. There is a really good feel to each of the three exploration camps – Kamituga’s camp has yet to be established. Each one has a Chief Geologist from either Tanzania or Ghana, all reporting to Dan Bansah, Vice President, Exploration. These African expats are helping to bring along Congolese into many responsible positions. For instance, there are now 38 Congolese geologists in the company. In Bukavu, under Peter Kersi the Ghanaian Chief Geologist Mineral Resources, Banro’s sample preparation facility is not only a model in efficiency with meticulous standards, it is another great Banro example of integrating the local community – almost completely staffed by Congolese workers, all with science backgrounds. While Banro obviously benefits from being one of the few employers in the city able to vocationally employ such people, it is doing so in ways that are clearly adding a great deal to the local skills pool resource.Reflecting the fact that prefeasibility studies are underway, which will quickly move to bankable feasibility studies and construction, Mike Prinsloo, a mine developer with a strong track record, was appointed Banro’s CEO in September 2007. He has 35 years experience in the gold mining industry, with turning round DRD Gold’s operations as one of his achievements this century. He will start building a mine development team soon, and will no doubt be continuing Banro’s African traditions and looking to bring on Congolese as much as possible.Twangiza is relatively close to a development go-ahead and discussing it with Mike Prinsloo he clearly already has some very practical ideas for its future development – like consideration of two 2.5 Mt/y circuits with smaller mills rather than a single one for 5 Mt/y (and it could be three circuits for about 8 Mt/y). As he rightly points out, problems with a big milling circuit in a region like this might be manageable (but very uncomfortable) for a major, but could kill smaller companies.Namoya will follow shortly after Twangiza becomes operational. At this scooping study stage, Banro is looking at combined first year output of 600,000-800,000 oz. Both start as open pits, Twangiza with a very low stripping ratio (averaging 2:1 overall for the whole orebody), with great potential at depth. Metallurgy is relatively simple, but extra gold may well be recoverable from Twangiza by employing some of the latest technologies.RBC Capital Markets has been appointed to study Banro’s options ahead of financing and developing the projects. The results of the study should be known early in 2008, according to Prinsloo. It could be that another larger mining company becomes involved. It could also be that a separate company is spun off to develop Banro’s mines and that its extensive exploration projects are packaged in a separate exploration company. Whatever happens, it is sure to be interesting, especially to the people of the South Kivu and Maniema Provinces.There can be no other mining company of this size with anything like the Banro Foundation, a registered charity in the DRC with a mandate to support education, health and infrastructure improvements, as well as provide humanitarian assistance as needed. Banro Corporation funds the Banro Foundation. A number of guiding principles steer its work as it focuses on needs identified by the local communities and invests in improvements that benefit communities as a whole. Whenever possible, the Foundation employs local labour in its initiatives. Last month the Banro Foundation officially opened its new community offices in Twangiza, Lugushwa and Namoya. These offices, each staffed by a local Banro Foundation secretary, are administrative centres for its work in promoting social and economic development. A number of new community initiatives were launched as part of the inauguration ceremonies. New projects at Lugushwa include construction of a new medical clinic and the building of a Women’s Centre to be used for the teaching of sewing and other skills. Rehabilitation of the Lugushwa-Tukenga road is also planned. At Namoya, new projects include rehabilitation of the local medical clinic and construction of the Sarambila Institute secondary school. Projects proposed by the local Banro Foundation committee at Twangiza include the supply of potable water to the community, construction of three new schools and provision of stationary supplies to local schools. The Banro Foundation has to date completed several social development projects. Among those have been a number of bridges, saving villagers considerable time and inconvenience in fording rivers. Most recently, the Foundation built the Ntiaso bridge and put in place the supply of potable water to a village in Lugushwa. It is also in the process of completing construction of the Kadubo bridge. Meanwhile, local residents in Namoya are finishing repairs to the Roman Catholic Church with building materials supplied by the Banro Foundation. The Foundation also provides writing supplies and desks, built by local carpenters, to primary schools. In the area of health care, it has focused on infrastructure development and distributes beds, blankets, and mosquito netting to medical clinics. Construction of roads and bridges is an ongoing priority. The full Banro story will be told in International Mining early in 2008.last_img

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