This acquisition supports the Company's strategy of advancing
production through a staged approach which will focus initially on
the processing of oxide material at the Company's wholly-owned
Twangiza gold project in the Democratic Republic of the Congo (the
"DRC"). It is planned that the plant will be transported by sea
from Australia, via the Mombasa port in Kenya, and then by road to
the Twangiza project site in the DRC, where it will be erected and
commissioned over the next 24 months.
The Company intends to further optimize this timeline as the
project moves forward. The refurbished plant comprises a crushing
plant, two ball mills, carbon-in-pulp (CIP) section, gold room and
a laboratory. The Company's consultants, SENET Engineering,
estimate the total cost of purchasing and delivering the plant to
Twangiza to be less than US$15 million, which represents
significant savings in time and cost to Banro. SENET Engineering
has been selected as the overall project manager and will also
manage the erection and commissioning of the plant. The Company
intends to operate the plant as part of a low-cost "phase one"
oxide mining operation, to be expanded in subsequent years. It is
estimated that annual production from this first phase plant will
be between 80,000 and 110,000 ounces of gold per annum at a total
operating cash cost of less than US$400 per ounce. The Company
estimates the capital cost for phase one of the project (which
phase is planned to use diesel power rather than hydroelectric
power) to be approximately US$145 million, including contingencies.
The Company has initiated discussions with a number of parties to
arrange debt financing to supplement the equity financing which
closed on June 25, 2009.
The Company believes that this decision will enable the Company
to fast track the Twangiza project and commence gold production
earlier along the extensive Twangiza - Namoya gold belt in the DRC
where significant potential exists for expanding the Company's gold
resources at its four wholly-owned gold projects. The updated
feasibility study of the Twangiza project, announced on June 8,
2009, indicated full production at the Twangiza project to be in
excess of 300,000 ounces of gold per annum based on current
resources. Full details of the updated feasibility study of
Twangiza, including the factors and assumptions used to develop the
study's conclusions, are contained in the technical report of SENET
dated July 17, 2009 and entitled "Updated Feasibility Study NI
43-101 Technical Report, Twangiza Gold Project, South Kivu
Province, Democratic Republic of Congo."
SOURCE
