laying the foundation to develop central africa’s premier gold company simon village – chairman...
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Laying the foundation to develop Central Africa’s Premier Gold Company
Simon Village – Chairman
December 2009
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Cautionary Notes
Cautionary Notes
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 project economics, mineral resource estimates, potential mineralization, potential mineral resources and the Company's exploration and development plans and objectives with respect to its projects) 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 Preliminary Assessments and mine plans; failure to establish estimated mineral resources; 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 onsite 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 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.
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.
The Preliminary Assessments are preliminary in nature and include 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 Assessments will be realized.
Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
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Banro has the ability to develop into a mid tier gold producer through the development of a single gold belt
100 % ownership of four open pit, heavily oxidised and rapidly advancing gold projects
P & P Reserves of 4.6 M oz
Resource of 11.2 M oz (6.72 M oz M&I; 4.46 M oz Inferred) and growing
16 new targets identified to date along trend
Construction underway at Twangiza project with gold production targeted for Q4 2011
Feasibility Study work in progress at the Namoya Project
Scoping study work in progress at the Lugushwa Project
Desktop work completed on Kamituga
Corporate OverviewCorporate Overview
4
BanroCorporation
BanroCorporation
Banro Congo Mining SARL(Exploration)
Banro Congo Mining SARL(Exploration)
Kamituga Mining SARL
Kamituga Mining SARL
Lugushwa Mining SARL
Lugushwa Mining SARL
NamoyaMining SARL
NamoyaMining SARL
Twangiza Mining SARL
Twangiza Mining SARL
All 4 Subsidiary Companies have their own approved mining convention
Banro Corporate Structure allows optimal financing and corporate development
100% 100%100%100%
100%
Corporate OverviewCorporate Overview
Banro Hydro Project
Banro Hydro Project 100%
5
StrategyStrategy
Underlying rationale driving strategy to move to production
The price vs valuation anomaly highlights investors concerns over financing or technical capability
574
409 390349
315 287
194
101 8535
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Red
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Sem
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Gold
en
Sta
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MD
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Cre
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Banro
Pers
eus
Adam
us
4.6 4.5
3.9 3.8
2.92.6
1.8 1.6
0.90.3
0.0 0.0
Red
Back
Banro
Cre
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Moto
Gold
en
Sta
r
Reso
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Sem
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MD
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Adam
us
Pers
eus
Attributable 2P Reserves (Moz)
EV/2P Reserves (US$/oz)
Attributable Total Resources (Moz)
EV/Total Resources (US$/oz)
15.8
11.2 10.5 9.88.3
7.36.0 5.1 4.8
3.5 2.7 2.1
Mo
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Cre
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ack
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Ad
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Producer Average = US$309/oz
Developer Average = US$193/oz
316
133 127 11570 59 48 47 47 34 25 14
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Banro
Producer Average = US$114/oz
Developer Average = US$48/oz
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Key issues influencing Banro’s ability to achieve producer status and unlock the value trap
In Country Expertise
Assets & Mining Title
Technical Capability Finance
Focused on DRC with strong relationships and commitment to the country
Recruitment and training of local population (40 geology graduates employed from the DRC over the past 4 years)
Banro Foundation has generated a tremendous good will at a national and regional level and is investigating whether to become an international charity
Mining Title and Exploration permits ratified by Government
4 open pit projects delineated to date
Ability to increase Reserves and Production Profile on existing projects
Significant exploration upside with only 8% of licence area explored to date, with numerous targets identified
Banro has developed a strong technical production capability to compliments its existing exploration platform
The production team, headed by Mike Prinsloo and Johan Botha have recruited a team of engineers with proven track records in building and running open pit projects
Past 5 years knowledge of the regional geology will lead to further discovery of more projects to fill the pipeline
June 09 concluded an equity financing of C$100 million
Standard Charter-ed appointed as debt arranger. Both companies intend to build long term relationship to fund the project pipeline
Similar long-term relationship strategy with key suppliers and contractors
Low cost, low capex options provide strong free cash-flow case to support off balance sheet financing
StrategyStrategy
7
Banro has chosen to fast track towards producer status with a lower risk strategy for investors
Initial focus on the higher grade, low strip, open pit operations at Twangiza
Modular, standardized operations to reduce risk yet retain upside
First gold pour: Q4 2011
StrategyStrategy
Prudent & EffectiveStrategy
Prudent & EffectiveStrategy
Matches Construction & Logistics withSituation on the
ground
Matches Construction & Logistics withSituation on the
ground
Will Elevate Banrointo
Producer Status
Will Elevate Banrointo
Producer Status
Quickest and Most Certain Path to
Production
Quickest and Most Certain Path to
Production
Achievable FinancingRequirements
Achievable FinancingRequirements
Standardized Plantswith Common Parts
& MaintenanceProcedures
Standardized Plantswith Common Parts
& MaintenanceProcedures
Will DemonstrateSuccessful Completionof a Project in the DRC
Will DemonstrateSuccessful Completionof a Project in the DRC
Lower Political &Financial Risk
Lower Political &Financial Risk
100 000
200 000
300 000
400 000
500 000
600 000
700 000
OU
NCE
S P
ER A
NN
UM
TwangizaPhase 1
TwangizaProduction
TwangizaProduction
TwangizaProduction
TwangizaProduction
TwangizaProduction
TwangizaProduction
TwangizaPhase 2
TwangizaProduction
TwangizaProduction
TwangizaProduction
TwangizaProduction
TwangizaProduction
NamoyaProduction (HL)
NamoyaProduction
NamoyaProduction
NamoyaProduction
NamoyaProduction
LugushwaCommissioning
LugushwaProduction
LugushwaProduction
LugushwaProduction
KamitugaCommissioning
KamitugaProduction
KamitugaProduction
TwangizaPhase 3
TwangizaProduction
Other {Ntula}Commissioning
2 years 2 years 2 years 2 years 2 years 2 years 2 years
TIMELINE
NamoyaFS
NamoyaCommissioning
LugushwaSS
LugushwaFS
LugushwaFS
KamitugaSS
KamitugaFS
KamitugaFS
Banro’s modular project approach to +500,000 ozs
StrategyStrategy
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StrategyStrategy
90 shipping containers and 60 Break Bulk items ready to be shipped from Australia to Mombasa Port, Kenya. Additional containers and construction
items being prepared for shipment out of South Africa.
Phase I construction is underway with plant dismantled, refurbished and prepared for shipment
10
Project Location & Access
Location
Twangiza is located in South Kivu Province 41 km to southwest of Bukavu, the provincial capital
Uvira
Mwenga
Walungu
Bukavu
Shabunda 9700000 mN
9600000 mN
60
000
0 m
E6
000
00
mE
70
000
0 m
E7
000
00
mE
50
000
0 m
E
9600000 mN
9700000 mN
0 25
kilometres
50
KAMI TUGA
LUGUSHWA
NAMOYA
Lubanda
N
N5
N5
N2
N2
N2
Lake Kivu
Lake Tanganyika
Deposit Location and Name
Rivers
Main Roads and Towns
Permits for Exploitation
Secondary/other Roads
Permits for Exploration
Deposit Location and Name
LEGEND
Itula
Kalole
50
000
0 m
E
TWANGI ZA
Uvira
MwengaMwenga
Walungu
Bukavu
Shabunda 9700000 mN
9600000 mN
60
000
0 m
E6
000
00
mE
70
000
0 m
E7
000
00
mE
50
000
0 m
E
9600000 mN
9700000 mN
0 25
kilometres
500 25
kilometres
50
KAMI TUGA
LUGUSHWA
NAMOYA
Lubanda
NN
N5
N5
N5
N5
N2
N2
N2
N2
N2
N2
Lake Kivu
Lake Tanganyika
Deposit Location and Name
Rivers
Main Roads and Towns
Permits for Exploitation
Secondary/other Roads
Permits for Exploration
Deposit Location and Name
LEGEND
Deposit Location and Name
Rivers
Main Roads and Towns
Permits for Exploitation
Secondary/other Roads
Permits for Exploration
Deposit Location and Name
LEGEND
ItulaItula
KaloleKalole
50
000
0 m
E
TWANGI ZA
Access
Road access from Bukavu to Twangiza by travelling 55km on the recently upgraded N2 National Road and then 30km on a smaller side road to the camp
Helicopter flight between Bukavu and Twangiza takes around 20 minutes
Bukavu is serviced by regular commercial flights
International access through Rwanda/ Kenya/Uganda
Key Assets – TwangizaKey Assets – Twangiza
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Twangiza Resource Development
Significant resource development and conversion has been achieved over the last 3 years
The Company believes there is potential for a 5 Moz of mineable oxide/transition (non refractory) reserve and a further 3-4 Moz of resources in the vicinity of
Twangiza
2.13.0 3.1
3.9 3.7
5.66.5
1.1
2.63.1
2.7
0.6
0.4
1.5
2.3
0
1
2
3
4
5
6
7
8
9
Oct. 05 Sep. 06 Jul. 07 Dec. 07 Jun. 08 Jan. 09 Dec. 09
Gold
-M
oz
I nferred
New Targets
Tshondo
Mufwa
Luhwindja
Kaziba
2x Flanking structures off Twangiza North
Ntula
Inferred Resources not included in June 2008 Pre-Feasibility Study following a change in
the pit model
Key Assets – TwangizaKey Assets – Twangiza
Planned Resource development and
conversion
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Key Assets - TwangizaKey Assets - Twangiza
670000
670000
680000
680000
690000
690000
700000
700000
96700009670000
96800009680000
96900009690000
97000009700000
Bugoy Grid
125-2 50 ppb so il anom aly
M ayerW orkings M ubam ba
W orkings
2 g/t Au
Tubimbi W olframiteW orkings
Chibanda Target:Stream Sed Sam pling - C om pleteA ll resu lts rece ived.
Eastern W orkingsR ecce: C om pleteS tream Sed Sam pling:Phase 1 com plete
Albitite TargetR ecce com pleteS tream Sed Sam pling: Q 2 '09
Luhindja TargetR ecce com plete Soil Sam pling: Q 2 ' 09
Southern AnomalyR ecce & S tream SedSam pling com plete. So il sam pling: Q 2 '09
Tshondo W est AnomalyR ecce & S tream SedSam pling: Q 2 '09 Radiometric Anomaly
R ecce & S tream SedStream sam pling: Phases 1 and 2com plete .A ll resu lts received.Soil sam pling: C om m ence Q 1 '09
Kaziba W orkingsPhase 1 soil sam pling and m apping com plete: A ll results received.Soil sam pling western extension.M ar-Apr.'09
TSHONDO
MOROC
TW ANGIZA MAIN
LEGEND
Bedrock w orkings
A lluvia l workings
Terrace w orkings
H istorica l a lluvia ls (Au)
Coincident U ranium (green) and Thorium (Red) anom alies
Fold outline
Antic line axis
Syncline axis
Palaeo-Neo Proterozo ic terra in boundary
Target area
R idge
Ka kere W orkings
R ugeng e Wo rkin gs
Cirem bwe W orkings
Targets detected on LiDAR•Primary: 412•Alluvial: 130•Terrace workings: 92•Uncertain: 301
Ounces within trucking distance of central plant or consideration now being given to build more 1.3 – 1.5 Mtpa size plants at different sites as stand-alone plants
13
0.40.7
0.91.1
1.50.7
0.6
0.60.4
0.5
0
0.5
1
1.5
2
2.5
Jul. 05 Sep. 06 Jun. 07 Mar. 09 Dec. 09
Gold
- M
oz
Measured & Indicated Inferred
Namoya Resource Development
Significant resource development and conversion has been achieved over the last 3 years
The Company believes there is potential for a 1.5 Moz of mineable reserve and a further 1 Moz of resources in the immediate vicinity (New Targets) of Namoya
Planned Resource development and conversion
Key Assets – NamoyaKey Assets – Namoya
New Targets
Kakula West
Seketi
Matongo
Filon
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MPONGO CARRIERE A G20-21 D18-19 KILIMA
A BNOT TO SCALE
Dominant plunge direction
Inferred Au mineralizationbodies
Trace of refolded Fold axis
Dominant plunge direction
Surface topography
Key Assets – LugushwaKey Assets – Lugushwa
A
B
Lugushwa Project Overview
Summary
Scoping Study work in progress
Heavily oxidized shallow deposits
Namoya’s experience with Heap Leach and CIL options will provide a good learning curve for the future design/equipment for the Lugushwa Heap Leach development followed by a smaller CIL/Gravity Plant later to process the fresh ore
Next Steps
Both CIL and Heap Leach options to be progressed
Further drilling planned for 2010 (16,333m / 97 holes drilled to date)
Progress to Scoping Study and then advance through PFS to FS
Category Tonnes (Million)
Grade(g/t Au)
Ounces(Million)
Total Inferred 37.0 2.30 2.74
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Regional Exploration
Significant potential to expand the portfolio of projects through exploration on the highly prospective Twangiza-Namoya gold belt
Airborne Geophysical (aeromagnetic and radiometric) surveys have identified some 16 new targets during 2007 and 2008
LiDAR topographic surveys completed over key properties in 2007 and 2008
Analysis work for Geophysics and LiDAR, largely completed in-house and by Consultants
Less than 8% of 5311 km2 has been explored
Banro’s exploration team is currently busy prioritising exploration targets from the above analysis
Regional Radiometric Survey
Key Assets – ExplorationKey Assets – Exploration
16
Community Relations – Banro Foundation
Banro handles its community relations programme through the Banro Foundation, a registered charity in the DRC with the following mandate:
“Support education, health and infrastructure improvements, principally in the communities where Banro operates”
In May 2008 Banro was one of five finalists for a Canadian Award for International Cooperation in the category of "Construction, Reconstruction and/or Rehabilitation of Physical Infrastructure”
To date Banro has employed 40 graduate geologists from DRC universities, providing them with further geological training and education on project sites
New High School near Twangiza
A Responsible approach to operating in the DRC A Responsible approach to operating in the DRC
New High School near Namoya Potable Water System for 18,000 People
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1.Currently examining feasibility of incorporating the Banro Foundation as a charity in US & elsewhere
2.Build on partnerships with NGOs (eg CARE International) to attract funding from foundations, government agencies and institutional funds
3.Pursue innovative funding strategies – eg. carbon credits for reforestation
4.Implement internal funding formula as mining commences - % of net profits + % of ounces (+ carbon credits as hydro plant comes on stream)
5.Longer Term ~ consider transition to “pure” Charity model, disconnected from Banro, focused on the DRC and soliciting funds from public and granting agencies
The Banro FoundationThe Banro Foundation
Broadening the financing base – 2010 & beyond
18
Based in Toronto and listed on:TSX: BAAAMEX: BAA
Shares Issued 105.96 million
Fully Diluted 118.33 millionCash US$80 million
Enterprise Value US$177.48US$1.67/share
Shareholders (fully diluted) Management 7.3% Retail 15.7% Institutional 77.0%
Corporate OverviewCorporate Overview
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A strong in country presence in the DRC with the technical capability in exploration and project development
Mining permits and titles approved
Significant project pipeline with 4 open pit projects and 16 targets along the trend
Construction underway with gold production targeted for Q4 2011
Long term commitment to the DRC and its people through the Banro Foundation
www.banro.com
SummarySummary
Banro has all the ingredients to establish itself as the leading Central African Gold Producer