PDAC: Banro gears up for second central Africa gold mine

Wed Mar 7, 2012 12:49pm EST
 
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By Cameron French

TORONTO (Reuters) - Banro Corp (BAA.TO: Quote) aims to start producing gold at a second gold mine in the Democratic Republic of Congo within the next year and may build hydroelectric power plants to cut mining and processing costs at its operations, the company's CEO said on Wednesday.

The company, which currently operates the Twangiza mine and is developing three others in the central African country, could show a nearly four-fold increase output over the next three years from the 120,000 ounces it is on pace to produce in 2012, CEO Simon Village said at the PDAC convention in Toronto, the industry's largest annual gathering.

"Last year, (Banro's) major milestone was to turn this company into a gold producer," Village said at the event, organized by the Prospectors and Developers Association. "I believe the next twelve months are going to be as exciting."

Banro is one of several junior miners rushing to boost production in resource-rich Africa. The introduction of investor-friendly laws in several countries has boosted the continent's share of global metals production.

The company is also one of several Western-based miners - BHP Billiton (BHP.N: Quote) and Freeport-McMoRan (FCX.N: Quote) among them - currently at work in DRC, where a new mining code in 2003 and the first democratic elections in decades in 2006 have spurred a mining boom.

Even so, the country can still be an unpredictable place to do business. Canada's First Quantum Minerals (FM.TO: Quote), for instance, closed its DRC operations two years ago after its mining permits were revoked by the government.

CASH FLOW

Getting its second mine into production would bring Banro's output above 200,000 ounces and give the company free cash flow above $200 million a year at current gold prices, Village said.   Continued...