(Reuters) - Shares of Banro Corp BAA.TO fell nearly 5 percent after the company said commercial production at its Twangiza gold mine in the Democratic Republic of the Congo will be delayed mainly due to problems with the mill motor.
Banro said Twangiza, its first producing operation, will likely ramp up to full production in the third quarter, a month later than expected.
“The project commissioning phase can often present unforeseen challenges, but at Twangiza the final hurdle appears to be in sight,” said BMO Capital Markets analyst Andrew Breichmanas, who cut his price target on the stock to C$5.75 from C$6.
Twangiza, with an expected mine life of seven to eight years, is projected to produce about 120,000 ounces of gold per year, according to the company’s website.
The company could show a nearly four-fold increase in output over the next three years from the 120,000 ounces it is on pace to produce this year, CEO Simon Village told Reuters earlier this year.
Banro, which is also developing three other projects in the central African country, aims to start producing gold at a second gold mine in the Democratic Republic of Congo within the next year. It is targeting an annual output of about 450,000 ounces from four mines by 2015.
Banro, with a market value of C$882 million, is one of several junior miners rushing to boost production in resource-rich Africa. It took control of the Twangiza property in 1996.
Banro shares, which have lost 17 percent of their value in the past three months, fell to a low of C$3.80 on the Toronto Stock Exchange on Friday.
Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Joyjeet Das