Building the Premier Central African gold producer
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Objective Capital's Africa Resources Investment Congress 2011...

Objective Capital's Africa Resources Investment Congress 2011
Ironmongers' Hall, City of London
14-15 June 2011
Day 1: Africa Resources
Speaker: Simon Village, Banro Corporation

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  • In terms of mining the video footage reflected the North and Main pits, of which this section reflects a cross section through the main pit. The significant widths and higher grade nature of the oxides, combined with the low strip ratio of around 1.5:1, leads to not only the relatively low cash cost by industry standards, but also easier mining. The chart also reflects the boundary between the Phase I oxides and the Phase II Transitional and Fresh rock.
  • More important to our transition into producer status, and future growth is a very capable and competent management team that we have been able to attract over the past 6 years equipping Banro with the right skills, covering exploration, development and managing open pit gold mining projects in Africa. The management structure is flat, with clear lines of responsibility and accountability in the divisions of exploration, construction, mine management, finance and social. I believe that one of our key strengths is that the Excom is based in country, with the Executive Committee meets every 4 weeks in Bukavu with the key focus on the Twangiza constriction as well as near term reserve i.e. The next mineable ounces, generation.With a very well aligned incentive structure to project and exploration deliverables, the result to date has been a fast tracked production timetable.
  • In terms of mining the video footage reflected the North and Main pits, of which this section reflects a cross section through the main pit. The significant widths and higher grade nature of the oxides, combined with the low strip ratio of around 1.5:1, leads to not only the relatively low cash cost by industry standards, but also easier mining. The chart also reflects the boundary between the Phase I oxides and the Phase II Transitional and Fresh rock.
  • In terms of mining the video footage reflected the North and Main pits, of which this section reflects a cross section through the main pit. The significant widths and higher grade nature of the oxides, combined with the low strip ratio of around 1.5:1, leads to not only the relatively low cash cost by industry standards, but also easier mining. The chart also reflects the boundary between the Phase I oxides and the Phase II Transitional and Fresh rock.
  • In terms of mining the video footage reflected the North and Main pits, of which this section reflects a cross section through the main pit. The significant widths and higher grade nature of the oxides, combined with the low strip ratio of around 1.5:1, leads to not only the relatively low cash cost by industry standards, but also easier mining. The chart also reflects the boundary between the Phase I oxides and the Phase II Transitional and Fresh rock.
  • In terms of mining the video footage reflected the North and Main pits, of which this section reflects a cross section through the main pit. The significant widths and higher grade nature of the oxides, combined with the low strip ratio of around 1.5:1, leads to not only the relatively low cash cost by industry standards, but also easier mining. The chart also reflects the boundary between the Phase I oxides and the Phase II Transitional and Fresh rock.

Building the Premier Central African gold producer Presentation Transcript

  • 1. AFRICA RESOURCESINVESTMENT CONGRESS Building the Premier Central African gold producer Simon Village – Banro CorporationIRONMONGERS’ HALL, CITY OF LONDON TUESDAY-WEDNESDAY, 14-15 JUN 2011www.ObjectiveCapitalConferences.com 0
  • 2. Building the Premier Central African gold producer Simon Village Chairman & CEO June 2011
  • 3. Cautionary NotesThis document shall not constitute an offer to sell or the solicitation of an offer to buy any securities of Banro Corporation (“the Company”).Cautionary Note Concerning Forward-Looking Statements: This presentation contains forward-looking statements. All statements, other than statements of historicalfact, that address activities, events or developments that the "Company believes, expects or anticipates will or may occur in the future (including, withoutlimitation, statements regarding estimates and/or assumptions in respect of gold production, revenue, cash flow and costs, estimated project economics, mineral resource andmineral reserve estimates, potential mineralization, potential mineral resources and mineral reserves, projected timing of possible gold production and the Companysexploration and development plans and objectives with respect to its projects) are forward-looking statements. These forward-looking statements reflect the currentexpectations or beliefs of the Company based on information currently available to the Company. Forward-looking statements are subject to a number of risks anduncertainties 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 arerealized 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 actualresults or events to differ materially from current expectations include, among other things: uncertainty of estimates of capital and operating costs, gold production estimatesand estimated economic return; the possibility that actual circumstances will differ from the estimates and assumptions used in the economic studies of Company goldproperties; failure to establish estimated mineral resources or mineral reserves; fluctuations in gold prices and currency exchange rates; uncertainties relating to theavailability and costs of any financing needed in the future; inflation; gold recoveries being less than those indicated by the metallurgical test work carried out to date (therecan be no assurance that gold recoveries in small scale laboratory tests will be duplicated in large tests under on-site conditions or during production); changes in equitymarkets; political developments in the Democratic Republic of the Congo; lack of infrastructure; failure to procure or maintain, or delays in procuring or maintaining, permitsand approvals; lack of availability at a reasonable cost or at all, of plants, equipment or labour; inability to attract and retain key management and personnel; changes toregulations affecting the Companys activities; the uncertainties involved in interpreting drilling results and other geological data; and the other risks disclosed under theheading "Risk Factors" and elsewhere in the Companys annual information form dated March 29, 2011 filed on SEDAR at www.sedar.com and EDGAR at www.sec.gov. Anyforward-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 orobligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although the Company believes that theassumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue relianceshould not be put on such statements due to the inherent uncertainty therein.The preliminary economic assessment of the Company’s Namoya heap leach project is preliminary in nature and includes inferred mineral resources that are considered toospeculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that theconclusions reached in the preliminary economic assessment will be realized.Cautionary Note Concerning Resource and Reserve Estimates: The Company’s mineral resource and mineral reserve figures are estimates and no assurances can be given thatthe indicated levels of gold will be produced. Such estimates are expressions of judgment based on knowledge, mining experience, analysis of drilling results and industrypractices. Valid estimates made at a given time may significantly change when new information becomes available. While the Company believes that its mineral resource andmineral reserve estimates are well established, by their nature mineral resource and mineral reserve estimates are imprecise and depend, to a certain extent, upon statisticalinferences 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.Mineral resources that are not mineral reserves do not have demonstrated economic viability. There is no certainty that mineral resources can be upgraded to mineral reservesthrough continued exploration.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 anindicated or measured mineral resource as a result of continued exploration. Confidence in the estimate is insufficient to allow meaningful application of the technical andeconomic parameters to enable an evaluation of economic viability worthy of public disclosure (except in certain limited circumstances). Inferred mineral resources areexcluded from estimates forming the basis of a feasibility study.The United States Securities and Exchange Commission (the "SEC") permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that acompany can economically and legally extract or produce. Certain terms are used by Banro, such as "measured", "indicated", and "inferred" "resources", that the SECguidelines strictly prohibit U.S. registered companies from including in their filings with the SEC. U.S. Investors are urged to consider closely the disclosure in Banros Form 40-F Registration Statement, File No. 001-32399, which may be secured from Banro, or from the SECs website at http://www.sec.gov/edgar.shtml. The Namoya preliminaryeconomic assessment referred to herein is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economicconsiderations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the conclusions reached in the preliminary economicassessment will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.Additional information regarding Banro and its gold properties is included in the Company’s annual information form dated March 29, 2011, a copy of which has been filedon, and can be obtained from, SEDAR at www.sedar.com and EDGAR at www.sec.gov.Qualified Person: Daniel K. Bansah, who is Vice President, Exploration of the Company and a "qualified person" (as such term is defined in Canadian National Instrument 43-101), has reviewed the technical information in this presentation. 2
  • 4. Banro at a Glance – transition to producer Offices Toronto (Corporate) Bukavu & Kinshasa (Operations) Flagship project – Twangiza (Phase I) Democratic with planned gold production in Q4 2011 Republic of the Congo 4 additional projects along the belt: o Namoya o Twangiza Phase II o Lugushwa o Kamituga TSX, NYSE AMEX: BAA US$600 million market cap 190.7 million shares outstanding 209.3 million fully diluted Financial position o Cash $68 million as at June 14th 2011 o Fully-funded to Twangiza production Twangiza Phase 1 – Civil works 93% complete; structural 80% complete 3
  • 5. Twangiza-Namoya gold belt equal in size & geologic potential to Ashanti belt in GhanaTwangiza-Namoya Ashanti GoldGold Belt (DRC) Belt (Ghana) Both maps at same scale 4
  • 6. Board with proven track records in Africa & in Gold Simon Village, Chairman & CEO • Former Managing Director, World Gold Council; founder of Exchange Traded Gold; HSBC Managing Director for Global Mining , Mining Engineer (Anglo American/De Beers), joined Banro’s board in 2004; appointed CEO in 2010 Arnold Kondrat Dr. Peter Ruxton Exec VP & Director Director • Founder Banro Corp. • Former partner, Actis Capital • Active in the DRC since 1996 • Former Exploration • President, Sterling Portfolio Manager, Billiton Securities Inc. • CEO Gentor Resources; director, Platmin; Chairman GGG Resources Peter Cowley Richard Lachcik Director Director • CEO Loncor Resources • Partner, Macleod Dixon LLP; chair • Former Managing of Global Mining Group Director, Ashanti Goldfields • Specialty in securities law Exploration Dr. John Clarke Bernard van Rooyen Director Director • Former CEO Nevsun Resources • Director for Mvelaphanda • Former Exec. Director Ashanti Resources, Ndowana Goldfields Ltd. Exploration, Northam Platinum & • Director Mediterranean Trans Hex Group Resources 5
  • 7. Strong in-country expertise; Flat management structure Minimal turnover at all levels Board of Directors Executive Committee 6
  • 8. Resources Summary 2011 budget will increase Reserves by +2mozs Growth in Resources & Reserves along the belt Property Measured & Inferred Indicated Oz gold Oz gold Twangiza 5,600,000 400,000 Namoya 1,138,305 543,125 Lugushwa 2,735,000 Kamituga 915,000 TOTAL 6,738,305 4,593,125 7
  • 9. Five significant projects in the Twangiza-Namoya Gold Belt210 km gold beltwith multiple goldprospectsExtensive artisanalgold workingsthroughout entirebeltIn order of planneddevelopment:1. Twangiza Phase I2. Namoya Heap Leach3. Twangiza Phase IIExploration:4. Kamituga5. Lugushwa 8
  • 10. Targeted production profile 500,000 450,000 400,000 350,000 Ounces 300,000 of gold 250,000 200,000 150,000 100,000 50,000 0 2011 2012 2013 2014 2015 2016 Twangiza Phase I Namoya Twangiza Phase II 9
  • 11. Twangiza Phase 1 Overview: +1 million ounces of goldPhase I – Oxide materialTotal gold production expected to be+ 1 million ozs over 8 yearsPlant designed to process 1.7mtpa with annualproduction of 119,303 ozs* for first 5 years @cash cost of US$356/oz**Total capital expenditure – US$209 MillionPlanned gold production in Q4 2011• Royalty payment of 1% of gold revenues• Net profit payment of 4% (after return of capital)• Cash flow from Twangiza I to be used to fast track Banro’s second gold mine development at Namoya (scheduled for completion by end 2013)Twangiza Phase II – “Transition” & Sulphide Material• Separate processing facility• Recently commissioned economic assessment for Phase II including detailed metallurgical study & plant design• Anticipate production from Twangiza Phase I and Namoya Heap Leach project to fund development of Twangiza Phase II* Based on SRK projections and does not include Management’s plans to increase gold output viaselectivity, grade control and use of 4g/t Au valley fill material (not included in SRK projections)**Diesel costs represent approximately 40% of the total cash cost 10
  • 12. Twangiza Main Pit – Phase I Oxide (1.7mtpa) & Phase II (4mtpa) transition/fresh rock Oxide Pit Final Pit Strip ratio: 1.5:1 over LOM 11
  • 13. Namoya – Low cost heap leach operation NAMOYA PROJECT (Mwendamboko Prospect; Section 5) AMEX 560900 mE 560800 mE 561000 mE TSX:Namoya – Overview 5.0m@13.26g/t 26.0m@13.43g/t 1000 mN 1000 mN• 100% owned by Banro SW G5N NDD05 NDD03 NE• 2.5km long mineralized zone with 4 main G25 6.0m@3.75g/t Pit outline deposits in 175km2 area 26.54m@5.96g/t 29.0m@15.10g/t• Banro work to date includes: 900 mN 2.77m@2.53g/t 39.37m@3.63g/t 900 mN • 209 diamond drill holes Sericite Schist Base of complete oxidation • Extensive resampling of old mine adits 7.27m@1.99g/t Quartz Sericite Schist Chlorite Schist • Preliminary assessments in 2007 & 2011 Diorite/Quartz Diorite intrusive Quartz vein/stockwork Top of fresh rock 0 20 40 Mineralization intercept Metres Namoya – Preliminary Assessment 2011 Namoya – Strategy • 124,053 oz Au/year • Second development • 7 year mine life, open pit project for Banro following Twangiza Phase 1 • Total cash cost = US$359/oz • Cash flows from Twangiza • Initial capital cost = $118.2 million Phase 1 and Namoya can • On-going capital costs = $15.1 million allow Banro to build hydro • 1 year payback on project capex plant required for Twangiza Phase II 12
  • 14. Twangiza – Namoya infrastructure 700000 mE 500000 mE 600000 mE N2 road under construction by the Lake Kivu Chinese (World Bank Project) N Bukavu N2 Walungu9700000 mN Shabunda N5 9700000 mN Lubanda HEP TWANGIZA KAMITUGA Mwenga Pangi HEP N5 LUGUSHWA Uvira Itula N29600000 mN 9600000 mN Kalole LEGEND Lake Tanganyika Rivers NAMOYA Towns Main Roads and Towns Secondary/other Roads Permits for Exploitation 700000 mE 600000 mE 0 25 50 Permits granted and under kilometres Fizi application 13
  • 15. Hydro power potentialHydro power generation would advance the rate of development in the Twangiza-Namoya Gold Belt & maximize profitability  At a cost of US$120 million, the first phase of a hydro electric power generating facility will be built 25km from Twangiza with a generation capacity of 30MW  Additional US$60 million to expand generation facility to increase capacity to 66MW  Hydro electric power would reduce production cash costs by approximately US$100/oz for both Twangiza Phase I and Phase II 14
  • 16. Hydro potential will contain cost inflation & reduce initial cash costs by at least $100/oz 450 400 350 300 250(US$/oz) 200 150 100 50 0 2011 2012 2013 2014 2015 Twangiza Phase I Namoya Twangiza Phase II 15
  • 17. The Banro Foundation A Responsible approach to operating in the DRC New High School near TwangizaMartin Jones, Head of Banro Foundation Founded in 2005, the Banro Foundation has been reorganized as a stand-alone charity, focused on education, health and infrastructure improvements, as well as humanitarian relief. Projects completed to date include two high schools, two primary schools, a health care centre, a potable water project serving 18,000 people, the rehabilitation of over 100 km of roads and bridges + many more projects. In December 2009, Banro was recognized for its contributions to Congolese reconstruction with an Award of Merit from a leading Congolese youth group. Potable Water System for 18,000 People New High School near Namoya 16
  • 18. Relative Valuation – P/NAV Note: Purple denotes African Company Source: CIBC World Markets 17
  • 19. Relative Valuation – US$ EV per Ounce Source: CIBC World Markets 18
  • 20. Banro – on the cusp of being a leading Central African Gold Producer Banro has a strong in-country presence with technical capability in exploration and project development Banro has a World Class project pipeline and is well on its way to being a low cost gold producer (Q4 2011) The open-pitable, low cost nature of the projects, and unique potential of Hydro electric power should differentiate Banro on the Global Cost curve The company’s knowledge of the African continent combined with strong future cash-flow will allow the Company to consider expanding geographically and diversifying the risk associated with operating in an emerging country www.banro.com 19
  • 21. Twangiza construction update - video 20
  • 22. Appendix I Banro Resources Property Measured Indicated Inferred Tons g/t Au Oz Au Tons g/t Au Oz Au Tons g/t Au Oz Au Twangiza 17,200,000 2.40 1,320,000 90,300,000 1.50 4,280,000 8,280,000 1.70 400,000 Namoya 4,270,666 2.76 378,969 10,305,495 2.29 759,336 8,952,162 1.89 543,126 Lugushwa 37,000,000 2.30 2,735,000 Kamituga 7,260,000 3.9 915,000 TOTAL 1,698,969 5,039,336 4,593,126 At 1g/t Au cut-off for Kamituga and Lugushwa; 0.5 g/t Au for Twangiza; 0.4 g/t Au for Namoya 21
  • 23. Appendix II Banro Warrants Date Issued # of Warrants Expiry date Exercise price Value Sept 17, 2008 5,836,811 Sept 17, 2011 US$2.20 US$12,840,984 March 4, 2011 1,050,000 Feb 24, 2013 CAD$3.25 CAD$3,412,500 22