Banro Corp. fka BAA

[Libertarian_Statist]

My Uninformed Thoughts On Banro. *Based on publically available data*
Gramercy.
Gramercy has been dumping shares since the financing announcement. Spread over 5 days they have collectively dumped 1,977,836 shares from their total of 10,873,150, which represents 18% of their total common stocks holdings. Two theories were presented:
A) To keep their holdings under 20%
B) To rebalance.
While decent theories, I has addressed and refuted them both in these past posts.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=112417044
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=112414689

So I suggest C)
It is my contention that since the shares were sold in a deliberately price negative manner the day of the financing release Gramercy’s objective was to cap the stock price. Think about this, they could have waited but ONE DAY to unload and probably sold the same amount at 0.4 that they offloaded at average price of 0.25 before anyone was the wiser. Why?
- I suggest the management at Gramercy was lining their personal accounts with the discarded shares, it’s the only thing that makes sense given this financing is going through.

There is reason to suspect the financing will go through, Gramercy has already ponyed up 20million, some of that went to pay the preferred dividends (which they hold a lot of), but some also went to settle up accounts payable so clearly the shares the sold which gave them call it 500k does not recoup the 20mil they spent already.
Furthermore, while their SG 13 fillings show they have 350mil in stocks it was brought to my attention they are a 5bil fund, so it is conceivable they could do the deal and still remain diversified. Their wiki page even lists “distressed debt” as one of their key strategies.

Blackrock.
Blackrock has accumulated 26,567,286 in the past 3 months as per their SG 13 filling disclosed 02/13/2015. I was not surprised the day of the disclosure because early this year there was a consistent bid in the market despite the first financing falling through.

Earnings.
This is very tough to pin down, we do not know anything about how profitable Namoya ‘s ounces are, period. All we know for sure is that the drum was not present for Q4 and as per Banro’s update it will:
“It will significantly enhance the quality of the heap leach feed and will improve leach recovery rates”
So Namoya has disappointing profitability right now and it’s going to get alot better.
Starting with what we do know:
In the new BAA’s adjusted cash costs were 618 for Q3. We saw a large improvement in gold grade, 16% improvement. This is how they were able to mine less and produce more.

Back of the napkin this puts their cash costs at: 618/1.16 = 532
Oil dropped over that period and energy is a large input in the form of diesel, I am not aware of any hedging program. I think when oil is factored in costs cash costs will be hugging 500/ounce. A good rule of thumb is energy is one quarter of all miner costs.
On the revenue side Twangiza 29,445 oz an 8.3% increase which help offset the 5% decrease in realized gold price.
SO ignoring Namoya and JUST working on Twangiza :
Starting with Q4 topline revenues.
Revenues: 29,445 X 1,206 = 35,510,670
Expenses: 29,445 X 500 cashcost = 14,722,500
Overhead = 4,500,000
______________________________________
EBITA (excluding inventory writedowns) = 16,288,170
Net Income GUESS 7.5mil / 250mil shares (not diluted) = 0.03 EPS
FULLY DILUTED = 7.5mil/350mil shares = 0.02EPS

SO. EPS from Twangiza is 0.02. The wild card here is Namoya. We know they are not at commercial production (mainly an accounting term) and as such we receive no info on cash costs ect. Any half-asses regression analysis that trys to guess Namoya’s cash costs given the limited data from Q2 would is a joke.

Namoya’s production is no joke: 8,791oz but who knows what it cost to produce. AT MOST I see it adding half a cent in EPS, so I am baffled where all these call for fully diluted calls for 0.04-0.06 EPS from Q4.

BOTTOM LINE I see the EPS on a fully diluted basis coming in at $0.02-0.025 EPS on a fully diluted basis and $0.03-0.035 on an undiluted basis.
I could be wrong, so if someone cares to walk me through how they get anything substantially higher or lower be my guest.

I hold a (relatively) small position in Banro, but I have done a lot of research because given financing gets approved I will back up the truck. Any 27 year (expected mine life) DCF analysis shows this stock is worth a heck of a lot more then it trades for today.
In short, given financing this will turn middle class North Americans into millionaires
Good luck longs, even if BAA doesn’t pan out there are tonnes of other stories out there that are slam dunk 10 baggers even given 1200 gold.