Banro Corp. fka BAA

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From Blackrock world mining trust update to its shareholders:
http://www.euroinvestor.com/news/2015/08/13/blackrock-world-mining-trust-plc-half-yearly-report/13204547

Banro gold-linked preference shares and 10% senior secured note (2.4% of the portfolio)

In April 2013, the Company purchased gold-linked preference shares from Canadian-listed Banro Corporation. The preference shares provide exposure to the gold price as well as to production growth, with the principal moving in line with the gold price and the coupon ranging between 10% and 15% depending on Banro’s overall level of production. As at the end of June 2015, the Company had received a total of US$6.6 million in dividends, US$1.9 million of which were received in the first half of 2015.

In 2014 a series of operational issues during the commissioning of Banro’s second mine, Namoya, necessitated the securing of additional financing in the second half of 2014. A difficult financing market for junior gold companies, combined with uncertainty over the closing of Banro’s previously announced financing deal with Gold Holdings, resulted in the Board, based on a recommendation from BlackRock’s Pricing Committee, concluding that it was appropriate to hold the Banro gold-linked preference shares at a 30% discount to the implied gold price used in the valuation of these preference shares. In addition, given the lack of trading in Banro’s 10% senior secured note (March 2017), and reflecting the unquoted nature of the security, combined with ongoing financing uncertainty, the Board concluded that it was also prudent to apply a 25% discount to its last traded price.

In the year to date we have been encouraged by the operational improvements at Banro with Twangiza delivering three consecutive quarters of improving production and now hitting nameplate capacity. Namoya continues to ramp-up targeting Q3/Q4 to hit its nameplate capacity. Furthermore, following the US$90 million financing completed in February 2015, the company has sufficient funds to meet all near term liquidity needs. Post completion of the financing, both the equity and the bonds have rallied sharply. Increased liquidity in the senior secured note and a recommendation from BlackRock’s Pricing Committee has resulted in the discount previously applied to the senior secured note being reduced to nil. As the senior secured note continues to trade at a discount to par value, a 15% discount on the valuation of the gold-linked preference shares remains in place. In light of the new guidelines surrounding unquoted investments, the Investment Manager has reduced the Company’s exposure to the Banro senior secured note following its upwards revaluation to ensure that the Company’s total exposure to Banro is below 3%.