Banro Corp. fka BAA

[bullforever]

Too bad, among all of posters nobody likes the 50m shares dilution, but the dilution is the best in the deal although all of others are perfect. I cannot blame you guys because you may not understand Chinese, so you don't know much about Baiyin.

See below, I will analyze what is the benefit and what is the possible negative about the 50M shares dilution.

1, Baiyin would like accept BAA 50M common shares (16.6% BAA ownership), which means Baiyin would like support BAA future growth, but all of others in the deal don't have this function.

2, With Baiyin as another BAA big holder, BAA will not be bankruptcy in danger anymore. Why?

a: Although we have had two big holders before, Blackrock and Gramercy, BAA still has the possibility of BK because both Blackrock and Gramercy are planning to make money in BAA, not for gold. So, if gold price continues low they may give up their support to BAA, however, Baiyin is for gold to come into BAA, so Baiyin will support BAA forever no matter what gold price is.
As Baiyin Chairman said:

"Baiyin's investment in Banro through our offshore direct investment fund is consistent with our strategy to invest in low cost mines with large gold endowments and substantial growth opportunities," commented Baiyin Chairman, Liao Ming. "We will support Banro in unlocking the considerable potential of the Twangiza-Namoya Gold Belt."

Wow, Baiyin will support Banro in unlocking the considerable potential of the Twangiza-Namoya Gold Belt, that means it will finance all of BAA future projects!

b, Baiyin is a Chinese company and both Chinese people and government like gold, so gold price there is much higher, when Baiyin has 16.6% BAA ownership why will Baiyin not transport BAA gold into China for good price.

c, Chinese companies and Chinese people respect relationship more than money. If BAA has shortage of money Baiyin will support BAA with favorable term, not with harsh term. We see now Baiyin gives BAA money for 8.5% interest, do you remember Gramercy charged interest from BAA for 14% with monthly continuous increase last year when BAA ran out of money?

d, As an operator of Chinese government gold strategy, Baiyin has multi-billions asset and many Chinese big banks and institutions are its board members. Baiyin investment in BAA is not for making money, but for helping Chinese government to control Twangiza-Namoya Gold Belt. It looks Baiyin will replace Blackrock and Gramercy in BAA future with its stakes of 50M common shares, $11.25M loan, $67.5 million gold streaming transaction, $60 million of outstanding debt and preferred shares. I believe Baiyin will have more BAA stake in future, maybe a complete buyout.

e, Congo and China are historic brother countries and China gives a lot of helps to Congo. When Baiyin has BAA stake the current or future Congo government will not hurt BAA.

f, some posters here still dream Randgold or other big gold companies to buyout or partner of BAA, now with Baiyin involved BAA will not be interested in partner or buyout from any others anymore.

g, as for the 50M shares, or 20% dilution, I don't think it has any affect to the BAA future ceiling price. Thinks things this way, if BAA has $10 per share ceiling price in future without dilution, its theoretic ceiling price will be $8 with the dilution. Do you think things really work that way? Actually, with Baiyin on board the diluted $8 theoretic ceiling price may go to $20 ceiling price in practice while the undiluted $10 theoretic ceiling price may just go to $5 in deed. The book value is the fair value and stock price should be based on it, does any one see that always happen?

3, Although the dilution is the best all of others are still perfect.
a, 8.5% interest loan, few companies can get this low interest loan, even for the major gold companies.
b, buyback price at internal rate of return of 17.5% for streaming arrangement. It is usually greater than 20% for BAA previous deal.
c, $0.175 per BAA share for the dilution, this price is not bad, comparing current BAA price.

I must go now