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[Dobie Lama]

BAA- Looking good!

TEXT SIZE 2014-03-28
Toronto-based Banro Corp. (TSX: BAA; NYSE: BAA) has published an initial reserve estimate for its Namoya gold mine in the Democratic Republic of the Congo, pushing up company-wide reserves by 53% to 2.36 million oz. Namoya, which is the junior’s second gold mine, now hosts reserves of 23.7 million tonnes grading 1.75 grams gold per tonne for 1.34 million oz. gold. Banro says it successfully converted 73% of Namoya’s 1.83 million oz. gold in measured and indicated into reserves. BMO analyst Andrew Breichmanas describes the results as “positive,” noting the reserves of 1.34 million oz. were above his estimate of 920,000 oz., although unit costs are slightly higher than predicted. To calculate the reserves, Banro assumed unit costs of US$3.85 per tonne for mining, US$11.38 per tonne for processing, and US$5.89 per tonne for general and administration. It used a cut-off grade of 0.45-gram gold per tonne and a gold price of US$1,200 per oz. With the addition of Namoya, the junior has bolstered its gold count, despite reserves dropping 33% to 1.03 million oz. at its nearby Twangiza gold mine. That decrease resulted mainly from Twangiza lowering its gold price assumption to calculate reserves to US$1,200 per oz. from US$1,500 per oz. On a positive note, Twangiza’s reserve grade has improved to 2.34 grams gold per tonne from 1.87 grams gold in 2013. “The higher grade indicates that current production rates are more sustainable than previously thought,” Breichmanas notes. Twangiza saw its production sequentially grow in each quarter last year. It produced 22,858 oz. gold in the fourth quarter, roughly 10% higher than the third quarter, as it continued an expansion to boost future throughout to up to 1.7 million tonnes a year. For the full-year, Twangiza delivered 82,591 oz., slightly below its annual guidance. Namoya wasn’t able to contribute much to last year’s production, as it poured its first gold, amounting to 320 oz., on Dec. 30. Commissioning efforts are currently underway, with commercial production slated to start before June. Namoya sits in the Twangiza-Namoya gold belt roughly 200 km south of the Twangiza gold mine. Banro is set to release its 2013 financials on March 31. The company closed the day flat at 56¢, down 23% since the start of the year. Breichmanas has a 75¢ target price and an underperform rating on the stock. - See more at: www.northernminer.com/news/banros-gold-reserves-jump-53-due-to-namoya/1002985633/#sthash.smNeoIqW.dpuf