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Share Name | Share Symbol | Market | Type |
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Banro Corporation Ordinary Shares (delisted) | AMEX:BAA | AMEX | Common Stock |
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 or
15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
For the month of August, 2015.
Commission File Number 001-32399
BANRO CORPORATION
(Translation of registrants name into English)
1 First Canadian Place
100 King Street West, Suite
7070
Toronto, Ontario, Canada
M5X 1E3
(Address of
principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F
Form 20-F [ X ] Form 40-F [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrants home country), or under the rules of the home country exchange on which the registrants securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrants security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BANRO CORPORATION | ||
/s/ Kevin Jennings | ||
Date: | August 12, 2015 | Kevin Jennings |
Chief Financial Officer |
-2-
INDEX TO EXHIBITS
99.1 | Material Change Report dated August 10, 2015 |
-3-
FORM 51-102F3 - MATERIAL CHANGE REPORT
1. |
Name and Address of Company |
Banro Corporation | |
1 First Canadian Place | |
Suite 7070, 100 King Street West | |
Toronto, Ontario | |
M5X 1E3 | |
2. |
Date of Material Change |
July 29, 2015. | |
3. |
News Release |
The news release (the "News Release") attached hereto as Schedule "A" was issued through Marketwired on July 29, 2015. | |
4. |
Summary of Material Change |
See the attached News Release, which News Release is incorporated herein. | |
5. |
Full Description of Material Change |
5.1 |
Full Description of Material Change |
See the attached News Release, which News Release is incorporated herein.
5.2 |
Disclosure for Restructuring Transactions |
Not applicable.
6. |
Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable. | |
7. |
Omitted Information |
Not applicable. | |
8. |
Executive Officer |
Geoffrey Farr (Vice President, General Counsel and Corporate Secretary) - (416) 366-2221. | |
9. |
Date of Report |
August 10, 2015. |
Schedule "A"
PRESS RELEASE |
Banro Files NI 43-101 Technical Report for Twangiza |
Relating to Previously Announced 59% Increase in Twangiza Mineral Reserves |
and Twangiza Mine Life Extension to 14 Years |
Toronto, Canada July 29, 2015 Banro Corporation ("Banro" or the "Company") (NYSE MKT - "BAA"; TSX - "BAA") announces that it has filed on SEDAR a National Instrument 43-101 technical report in respect of the Companys Twangiza gold mine, which follows the Mineral Reserve update for Twangiza announced by the Company in its June 8, 2015 press release. This report, which was prepared by SRK Consulting (UK) Limited (SRK), is dated July 29, 2015 and entitled NI 43-101 Technical Report, Mineral Resource and Reserve Update, December 31 2014, Twangiza Gold Mine, Democratic Republic of the Congo (the Technical Report).
Highlights
|
As previously reported in Banros June 8, 2015 press release, as at December 31, 2014, Twangiza Proven and Probable Reserves increased 59% to 1.64 million ounces (Moz) of gold (22.38Mt @ 2.28g/t Au) with the inclusion of non-oxide materials in the reserve pit shell which are now considered to be economically treatable with the existing plant. | |
| Total gold production of 1,246,311 ounces over 14 years, with an average annual production of 108,733 ounces of gold over the first 5 years. | |
| Average total cash operating costs over the current life of mine of US$699/ounce, with total cost per ounce over the current life of mine of US$888/ounce. | |
| Post-tax net present value (NPV) of US$285 million based on a 5% discount rate and a gold price of US$1,200 per ounce. |
The reserve growth at Twangiza has been achieved through the proven ability of the current plant in late 2014 to economically process a blend of non-oxide materials existing within the reserve pit shell. These processing capabilities have been further built upon in the first half of 2015. These ongoing achievements have extended the mine life of the current installed operations to 14 years, and provide a continuously strengthening foundation for future optimization and the possible future expansion of the existing Twangiza operations, commented Banro CEO and President, John Clarke.
Twangiza Mine Overview
The Twangiza mine, which is 100% wholly-owned by Banro, is located in the South Kivu Province of the Democratic Republic of the Congo (DRC), some 35 kilometres west of the Burundi Border and 45 kilometres to the south-southwest of Bukavu, the provincial capital. The Twangiza property consists of six exploitation permits totalling 1,156 square kilometres which are wholly-owned by Twangiza Mining SA, a DRC subsidiary of Banro. The Twangiza project poured its first gold in October 2011. The mine commenced with a refurbished plant designed primarily to process oxide material at 1.3Mtpa. Since commissioning, the plant has been improved and expanded to 1.7Mtpa and has been shown to be able to process a blend of oxide material with harder non-oxide material comprising partially weathered transitional rock containing residual sulphides and fresh rock containing sulphides.
A-2
Technical Report
The Technical Report provides:
| an update on the expansion and upgrade of the original processing plant to allow processing of non-oxide material at an annual throughput of 1.7Mtpa; | |
| a summary of changes implemented as a result of production reconciliation with historical estimates; | |
| historical and forecast mining and processing operating costs based on the ability to process non-oxide material at the increased annual throughput; | |
| mine plan for the 1.7Mtpa processing operating costs, at a range of gold prices and mining operating costs; | |
| a base line production schedule based on an economic cut-off grade; | |
| the tailings management facility plan to accommodate the increased Mineral Reserve tonnage and throughput rate; and | |
|
a base line financial model that incorporates the additional capital to be expensed during the mine life and assesses the sensitivity of the project to gold price fluctuation. |
Banros Mineral Resources and Mineral Reserves are reported in accordance with National Instrument 43-101, which incorporates by reference the CIM Definition Standards on Mineral Resources and Mineral Reserves. The Mineral Resources are inclusive of the Mineral Reserves component.
Twangiza Mineral Resource and Mineral Reserve Declaration as at December 31, 2014
Table 1: Twangiza Mineral Resources
Category | As at December 31, 2013 | As at December 31, 2014 | ||||
Tonnes | Grade | Gold | Tonnes | Grade | Gold | |
(Mt) | (g/t Au) | (Moz) | (Mt) | (g/t Au) | (Moz) | |
Twangiza (Oxide) | ||||||
Measured | 6.56 | 2.62 | 0.55 | 3.72 | 2.30 | 0.28 |
Indicated | 9.00 | 1.89 | 0.55 | 8.76 | 1.88 | 0.53 |
Measured & Indicated | 15.56 | 2.21 | 1.10 | 12.48 | 2.02 | 0.81 |
Inferred | 1.27 | 1.35 | 0.06 | 1.34 | 1.32 | 0.06 |
Twangiza (Transition & Fresh) | ||||||
Measured | 5.97 | 2.23 | 0.43 | 3.80 | 2.23 | 0.27 |
Indicated | 92.87 | 1.43 | 4.26 | 93.00 | 1.40 | 4.18 |
Measured & Indicated | 98.85 | 1.48 | 4.69 | 96.80 | 1.43 | 4.45 |
Inferred | 12.10 | 1.22 | 0.47 | 11.65 | 1.12 | 0.42 |
TOTAL MEASURED & INDICATED | 114.41 | 1.57 | 5.79 | 109.28 | 1.50 | 5.26 |
TOTAL INFERRED | 13.37 | 1.23 | 0.53 | 12.99 | 1.15 | 0.48 |
A-3
As previously reported in Banros June 8, 2015 press release, Twangizas Measured & Indicated (M&I) Mineral Resource has decreased 9.16% to 5.26 Moz (109.28Mt @ 1.50g/t Au) (December 31, 2013: 5.79 Moz representing 114.41Mt @ 1.57g/t Au), and Inferred Mineral Resources have decreased by 9.44% to 0.48 Moz (12.99Mt @ 1.15g/t Au) (December 31, 2013: 0.53 Moz representing 13.37Mt @ 1.23g/t Au). The reduction in the Mineral Resource is mainly attributed to mining depletion. The current Mineral Resource estimates consist of in situ Mineral Resources at a 0.4 g/t Au cut-off constrained within a US$1,600 per ounce optimized pit shell.
Table 2: Twangiza Mineral Reserves
Category | As at December 31, 2013 | As at December 31, 2014 | ||||
Tonnes | Grade | Gold | Tonnes | Grade | Gold | |
(Mt) | (g/t Au) | (Moz) | (Mt) | (g/t Au) | (Moz) | |
Proven | 5.62 | 2.49 | 0.45 | 7.47 | 2.41 | 0.58 |
Probable | 8.07 | 2.23 | 0.57 | 14.91 | 2.22 | 1.06 |
Proven + Probable | 13.69 | 2.34 | 1.03 | 22.38 | 2.28 | 1.64 |
Note: Rounding of numbers may result in computational
discrepancies.
Mineral Reserves are included in Mineral Resources.
As previously reported in Banros June 8, 2015 press release, the Proven and Probable Mineral Reserve of Twangiza has increased by 59% to 1.64 Moz (22.38Mt @ 2.28g/t Au) from 1.03 Moz (13.69Mt @ 2.34g/t Au) (December 31, 2013). This 59% increase is comprised of net mining depletion, discount on bulk density, artisanal mining voids and an increase in reserves as a result of the proven ability to process by blending the portions of the non-oxide ore within the reserve pit using the upgraded Twangiza plant.
A reconciliation exercise carried out under the supervision of SRK recommended a revision of the bulk densities of the top 15m material in the Twangiza Main and North pits, from an average of 2.05 t/m3 to 1.80 t/m3 and 1.89 t/m3, respectively. Due to the extensive degree of weathering and artisanal mining, a further 19.5% discount was applied to the overall bulk densities of the measured component of the Twangiza Main pit. These modifications were not captured in the feasibility studies published in July 2009. Banro management will continue to revisit the bulk density discount currently applied to the top 15m of material based on results obtained from operational mining data. The simultaneous application of the two discounts may have resulted in a particularly conservative estimate.
During the first half of 2015, Twangiza has progressively increased the percentage of transition material processed, with single day levels surpassing 60% of tonnes processed being transition ore. Recoveries during these periods have indicated the potential for overall recoveries of blended material (oxide and non-oxide material) to be greater than that of the stand-alone processing results as indicated by historic laboratory-based metallurgical recovery analyses. The current NI 43-101 study used the results of the historic laboratory-based metallurgical recovery analyses. Further testwork will be conducted to fully evaluate the potential high recovery benefits of blended materials compared with their component recoveries.
A-4
Operating Cost, Capital Cost and Financial Analysis Summary
The operating costs and capital costs were estimated and incorporated into the financial analysis below. These estimates have been prepared based on a zero-based cost analysis following a review of 2014 historical costs. The financial analysis also reflects the fiscal aspects of the mining convention governing the Twangiza mine, which includes a 100% equity interest and a 10 year tax holiday from the start of production. An administrative tax of 5% for the importation of plant, machinery and consumables has been included in the projected capital and operating costs.
Table 3: Summary of LOM Operating Costs
Item | Actual H2 2014 (Annualised) |
Forecast in Mine Plan | ||||
US$ million
/ annum |
US$ / t
processed |
US$ / oz
poured |
US$ million /
annum |
US$ / t
processed |
US$ / oz
poured | |
Mining Payroll Materials Contractors & Consultants Diesel & Power Sundry Expenses Mining Total |
5.40 3.71 3.13 3.42 0.39 16.06 |
3.53 2.43 2.05 2.23 0.25 10.49 |
47.7 32.8 27.6 30.2 3.4 141.8 |
3.99 2.60 0.90 1.89 0.15 9.53 |
2.50 1.62 0.56 1.18 0.09 5.95 |
45 29 10 21 2 107 |
Processing Payroll Materials Contractors & Consultants Diesel & Power Sundry Expenses Processing Total |
6.15 9.11 1.96 15.16 3.61 36.00 |
4.02 5.95 1.28 9.91 2.36 23.52 |
54.3 80.5 17.3 133.9 31.9 317.9 |
5.08 11.76 1.28 11.80 2.17 32.09 |
3.17 7.35 0.80 7.37 1.35 20.04 |
57 132 14 133 24 360 |
G&A Payroll Materials Contractors & Consultants Diesel & Power Sundry Expenses G&A Total |
5.39 2.07 6.78 0.74 6.63 21.61 |
3.52 1.35 4.43 0.49 4.33 14.12 |
47.6 18.3 59.9 6.6 58.6 190.9 |
5.68 0.73 6.40 0.69 7.12 20.62 |
3.55 0.46 4.00 0.43 4.45 12.89 |
64 8 72 8 80 232 |
Total Operating Costs |
73.67 |
48.12 |
650.6 |
62.24 |
38.88 |
699 |
A-5
Table 4: Summary of Capital Costs
ITEM | COST (US$ million) |
CAPITALISED EXPENDITURE | |
MINING SUSTAINING CAPITAL | 25.5 |
PROCESSING SUSTAINING CAPITAL | 6.4 |
TMF CONSTRUCTION | 46.0 |
TAILINGS SUSTAINING CAPITAL | 30.5 |
GENERAL & ADMINISTRATION - SUSTAINING CAPITAL | 20.6 |
BANRO FOUNDATION | 1.2 |
TOTAL CAPITALISED EXPENDITURE | 130.2 |
Table 5: Financial Analysis Summary
ITEM | UNIT | AMOUNT |
LIFE OF MINE GOLD PRODUCTION | koz | 1,246 |
PRODUCTION PERIOD | years | 14 |
ANNUAL GOLD PRODUCTION FOR FIRST 5 YEARS | koz | 109 |
LIFE OF MINE DIRECT OPERATING COSTS | US$/oz | 699 |
TOTAL CAPITAL COSTS | US$/oz | 104 |
ALL IN COSTS | US$/oz | 888 |
NET CASHFLOW AFTER TAX AND CAPEX | US$ million | 395 |
A sensitivity analysis was performed on the after tax profits by varying the gold price between US$1,000 and US$1,600 per ounce, at varying discount rates. The relevant after tax profits are based on the above noted cost estimates.
Table 6:
Cash Flow |
NET PRESENT VALUE (US$ million) | ||||||
1600 | 1500 | 1400 | 1300 | 1200 | 1100 | 1000 | |
NPV 0.0% | 847 | 734 | 621 | 508 | 395 | 282 | 169 |
NPV 5.0% | 612 | 530 | 449 | 367 | 285 | 203 | 122 |
NPV 8.0% | 516 | 447 | 378 | 310 | 241 | 172 | 103 |
NPV 9.5% | 476 | 413 | 350 | 286 | 223 | 159 | 96 |
NPV 10.0% | 464 | 402 | 341 | 279 | 217 | 156 | 94 |
NPV 12.5% | 411 | 356 | 302 | 247 | 193 | 139 | 84 |
NPV 15.0% | 366 | 318 | 270 | 222 | 173 | 125 | 77 |
The above financial analysis does not take into account ongoing exploration, feasibility, financing or interest costs.
A-6
Future Opportunities
Banro is actively pursuing a number of alternatives for enhancing and increasing the economics and financial returns relating to the Twangiza mine. These include optimal ore blend for enhanced recoveries, low cost power alternatives, process optimizations to improve throughput constraints and metallurgical recoveries, process enhancements to increase processing capabilities to meet the requirements of additional hard rock resources and delineating additional high grade resources from the known deposits as well as from a number of prospects. Possible future expansions of operations will be evaluated to maximize net present values at market discount rates.
Qualified Persons
The "Qualified Persons" (as such term is defined in National Instrument 43-101) for the purpose of the Technical Report are Martin Pittuck (CEng, MIMMM), who is a Corporate Consultant of SRK, David Pattinson (PhD, CEng, MIMMM), who is a Corporate Consultant of SRK, and Daniel Bansah (MSc (MinEx), MAusIMM(CP)), who is Banros Head of Projects and Operations. Each of the said Qualified Persons has reviewed and approved the relevant contents of this press release.
Banro Corporation is a Canadian gold mining company focused on production from the Twangiza mine, which began commercial production September 1, 2012, and completion of commissioning of its second gold mine at Namoya located approximately 200 kilometres southwest of the Twangiza gold mine. The Companys longer term objectives include the development of two additional major, wholly-owned gold projects, Lugushwa and Kamituga. The four projects, each of which has a mining license, are located along the 210 kilometre long Twangiza-Namoya gold belt in the South Kivu and Maniema provinces of the DRC. All business activities are followed in a socially and environmentally responsible manner.
Cautionary Note to U.S. Investors
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 a company can economically and legally extract or
produce. Certain terms are used by the Company, such as "Measured", "Indicated",
and "Inferred" "Resources", that the SEC guidelines 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 the Company's Form
20-F Registration Statement, File No. 001-32399, which may be secured from the
Company, or from the SEC's website at http://www.sec.gov/edgar.shtml.
Cautionary Note Concerning Mineral Resource and
Mineral Reserve Estimates
The Companys Mineral
Resource and Mineral Reserve figures are estimates and no assurances can be
given that the indicated levels of gold will be produced. Such estimates are
expressions of judgment based on knowledge, mining experience, analysis of
drilling results and industry practices. Valid estimates made at a given time
may significantly change when new information becomes available. While the
Company believes that the Mineral Resource and Mineral Reserve estimates
included in this press release are well established, by their nature Mineral
Resource and Mineral Reserve estimates are imprecise and depend, to a certain
extent, upon statistical inferences which may ultimately prove unreliable.
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 Reserves through 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 an Indicated or Measured Mineral Resource as a result of continued exploration. Confidence in the estimate is insufficient to allow meaningful application of the technical and economic parameters to enable an evaluation of economic viability worthy of public disclosure (except in certain limited circumstances). Inferred Mineral Resources are excluded from estimates forming the basis of a feasibility study.
A-7
Cautionary Note Concerning Forward-Looking
Statements
This press release contains forward-looking
statements. All statements, other than statements of historical fact, that
address activities, events or developments that the Company believes, expects or
anticipates will or may occur in the future (including, without limitation,
statements regarding estimates and/or assumptions in respect of net present
values and future cash flows, Mineral Resource and Mineral Reserve estimates,
future gold production, costs, mine life extension, gold recoveries, potential
Mineral Resources and Mineral Reserves and the Companys production, development
and exploration plans and objectives) are forward-looking statements. These
forward-looking statements reflect the current expectations or beliefs of the
Company based on information currently available to the Company. Forward-looking
statements are subject to a number of risks and uncertainties 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 are realized 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
actual results or events to differ materially from current expectations include,
among other things: uncertainty of estimates of capital and operating costs,
production estimates and estimated economic return of the Companys projects;
the possibility that actual circumstances will differ from the estimates and
assumptions used in the economic studies of the Companys projects; failure to
establish estimated Mineral Resources and Mineral Reserves (the Companys
Mineral Resource and Mineral Reserve figures are estimates and no assurance can
be given that the intended levels of gold will be produced); fluctuations in
gold prices and currency exchange rates; inflation; gold recoveries being less
than those indicated by the metallurgical testwork carried out to date (there
can be no assurance that gold recoveries in small scale laboratory tests will be
duplicated in large tests under on-site conditions or during production);
uncertainties relating to the availability and costs of financing needed in the
future; changes in equity markets; political developments in the DRC; lack of
infrastructure; failure to procure or maintain, or delays in procuring or
maintaining, permits and 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 to regulations affecting the Company's
activities; the uncertainties involved in interpreting drilling results and
other geological data; and the other risks disclosed under the heading "Risk
Factors" and elsewhere in the Company's annual report on Form 20-F dated April
6, 2015 filed on SEDAR at www.sedar.com and EDGAR at www.sec.gov. Any
forward-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 or obligation to update any forward-looking statement, whether as a
result of new information, future events or results or otherwise. Although the
Company believes that the assumptions inherent in the forward-looking statements
are reasonable, forward-looking statements are not guarantees of future
performance and accordingly undue reliance should not be put on such statements
due to the inherent uncertainty therein.
For further information, please visit our website at www.banro.com, or contact: |
Martin Jones |
+1 (416) 366-2221, Ext. 3213 |
+1-800-714-7938, Ext. 3213 |
info@banro.com |
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