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 November, 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: November 12, 2015 |
Kevin Jennings |
|
Chief Financial Officer |
-2-
INDEX TO EXHIBITS
-3-
Banro Announces Q3 2015 Financial Results;
Q3 2015
EBITDA of $20.3 Million, YTD 2015 EBITDA of $54 Million and Twangiza
Lowers
Cash Cost to $501 per Ounce
Toronto, Canada November 11, 2015 Banro Corporation
("Banro" or the "Company") (NYSE MKT - "BAA"; TSX - "BAA") today announced its
financial and operating results for the third quarter of 2015.
TWANGIZA OPERATIONAL HIGHLIGHTS
|
|
Twangiza year-to-date production increases 53%
to 105,092 ounces from 68,739 ounces in 2014, exceeding full year 2014
production of 98,184 |
|
|
Twangiza maintains quarterly gold production,
34,824 ounces, with throughput above design capacity at 104% |
|
|
Twangiza Q3 2015 cash costs per ounce decreased
19% to $501 per ounce, contributing to a 2015 year-to-date cash costs of
$539 per ounce |
|
|
Q3 2015 AISC of $608 per ounce, a 13% decrease
from Q3 2014 of $702 per ounce |
NAMOYA PROJECT HIGHLIGHTS
|
|
Namoya continues to increase stacked material
and gold content, leading to improved gold production, as the operation
progresses towards steady-state operating levels |
|
|
Exploration drilling at the Namoya-Summit Filon
B target delivers positive results |
FINANCIAL HIGHLIGHTS
|
|
Record EBITDA of $20.3 million in Q3 2015, a
46% increase over Q3 2014 of $14 million, and year-to-date EBITDA of $54
million, a 118% increase over the same period in 2014 |
|
|
Q3 2015 net income before non-cash impairment
charges of over $10 million, an increase of 188% over Q3 2014 ($4 million)
|
|
|
Gross earnings from operations of over $15
million in Q3 2015, consistent with Q2 2015, as lower operating costs
offset depressed gold market conditions |
All dollar amounts in this press release are expressed in
thousands of dollars and, unless otherwise specified, in United States dollars.
''We are very pleased with the performance of the Twangiza
mine, where exceptionally strong production results are providing a solid
operating and financial foundation for the Company. Meanwhile, we are working to
identify further opportunities to continue to enhance production and reduce
costs at Twangiza, said Banro President and CEO John Clarke.
The Namoya mine also made significant progress during the
quarter as it continues to ramp-up towards steady-state operating levels.
However, the delay in the delivery of trucking and excavating equipment to site,
which is now on site and being commissioned, resulted in lower than expected
quarterly gold production at Namoya. We continue to expect commercial
production by the end of 2015. Looking ahead to the fourth quarter, we expect
that improving mine productivity resulting from the commissioning of new
equipment, together with the lagging nature of heap leach gold production from
material stacked in the third quarter, will contribute to enhanced quarterly
production. The Company expects to meet the consolidated production guidance of
175,000 to 195,000 ounces of gold for 2015, with Twangiza cash costs and AISC
being below $600 per ounce and $700 per ounce, respectively,
The table below provides a summary of financial and operating
results for the three and nine-month periods ended September 30, 2015, and
corresponding periods in 2014 as well as the second quarter of 2015:
(I) FINANCIAL
|
|
Q3 2015 |
|
|
Q3 2014 |
|
|
Q2 2015 |
|
|
YTD 2015 |
|
|
YTD 2014 |
|
Selected Financial Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
38,504 |
|
|
33,285 |
|
|
42,597 |
|
|
122,104 |
|
|
90,258 |
|
Total
mine operating expenses1 |
|
(23,084 |
) |
|
(25,192 |
) |
|
(28,068) |
|
|
(75,433 |
) |
|
(71,833 |
) |
Gross
earnings from operations |
|
15,420 |
|
|
8,093 |
|
|
14,529 |
|
|
46,671 |
|
|
18,425 |
|
Net
income before impairment charge2 |
|
10,789 |
|
|
3,750 |
|
|
1,534 |
|
|
19,103 |
|
|
48 |
|
Net
(loss)/income |
|
(12,211 |
) |
|
3,750 |
|
|
(48,666) |
|
|
(54,097 |
) |
|
48 |
|
Basic net (loss)/earnings per share ($/share) |
|
(0.05 |
) |
|
0.01 |
|
|
(0.19) |
|
|
(0.21 |
) |
|
- |
|
Key Operating Statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average gold price received ($/oz) |
|
1,117 |
|
|
1,233 |
|
|
1,194 |
|
|
1,173 |
|
|
1,254 |
|
Gold
sales (oz) |
|
34,467 |
|
|
26,997 |
|
|
35,665 |
|
|
104,088 |
|
|
71,961 |
|
Gold
production (oz) |
|
34,824 |
|
|
27,171 |
|
|
34,325 |
|
|
105,092 |
|
|
68,739 |
|
All-in
sustaining cost per ounce ($/oz) |
|
608 |
|
|
702 |
|
|
701 |
|
|
631 |
|
|
827 |
|
Cash
cost per ounce ($/oz) |
|
501 |
|
|
618 |
|
|
587 |
|
|
539 |
|
|
728 |
|
Gold margin ($/oz) |
|
616 |
|
|
615 |
|
|
607 |
|
|
634 |
|
|
526 |
|
Financial Position |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents |
|
3,895 |
|
|
2,148 |
|
|
9,270 |
|
|
3,895 |
|
|
2,148 |
|
Gold
bullion inventory at market value3 |
|
3,487 |
|
|
2,335 |
|
|
1,875 |
|
|
3,487 |
|
|
2,335 |
|
Total
assets |
|
869,806 |
|
|
869,068 |
|
|
879,510 |
|
|
869,806 |
|
|
869,068 |
|
Long term debt |
|
166,859 |
|
|
192,079 |
|
|
165,591 |
|
|
166,859 |
|
|
192,079 |
|
(1) Includes depletion and depreciation.
(2) Impairment charges of $23,000 and $73,200 were recognized
in Q3 2015 and YTD 2015, respectively. Refer to the Namoya - Mine Under
Construction section below for additional information.
(3) This represents 3,130 ounces of gold bullion inventory,
with a total cost of $734 per ounce, shown at the September 30, 2015 closing
market price of $1,114 per ounce of gold.
|
|
Revenues during the three and nine-month
periods ended September 30, 2015 were $38,504 and $122,104, respectively,
compared with revenues of $33,285 and $90,258, respectively, for the
corresponding periods in 2014. During the third quarter of 2015, ounces of
gold sold increased by 28% to 34,467 ounces compared to sales of 26,997
ounces during the third quarter of 2014. The average gold price per ounce
sold in the quarter was $1,117 compared to an average price of $1,233 per
ounce obtained during the corresponding prior year period as a result of
lower average market prices. |
|
|
|
|
|
Mine operating expenses, including depletion
and depreciation, for the three and nine-month periods ended September 30,
2015 were $23,084 and $75,433, respectively, compared to $25,192 and
$71,833 for the respective three and nine-month periods ended September
30, 2014. The decrease in costs during the 2015
three month period was due to lower depreciation as a result of the
extension in the life of the mine during the second quarter of 2015,
partially offset by higher production costs due to increased mill
throughput for a total of 441,579 tonnes compared to 394,500 tonnes, as
the operation surpassed design capacity. The increase in costs during the
nine month period was due to higher production costs as Twangiza
significantly increased milling throughput on a year-to-date basis from
987,844 tonnes to 1,299,084 tonnes, resulting in lower costs per ounce. |
2
|
|
Gross earnings from operations for the
respective three and nine-month periods ended September 30, 2015, were
$15,420 and $46,671, respectively, compared to $8,093 and $18,425,
respectively, for the corresponding periods of 2014. The 16% higher gold
sales during Q3 2015 compared to Q3 2014, with a corresponding 8% decrease
in mine operating expenses translated into improving gross margins by over
90%. While the average gold price received per ounce decreased due to the
market conditions, this was offset by increased gold ounces sold. |
|
|
|
|
|
Cash costs on a sales basis for the nine months
ended September 30, 2015 were $539 per ounce, a reduction of 26% from $728
per ounce for the corresponding period in 2014. Cash costs per ounce on a
sales basis for the third quarter of 2015 were $501 per ounce of gold
(compared to $618 per ounce of gold for the third quarter of 2014 and $587
per ounce for the second quarter of 2015). Cash costs for the third
quarter of 2015 were lower than the prior year quarter as a result of
continued levels of increased productivity at Twangiza. Consistent with
the first two quarters of 2015, Twangiza maintained steady state
production levels and normalized production costs in line with life of
mine expectations as well as benefits from the reductions in diesel
pricing. |
|
|
|
|
|
All-in sustaining costs were $631 per ounce for
the nine months ended September 30, 2015, a 24% reduction from $827 per
ounce for the corresponding period in 2014. All-in sustaining costs were
$608 per ounce for the third quarter of 2015 (compared to $702 per ounce
of gold for the third quarter of 2014 and $701 per ounce for the second
quarter of 2015) driven by lower cash costs per ounce.
|
(II) OPERATIONAL
- TWANGIZA
|
|
During the third quarter of 2015, Twangiza was
loss time injury (LTI) free, progressing to over twenty-one months and
8.9 million LTI free hours since the last recorded LTI. |
|
|
|
|
|
During the third quarter of 2015, the plant at
the Twangiza Mine processed 441,579 tonnes of ore (compared to 394,500
tonnes during the third quarter of 2014 and 428,661 tonnes in the second
quarter 2015), maintaining throughput above design capacity for 104% of
design capacity. This achievement was made while Twangiza continued to
process a significant amount of non-oxide material. Ore was processed
during the third quarter of 2015 at an indicated head grade of 3.07 g/t Au
(compared to 2.60 g/t Au during the third quarter of 2014 and 3.01 g/t Au
during the second quarter of 2015) with a recovery rate of 79.8% (compared
to 82.2% during the third quarter of 2014 and 82.2% in second quarter
2015) to produce 34,824 ounces (compared to 27,171 ounces during the third
quarter of 2014 and 34,325 ounces in second quarter 2015) of gold.
|
(III) MINE UNDER
CONSTRUCTION NAMOYA
3
Mine Under Construction - Investment |
|
Q3 2015 |
|
|
Change |
|
|
Q3 2014 |
|
|
|
($000's) |
|
|
(%) |
|
|
($000's) |
|
Additions1 |
|
14,348 |
|
|
(17% |
) |
|
17,301 |
|
Impairment2 |
|
(23,000 |
) |
|
100% |
|
|
- |
|
Balance as at September 30 |
|
387,713 |
|
|
(3% |
) |
|
397,706 |
|
(1) Net of pre-commercial revenue of $13,274 and $5,449 in
Q3 2015 and Q3 2014, respectively.
(2) Refer to the Namoya - Mine Under Construction section
below for additional information.
|
|
During the third quarter of 2015, the Namoya
Mine produced 12,157 ounces of gold from a total of 446,653 tonnes of ore,
stacked and sprayed on the heap leach pads, at an indicated head grade of
1.67 g/t Au. Stacking levels and grades were below the design capacity of
the operation during the quarter as a result of restricted excavator
availability which in turn resulted in lower than planned ore production
and waste removal. |
|
|
|
|
|
With the ongoing commissioning of process
upgrades during the third quarter, daily stacking rates continued to
incrementally improve and stabilize, however, the utilization of the
processing circuit was restricted due to ore delivery from mining
operations with the ore stacked being supplemented by low grade stockpile
material. The achievements made with respect to the processing circuit has
increased the focus on mining productivity in order to enhance ore
delivery and enable improved utilization of the processing circuit. |
|
|
|
|
|
The process to achieving the required
improvements to mining productivity commenced during the third quarter as
Namoya began receiving, assembling and commissioning the larger mining
fleet. The excavator was commissioned in September and began contributing
to improved mining productivity and the CAT 777s began commissioning in
October with the final haul trucks expected to come online by the end of
November. The expanded fleet will support the ongoing mining activities in
multiple pits and the removal of waste required for additional mining
faces to be opened, which should result in significantly reducing the need
to blend low grade stockpile material with the stacked ore.
|
(IV) EXPLORATION
|
|
During the third quarter of 2015, exploration
activities increased with the focus on near mine exploration at Namoya.
High grade drill results intersecting significant mineralization were
obtained from the first stage of the follow up drill program in the Namoya
Summit footwall zone which borders the Filon B area (see Banros September
18, 2015 press release). Drilling results included 16.00 metres grading
5.35 g/t Au, 15.00 metres grading 5.00 g/t Au and 24.00 metres grading
2.77 g/t Au. Exploration drilling will continue through the fourth quarter
of 2015 along with grade control drilling at Namoya Summit.
|
(V) CORPORATE
DEVELOPMENT
|
|
In September 2015, the Company closed a new $9
million loan facility with an existing lender, Banque Commerciale du Congo
("BCDC"), following repayments of the previous $10 million credit facility
with BCDC which is now extinguished, as well as repayments of other
existing facilities with DRC banks. The loan facility is for a term of 22
months, bears interest of 9.5% per annum and is repayable over 19 months
starting in January 2016. |
4
|
|
In September 2015, the Company closed a $7
million gold forward sale transaction. The forward sale transaction
provides for the prepayment by the purchaser of $7 million for its
purchase of 8,481 ounces of gold from the Twangiza mine, with the gold
deliverable over 33 months, at 257 ounces per month beginning January
2016. The forward sale may be terminated at any time upon payment to the
purchaser of a one-time termination amount. The terms of the forward sales
also include a gold floor price mechanism whereby, if the gold price falls
below $1,100 per ounce in any month, additional ounces are deliverable to
ensure a realized gold price of $1,100 per ounce for that month. |
|
|
|
|
|
The Company elected not to declare the
September 2015 dividend on the preference shares issued in 2013. The
accrued amount in respect of this dividend was $927 as at September 30,
2015. |
TWANGIZA MINE
With the ability to maintain stable operating performance
following a year of increased productivity levels, Twangiza management focused
on evaluating the processing capabilities of the plant. Throughput levels
increased to 104% of design capacity while continuing to process significant
amounts of non-oxide ore. The Company performed multiple days of trials to test
the throughput of pre-crushed non-oxide ore. The results demonstrated that
throughputs greater than design capacity may be achievable with pre-crushed
material. As expected, the recovery rates of the non-oxide feed were lower than
those being regularly achieved with blended ore and contributed to lower overall
recoveries in the current quarter. These trials are being performed to evaluate
potential enhancements to further utilize the existing plant in the future.
Twangiza management will continue to focus on process plant feed optimization to
secure reliable throughput levels that can be maintained through the rainy
season.
TWANGIZA MINE |
Q3 2015 |
Q2 2015 |
Prior Quarter Change % |
Q3 2014 |
Prior Year Change %
|
Gold sales (oz) |
34,467 |
35,665 |
(3%) |
26,997 |
28% |
Gold produced (oz) |
34,824 |
34,325 |
1% |
27,171 |
28% |
Material mined (t) |
707,861 |
770,162 |
(8%) |
1,027,311 |
(31%) |
Ore mined (t)1 |
453,960 |
548,175 |
(17%) |
589,288 |
(23%) |
Valley fill mined (t) |
- |
- |
- |
- |
- |
Waste mined (t) |
253,901 |
221,987 |
14% |
438,023 |
(42%) |
Strip ratio (t:t)2 |
0.56 |
0.41 |
37% |
0.74 |
(24%) |
Ore milled (t)1 |
441,579 |
428,661 |
3% |
394,500 |
12% |
Head grade (g/t Au)3 |
3.07 |
3.01 |
2% |
2.60 |
18% |
Recovery (%) |
79.84 |
82.2 |
(3%) |
82.20 |
(3%) |
Cash cost per ounce ($US/oz) |
501 |
587 |
(15%) |
618 |
(19%) |
(1) |
The difference between ore mined and ore milled is,
generally, the result of the stockpiling of lower grade ore. |
|
|
(2) |
Strip ratio is calculated as waste mined divided by ore
mined. |
|
|
(3) |
Head grade refers to the indicated grade of ore
milled. |
In the third quarter of 2015, Twangiza achieved production
levels consistent with the first two quarters of 2015, continuing to produce
above the monthly average production guidance of 9,000 ounces per month. Cash costs per ounce during the quarter were 15% lower
than the second quarter of 2015 and represented a 19% reduction from the third
quarter of 2014, mainly due to the improvements in productivity levels and the
benefit of lower diesel prices. Similar to recent quarters, the strong operating
results continue to be driven by improved productivity with the plant
throughputs being maintained at or above design capacity while processing a
significant portion of non-oxide ore. In the current quarter, mill throughput,
which achieved 104% of design capacity, and head grade were the most significant
contributors with 12% and 18% increases, respectively, compared to the same
prior year period, contributing to an overall increase in gold content processed
of 32% while gross spending on processing only increased by approximately 19%.
5
Gross spending and unit costs for Q3 2015 in comparison to Q2
2015 and Q3 2014 are as follows:
Mine Operating Costs |
|
|
|
|
(In '000s) |
|
|
|
|
|
Cost per tonne Milled ($/t) |
|
|
|
Q3 2015 |
|
|
Q2 2015 |
|
|
Q3 2014 |
|
|
Q3 2015 |
|
|
Q2 2015 |
|
|
Q3 2014 |
|
Mining
Costs |
|
3,603 |
|
|
4,495 |
|
|
3,430 |
|
|
8.2 |
|
|
10.5 |
|
|
8.7 |
|
Processing Costs |
|
10,214 |
|
|
9,252 |
|
|
8,583 |
|
|
23.1 |
|
|
21.6 |
|
|
21.8 |
|
Overhead |
|
4,771 |
|
|
5,269 |
|
|
4,506 |
|
|
10.8 |
|
|
12.3 |
|
|
11.4 |
|
Inventory Adjustments |
|
(1,325 |
) |
|
1,927 |
|
|
178 |
|
|
(3.0 |
) |
|
4.5 |
|
|
0.5 |
|
Total mine operating cost |
|
17,263 |
|
|
20,943 |
|
|
16,697 |
|
|
39.1 |
|
|
48.9 |
|
|
42.4 |
|
Total tonnes milled (tonnes) |
|
441,579 |
|
|
428,661 |
|
|
394,500 |
|
|
|
|
|
|
|
|
|
|
Mining
A total of 707,861 tonnes of material (Q3 2014 1,027,311
tonnes) were mined during the three month period ended September 30, 2015. Total
ore mined was 453,960 tonnes (Q3 2014 589,288 tonnes). The strip ratio for the
third quarter of 2015 decreased to 0.56 as compared to 0.74 during the third
quarter of 2014. The mining cost per tonne milled during the third quarter of
2015 decreased compared with the second quarter of 2015 to $8.20 per tonne
milled as a result of lower gross mining costs due to redirected mining
resources to the Tailings Management Facility (TMF) construction and increased
tonnes milled.
Processing & Engineering
For the three month period ended September 30, 2015, the plant
at the Twangiza Mine processed 441,579 tonnes of ore (Q3 2014 394,500 tonnes),
representing a 12% increase over the prior year period, as the operations
continued to exceed the annualized rate of 1.7 Mtpa. This quarterly throughput
was marginally higher, at 13,000 tonnes over the second quarter of 2015.
Processing cost per tonne milled increased from $21.80 per tonne in the third
quarter of 2014 to $23.10 per tonne in the third quarter of 2015 as a result of
increased consumables consumption from the processing of non-oxide ore. During
the quarter, Twangiza performed multiple days of trials to test the throughput
of pre-crushed non-oxide ore. The results demonstrated that throughputs greater
than design capacity may be achievable with pre-crushed material. As expected,
the recoveries of the non-oxide feed were lower than those being regularly
achieved with blended ore and contributed to lower recovery of 79.84% during the
period. The processing costs were 19% higher compared to Q3 2014 as a result of
the 12% increase in throughput combined with increased consumables consumption
due to the ore blend.
6
Sustaining Capital Activities
Capital spending at Twangiza was focused on upgrades to the
mobile fleet and continued construction of the TMF. Mobile fleet upgrades during
the quarter included the purchase of secondary equipment to support mining
operations, road maintenance and TMF construction. TMF construction continued at
increasing activity levels, with activity levels expected to be sustained into
the fourth quarter of 2015, however, lower levels of activity may occur based on
the impact of the rainy season.
Cash cost and All-in sustaining cost
Cash costs per ounce for the third quarter of 2015 were lower
than the prior year period, primarily due to increased sales of 7,470 ounces or
28%, due to increased production over the third quarter of 2014, while gross
spending increased as a result of higher throughput slightly above the design
capacity of the mill and higher consumables consumption. The all-in sustaining
cost decreased from $702 per ounce in Q3 2014 to $608 per ounce in Q3 2015,
primarily due to lower cash costs related mainly to lower diesel costs and
improved milling efficiency. The all-in sustaining cost decreased from $701 per
ounce in Q2 2015 to $608 per ounce in Q3 2015, primarily due to the impact of
inventory adjustments from increased gold-in-process and gold bullion levels.
Cash Cost per ounce sold |
|
|
|
|
($US/ounce) |
|
|
|
|
|
|
Q3 2015 |
|
|
Q2 2015 |
|
|
Q3 2014 |
|
Mining Costs |
|
105 |
|
|
126 |
|
|
127 |
|
Processing Costs |
|
296 |
|
|
259 |
|
|
318 |
|
Overhead |
|
138 |
|
|
148 |
|
|
166 |
|
Inventory Adjustments |
|
(38 |
) |
|
54 |
|
|
7 |
|
Total cash costs per ounce |
|
501 |
|
|
587 |
|
|
618 |
|
Total ounces sold (ounces)
|
|
34,467 |
|
|
35,665 |
|
|
26,997 |
|
All-in sustaining costs per
ounce |
|
608 |
|
|
701 |
|
|
702 |
|
NAMOYA - MINE
UNDER CONSTRUCTION
During the third quarter of 2015, Namoyas ramp up towards
commercial production progressed with stacking levels averaging 149,000 tonnes
per month for a total of 446,653 tonnes for the quarter. This represents a 35%
increase in ore stacked over the second quarter of 2015. Ore stacked was below
the design rate of 190,000 tonnes per month due to low excavator availability.
The low availability of ore from mining activities in the third quarter resulted
in the processing of ore from low grade stockpiles, resulted in an average
stacked grade of 1.67 g/t Au. Contained gold stacked on the heap leach increased
to approximately 24,000 ounces or approximately 48% over the previous quarter.
Due to heap leach operations requiring several months of percolation to fully
recover the leachable gold, gold production in the quarter increased by
approximately 15%. Namoya poured 3,415 ounces in July, 4,233 ounces in August
and 4,509 ounces in September for a total of 12,157 ounces of gold in the third
quarter of 2015.
Excavator availability improved in September with the
commissioning of the first component of the larger mining fleet. This will
significantly improve waste removal activities. The commissioning process of the
CAT 777s has commenced, which will occur in phases throughout November following
the completion of the onsite assembly process. The full commissioning of the
larger mining fleet along with the continued support from the pre-existing
mining fleet is expected to significantly improve mining productivity levels.
With increasing ore availability at Namoya, stacking levels and grades are
expected to increase to commercial production levels in the fourth quarter of
2015.
The CIL circuit was not utilized during the third quarter of
2015 as the focus of the operations continues to be the improvements to the heap
leach processing circuit.
7
During the third quarter of 2015, the Company recorded a
non-cash impairment charge totalling $23.0 million against the Namoya Mine Under
Construction balance in its interim condensed financial statements, resulting in
a net balance of $388 million as at September 30, 2015. The non-cash impairment
charge recorded was due to the aggregate adverse impact of the deterioration of
the long term gold price outlook, the build-up of capitalized borrowing costs
(interest and dividends directly attributable to the construction of the asset)
and pre-commercial operating losses from the extended ramp up due to the delay
in financing, the commissioning of the mobile fleet and the redesign of the
plant.
Under International Financial Reporting Standards (IFRS), in
addition to the project development and the associated exploration and
evaluation costs, the Mine Under Construction balance includes borrowing costs,
depreciation and pre-commercial operating losses. Prior to the recognition of
impairment charges in the current year, as at September 30, 2015, the Mine Under
Construction balance included over $75 million of borrowing costs, $22 million
of depreciation and approximately $35 million of pre-commercial operating
losses. The 2015 year-to-date non-cash impairment charge of $73.2 million was
less than the amount of the above indirect project development costs, indicating
that the direct Namoya project development costs are recoverable under the
prevailing market conditions.
EXPLORATION
Consistent with the Companys focus on cash flow management
during the completion of development at Namoya, exploration activities during
the third quarter of 2015 involved the provision of support by the geological
teams for production related activities at the two mine sites, as well as the
use of small teams focused on new oxide target generation activities in Lugushwa
and Kamituga through BLEG and ground maintenance activities.
Near mine exploration at Namoya during the third quarter of
2015 yielded high grade drill results intersecting significant mineralization.
These results were obtained from the first stage of the follow up drill program
in the Namoya Summit footwall zone which borders the Filon B area (see Banros
September 18, 2015 press release). Drilling results included 16.00 metres
grading 5.35 g/t Au, 15.00 metres grading 5.00 g/t Au and 24.00 metres grading
2.77 g/t Au. The drill program that has yielded these significant mineralization
results is ongoing and has been integrated with production related drilling
activities to effectively utilize the available resources. Additional drill
results from the ongoing drill program are expected in the fourth quarter of
2015.
As previously reported, to support the Twangiza and Namoya
operations, near term exploration will focus on the following:
|
Deliver sufficient drilling to allow full
delineation of mineable material for the Namoya Summit - Filon B targets
at Namoya; |
|
|
|
Development and execution of the drill program
to convert inferred and indicated resources to higher confidence resources
and mineral reserves within the existing open pits; and |
|
|
|
Delineate resources from identified targets
within a 5 kilometre radius of the current operations.
|
Qualified Person
Daniel K. Bansah, the Company's Head of Projects and Operations
and a "Qualified Person" as such term is defined in National Instrument 43-101,
has approved the technical information in this press release.
8
NON-IFRS MEASURES
Management uses cash cost, all-in sustaining cost, gold margin
and EBITDA to monitor financial performance and provide additional information
to investors and analysts. These metrics do not have a standard definition under
IFRS and should not be considered in isolation or as a substitute for measures
of performance prepared in accordance with IFRS. As these metrics do not have a
standardized meaning, it may not be comparable to similar measures provided by
other companies. However, the methodology used by the Company to determine cash
cost per ounce is based on a standard developed by the Gold Institute, which was
an association which included gold mining organizations, amongst others, from
around the world.
The Company defines cash cost, as recommended by the Gold
Institute standard, as all direct costs that the Company incurs relating to mine
production, transport and refinery costs, general and administrative costs,
movement in production inventories and ore stockpiles, less depreciation and
depletion. Cash cost per ounce is determined on a sales basis.
|
|
|
|
|
|
|
|
|
|
|
Q3 2015 |
|
|
Q3 2014 |
|
Cash Cost |
|
Q3 2015 |
|
|
Q3 2014 |
|
|
Q2 2015 |
|
|
YTD |
|
|
YTD |
|
|
|
($000's)
|
|
|
($000's) |
|
|
($000's) |
|
|
($000's)
|
|
|
($000's) |
|
Mine operating expenses |
|
23,084 |
|
|
25,192 |
|
|
28,068 |
|
|
75,433 |
|
|
71,833 |
|
Less: Depletion and depreciation |
|
(5,821 |
) |
|
(8,495 |
) |
|
(7,125) |
|
|
(19,332 |
) |
|
(19,431) |
|
Total cash costs |
|
17,263 |
|
|
16,697 |
|
|
20,943 |
|
|
56,101 |
|
|
52,402 |
|
Gold
sales (oz) |
|
34,467 |
|
|
26,997 |
|
|
35,665 |
|
|
104,088 |
|
|
71,961 |
|
Cash cost per ounce ($/oz) |
|
501 |
|
|
618 |
|
|
587 |
|
|
539 |
|
|
728 |
|
The Company defines all-in sustaining costs as all direct costs
that the Company incurs relating to mine production, transport and refinery
costs, general and administrative costs, movement in production inventories and
ore stockpiles, less depreciation and depletion plus all sustaining capital
costs (excluding exploration). All-in sustaining cost per ounce is determined on
a sales basis.
|
|
|
|
|
|
|
|
|
|
|
Q3 2015 |
|
|
Q3 2014 |
|
All-In Sustaining Cost |
|
Q3 2015 |
|
|
Q3 2014 |
|
|
Q2 2015 |
|
|
YTD |
|
|
YTD |
|
|
|
($000's)
|
|
|
($000's) |
|
|
($000's) |
|
|
($000's)
|
|
|
($000's) |
|
Mine operating expenses |
|
23,084 |
|
|
25,192 |
|
|
28,068 |
|
|
75,433 |
|
|
71,833 |
|
Less: Depletion and depreciation |
|
(5,821 |
) |
|
(8,495 |
) |
|
(7,125) |
|
|
(19,332 |
) |
|
(19,431) |
|
Total cash costs |
|
17,263 |
|
|
16,697 |
|
|
20,943 |
|
|
56,101 |
|
|
52,402 |
|
Sustaining capital |
|
3,690 |
|
|
2,262 |
|
|
4,074 |
|
|
9,589 |
|
|
7,101 |
|
All-in cash costs |
|
20,953 |
|
|
18,959 |
|
|
25,017 |
|
|
65,690 |
|
|
59,503 |
|
Gold
sales (oz) |
|
34,467 |
|
|
26,997 |
|
|
35,665 |
|
|
104,088 |
|
|
71,961 |
|
All-in cash cost per ounce ($/oz) |
|
608 |
|
|
702 |
|
|
701 |
|
|
631 |
|
|
827 |
|
The Company defines gold margin as the difference between the
cash cost per ounce disclosed and the average price per ounce of gold sold
during the reporting period.
Banro calculates EBITDA as net income or loss for the period
excluding: interest and financing costs, income tax expense, depreciation and
amortization and impairment charges. EBITDA is intended to provide additional
information to investors and analysts. It does not have any standardized meaning
prescribed by IFRS and should not be considered in isolation or as a substitute
for measures of performance prepared in accordance with IFRS. EBITDA excludes
the impact of cash costs of financing activities and taxes, and the effects of
changes in operating working capital balances, and therefore is not necessarily
indicative of operating profit or cash flow from operations as determined under
IFRS. Other companies may calculate EBITDA differently. A reconciliation between
net profit for the period and EBITDA is presented below:
9
|
|
|
|
|
|
|
|
|
|
|
Q3 2015 |
|
|
Q3 2014 |
|
EBITDA |
|
Q3 2015 |
|
|
Q3 2014 |
|
|
Q2 2015 |
|
|
YTD |
|
|
YTD |
|
|
|
($000's)
|
|
|
($000's) |
|
|
($000's) |
|
|
($000's)
|
|
|
($000's) |
|
Net (loss)/income |
|
(12,211 |
) |
|
3,750 |
|
|
(48,666) |
|
|
(54,097 |
) |
|
48 |
|
Interest and Financing Costs |
|
3,686 |
|
|
1,686 |
|
|
6,035 |
|
|
15,424 |
|
|
5,249 |
|
Taxes |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Depletion and depreciation |
|
5,834 |
|
|
8,513 |
|
|
7,148 |
|
|
19,393 |
|
|
19,480 |
|
Impairment |
|
23,000 |
|
|
- |
|
|
50,200 |
|
|
73,200 |
|
|
- |
|
EBITDA |
|
20,309 |
|
|
13,949 |
|
|
14,717 |
|
|
53,920 |
|
|
24,777 |
|
Q3 2015 Financial Results Conference Call Information
Banro will host a conference call at 11:00AM EST on November
12, 2015. Please use the following dial in numbers:
Q3 2015 Financial Results Conference Call Information
Toll Free (North America): |
+1 877-291-4570 |
Conf ID: 78819755 |
Toronto Local & International: |
+1 647-788-4919 |
Conf ID: 78819755 |
Q3 2015 Financial Results Conference Call REPLAY
Toll Free Replay Call (North America): |
+1 800-585-8367 |
Conf ID: 78819755 |
Toronto Local & International: |
+1 416-621-4642 |
Conf ID: 78819755 |
The conference call replay will be available from 2:00PM EST on
November 12, 2015 until 11:59 PM EST on November 26, 2015.
For further information regarding this conference call, please
contact Banro Investor Relations or visit the Company website,
www.banro.com.
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 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.
10
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 future gold
production (including the timing thereof), costs, cash flow and gold recoveries,
mineral resource and mineral reserve estimates, 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
11
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