Banro Corporation
Banro Corporation Namoya gold mine DRC
Dual-listed gold producer Banro Corporation continues to face significant ongoing, operational and financial challenges.

This has been compounded by the continued suspension of mining operations at Banro Corporation’s Namoya mine in Maniema province of the Democratic Republic of the Congo (DRC). Operations were first suspended on 25 September due to the ongoing closure of road access to the mine site as a result of activities of local groups against both the local populations and against the DRC national army.

Banro’s ability to continue operations in the normal course of business is dependent on several factors, including securing funding for operations and to meet upcoming debt servicing and working capital requirements. In the event the company is unsuccessful in addressing these ongoing operational and financial challenges, it may become unable to meet its non-DRC financial obligations as they become due.

In light of this, the board of directors of the company established a special committee comprised of independent directors to identify and make recommendations to the board concerning financing and other strategic options (including the restructuring or refinancing of existing obligations).

The committee has advised the board that, based in part on the opinion of its financial advisor, it has concluded that there is no reasonable prospect that a successful capital raise (whether debt, equity or a combination) could be completed at the current time at a level sufficient to refinance Banro’s existing indebtedness and to address its working capital requirements. Consequently, there is substantial doubt as to the company’s ability to continue as a going concern.

The committee reported that it is in discussions with Banro’s major stakeholders concerning the possible restructuring of the company’s non-DRC debt obligations as well as the provision of financing to support the company’s ongoing operations in the DRC.  There is significant risk that any restructuring of the company’s non-DRC debt obligations may result in significant impairment to the value of the equity holders’ interests in the company.

Banro said that will continue to take all steps necessary to ensure the continuity of its operations in the DRC.