HomeGoldTwangiza project costs accelerate to US$580 million

Twangiza project costs accelerate to US$580 million

Resource drilling on
the main Twangiza
deposit in the DRC
Toronto, Canada — MININGREVIEW.COM — 11 July 2008 – The newly-completed pre-feasibility study of the Twangiza gold project owned by Banro Corporation – a Canadian-based gold exploration company with four wholly-owned properties along a major gold belt in the Democratic Republic of the Congo (DRC) – shows that Twangiza has measured and indicated gold resources of 3.74m oz from which 2.3m oz will be produced at an average operating cash cost of $345/oz during a 12-year economic life.
The study – released here this week – indicated production of 345 125 oz per year at a total operating cash cost of US$212/oz during first three years, and production over the first seven years was estimated at an average 236 144 oz. Payback of capital expenditure (including hydro electric power) was calculated at 2.78 years, based on a gold price of US$850/oz.

The pre-feasibility study puts the overall capital expenditure of the project at US$581 million (almost R4.7 billion) – which is US$200 million (R1.6 billion) above original estimates in the scoping study. Banro, however, hopes to bring that expenditure down.

“In spite of excessive increases in the cost of steel, fuel, other reagents and transportation which have been experienced since the publication of the scoping study last year, this pre-feasibility study demonstrates the robust economics of the Twangiza project,” said Banro President and CEO Mike Prinsloo.

“Twangiza has the potential to generate significant cash flow based on its projected low operating cash costs. Our focus is now to further improve Twangiza’s economics by expanding the resource base, as well as optimising various aspects of the project, specifically the processing route and the hydro electric plant,” Prinsloo added. “This will be done as we finalise the bankable feasibility study and move Twangiza further along the development path and up the value curve.”

The pre-feasibility study revealed that work would now progress directly to a definitive, bankable feasibility study with completion targeted for the end of the fourth quarter of 2008.

“During this period,” it added, “Banro will carry out a fund-raising exercise involving debt and equity. The company intends to initiate discussions with potential project finance lenders, including both multilateral agencies and commercial banks,” it concluded.