Banro Corporation (
TSX:BAA,
Stock Forum) has had a hard year and in an effort to cope with weather disappointments and operational letdowns announced an update today on Q2 2014 gold production and operations at its Twangiza and Namoya mines located in the Democratic Republic of Congo.
According to the
news release, the company was able to up gold production in the quarter by 10.8% despite heavy rains in April at Twangiza and as a result maintained the same production throughput the company had recorded in the matching 2013 quarter.
As a plan moving ahead in order to obtain an acceptable level of dry material to maintain steady plant throughput, the company intends to install a roof over the mill feed stockpile and ore handling area with the anticipation that it will be completed by the start of the next wet season.
Company CEO, Dr. John Clarke, commented, “With the advent of the dryer weather late in April, throughputs at Twangiza increased significantly resulting in higher monthly production in May and June compensating for the lower throughputs in April.”
Then he added, “We anticipate more consistent throughput and production rates now that we are seeing the full benefits of the plant expansion program completed in Q2 of this year.”
This wasn’t the end of issues however as within the last few days the company also determined that the Namoya plant is incapable of running at full capacity due to characteristics of Namoya ore. The problem stems from the excess of fine material in the scrubbed ore exceeds the plants engineered designs and as a result, the plant cannot efficiently process the higher quality.
If that wasn’t enough, hot commissioning of the plant also indicated that some of the equipment of the wet portion of the circuit requires upgrading to raise throughput to design capacity. Both of the aforementioned issues are considered as legacy and are attributed to decisions made by the previous management team.
Short term strategies include cutting production at the main Namoya plant to coincide with the maximum wet processing capacity of the gravity circuit with medium-term solutions include the consideration of the current Gravity/CIL plant to increase throughput capacity of the fine sizes and ending in a long-term goal of optimization of production.
As a result of the weather in April and the issues with Namoya, the company has decided to downgrade its 2014 production guidance ~24% to a total of 115,000 to 130,000 ounces for both Twangiza and Namoya.
Banro was in the news recently when the
company announced the election of directors 12 days ago.
Shares plummeted 30.39% on the news to $0.355 per share.
Currently there are 252.1m outstanding shares with a market cap of $89.5 million.