Wednesday, January 25, 2017

Banro - Production Results

A few days ago Banro Corp published its 2016 operating results. Let me start from the oldest mine, Twangiza:

Twangiza's head grades, although lower than in 2015, were improving from quarter to quarter (except for 3Q 2016). On the other hand, recovery ratios have been in a downward trend since 2014. It looks like the company's metallurgists have some problems with processing.

As a result, in 2016 the mine delivered 104.4 thousand ounces of gold (a decrease of 22.9%, compared to 2015). In other words, Banro did not meet its 2016 guidance of 110 - 120 thousand ounces in gold production.

Now Namoya. It is a new mine. It is still ramping - up its production so its operating results should be considered as initial ones:

As the chart shows, the grades delivered by the mine are generally stable but recovery ratios are fluctuating (once again metallurgical problems?).

Similarly to Twangiza, Namoya also did not meet its production guidance. In 2016, instead of 100 - 110 thousand ounces, it produced 93.2 thousand ounces of gold.

So the company did not meet its 2016 guidance at all.

Therefore the question is: are Twangiza and Namoya good assets (I am not asking about corporate financial issues - they are terrible)? Well, let me wait with answering this question until I see remaining figures (mainly costs of production).

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