Big ceremony at Twangiza lifts Banro

Sometimes all it takes is a little bit of pomp and ceremony to get the market to wake up to the virtues of a project.

That seems to be the case with Banro (BAA-T, BAA-X) and its gold-rich Twangiza project in the Democratic Republic of the Congo.

The company’s share price has been moving in the right direction since announcing a visit from key DRC federal and provincial leaders at a ground breaking ceremony at the plant site.

And while the ceremonial visit offered words of continued support from the minister of mines and the governor of South Kivu, it would have had no effect on the actual economics of the mine.

Where such a visit does offer considerable help, is on the psychology of investing in the DRC as evidenced by the company’s shares climbing as much as 17% the day after the news of the ceremony was released. They closed at $2.58 in Toronto on Oct. 8.

Beyond the stories of violence and unrest in the eastern part of the country – Banro too is in the east but its project is deeper in the mountains and has not been affected by rebel and government troop clashes – the country’s reputation has also suffered thanks to its retraction of mining licences from First Quantum Minerals (FM-T).

Banro, however, has managed to skate over such political issues. The company passed through the mining review which undid First Quantum and held-up many others, in a relatively efficient manner, and since then, it has focused on getting Twangiza into production.

Phase one of the Twangiza mine is slated to go into production in the fourth quarter of 2011. The plant will be able to process 1.3 million tonnes of ore per year with annual production of 100,000 oz. of gold per year, ramping up to the 300,000 oz. per oz mark.

Twangiza currently has proven and probable reserves of 82 million tonnes grading 1.71 grams gold for 4.54 million oz.

Twangiza represents the company’s first phase of development along Banro’s wholly owned 210 km-long Twangiza-Namoya gold belt, which hosts four distinctive mineralized zones.

On Oct. 8 the company also announced that Dr. Peter Ruxton was joining the company’s board as a non-executive director.

Ruxton is currently president and chief executive of Gentor Resources, and has built his reputation on the exploration side as part of the team that discovered the Sunrise Dam Gold Mine in Western Australia.