EXPLORATION 1997 — Banro Resource on hold in eastern Zaire after purchase of Sominki

Following its acquisition of privately held Sominki, Toronto-based Banro Resource (BANR-C) is anxious to get on with the job of exploring its exclusively held gold belt in eastern Zaire.

But first the company must wait for stability to return to Kivu province in eastern Zaire, where rebel armies have seized several towns, including Bukavu and Kalemie.

“That is the only thing holding us up,” says Michael Nikiforuk, vice-president of Banro. “We’re financed, we’ve got the people and equipment — now we’ve just got to get access.”

The company is encouraged that the governments of South Africa and other countries are mediating between rebel leader Kabila and Zairean government officials. Meanwhile, in Johannesburg, 60 tonnes of Banro exploration equipment have been held back prior to being shipped to Zaire by train.

Banro recently obtained a 93% interest in Sominki (officially known as Societe Zairoise Miniere et Industrielle du Kivu) and renamed it Sakima (Societe Aurifere du Kivu et Maniema) — both to indicate its new focus on gold and to show that the company is embarking on a fresh start. The government of Zaire will maintain a 7% carried interest, whereas Sakima will retain Sominki’s management team of 12 expatriates and 70 Zaireans, as well as its 5,000 employees.

“What makes Banro unique, relative to other companies going into emerging markets, is that we haven’t gone in on our own,” says Nikiforuk. “We’ve gone in through the acquisition of Zaire’s largest private-sector mining company.” Through the acquisition, Banro has managed to gain control of an entire gold belt in eastern Zaire — the 180-km-long Namoya-Twangiza trend which the company likens to Ghana’s Ashanti belt. The trend contains 10 deposits discovered only through surface geochemical prospecting. There has never been a geophysical airborne survey flown over the trend, nor have any other modern exploration methods been used in the region.

In total, Banro controls 10 mining permits and 47 mining concessions encompassing 10,271 sq. km in eastern Zaire.

In addition to the properties, Banro owns six hydroelectric power plants, a foundry, machine shops, aircraft and airstrips, housing, hospitals, health care clinics, a fleet of vehicles and more than 1,000 km of roads.

Banro’s agreement with the Zairean government to form Sakima includes: a 10-year tax moratorium from the start of commercial production; the ability to export all gold production and operate in U.S. currency; the elimination of import duties; and title confirmation on all concessions.

Banro has agreed to invest a total of US$15 million, of which US$5 million has already been credited. “What we bring to the table is money, and that’s something this company has never had,” says Nikiforuk.

The company is in the process of moving 3 tonnes of maps and data from Zaire’s interior via Kinshasa to its new office in Johannesburg, where technicians will digitize 75 years’ worth of information concerning deposits at Twangiza, Mobale-Kamituga and Lugushwa.

When stability returns to the region, Banro will explore four major gold properties in the trend: Twangiza, Mobale-Kamituga, Lugushwa and Namoya. The company plans to begin work at Twangiza first, though the intention is to soon be working on all four projects simultaneously.

CME Consulting will manage the exploration program, which will start with a US$1-million, 43,000-line-km, airborne geophysical survey followed by surface mapping and diamond drilling. Banro has already budgeted US$10 million for exploration during 1997 and foresees spending another US$90 million on exploration in the future.

At Twangiza, 45 km south of Bukavu, the geology consists of black shales, sericitic schists and intercalated, coarse-grained arkoses of the Burundi system. Within fractures, there are hydrothermal albite-carbonate alterations with associated gold, pyrite and arsenopyrite mineralization. Gold occurs as fine sulphidic disseminations or in quartz stockworks plunging to the southeast.

The primary deposit at Twangiza was discovered in the 1950s at the headwater of the Twangiza River but was only worked to a depth of 100 metres within an 800-metre section at the southern end of a 5-km-long trend. Within this 800-metre section, more than 52,000 samples were taken from 15 km of surface trenching and 11 km of adits dug on seven levels.

During Banro’s upcoming phase of work at Twangiza, more than 5,000 metres of core will be drilled over five months. The firm plans to drill 10 holes spaced at 50-metre intervals along strike, down to a depth of at least 300 metres, and drill another seven exploratory holes north and south of the primary deposit.

Current proven and probable open-pit oxide reserves at Twangiza are estimated at 5.5 million tonnes grading 4.3 grams gold per tonne. Possible sulphide resources stand at 2.7 million tonnes. The deposit remains open in all directions.

Previous studies of the Twangiza deposit, based on mining by open-pit methods and carbon-in-pulp processing, indicate a capital requirement in the order of US$100 million.

Mobale-Kamituga property

The second major property is the Mobale-Kamituga concession, 100 km southwest of Bukavu, where gold mineralization occurs in a series of extensively developed sheeted quartz veins within phyllitic schists and intercalated quartzites in a southeast-plunging anticline.

Through open-pit and underground mining, the Mobale deposit produced 10,000 oz. gold in 1996 and about 1 million oz. over its lifetime to date. A 300-tonne-per-day gravity flotation mill at Mobale operates at less than 20% capacity.

At the nearby Kamituga property, 29 nuggets weighing in excess of 1 kg were found in the alluvial gravels prior to 1945. The largest nugget, weighing 64 kg, is on display in a Belgian museum.

The geology of the Lugushwa property, 45 km southwest of Kamituga, comprises granitic intrusives and mica schists with intercalated quartzites and greenstone.

Gold mining at Lugushwa is being contracted out to artisanal miners who exploit high-grade quartz veins, as well as alluvial deposits, using cutoff grades of 3 grams gold per tonne. “They’re operating using circa-1940s mining technologies,” says Nikiforuk.

The Lugushwa property has an antiquated 10-tonne-per-day gravity separation plant that annually produces about 2,000 oz. gold.

Resources at Lugushwa within the two known primary deposits, Mapale G7 and Lugushwa G20-21, are estimated to be 3 million tonnes grading 4.5 grams gold and 2.5 million tonnes grading 4 grams, respectively.

Namoya property

The Namoya concession, 180 km southeast of Kalima, consists of quartz vein stockworks within shear zones in hydrothermally altered Precambrian sericite-chlorite-carbonate schists intercalated with basic volcanics.

The Namoya gold mine produced 150,000 oz. from the primary deposit situated in Mwendamboko from 1956 until 1961, when civil war forced the mine to close.

Until then, 373,000 tonnes grading 11.4 grams gold had been processed in a nearby cyanide mill. At that time, proven and probable reserves were estimated to be 1.6 million tonnes grading 7 grams gold.

Of particular interest at Namoya is an adit at the 1,068-metre level at Mwendamboko, where 400 metres of disseminated mineralization in altered schists and volcanics graded 2.1 grams gold. In addition, four other targets have been located along a 3-km strike length at Namoya.

Before the collapse of the International Tin Council in 1985, Sominki was a major producer of cassiterite (tin ore), as well as wolframite (tungsten), tantalite (tantalum) and monazite (thorium). It still managed to ship about 650 tonnes of tin in 1996, and maintains tin reserves totalling 3-4 years of production.

Thus Banro has also acquired more than 30 small alluvial and eluvial tin mining operations north of the gold belt, as well as tin concentrate processing plants in Kalima and Kailo.

Banro, however, is not interested in the tin. “Our intention is to find a buyer who would be interested in continuing the tin operations,” says Nikiforuk. “Our focus is gold, gold, gold.”