TORONTO, ONTARIO--(Marketwired - April 3, 2017) - Banro Corporation ("Banro" or the "Company") (NYSE MKT:BAA) (TSX:BAA) today announced its financial and operating results for the full year 2016 and fourth quarter 2016.
FINANCIAL HIGHLIGHTS
OPERATIONAL HIGHLIGHTS
All dollar amounts in this press release are expressed in thousands of dollars and, unless otherwise specified, in United States dollars.
"We are pleased with the overwhelming support from our stakeholders in the approval of the Company's Recapitalization, that we expect to be implemented in the coming weeks," commented Banro CEO and President John Clarke. "With the ongoing support of our stakeholders, we expect to continue to increase the performance of both Twangiza and Namoya."
(i) Financial
Effective January 1, 2016, commercial production was declared at Namoya. As such, the financial results for the year ended December 31, 2016, reflect the activity of both Twangiza and Namoya while the financial results for the year ended December 31, 2015, reflect the activity of only Twangiza. The table below provides a summary of financial and operating results for the three months and years ended December 31, 2016 and 2015, as well as the three months ended September 30, 2016:
Q4 2016 | Q4 2015 | Change % | Q3 2016 | 2016 | 2015 | Change % | |||||||||
Selected Financial Data | |||||||||||||||
Operating revenues | 54,692 | 34,606 | 58 | % | 67,465 | 228,346 | 156,710 | 46 | % | ||||||
Total mine operating expenses1 | (53,377 | ) | (25,232 | ) | 112 | % | (56,085 | ) | (205,912 | ) | (100,665 | ) | 105 | % | |
Gross earnings from operations | 1,315 | 9,374 | (86 | %) | 11,380 | 22,434 | 56,045 | (60 | %) | ||||||
Net loss | (9,654 | ) | (19,446 | ) | (50 | %) | (4,658 | ) | (50,932 | ) | (73,543 | ) | (31 | %) | |
EBITDA | 9,720 | 11,922 | (18 | %) | 23,871 | 62,154 | 68,268 | (9 | %) | ||||||
Basic net (loss)/earnings per share ($/share) | (0.03 | ) | (0.08 | ) | (63 | %) | (0.02 | ) | (0.17 | ) | (0.29 | ) | (41 | %) | |
Key Operating Statistics | |||||||||||||||
Average gold price received ($/oz) | 1,163 | 1,106 | 5 | % | 1,266 | 1,190 | 1,157 | 3 | % | ||||||
Gold sales (oz) | 47,034 | 31,303 | 50 | % | 53,284 | 191,966 | 135,391 | 42 | % | ||||||
Gold production (oz) | 50,449 | 30,440 | 66 | % | 53,377 | 197,691 | 135,532 | 46 | % | ||||||
All-in sustaining cost per ounce ($/oz) - mine site | 973 | 745 | 31 | % | 869 | 900 | 657 | 37 | % | ||||||
Cash cost per ounce ($/oz) | 811 | 601 | 35 | % | 734 | 761 | 553 | 38 | % | ||||||
Gold margin ($/oz) | 352 | 505 | (30 | %) | 532 | 429 | 604 | (29 | %) | ||||||
Financial Position | |||||||||||||||
Cash including restricted cash | 11,373 | 2,262 | 19,566 | 11,373 | 2,262 | ||||||||||
Gold bullion inventory at market value2 | 10,550 | 2,398 | 7,169 | 10,550 | 2,398 | ||||||||||
Total assets | 897,940 | 871,731 | 898,754 | 897,940 | 871,731 | ||||||||||
Long term debt - current and non-current | 206,479 | 168,127 | 204,543 | 206,479 | 168,127 |
(1) | Includes depletion and depreciation. |
(2) | This represents 9,207 ounces of gold bullion inventory shown at December 31, 2016 closing market price of $1,146 per ounce of gold. |
(ii) Operational - Twangiza
(iii) Operational - Namoya
(iv) Exploration
(v) Corporate Development
Outlook
Banro intends to control costs by continuing to improve operating efficiencies through optimizing operating procedures and increasing production and processing capacities at Twangiza and Namoya to benefit from economies of scale, while maintaining strong environmental and safety standards.
The Company also intends to transition from diesel to hydro generated power at Twangiza and Namoya which is expected to significantly reduce operating costs. Diesel generator sets would remain on site to serve as back-up power solutions in case of droughts or operational issues with a hydro plant. Banro is pursuing discussions with third parties with respect to the potential construction, financing and operation by third parties of a hydro plant that would be large enough to provide power to both Twangiza and Namoya. In addition, management is in the process of planning and implementing certain efficiency improvements at Twangiza and Namoya. At Twangiza, the Company intends to increase mill throughput by 10% to 15% from current design capacity through de-bottlenecking activities such as the incremental expansion of the pre-crushing circuit. At Namoya, the Company is planning to implement various optimization measures to enhance production and reduce operating costs, including the optimization of the crushing circuit, the agglomerated heap leap processing circuit and the installation of higher capacity pumps.
Furthermore, the Company is actively investigating the possibility of establishing underground mining under the existing open pits. Given Twangiza's topography, adit access by horizontal or nearly horizontal shafts would be employed which tends to be less capital intensive than typical underground mining operations which utilize vertical shafts. Like at Twangiza, Namoya's mineral resources endowment is also suited for underground mining under its existing pits through adit access. Banro anticipates that it would pursue the underground expansion at Namoya before doing so at Twangiza.
In consideration of current gold prices and the Company's intent to operate the two existing mines to their maximum potential, the Company has developed several key objectives for 2017. These objectives are aimed at increasing gold production while containing costs and increasing the Company's quality of mineral resources to potentially improve the medium term economics of the mines. These objectives include:
Qualified Person
Daniel K. Bansah, the Company's Head of Projects and Operations and a "qualified person" as such term is defined in National Instrument 43-101, has approved the technical information in this press release.
Non-IFRS Measures
Management uses cash costs, all-in sustaining costs, average gold price received, gold margin, and EBITDA to monitor financial performance and provide additional information to investors and analysts. These measures do not have a standard definition under IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. As these measures do not have a standardized meaning, they may not be comparable to similar measures provided by other companies. However, the methodology used by the Company to determine cash cost per ounce is based on a standard developed by the Gold Institute, which was an association that included gold mining organizations, amongst others, from around the world.
The Company defines cash cost, as recommended by the Gold Institute standard, as all direct costs that the Company incurs relating to mine production, transport and refinery costs, general and administrative costs, movement in production inventories and ore stockpiles, less depreciation and depletion. Cash cost per ounce is determined on a sales basis. The Company defines all-in sustaining costs as all direct costs that the Company incurs relating to mine production, transport and refinery costs, general and administrative costs, movement in production inventories and ore stockpiles, less depreciation and depletion plus all sustaining capital costs (excluding exploration). All-in sustaining cost per ounce is determined on a sales basis.
Q4 2016 | Q4 2015 | |||||||||
Twangiza | Namoya | Consolidated | Twangiza | Q3 2016 | ||||||
Mine Operating Costs ($) | 25,850 | 27,527 | 53,377 | 25,232 | 56,085 | |||||
Depreciation ($) | (6,475 | ) | (8,782 | ) | (15,257 | ) | (6,416 | ) | (16,977 | ) |
Cash Costs ($) | 19,375 | 18,745 | 38,120 | 18,816 | 39,108 | |||||
Sustaining Capital ($) | 5,405 | 2,255 | 7,660 | 4,507 | 7,188 | |||||
All-In Sustaining Cost - Mine Site ($) | 24,780 | 21,000 | 45,780 | 23,323 | 46,296 | |||||
General and Administrative Costs and Other ($) | 4,492 | 3,814 | ||||||||
All-In Sustaining Cost - Total ($) | 50,272 | 50,110 | ||||||||
Ounces Sold | 24,459 | 22,575 | 47,034 | 31,303 | 53,284 | |||||
Cash Cost per Ounce $/oz | 792 | 830 | 811 | 601 | 734 | |||||
All-In Sustaining Cost per Ounce - Mine Site $/oz | 1,013 | 930 | 973 | 745 | 869 | |||||
All-In Sustaining Cost per Ounce - Total $/oz | 1,069 | 940 | ||||||||
2016 | 2015 | 2014 | ||||||||
Twangiza | Namoya | Consolidated | Twangiza | Twangiza | ||||||
Mine Operating Costs ($) | 98,409 | 107,503 | 205,912 | 100,665 | 96,045 | |||||
Depreciation ($) | (26,114 | ) | (33,880 | ) | (59,994 | ) | (25,748 | ) | (26,897 | ) |
Cash Costs ($) | 72,295 | 73,623 | 145,918 | 74,917 | 69,148 | |||||
Sustaining Capital ($) | 16,299 | 10,477 | 26,776 | 14,096 | 9,945 | |||||
All-In Sustaining Cost - Mine Site ($) | 88,594 | 84,100 | 172,694 | 89,013 | 79,093 | |||||
General and Administrative Costs and Other ($) | 17,151 | |||||||||
All-In Sustaining Cost - Total ($) | 189,845 | |||||||||
Ounces Sold | 101,496 | 90,470 | 191,966 | 135,391 | 101,225 | |||||
Cash Cost per Ounce $/oz | 712 | 814 | 761 | 553 | 683 | |||||
All-In Sustaining Cost per Ounce - Mine Site $/oz | 873 | 930 | 900 | 657 | 781 | |||||
All-In Sustaining Cost per Ounce - Total $/oz | 989 |
The Company defines gold margin as the difference between the cash cost per ounce disclosed and the average price per ounce of gold sold during the reporting period.
EBITDA is intended to provide additional information to investors and analysts to determine cash earnings before financing and taxes. The Company calculates EBITDA as net income or loss for the period excluding: interest, income tax expense, depreciation and amortization, and other non-cash charges. EBITDA does not have any standardized meaning prescribed by IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. EBITDA excludes the impact of cash costs of financing activities and taxes, and the effects of changes in operating working capital balances, and therefore is not necessarily indicative of operating profit or cash flow from operations as determined under IFRS. Other companies may calculate EBITDA differently. A reconciliation between net loss for the period and EBITDA is presented below:
Q4 2016 | Twangiza | Namoya | Total Mine | Corporate | Consolidated | |||||
$ | $ | $ | $ | $ | ||||||
Net Income/(Loss) | 226 | (5,636 | ) | (5,410 | ) | (4,244 | ) | (9,654 | ) | |
Finance expenses | 1,050 | 1,886 | 2,936 | 8,499 | 11,435 | |||||
Other non-cash charges | (1,184 | ) | (14 | ) | (1,198 | ) | (6,621 | ) | (7,819 | ) |
Share-based payments | 6 | 5 | 11 | 76 | 87 | |||||
Depletion and depreciation | 6,475 | 8,782 | 15,257 | 14 | 15,271 | |||||
Taxes | - | - | - | 400 | 400 | |||||
EBITDA | 6,573 | 5,023 | 11,596 | (1,876 | ) | 9,720 | ||||
Q3 2016 | Twangiza | Namoya | Total Mine | Corporate | Consolidated | |||||
$ | $ | $ | $ | $ | ||||||
Net Income/(Loss) | 4,172 | 1,439 | 5,611 | (10,269 | ) | (4,658 | ) | |||
Finance expenses | 911 | 1,611 | 2,522 | 7,854 | 10,376 | |||||
Other non-cash charges | 345 | 48 | 393 | 714 | 1,107 | |||||
Share-based payments | 8 | 2 | 10 | 46 | 56 | |||||
Depletion and depreciation | 6,631 | 10,346 | 16,977 | 13 | 16,990 | |||||
EBITDA | 12,067 | 13,446 | 25,513 | (1,642 | ) | 23,871 | ||||
Q4 2015 | Twangiza | Namoya | Total Mine | Corporate | Consolidated | |||||
$ | $ | $ | $ | $ | ||||||
Net Income/(Loss) | 2,784 | (15,311 | ) | (12,527 | ) | (6,919 | ) | (19,446 | ) | |
Finance expenses | 727 | 108 | 835 | 2,454 | 3,289 | |||||
Other non-cash charges | 1,641 | 11,128 | 12,769 | 8,396 | 21,165 | |||||
Share-based payments | 12 | - | 12 | 72 | 84 | |||||
Depletion and depreciation | 6,416 | - | 6,416 | 14 | 6,430 | |||||
Taxes | - | - | - | 400 | 400 | |||||
EBITDA | 11,580 | (4,075 | ) | 7,505 | 4,417 | 11,922 | ||||
2016 | Twangiza | Namoya | Total Mine | Corporate | Consolidated | |||||
$ | $ | $ | $ | $ | ||||||
Net Income/(Loss) | 4,116 | (14,107 | ) | (9,991 | ) | (40,941 | ) | (50,932 | ) | |
Finance expenses | 5,818 | 5,920 | 11,738 | 31,531 | 43,269 | |||||
Other non-cash charges | 4,627 | 1,727 | 6,354 | 2,532 | 8,886 | |||||
Share-based payments | 39 | 24 | 63 | 420 | 483 | |||||
Depletion and depreciation | 26,114 | 33,880 | 59,994 | 54 | 60,048 | |||||
Taxes | - | - | - | 400 | 400 | |||||
EBITDA | 40,714 | 27,444 | 68,158 | (6,004 | ) | 62,154 | ||||
2015 | Twangiza | Namoya | Total Mine | Corporate | Consolidated | |||||
$ | $ | $ | $ | $ | ||||||
Net Income/(Loss) | 36,856 | (88,920 | ) | (52,064 | ) | (21,479 | ) | (73,543 | ) | |
Finance expenses | 3,694 | 404 | 4,098 | 14,615 | 18,713 | |||||
Other non-cash charges | 6,138 | 84,441 | 90,579 | 5,563 | 96,142 | |||||
Share-based payments | 97 | - | 97 | 636 | 733 | |||||
Depletion and depreciation | 25,748 | - | 25,748 | 75 | 25,823 | |||||
Taxes | - | - | - | 400 | 400 | |||||
EBITDA | 72,533 | (4,075 | ) | 68,458 | (190 | ) | 68,268 | |||
2014 | Twangiza | Namoya | Total Mine | Corporate | Consolidated | |||||
$ | $ | $ | $ | $ | ||||||
Net Income/(Loss) | 20,163 | (327 | ) | 19,836 | (19,516 | ) | 320 | |||
Finance expenses | 4,796 | 327 | 5,123 | 7,247 | 12,370 | |||||
Other non-cash charges | 337 | - | 337 | 804 | 1,141 | |||||
Share-based payments | (9 | ) | - | (9 | ) | 561 | 552 | |||
Depletion and depreciation | 26,897 | - | 26,897 | 88 | 26,985 | |||||
EBITDA | 52,184 | - | 52,184 | (10,816 | ) | 41,368 |
NYSE MKT LLC Company Guide Matters
The following additional information, which relates to the Company's audited consolidated financial statements as at and for the year ended December 31, 2016 (the "Annual Financial Statements") filed today, is being provided pursuant to the requirements of the NYSE MKT Company Guide. NYSE MKT Company Guide Section 610(b) requires separate disclosure of receipt of an audit opinion containing going concern explanatory language. As was the case last year, the audit opinion accompanying the Annual Financial Statements includes an emphasis of matter paragraph with respect to the Company's use of the going concern assumption. The Annual Financial Statements are included in the Company's annual report on Form 20-F dated April 2, 2017 filed today with the U.S. Securities and Exchange Commission via EDGAR at www.sec.gov, and have also been filed today with applicable Canadian securities regulators via SEDAR at www.sedar.com. The Annual Financial Statements are also available on the Company's website at www.banro.com, and hard copies of the Annual Financial Statements are available, free of charge, to shareholders upon written request.
Banro Corporation is a Canadian gold mining company focused on production from the Twangiza mine, which began commercial production September 1, 2012, and on production at its second gold mine at Namoya, where commercial production was declared effective January 1, 2016. The Company's longer term objectives include the development of two additional major, wholly-owned gold projects, Lugushwa and Kamituga. The four projects, each of which has a mining license, are located along the 210 kilometre long Twangiza-Namoya gold belt in the South Kivu and Maniema provinces of the DRC. All business activities are followed in a socially and environmentally responsible manner.
Cautionary Note Concerning Forward-Looking Statements
This press release contains forward-looking statements. All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding the proposed implementation of the Recapitalization, the satisfaction of the remaining conditions, and the timing to complete the Recapitalization and the anticipated effect of the Recapitalization on the Company's operations and financial condition, mineral resource and mineral reserve estimates, potential mineral resources and mineral reserves and the Company's production, development and exploration plans and objectives) are forward-looking statements. These forward-looking statements reflect the current expectations or beliefs of the Company based on information currently available to the Company.
Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: the risk that the Company will be unable to obtain all remaining approvals necessary for implementation of the Recapitalization or may not be able to satisfy the other conditions to the completion of the Recapitalization contained in the support agreement; uncertainty of estimates of capital and operating costs, production estimates and estimated economic return of the Company's projects; the possibility that actual circumstances will differ from the estimates and assumptions used in the economic studies of the Company's projects; failure to establish estimated mineral resources and mineral reserves (the Company's mineral resource and mineral reserve figures are estimates and no assurance can be given that the intended levels of gold will be produced); fluctuations in gold prices and currency exchange rates; inflation; gold recoveries being less than those indicated by the metallurgical testwork carried out to date (there can be no assurance that gold recoveries in small scale laboratory tests will be duplicated in large tests under on-site conditions or during production); uncertainties relating to the availability and costs of financing needed in the future; changes in equity markets; political developments in the DRC; lack of infrastructure; failure to procure or maintain, or delays in procuring or maintaining, permits and approvals; lack of availability at a reasonable cost or at all, of plants, equipment or labour; inability to attract and retain key management and personnel; changes to regulations affecting the Company's activities; the uncertainties involved in interpreting drilling results and other geological data; and the other risks disclosed under the heading "Risk Factors" and elsewhere in the Company's annual report on Form 20-F dated April 2, 2017 filed on SEDAR at www.sedar.com and EDGAR at www.sec.gov. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.
For further information, please visit our website at www.banro.com.
Banro Corporation
Martin Jones
+1 (416) 366-2221, Ext. 3213
+1-800-714-7938, Ext. 3213
[email protected]
www.banro.com