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Banro agrees sale of troubled Namoya gold mine in Congo

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06/23/2020 | 09:15am EDT

By Helen Reid

Canadian miner Banro Corporation has agreed to sell its Namoya Mining gold mine in Democratic Republic of Congo to Shomka Resources Ltd, in which China's Baiyin International Investments has a minority stake.

Banro mines in Congo's eastern Maniema and South Kivu provinces have faced several attacks by armed militia. Two of its workers were kidnapped in July 2019, the fifth in a series of such incidents since September 2016, according to a United Nations report published on June 12.

Banro told Reuters in February it was looking to sell Namoya at a discount, after it was forced to suspend operations there and at several other mine sites.

Under the deal, which is subject to final approval from Congo's government, Banro would receive a perpetual royalty for all production from the Namoya property, it said on Tuesday.

Banro Chairman Brett Richards declined to disclose the purchase price or royalty rate.

The buyer, Shomka Resources, is a venture owned 65.5% by Congolese-owned Shomka Capital Ltd and 34.5% by Chinese firm Baiyin International Investments Ltd. The Chinese company bought Banro's Twangiza mine in January for $1.

Shomka Resources Chairman and Chief Executive Victor S. Kasongo said his firm aimed to resume production at Namoya by early January, and that it was speaking to communities near the mine on alleviating poverty and keeping the peace.

In their report, the U.N. Group of Experts on the Congo said the leader of the Mai-Mai Malaika rebel group profited from illegal artisanal gold production on the Namoya concession. The experts were unable to contact the leader for comment.

The unrest has caused Banro significant financial distress, and it delisted from the Toronto stock exchange in January 2018.

After the sale of Namoya, the Cayman Islands-based firm will still hold two mining licences - Lugushwa Mining and Kamituga - and 17 exploration properties in the Congo.

(Reporting by Helen Reid, Editing by Edmund Blair and Mark Potter)

Stocks mentioned in the article
ChangeLast1st jan.
GOLD -0.07% 1784.4 Delayed Quote.17.04%
SILVER -0.30% 18.2318 Delayed Quote.1.17%
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