Banro doubts ability to continue as going concern
BANRO CORP. continues to face significant, continuing, operational and financial challenges including short- and long-term liquidity constraints. The company’s ability to continue operations in the normal course of business is dependent on several factors, including securing financing for operations and to meet upcoming debt servicing and working capital requirements. In addition, mining operations at the company’s Namoya mine in Maniema province of the Democratic Republic of the Congo (DRC) continue to be suspended due to the continuing closure of road access to the mine site. Please refer to the company’s press release of Sept. 25, 2017.
In the event the company is unsuccessful in addressing these continuing operational and financial challenges, it may become unable to meet its non-DRC financial obligations as they become due.
As previously announced, the board of directors of the company established a special committee comprising independent directors to identify and make recommendations to the board concerning financing and other strategic options (including the restructuring or refinancing of existing obligations).
The committee has advised the board that, based in part on the opinion of its financial adviser, it has concluded that there is no reasonable prospect that a successful capital raise (whether debt, equity or a combination) could be completed at the current time at a level sufficient to refinance the company’s existing indebtedness and to address its working capital requirements. Consequently, there is substantial doubt as to the company’s ability to continue as a going concern.
The committee reported that it is in discussions with the company’s major stakeholders concerning the possible restructuring of the company’s non-DRC debt obligations as well as the provision of financing to support the company’s continuing operations in the DRC. There is significant risk that any restructuring of the company’s non-DRC debt obligations may result in significant impairment to the value of the equity holders’ interests in the company.
The company continues to take all steps necessary to ensure the continuity of its operations in the DRC.
Due to the significant uncertainty surrounding the company’s ability to continue as a going concern, the company will not be in a position to release its interim unaudited condensed consolidated financial statements and related management’s discussion and analysis for the period ended Sept. 30, 2017.
About Banro Corp. Banro is a Canadian gold mining company focused on production from the Twangiza and Namoya mines, which began commercial production in September, 2012, and January, 2016, respectively. 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 licence, are located along the 210-kilometre-long Twangiza-Namoya gold belt in the South Kivu and Maniema provinces of the Democratic Republic of the Congo.
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Richard William Brissenden, John Allen Clarke, Michael Hankin Li, Jiongjie Lu, Robert L Rauch, Robert Alexander Rorrison, Derrick Horst Weyrauch
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