Banro Responds To Statements Regarding Status Of Properties Applied For
Toronto, Canada — March 21, 2007 - Banro Corporation (“Banro” or the “Company”) (AMEX - “BAA”; TSX - “BAA”) wishes to clarify some confusion created in the market-place as a result of public statements made by La Quinta Resources Corporation (“La Quinta”) (TSX-V - “LAQ”) regarding properties located in the Democratic Republic of the Congo (the “DRC”). The most recent such statements were set out in a press release of La Quinta issued on March 14, 2007.
The Company’s four gold projects, Twangiza, Lugushwa, Namoya and Kamituga, consist of a total of 13 exploitation permits 100% owned by wholly-owned DRC subsidiaries of the Company. The Company has a dispute with La Quinta regarding properties that the Company has applied for located between the Company’s Lugushwa and Namoya projects. This dispute therefore does not in any way affect the Company’s four projects, the titles to which are not in question. The dispute also does not affect in any way the 14 exploration permits that were recently acquired by the Company, which are located between the Twangiza and Kamituga projects and between the Kamituga and Lugushwa projects (see the Company’s press release dated March 8, 2007).
Background on Dispute
In 2003, shortly after implementation of the New Mining Code, the Company’s wholly-owned subsidiary, Banro Congo Mining SARL (“Banro Congo”), submitted applications for 23 exploration permits (“PRs”) covering ground (the “Disputed New Ground”) between the Company’s Lugushwa and Namoya projects.
Soon after filing these applications, the Company was advised that WB Kasai Congo SPRL, a private DRC company, would be claiming priority to the Disputed New Ground based on applications for ZERs (Zone de Researches Exclusive) filed under the Old Mining Code in 1999. However, subsequent searches by the Company’s DRC counsel and reviews of Mining Journals and Cadastre Miniere records failed to yield evidence of these ZERs registered in the name of WB Kasai Congo SPRL.
WB Kasai Congo SPRL subsequently approached the Company in 2005 seeking to joint venture the Disputed New Ground. To address the possibility that WB Kasai Congo SPRL would be successful in its claim for priority, the Company decided to enter into an agreement with WB Kasai Congo SPRL regarding the Disputed New Ground. An agreement was signed in September 2005 between Banro Congo and WB Kasai Congo SPRL requiring Banro Congo to pay approximately US$113,000 over a 4 year period in addition to providing management and capital to develop the potential of the Disputed New Ground. The agreement contemplated that Banro Congo would hold 85% of the joint venture, with WB Kasai Congo SPRL holding 15%. The agreement was subject to WB Kasai Congo SPRL obtaining title to its PR applications. WB Kasai Congo SPRL subsequently repudiated its agreement with Banro Congo, and entered into an agreement with La Quinta, the validity of which Banro disputes.
WB Kasai Congo SPRL proceeded with a lawsuit against Banro Congo, and has obtained a preliminary judgment in the DRC. This judgment, referred to in La Quinta’s press release of March 14, is from a Congolese Commercial Court granting a US$200,000 award against Banro Congo for damages, essentially for obtaining a benefit on the value of WB Kasai Congo SPRL’s PRs. The Company’s DRC counsel finds the damages award puzzling as WB Kasai Congo SPRL was not in possession of title certificates during the period in question. Further, the Company’s DRC counsel is of the opinion that the judgment was ambiguous when it failed to conclude that the agreement between WB Kasai Congo SPRL and Banro Congo was null and void. The Company will be appealing the judgment.
The Company has been advised that the Ministry of Mines and Cadastre Miniere are currently reviewing the circumstances of WB Kasai Congo SPRL’s applications for title to the Disputed New Ground. A decision is expected shortly.
The Company believes it has valid claims to the Disputed New Ground, and is pursuing its legal rights in both Canada and the DRC.
Banro is a Canadian-based gold exploration company focused on the development of four major, wholly-owned gold projects along the 210 kilometre-long Twangiza-Namoya gold belt in the South Kivu and Maniema provinces of the DRC. Led by a proven management team with extensive gold and African experience, Banro’s strategy is to unlock shareholder value by increasing and developing its significant gold assets in a socially and environmentally responsible manner.
For further information, please visit our website at www.banro.com, or contact: Peter Cowley, President and C.E.O., United Kingdom, Tel: (44) 790-454-0856; Arnold T. Kondrat, Executive Vice-President, Toronto, Ontario, or Martin Jones, Vice-President, Corporate Development, Toronto, Ontario, Tel: (416) 366-2221 or 1-800-714-7938.