Canadian miner Banro Corp. has agreed to sell its Namoya Mining gold mine in the Democratic Republic of the Congo to Shomka Resources Ltd., in which China’s Baiyin International Investments Ltd. 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 said 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 per cent by Congolese-owned Shomka Capital Ltd. and 34.5 per cent by Chinese firm Baiyin International Investments. The Chinese company bought Banro’s Twangiza mine in January for US$1.
Shomka Resources chairman and chief executive Victor 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 UN 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.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.