2013 Sustainability Report

Investing in Capacity-Building Jobs &Community Development OUR GOAL IS TO BE A MODEL OF EXCELLENCE IN SUSTAINABILITY

With the transition from mineral exploration to mining, Banro’s commitment as an exploration company to leadership in I Mining Permits Corporate Social Responsibility has grown I Exploration Permits into a comprehensive focus on excellence in I Permits Applied For sustainability, encompassing global standards in B environmental management, the creation of capacity- building jobs, a significant investment in community development and much more. Banro’s contributions to responsible economic development in the eastern Congo are expected to grow significantly in the years ahead.

Front Cover: A physician and patients in front of the multi-purpose women's health unit at the Panzi General Referral Hospital in Bukavu. The unit was inaugurated in August 2012. Banro Corporation is a Canadian gold surface oxide material. A second mine, located Banro has to date identified 10.18 million exploration and mining company, focused on at the Namoya project and designed to produce ounces of Measured and Indicated Resources, the development of four wholly-owned gold an additional 122,000 ounces of gold per year plus Inferred Resources of 7.01 million ounces.* projects in South Kivu and Maniema provinces during its first five years of production, is In addition to its four projects which hold of the Democratic Republic of the Congo (DRC). currently under construction and scheduled mining licenses and cover 2,613 square kilo - In October 2011, the Company commenced to begin full operations in the fourth quarter meters, Banro also has 14 exploration permits operations at its Twangiza gold mine, the first of 2013. Exploration is ongoing at all four of covering 2,638 square kilometres. Less than commercial gold mine built in the DRC in over the Company’s project areas, including the 12% of this total ground has been explored 50 years. Twangiza is planned to produce Lugushwa and Kamituga projects. using modern techniques. 120,000 ounces of gold per year from the Since beginning exploration in November of 2004, Banro has emerged as one of the largest private sector employers in the eastern DRC, having created jobs directly and through contractors for over 4,000 Congolese citizens.

The Company is headquartered in Toronto and trades on the Toronto Stock Exchange and the NYSE MKT under the symbol “BAA.”

More information on the Company’s activities and its commitment to Corporate Social Responsibility is available on the Company’s Banro website, www.banro.com, and on the website of the Canadian Securities Administrators, Corporation www.sedar.com, and the SEC's website at www.sec.gov/edgar.shtml.

* Information on tonnage and grades is provided on page 27.

Message From The Banro Foundation – Governance, contents John Clarke, Interim Creating Jobs & Communities & Environmental Investing In Community Conflicts Minerals & President And CEO Building Capacity Artisanal Miners Management Development Human Rights page page page page page page

4 5 13 17 19 25 2 Total Investments and Banro Corporation Expenditures in the Expenditures on DRC Exploration Activities US$139,081,000 Democratic Republic Investment in the Twangiza Gold Plant 191,872,000

of the Congo Expenditures on Twangiza Infrastructure 21,027,000 (2004 – 2012) (Roads, bridges, houses, schools, churches and public facilities) Investment in the Namoya Gold Plant 89,968,000

Expenditures on Namoya Infrastructure 10,119,000 (Roads, bridges, houses, schools, churches and public facilities)

Total DRC Taxes and Government Fees 36,511,000 (Payroll, Import, Fuel)

Sub-Total US$488,578,000 Banro Foundation

Investment in Education in DRC US$1,622,125

Investment in Health Care in DRC 447,631

Investment in Social Infrastructure in DRC 1,277,301

Other Expenditures (Humanitarian Assistance, Community Support, Conservation) 269,435

Sub-Total US$3,616,492

Total DRC Expenditures US$492,194,492

3 Message From John Clarke , Interim President And CEO

Banro has recorded exceptional progress since commitment to promoting local development. In Education is the top priority for the Banro Foun - embarking on exploration eight years ago. singling out this theme, we also wish to demonstrate 4dation, which has constructed 10 new schools the far-reaching and positive impact that responsible and rehabilitated two more schools, serving a In 2011, the Company brought into production the commercial mining has on communities and on the total of 4,000 students. All 12 schools have also Twangiza gold mine, the first commercial gold mine prospects for economic progress. been outfitted with desks and furniture. This in the DRC in over 50 years. Today, we are progress - has been complemented by initiatives to increase ing toward completion of our second gold mine, at In this Report, you will read numerous examples of school enrollment by girls, retain teachers, rescue Namoya, while our exploration activities continue Banro’s contributions to local development, of which and educate former child artisanal miners, and to identify the next generation of gold projects to we have chosen to highlight five: introduce community literacy programs. support the growth of the business and the economic development of the DRC. Over the last eight years, Banro has invested Banro is building the industrial skills base of 1US$492 million in South Kivu and Maniema 5Congolese through vocational training and skills While the efforts of Banro in the DRC are consider - provinces, creating jobs and business opportuni - development in the workplace; strengthening of able, no single company achieves success on its own, ties for many tens of thousands of local people, university faculties in relevant disciplines; and and progress has many partners. In our case these generating taxes, adding new public facilities scholarships for high potential students. We have partners include a dedicated and talented Congolese and infrastructure and much more. also introduced world class standards of occupa - workforce, supportive local communities and gov - tional health and safety in all our operations. ernment officials, strong local and global suppliers, Banro employs over 1,000 Congolese in technical, international shareholders and many others. 2professional, management or supervisory jobs This report discusses these and other initiatives in that build real capacity; another 3,000 Congolese more detail, as well as the work being done across Together, we have embraced the unique challenges are employed through contractors. This direct Banro’s operations to foster sustainability and ensure that face building a commercial business in the east - employment generates another 20,000 or more that all practices are compliant with world class ern DRC, and a need to see this creation and growth jobs indirectly with an multiplier effect that standards, as set out in various international frame - managed with technical excellence and in a manner supports more than 200,000 local people. The works and in the Mining Code of the DRC. that is ethical and socially and environmentally Company is working towards a goal of having responsible. It is only through this approach that 95% of technical, professional, management or Banro’s investment in sustainability is not an add-on we believe the business will serve all stakeholders, supervisory jobs held by Congolese nationals and to our operations, but the heart of our business, as well as be sustainable well into the future. has achieved this in its exploration operation . which we view as a long-term investment in the We also pride ourselves on the fact that our security, progress and social development of the Our approach is comprehensive in terms of Sus - Chief Financial Officer and our Vice President communities in which our people work and often live. tainability. This 2013 Report discusses policies and of Government Relations are both of Congolese initiatives across a wide range of issues, including origin, and many heads of divisional departments recruitment and job training, occupational health are Congolese nationals. and safety, environmental management, community relations, artisanal mining, corporate governance, Through both its mining operations and the Banro human rights and conflict minerals. 3Foundation, the Company is making a substantial contribution to social infrastructure, including You will also see the emphasis on the Company’s con - the upgrading and construction of hundreds of tribution to social and economic development, which kilometres of new roads, schools, housing, health John Clarke in fact forms the theme of this year’s Sustainability care facilities, potable water systems and more – Report. We believe that Banro is unique among small with new hydroelectric facilities planned for Interim President And CEO mining companies in terms of the extent of its the future.

4 Creating Jobs Building Capacity Through& its investments in mineral exploration and enhanced education, the development of transporta - The DRC has a very long way to travel before it mining operations, Banro is emerging as an engine tion and energy infrastructure and the promotion reaches the economic level of some neighbouring of development for this eastern region of the DRC. of sustainable agriculture. countries. Furthermore, Banro is a relatively new company – the only mining company to have taken Development occurs when multiple factors are Banro is contributing to each of these forces for the risk so far of operating in the region – and its present. Core to these are new investment and the development – and to many others. efforts and finances can only go so far. creation of capacity-building jobs, improved security,

5 OF THE SKILLED OF THE SKILLED OUT OF 1,210 POSITIONS INVOLVED POSITIONS IN DIRECTLY EMPLOYED IN OPERATING THE BANRO’S EXPLORATION IN OPERATIONS TWANGIZA MINE DEPARTMENT Nonetheless, we share the view expressed by the governments of serveral developed countries and the Congolese leadership, that the most effective route 83% 91% 95% toward economic renewal is through the responsible ARE CONGOLESE ARE HELD BY ARE HELD BY development of the country’s natural resources. CITIZENS CONGOLESE CONGOLESE The most important contribution to development is the creation of capacity-building jobs and ancillary economic opportunities.

Creating Jobs and Economic Opportunities

Jobs and wages are of exceptional importance to people living in South Kivu and Maniema provinces, as they are to people everywhere. This is a region of chronic high unemployment and lack of opportunities, which has guaranteed the persistence of poverty and the continuance of instability and violence.

Banro’s role in job creation includes the creation of direct, capacity-building jobs in exploration, mine development and mining production; the generation of indirect jobs with contractors and labour hire companies engaged by the Company; and the oppor - tunities created through Banro’s growing Congolese supply chain.

Direct Employment Since beginning exploration in late 2004, Banro has emerged as one of the largest private sector employers in South Kivu and Maniema provinces. As of October 2012, the Company employed a total of 1,210 people directly in its operations in the DRC. Of these, 83% or 1,003 were Congolese citizens.

Much of this employment is in skilled, capacity- building roles, including engineers, geologists, 6 metallurgists, environmental specialists, technicians, The Company is committed to hiring and promoting operating the Twangiza Mine are held by Congolese accountants, human resource specialists, women where possible – a difficult task in the highly and 56% of the skilled positions required to construct community relations officers, administrators patriarchal culture of the DRC where unemployment the mine at Namoya are Congolese. The statistic and other specialists. rates are exceptionally high. The Company employs for Namoya is typical of the highly specialized 53 Congolese women out of a total Congolese work - employment mix required for the mine construction Of this total, 220 Congolese work in Banro’s force of 1,003; of these, 11 are in supervisory or phase. As happened at Twangiza, the percentage of Exploration Department. The mining and mine management positions. Obviously this is not sufficient Congolese employees will trend toward 90% or more development teams employ 597 Congolese at and the Company is committed to improving its by the time mining operations commence. Twangiza and a further 169 Congolese nationals at performance in this area. the Namoya mine construction site. A significant Banro’s employee base in the DRC is largely African, increase in employment is anticipated at Namoya While the construction of our mines requires with good employee representation from Ghana, as construction activities intensify prior to the specialist skills, many of which must be imported South Africa and Tanzania. commencement of production in mid-2013. Of the in the early stages of mine development, the end 17 employees in the Kinshasa administrative office, goal is to have 95% of all management, professional, Contract Employment 14 are Congolese citizens and three are foreign skilled and administrative jobs on our mines filled Contract employment at Banro is divided into two nationals of Congolese background. The Banro by Congolese nationals. Today, over 95% of the skilled categories. In the first are contract firms that provide Foundation employs seven Congolese and two positions within Exploration are filled by Congolese professional or specialist services, such as engineer - foreign nationals of Congolese origin. citizens. 91% of the skilled positions involved in ing and related consulting services, building and

7 PROFESSIONAL OR SPECIALIST SERVICES JOBS CREATED THROUGH CONTRACT Future Employment Growth in Banro COMPANIES Banro expects to be a large and growing employer in South Kivu and Maniema provinces for many decades to come. The Company’s strategic plan includes 89% the construction and operation of new mines at ARE HELD BY Lugushwa and Kamituga, as well as future expan - CONGOLESE sions of both the Twangiza and Namoya mines. We also anticipate a future acceleration in our exploration activities which could, in turn, lead to the discovery of new deposits and the building of additional mining operations.

Occupational Health and Safety Banro is committed to creating a safe work environ - ment for its employees and contractors throughout its varied operations, with the greatest long-term challenge to safety being in mining operations. As projects move from the construction to the production phase, Banro is working hard to provide employees and contractors with a workplace free road construction, transportation services, catering down at each site, our goal is to reposition these of uncontrolled hazards. This involves identifying and camp management, on-site security and so on. Congolese labourers in alternative livelihoods potential risks to the health and safety of employees, The number of jobs created through such contract through the formation of micr o- enterprises based contractors and the public and then either eliminating companies as of October 31, 2012 was 1,997, of mostly on agriculture. such risks or controlling them at levels as low as which 1,793 were held by Congolese. reasonably achievable. Total Employment Impact The Company also contracts out to labour hire firms, Total direct, contract and labour hire employment This is being undertaken in a very challenging which played a significant role in the construction of at Banro currently accounts for just over 4,000 environment, with difficult terrain and where the the Twangiza mine and accounted for a total of 1,800 Congolese jobs. A rule of thumb in the mining indus - majority of employees, contractors, suppliers and Congolese jobs at the peak construction point in late try is that every job created within mining generates other stakeholders are largely unfamiliar with indus - 2011. While this large labour presence declined an additional 10 jobs in the larger economy. trial safety concepts. Consequently, the management sharply with the completion of Twangiza construc - Furthermore, it is estimated that in Africa, every team devotes considerable effort to the compilation tion, new labour groups will be formed at each single job helps support a total of 10 individuals. and implementation of an effective occupational development project as it begins construction, In estimating total economic impact, we have been health and safety policy with supporting programs beginning with the Namoya mine. As of October 31, conservative and used a multiplier of 5 for job and procedures. 2012, 1,467 Congolese were employed by labour generation rather than 10. This would suggest that hire firms at Banro sites, the majority at Namoya, Banro’s operations are currently generating a total All employees, contractors, suppliers, stakeholders which will further increase its complement of such of 24,000 direct and indirect jobs, which in turn are and visitors are systematically taken through safety employees during 2013. As construction winds providing economic benefits to 240,000 Congolese. awareness training and induction. This awareness

8 training includes, but is not limited to, a brief In 2012, the Twangiza mine had one loss time injury On the job and classroom training is also an integral induction for visitors, suppliers and stakeholders (LTI). At the end of October, the facility had operated part of mining operations. At the time of writing, job and an intense induction for Banro employees and for 120 days or 1,459,496 hours without a loss time training at the Twangiza Mine was in the process long term contractors. Additional training is given injury, equal to an LTI frequency rate of 0.06. of being overhauled by new mine management. In to employees when they are assigned to their future, training will focus on developing courses in respective departments. On the Job and Classroom Training the operational areas of maintenance, mining and Job training has been an important focus for Banro processing, leading ultimately to a Certificate of A 5 Point Awareness Program was implemented at since it began activities in late 2004. The Company’s Competence. The goal is to train a growing cadre the Twangiza mine in October 2012 with the goal of training and development goal is to encourage and of Congolese employees who over time can assume making all employees more aware of the potential support employees to attain their maximum potential, technical responsibilities and replace expatriates. hazards around them at all times. Safe Work Proce - while linking personal development to current and dures have been developed in each department at the long-term business objectives. Exploration staff, for mine and a training program using Competency example, receive extensive education and training Developing Congolese and Based Learning is being developed for departmental as appropriate in geology and associated software African Supply Chains progression. A Job Hazard Analysis is conducted for programs, supervisory and management skills, all jobs which do not have a Safe Work Procedure French or English language training, occupational Banro sources almost all materials and equipment in order to eliminate or control associated hazards. safety and first aid. within Africa, primarily from the Republic of South Africa, and to a lesser but increasing extent from Kenya and Tanzania, with additional materials 9 being sourced within the DRC wherever possible. Here are some representative contributions to In 2012, the Company spent US$117 million on development being made by Banro and its people. goods, services and wages in the DRC. An additional $135 million worth of goods and services was Building transportation and energy infrastructure sourced in the rest of Africa. Goods and services It has been said that “You don’t need wealth to build purchased locally include foodstuffs, construction roads, but you need roads to build wealth.” Without services, construction supplies and materials, proper roads and bridges, economic development will banking services, rental accommodations, trans - not occur. The lack of roads and bridges separates portation services and clothing, as well as salaries communities and families from one another and often and wages. Banro is a member of the Congolese makes it impossible for business people, farmers and Business Association in order to expand its universe artisans to bring goods to market, for children to at - of potential local suppliers, particularly at the tend school and for families to reach medical clinics. provincial level. In constructing the Twangiza and Namoya mines, The Company also works with several local business and through the activities of the Banro Foundation, people to assist them in establishing and building the Company has built or rebuilt over 500 kilometres businesses capable of selling goods and services on a of roads and replaced or upgraded over 100 bridges. competitive basis to Banro. This has been particularly helpful to both Banro and to local suppliers in Road and bridge building was a key priority for the sourcing building materials and services locally Twangiza mine development team, which in addition during the mine construction phase. However, the to building local access routes, upgraded the 50 lack of a local industrial base is a serious challenge kilometres of roadway running from Bukavu to to increasing procurement of Congolese equipment Butuza along the N2 Highway and rebuilt the 38 and services. Helping local suppliers to improve kilometre road between Butuza and Twangiza. In their capabilities will be increasingly important as 2004, the 80 kilometre trip to Bukavu entailed a Banro continues to build its operations in the DRC. five day bicycle ride; today it can be covered in just over two hours by motorized vehicle.

$117 $135 Other Contributions to To gain access to the Namoya mine site, Banro Regional Development reconstructed 220 kilometres of the N5 roadway MILLIONS WERE SPENT MILLIONS OF GOODS running from Uvira at the head of Lake Tanganyika, ON GOODS, SERVICES AND SERVICES WERE AND WAGES IN DRC BY SOURCED IN THE REST In addition to its role as a creator of jobs and oppor - along the western shore of the lake through the BANRO IN 2012 OF AFRICA IN 2012 tunities, Banro contributes in many other ways to towns of Baraka and Fizi. A 200 kilometre spur road, furthering the economic and social development of linking Fizi with Namoya, was also reconstructed. the surrounding region. These contributions occur Approximately 90 bridges were built as part of this through the payment of taxes, the stimulation of new initiative, linking together communities which in businesses, the transfer of technology and skills, many instances had been separated for decades. projects to improve health care, the fostering of When Banro began road reconstruction, the journey agricultural innovation, the promotion of alternative from Bukavu to Namoya took 28 days; travel time has livelihoods and other means. been reduced to an average of two and a half days. 10 The Zambian Copperbelt It is fascinating to watch the evolving impact of these new roads on communities. As soon as a road A Case Study of Mining and Regional Development is opened, commercial traffic appears, bringing commodities and supplies to communities along Mining has shown itself to be a powerful catalyst for development in many parts of the world. An example the route. We have observed a dramatic reduction close to home is the Zambian Copperbelt. The first copper mines in north-east Zambia began operating in in community prices in the villages as a result of the late 1920s where, previously, there was nothing more than the odd cluster of huts and subsistence farming. the reduction in distribution costs. This is obviously Decades later, as the result of mining activities, there are not only roads, railways, and airports, but towns and large bustling cities, with shops, supermarkets, banks, businesses, commercial farming, schools, hospitals, a far reaching economic benefit to the community, a university, and a full range of top class sports clubs, including football, rugby, cricket, field hockey, golf but one difficult to quantify. and tennis.

Similarly, the N5 Road, before its rehabilitation, had The money that generated this activity did not come just from mining activities, but also came from the been notorious for the security problems created by ancillary economic activities that grew up around the mines and from the efforts of the Zambia government, which began to invest in community infrastructure and provided financial support to private enterprise once armed groups along its entire length. An unplanned economic momentum was underway. consequence of the upgrading of the road has been an unprecedented reduction in incidences of banditry, There is an unfortunate expectation in the DRC that Banro must create all the jobs directly and provide all of despite the increased traffic flow. the money for development. This is obviously not possible. Development will occur as individuals begin taking advantage of the opportunities resulting from mining, infrastructure and other investment and demonstrate initiative in creating their own commercial ventures. The absence of secure and reliable energy sources is another major hurdle to development in the eastern The government of the DRC also has a crucial role to play in development. If regional development and Congo. The lack of energy severely limits activities as growing prosperity are to occur, government must invest in education and health care, road construction diverse as transportation, the operation of equipment, and other public infrastructure and provide adequate security for the people of the region. It is also essential artisanal fabrication, the use of modern communi - that government put in place legal and regulatory frameworks that promote and support the creation and cations and the deployment of artificial lighting for success of local entrepreneurial businesses. personal use and for public safety. The use of the internet, which has brought extraordinary access to knowledge and benefits to people around the world, is just one of several opportunities denied to many electricity then sold to Banro and to local community Improving quality and access to education people in the eastern Congo. distributors. While these plans are in the early Improving access to education is one of the best stages, the construction of new hydro-electric gen - routes to enhancing long-term quality of life. A Banro Foundation project currently underway is eration plants could have a transformative impact Education is priority number one for the Banro the refurbishment of the Kamituga community on local communities. Foundation, which since 2009 has constructed and hydro-electric facility, which was originally built in outfitted with desks and furniture 10 new primary 1932. More importantly, Banro’s plans call for the By providing such infrastructure, Banro is being a and high schools and rehabilitated two more schools development over the next several years of three new true catalyst for economic development and the peace serving a total of 4,000 students. The Foundation has hydro-electric facilities to be built along the Twangiza which flows from that structural change. Banro also put in place programs and taken other steps to -Namoya corridor. These sites have been identified provides the means to improve quality of life, but in boost school attendance by girls and retain teachers and an initial feasibility report has been completed. a way that enables communities to determine their at all the schools it builds or rehabilitates. It is most likely that these facilities would be built own activities without further involvement from and managed by third party companies, with the the Company. The Banro Foundation has long supported scholar - ships for university students from Maniema province 11 and more recently has introduced a new scholarship Fostering sustainable agriculture Banro has since become a member of the CGI and a program to send promising students from the The vast majority of people living in the region make participant in its DRC action network. Construction Twangiza area to a technical high school in Bukavu. a living through subsistence farming. Unfortunately, of the new Salamabila Hospital near Namoya, which Since arriving in Bukavu in 2004, our geologists it appears that indigenous agricultural knowledge is discussed below in the section on the Banro Foun - have also worked with the Geological Sciences and techniques were lost during the colonial period dation, is our CGI Commitment to Action for 2012. department of the Official University of Bukavu to and replaced by little else, leaving local farming improve the teaching of geology. A future initiative communities with only rudimentary agricultural Working with Collaboration Santé Internationale, an under development will help send outstanding high knowledge and an exceptionally narrow range of NGO based in Quebec City, Canada, which collects school graduates from the region to study engineer - produce, with bananas representing the main crop. used hospital equipment, the Banro Foundation has ing and mining-related disciplines at the University It is not unusual to see people going hungry, despite shipped two containers of medical equipment to of Lubumbashi. the abundance of good agricultural land. several hospitals in South Kivu province.

Improving the quality and standards of business Helping rural communities develop sustainable Through two fund-raising events supported by As discussed above, Banro has created demand agricultural practices is a huge challenge, but is several of our international business suppliers, the for a range of locally produced goods and services. necessary if this region is to have a more prosperous Company in 2011 and 2012 raised over $200,000 for In buying from local business people, Banro has future. Banro is one of several organizations, who construction of a multi-purpose women’s health unit challenged them with new and demanding standards, are working with local communities to improve at the Panzi Hospital in Bukavu and construction of including the presentation of competitive proposals agriculture practices and introduce new forms of the new Salambila Referral Hospital near Namoya. and enhanced quality and performance measures. organization. The Company’s agricultural efforts This has been a painful experience for many – are focused in the Twangiza area at this time, with We have worked in conjunction with the Canadian but we also believe it has been enriching and has several initiatives underway involving pig farming NGO ERDO, to introduce a micro-financing scheme permanently raised business standards in ways and the growing of maize, onions, cabbage, beans for 225 women in the city of Bukavu. And in the that will benefit the entire sector. and eggplant, with a portion of the agricultural past, we have collaborated with CARE Canada and output being sold to Banro for its workforce. The several Congolese-based organizations with an Similarly, Banro takes a zero tolerance approach to all potential for developing larger scale farms and interest in development. Looking ahead, Banro and forms of corruption in its dealings with suppliers fish farming, as well as re-introducing tea growing the Banro Foundation will be working with many and others. Corruption is a serious issue in the DRC to the region, are under study. such organizations to find solutions to the challenges and one of the biggest obstacles to development. of development. Corruption destroys the integrity of the individuals Forging partnerships for development involved through the abuse of positions of power and As the largest and most dynamic private sector em - Those are some of the ways in which Banro is trust for personal gain at the expense of others. ployer in South Kivu and Maniema provinces, Banro making a difference in the eastern Congo. Over time, It dramatically slows the rate at which business is using its leverage to attract and focus development we hope that our success and progress, combined transactions are completed and creates an opaque efforts by NGOs and other organizations. with the growth in trained technicians and construc - pricing structure, thereby destroying the basis on tion workers, enhanced regional security and which supply and demand can be brought together In July, 2011, for example, Banro co-hosted a visit improving infrastructure, will act as a catalyst, equitably. Where corruption is endemic, people are of the Clinton Global Initiative (CGI) to South Kivu attracting more foreign mining companies to the engaging in activities which are value destroying province, with the goal of bringing together inter - eastern DRC and encouraging the growth of local rather than value creating. ested parties and new ideas to help address the non-mining businesses, thereby accelerating the long-standing challenges to Congolese communities. process of social and economic development.

12 A Banro employee answers questions about the Company’s activities at a community Open House at the Kamituga exploration office.

Artisanal Communities Miners With the transition of Banro from exploration to communities to its activitie&s. Among the goals of commercial mining operation and better understand mining, the Company has adopted a comprehensive this early consultation was to gain understanding the plant being proposed for Twangiza. approach to achieving excellence in mining sustain - of the social fabric of the community, including the ability. Relations with local communities is an composition of the indigenous and the local migrant Three separate community agreements were nego - important aspect of this. populations, two groups with very different interests tiated in the months leading up to mine construction and issues. In educating people about Banro’s activi - at Twangiza. These were discussed in detail in ties, Company geologists offer ongoing meetings Banro’s 2012 Sustainability Report. In each instance, Community Consultation and public presentations about exploration and formal discussions were held over several months mining activities, and host community open houses with the participation of the provincial governor’s Communities in rural Congo have been isolated from at the exploration camp. office and four provincial government ministries, two much of the world and are unfamiliar with modern local chiefs and other community leaders, the leader - industrial mining and commercial business practices. Two special events hosted at Twangiza by Banro in ship of the affected groups and Banro representatives. Consultation and education are thus critical to the the exploration phase were a three-day community This formal negotiation process was designed to process of mineral development. workshop on mining development held in 2006 and comply with DRC legislation and with International a 2007 visit to the Geita Gold Mine in Tanzania for Financial Corporation (IFC) Performance Standards In launching exploration activities at each site, Banro community elders and provincial officials. The Geita on Environmental and Social Sustainability. also began consulting with and sensitizing local visit provided the opportunity to view a modern

13 Through the work of the Association for the Protection of Children and the Family, a Twangiza-area NGO, and the support of the Banro Foundation, children who have worked or been sexually exploited in the artisanal mining sector are being integrated into the formal school system with the help of psychological counselling. challenge at both the Twangiza and Namoya sites is the establishment of a joint employment committee and creation of programs to foster enhanced agri - cultural skills and alternative livelihoods. The latter is discussed below.

However, many artisanals prefer to remain in small- scale mining activities. Consequently, the Company is exploring with local officials the possibility of provid - ing two parcels of land at Twangiza as artisanal gold licenses to be mined by artisanals currently working at the Twagniza North deposit. These packages would be remote from Banro’s industrial scale operations, with the licenses being renewed annually and title provided to the traditional tribal authority. Thus arti - With start-up of the Twangiza mine, the on-going lifestyle, relying to an extent on the use of child labour sanal miners who are currently mining ore illegally consultative process has been broadened and formal - and frequently exploited by shadowy third parties. on Twangiza’s permit areas would be able to operate ized. This process is based on a standard, continuous within the existing legal framework. A similar option approach to dialogue with leadership groups, with In commencing mine construction, Banro was is being explored to turn over a cassiterite deposit on each matter discussed and solved at the appropriate required to move approximately 1,300 artisanal the Twangiza concession to artisanal miners who forum. A monthly meeting is held with the senior miners from the Twangiza mine site. Following 10 are currently working near the Twangiza operations. community leadership under the chairmanship of a months of multi-party discussions, an agreement representative of the Governor, with participants able with the artisanal miners was signed in June 2010. At Namoya, the Company is working with the to propose additional actions to be taken in respect It provided financial compensation and temporary provincial government of Maniema and the national of each matter. employment for 875 people during the mine con - Division of Mines to make a gold deposit available struction phase. Another 400 former artisanal to a cooperative of 550 artisanal miners who have This Twangiza model of consultation has been miners were provided life and work skills training been active at Namoya. This deposit is located 25 mobilized at the Namoya project, where a number of through local NGOs under the supervision of Banro km from the Namoya site and lends itself to small agreements have been reached within the Community and the Banro Foundation. In addition, one hundred scale mining. Although the initiative will proceed Forum and consultative sub-structures. children working as artisanal miners at the site under the auspices of the Division of Mines, Banro were reintegrated into the formal school system will provide technical advice, geological analysis under a three year program, including psychologi - and a mine planning framework, and will fund the Artisanal Mining cal counselling, funded and overseen by Banro and start-up equipment required. the Foundation. Another one hundred older children The presence of illegal, artisanal miners at mining were provided with life and work skills training However, any such projects which Banro facilitates properties is one of the biggest challenges facing the programs suitable for their age group. will be consistent with Congolese and international commercial mining industry and local governments legal frameworks and require adherence to accept - across Africa and many other parts of the world. Artisanal miners remain a challenge for Banro and able employment, health, safety and environmental These are people largely engaged in a transient, one we continue to manage with care. Among the practices. environmentally destabilizing and sometime violent approaches being taken to the artisanal mining 14 Top: An adult literacy course at the Burhinyi chefferie near Twangiza. Bottom: Unloading cabbages grown at a Voluntary Household Resettlement meets twice a month with Banro representatives to cooperative farming project at Cinjira. at Twangiza and Namoya resolve outstanding issues and improve the quality of community life through enhancements to existing The most sensitive social challenge at the Twangiza structures and the building of new social facilities mine, and the one requiring the greatest care, is and other amenities. resettlement of the 463 households which reside in the mine footprint. Difficulty in acquiring sufficient packages of acceptable land at Twangiza for the relocation of The extensive process, demographic research, com - communities has prompted the Company to explore munity agreements and compensation associated an alternative approach to voluntary re-settlement with the voluntary resettlement at Twangiza were with the local authorities. This would involve provid - discussed in detail in Banro’s 2012 Sustainability ing households with the funds necessary for the Report, which is available on the Banro website at construction of primary dwellings, but with the www.banro.com. The formal negotiation processes location and construction of such dwellings being were designed to comply with DRC legislation and determined by local authorities. Relocation would international best practice guidelines as reflected then become the responsibility of the local authorities. in the World Bank Group’s standards and norms, The Company has received agreement in principle in particular those developed by its private sector from the local tribal authority for this approach. arm, the International Finance Corporation (IFC). The voluntary resettlement program to be undertaken Up to the end of October 2012, 238 of the total of at Namoya is based on the Twangiza – Cinjira model, 463 households had been relocated to the newly built with the advantage that the Namoya area benefits village of Cinjira on land selected by the community from flat terrain and ample unallocated land. As with and provided by the local chief. This community, Twangiza, this process has involved extensive social which is being financed and built by Banro, will and demographic research undertaken prior to the ultimately consist of 463 homes within a strategically beginning of mine construction, a multi-party con - designed and clustered township model, together sultative process and a compensation structure for with a school, churches, a health centre and other affected households which exceeds international public infrastructure. The size of the homes, the standards. It is proposed that 207 households will construction materials and social infrastructure, all be resettled to the new village of Mulanda, which is of which were agreed upon by the community prior currently under construction and will contain a to resettlement, are superior to previous living range of community amenities. conditions and exceed international standards. The Namoya mine is also constructing an office block However, despite the progress with resettlement for local government officials who have traditionally achieved to date, the move to Cinjira has not been operated out of makeshift offices at their homes, without problems. Banro continues to work closely making it difficult to work in a coherent manner. It with the community and its leadership. A resettlees’ is anticipated that the community will benefit consid - committee consisting of 10 members designated by erably from improved government functionality. the resettlees has been put in place at Cinjira and 15 Memorandums of Understanding agricultural knowledge and current agricultural time to sell to consumers in other communities in with the Luhwindja and Salamabila techniques are not adequate to ensuring economic Maniema and South Kivu provinces. communities sustainability. Agricultural specialists employed by the Company have worked with the Cinjira villagers Another sustainable small business underway is Among the agreements signed with the community and the former artisanal miners to develop alterna - brick-making, which currently employees about near Twangiza prior to construction was a Memoran - tive livelihood options that would enable farmers to 300 former artisanal miners. The product is sold to dum of Understanding (MOU), which articulates the become sustainable and improve living standards the Namoya mining project, the Banro Foundation developmental aspirations of the local Luhwindja over time. and the local community. community. Under the MOU the Company formally acknowledges these aspirations and agrees to address Following on the Company’s Agreement with the The Company’s contractor for catering and accom - them over time in accordance with available resources former artisanal miners at Twangiza, training in modation management at Banro’s sites is required and the order of priority accorded them. The MOU agriculture and animal husbandry, as well as such under its contract to source basic food commodities, directs the Banro Foundation to continue to invest as skills as motor mechanics, carpentry and masonry, including vegetables and small livestock, from local it has done since 2005 in major social infrastructure was provided over 2010-2011 to 440 adults. Today, producers. This requirement will be strengthened in projects such as schools, health clinics, potable water there are five agro-pastoral cooperatives and two 2013, with the contractor being expected to transfer projects, community facilities and roads and bridges, carpentry workshops run by former artisanal miners food commodities supply skills on a formal basis to with the goal of continually enhancing the quality and residents of Cinjira. Some of these cooperatives the farmers in these cooperatives and businesses. of life and economic opportunities for the thousands are supplying the company with potatoes, cabbage of people living in and near Luhwindja. and goats on a weekly basis. An additional 286 artisanal miners, who chose to work for Banro Teaching Literacy and The Namoya development team has begun discus - during construction of the Twangiza mine rather Numeracy Skills sions with the Namoya community forum to develop than enroll in training programs, are employed in a Memorandum of Understanding between the local two local business enterprises focused on pig, maize Among the initiatives which have been undertaken Salamabila community and the Company. It is and vegetable farming and subsidized with a five- by Twangiza Mining is the provision of adult literacy intended that this document will plan for a series of year loan from Banro. and numeracy training for the local community. A community infrastructure projects to be undertaken total of 1,896 women and men living in the Chefferie over the next 10 years, which is roughly the projected Research and discussions are also underway to of Luhwindja have successfully completed the liter - life of the mine based on current, estimated resources. examine the feasibility of introducing large scale acy training phase I and II, with each phase being Under the MOU, the Banro Foundation will continue commercial farming to the Twangiza region. six months in length. Approximately 95% of the to invest in such projects as roads, health care, beneficiaries are women. Phase III of the program is educational infrastructures, hydro-electric develop - The Namoya area is blessed with an abundance of flat mainly numeracy training, with 272 individuals ment and facilities for sports and leisure. terrain at lower altitudes than in Twangiza, and with having completed the program by the end of 2012. much higher average, annual rainfall. As a result of The same program is also offered in the neighboring research conducted by the Company’s social agron - Chefferie of Burhinyi, whereby 1,210 adults have Fostering Alternative and omist, Banro is launching a project to regroup 400 been enrolled in literacy training phase I. A total of Sustainable Livelihoods former artisanal miners into an agricultural 656 people successfully completed phase I and have cooperative producing rice and fish on a commercial started the phase II. In addition, 445 adults at The primary livelihood for the regional population scale. This will include development of a marketing Burhinyi began numeracy training in June 2012. is subsistence farming. Unfortunately, the level of network that will allow local farmers for the first

16 Environmental Management

Within the DRC, Banro is subject to a comprehensive Principles – 2 standards (EPs), the leading global environmental management practices and workplace set of national regulations with respect to environ - framework for environmental and social risk health and safety, these combined standards address mental management. These are set out in the 2002 management in the mining industry. The EPs were a range of social responsibility issues, including DRC Mining Code and associated regulations, which prepared and are used today by financial institutions labour and working conditions, community health, are administered by the Ministry of Mines. involved in international project debt financing safety and security; land acquisition; and volun - and are based on the IFC Performance Standards tary resettlement. In addition to compliance with DRC requirements, on social and environmental sustainability and on Banro is committed to global standards of environ - the World Bank Group Environmental, Health, and Since commencing exploration at Twangiza and mental compliance as articulated by the Equator Safety Guidelines. In addition to reflecting sound our other sites, Banro has been required to submit

17 annual environmental reports for each project to the extensively undertaken through established com - Directorate for the Protection of the Mining Environ - munity forums and working groups which enabled ment, Ministry of Mines. In 2006, the Company also Twangiza to successfully complete its Resettlement submitted an Environmental Adjustment Plan for all Action Plan (RAP), Stakeholder Engagement Plan its mining permits (Twangiza, Namoya, Lugushwa (SEP) and Community Development Plan (CDP). This and Kamituga) to the Ministry. These were updated was done in consultation with SRK (SA). Community in April 2011 as required by regulation. Thus, as consultation is a vital part of the corporate culture construction of Twangiza began, the Company of the Twangiza mine and all environmental and possessed extensive environmental knowledge of social impacts are continuously discussed with the the area. This was greatly expanded with the community to draw mitigation measures for the development by the consulting firm SRK (SA) of development of the ESMP. an interim Environmental Impact Report (EIR), a Socio-Economic Impact Report and an associated A similar approach is being undertaken at Namoya. interim Environmental Management Plan (EMP), In 2008, SRK(SA) conducted extensive community as required by Congolese law and international studies and consultation at Namoya. These studies standards. The EIR was included as part of the were updated in 2011 and will form the basis for the Company’s updated Feasibility Study, which was Namoya Resettlement Action Plan. filed on www.sedar.com and dated July 17, 2009.

However, in August 2009, the Company determined Twangiza Process Plant Design and to build a scaled-down Phase 1 plant, as opposed Tailings Management Facility to the large scale plant initially contemplated for Twangiza. This necessitated work on a revised ESIA The Twangiza mine has been built to meet interna - and ESMP in line with the parameters of the new tional requirements for environmental management. project design which was undertaken in consultation In particular, the carbon-in-leach plant is designed with SLR Consulting Ltd. to ICMI standards, which include the detoxification of effluent discharged into the Tailings Management The Namoya development team is duplicating the Facility and the recycling of the supernatant water process pursued at Twangiza and in 2013 will back into the Plant. publish an ESIA, addressing the environmental and social impacts of the new mine. The facility has been built to withstand a seismic event of magnitude 7 on the Mercalli Modified Scale.

Community Consultation in The lessons learned at the Twangiza mine site are Developing the ESIA and ESMP now being applied at the Namoya mine development at Twangiza site, and as the Company grows, so too will centres of excellence. In the process of developing the ESIA and ESMP for the Twangiza Project, community consultation was

18 The Mulangane Ngweshe Primary School being handed over to the community of Ngweshe in a public ceremony in January 2013.

Investing In Community Development The Banro Foundation is the Company’s vehicle for priority investment areas of the Banro Foundation – up to the commencement of Banro’s exploration investing in community development. Education, Health and Social Infrastructure activities in November 2004. Development – were selected following lengthy The Foundation was created in 2005 and operates consultations with local communities and their The Banro Foundation also provides Humanitarian solely in the DRC with a mandate to improve the leaders, central and provincial government officials Assistance as required and regularly helps sponsor quality of life and opportunities for individuals and Catholic Church officials in the months leading major community events. and communities near Banro’s operations. The

19 Almost one hundred women graduated from courses in soap making, bread making and hair dressing at the Makalanga Women's Centre in 10 4,000 5 Lugushwa in January 2013. The centre also offers courses in basic literacy NEW SCHOOLS HAVE STUDENTS NEW HEALTH CARE and sewing. BEEN BUILT AND TWO ARE EDUCATED FACILITIE S WILL ADDITIONAL SCHOOLS IN SCHOOLS BUILT OR BE COMPLETED REHABILITATED REHABILITATED BY THE BY MID-2013 SINCE 2009 BANRO FOUNDATION

A teacher at the Tima Primary School in Kamituga. The school was inaugurated at a public ceremony in August 2012.

Among the principles guiding the work of the Banro 2012 Projects Foundation is a focus on needs identified by local community leaders, with priority given to projects Vision 2012 was the busiest and most successful year to that benefit communities as a whole. Promotion of The Banro Foundation’s Vision is focused on ensuring date for the Banro Foundation with completion of opportunities for women is an important guiding that local communities share in the benefits of mineral projects totalling approximately US$1.08 million. principle of the Foundation. development while experiencing long-term and Here are the 2012 highlights: significant improvements in the quality of life that Since its creation, the Banro Foundation has com - will be sustainable beyond the closure of mining Education pleted over 60 projects with a total value of about activities in the distant future. School construction has become the leading priority $3.6 million. The Foundation is a registered charity of the Banro Foundation. In 2012, the Foundation Sustainable development through education and completed construction of three new schools, which in the DRC; a sister charity in Canada, the Banro skills development, improving health care, evolving Congo Charity, raises funds for construction of infrastructure and encouragement of local business – were then handed over to the local communities. health clinics and schools in the DRC. In 2012, the leading to long-term, enhanced opportunities and These included the Tima Primary School in Kamituga Banro Foundation employed eight Congolese na - quality of life for local Congolese communities. and two primary schools near Twangiza – the Mak - tionals on the ground. wale Burhinyi primary school and the Mulan gane Ngweshe primary school. Work also continued on

20 the Mapale Secondary School near Lugushwa, al - Health Care though somewhat hampered by logistical challenges. A major highlight of 2012 was the Official Opening in August of the new $121,000 multi-purpose Since completing its first school in 2009, the Banro women’s health unit at the world-renowned Panzi Foundation has now constructed 10 schools and General Referral Hospital in Bukavu. The Panzi rehabilitated two more schools, serving a total of Hospital treats an average of 3,500 women each year, 4,000 students. All 12 schools have also been outfit - free of charge. The multi-purpose women’s centre ted with desks and furniture. supports prenatal consultation, family planning and HIV sensitization, child health and other activities In Kindu, Maniema Province, the Banro Foundation related to women’s health. It was built by the Banro began construction of a 12-room women’s residence Foundation using funds raised through a charity for 24 students at the University of Kindu. Comple - golf tournament held near Toronto in 2011. tion is expected in mid-2013. In September 2012, the Banro Foundation hosted Several non-capital education programs were also its second fundraising event, “Celebrate the Congo,” introduced over 2012 to promote educational oppor - which was held in Toronto and attended by approx - tunities and access. This included a teacher retention imately 140 people. This celebration of Congolese art program which pays a basic salary to all teachers and music received outstanding financial support at schools built by the Foundation, with the goal of from Canadian and international companies active retaining teachers in remote areas and boosting in the mining industry, as well as the guests at the school participation rates for girls. The Foundation event, raising a total of $112,000. Proceeds from also took initial steps to establish scholarship the event are being used for the construction of a programs to enable promising high school students new $165,000 hospital in the town of Salambila, from communities near Banro’s operations to attend Maniema Province, DRC. a technical high school in the city of Bukavu . Among the financial contributors to the fundraising Also in 2012, the Banro Foundation worked with event were GMP Securities, Norton Rose LLP, Dorsey the community of Lugushwa to expand training & Whitney LLP, MDM Engineering, Aggreko plc, opportunities at the Makalanga Women’s Centre BMO Capital Markets, Civicon Congo SPRL, Dalbit to include bread making, soap making and hair Petroleum, Loncor Resources Inc, SGS, SRK Consult - dressing in addition to literacy skills and sewing. ing, Deloitte, TD Securities, RBC Dominion Securities The Women’s Centre was built by the Foundation and Macrae Design. in 2011. Other ongoing projects included support for a scholarship program for university students The Salambila Hospital is also Banro’s 2012 Commit - from Maniema Province and continuing financial ment to Action as a member of President Bill Clinton’s contributions to the Don Bosco Foundation in the foundation, the Clinton Global Initiative (CGI). capital city of Kinshasa which rescues street children and provides schooling and skills training pro - In addition to the two hospital projects above, the grams for over two thousand children and youth. Banro Foundation in 2012 also moved toward

21 A new ambulance presented to the Celebrating the arrival of medical Ifendula Hospital near Twangiza in equipment in Kindu, Maniema's August 2012. capital city, in September 2012. completion of the new Tukolo Health Centre, Phase I schools in the town of Kasongo. The arrival of the the Banro Foundation moved forward on three of its in the town of Kamituga and the new Biyombe equipment was celebrated in a public ceremony in largest cost items to date, completing construction Health Centre at Lugushwa. Both towns are in areas Kindu on September 2, 2012. of the central bridge at Sarambila near Namoya, of South Kivu Province that have been without which was officially inaugurated by the Governor of proper medical care. Improving the quality of medical care remains a Maniema Province in June. Progress was also made challenge in the eastern DRC. While the quality toward rehabilitation of a hydro-electric plant, built Another major initiative was the delivery of a new of care provided by the Panzi Hospital and its 150 in 1932, which serves the town of Kamituga, and ambulance to the Ifendula Hospital in the town of satellite clinics is considered to be outstanding, the completion of the new Nabuntalaga regional market - Luhwindja, South Kivu province on August 29, 2012. same is not true for many regional health centres. To place, which will serve 70,000 inhabitants living in The new Toyota Land Cruiser, whose operations will help improve the quality of medical care, the Banro or near the community of Luhwindja. be partly funded by Banro Foundation, replaced a Foundation has begun discussions with a leading 25-year-old vehicle. health NGO to assume health care management of A small but significant project in 2012 was the all medical facilities built by the Banro Foundation. rehabilitation of the Nfunu water delivery site, which Together with Banro’s mine development team at the serves 10,000 people in the Kadutu community of Company’s Namoya project, the Banro Foundation Social Infrastructure Bukavu. The number of water stations was increased underwrote the cost of transporting medical six Given the great needs in the eastern Congo, it is not from 20 to 50 and solar panels were added to power tonnes of medical equipment from Kinshasa to surprising that social infrastructure has become a public lighting for night use of the system. Other Kindu, Maniema Province, for use in a hospital and major spending priority for the Foundation. In 2012, recent social infrastructure projects include the

22 The Kama Bridge in Namoya was officially inaugurated in June 2012 by construction of three public basketball courts in the Governor of Maniema Province. the neighborhoods of Ibanda, Kadutu and Bagira in the city of Bukavu and construction of a community gathering site with latrines in the Kadutu commu - nity of Bukavu.

The 2012 projects represent a departure for social infrastructure spending, which in the past has focused on the construction or re-construction of over 100 kilometres of roads and bridges, as well as the building of potable water systems, including a facility at Luhwindja serving 18,000 people in four villages.

Humanitarian Relief The Banro Foundation maintains a discretionary budget to assist with humanitarian emergencies as they arise, and has been active in a number of relief efforts in the past. In December 2012, the Foundation and Banro Corporation worked together to deliver 24 tons of food and non-food aid to the Bulengo refugee camp near Goma, North Kivu Province, which was providing shelter for 15,000 residents displaced by a recent conflict.

The Future In discussing the future of the Banro Foundation, a serious caveat is in order.

Despite its relatively small size and status as an early stage company, Banro has made a substantial com - mitment to local community development through the Banro Foundation. This surpasses that of any other mining company in Africa at a similar stage of development.

To date, funding for the Foundation has been provided almost exclusively from monies raised

through capital market financings for exploration The community of Kadutu in Bukavu and the Banro Foundation celebrate the inauguration of the new Coopera community space in December 2012. The site was used for public screenings of 23 the African Cup Football tournament in early 2013. and mining development purposes. Such funding is obviously not sustainable. Indeed, 2013 will see a substantial cutback in funds available for the Banro Foundation due to the significant capital requirements associated with construction of the new Namoya plant and delays in bringing the Twangiza plant to full production.

In order to ensure the long-term sustainability of the Foundation and its investment in community development, future funding will increasingly be tied to the Company’s success as measured by production earnings and based on agreements negotiated with each community. In the case of With the completion of the Nfunu Twangiza, the Company has agreed to an annual potable water project in December financing formula for Banro Foundation projects 2012, the Banro Foundation has now completed water projects in the Twangiza area based on 1% of net earnings serving a total of 30,000 people. and $1 per ounce of gold produced from the Twangiza mine. A similar formula will apply to the Namoya mine and to future mines built by Banro in the DRC.

One of the three basketball courts built by the Banro Foundation for This new funding approach makes the local com - the youth of Bukavu. munities, the government of the DRC and Banro true partners in community development. Only by working together as partners to help make the Twangiza and Namoya mines productive and profitable, can there be assurance that the funds will be available in future for investment in local economic development.

24 Governance, Conflict Minerals Human Rights

Banro is fully cognizant of its ethical responsibilities Banro is incorporated un&der the Canada Business ministers and politicians, local and international as an extractive company operating in the developing Corporations Act . It is a publicly-traded corporation, non-governmental organizations, Congolese and world and is committed to maintaining the highest listed on the Toronto Stock Exchange and on the New international journalists, corporate and investment standards of corporate governance, transparency and York Stock Exchange MKT LLC, in each case trading bankers, financial analysts, senior diplomats from protections for human rights. The Board of Directors under the symbol “BAA”. As a public company based Canada, the United States and Germany, a delegation and management monitor changing international in North America, Banro Corporation operates within of Canadian MPs and Senators and a delegation from legislation, regulations, rules and best practices on a a highly transparent regulatory environment, which the German Federal Parliament. continuing basis and implement changes to policies includes the continuous disclosure requirements of and practices as needed. applicable American and Canadian securities laws. Within the DRC, Banro has entered into a number of These requirements include the timely disclosure of agreements with the national Government, including The Company's business and operating principles are material changes, as well as quarterly and annual a Mining Convention. Several Presidential, Prime stated in the Business Conduct Policy, which is appli - financial reporting. In the United States, the filings Ministerial and Ministerial Decrees have been issued cable to all directors, officers and employees. The of publicly-traded companies with the SEC must be relating to these agreements, all of which are a Policy establishes a common set of expectations and made electronically using EDGAR. In Canada, such matter of public record in the DRC. The Company’s standards for the Company and its people with respect filings are made on the System for Electronic subsidiaries in the DRC are fully compliant in filing to ethical business practices, international business, Document Analysis and Retrieval (“SEDAR”). annual financial statements with the Ministry of personal conduct, health, safety & environment, Finance (Direction Generale des impots (DGI)) and and disclosure of information. The public can access all of Banro’s EDGAR filings submitting the requisite environmental reports to since March 2005 by visiting at www.sec.gov. SEDAR the Directorate of Mining Development, Ministry The Board currently has three committees – Audit, filings since September 1997 can be accessed by of Mines. Compensation and Health, Safety, Environmental visiting the SEDAR website at www.sedar.com. and Technical. The mandate of the Audit Committee Public documents filed prior to that date can be Conflict Minerals and the Dodd-Frank Act is consistent with best practices. The Board has also obtained by contacting the Ontario Securities There is legitimate international concern that some enacted a whistle-blower policy to protect employees Commission, 20 Queen Street West, Suite 1903, minerals exported from the DRC originate at artisanal who report violations of law, regulations or corporate Toronto, Ontario, M5H 3S8, Canada. sites controlled or taxed by illegal, armed groups policy and to ensure that their concerns are acted or by rogue elements of the Congolese army. Banro upon as appropriate. An important test of transparency is a company’s shares this concern and supports efforts to end the openness to scrutiny. Banro maintains an “open door” trade in illegal minerals. The Business Conduct Policy, the mandate of the policy at all of its operations and welcomes delega - Audit Committee and the Whistle-Blower Policy are tions and legitimate visitors on a regular basis. In The U.S. Dodd-Frank Wall Street Reform and available for downloading on the Company’s website, the past this has included visits by local community Consumer Protection Act (the “Dodd-Frank Act”), www.banro.com. leaders, DRC national and provincial government which was signed into law in July 2010, imposes an

25 countries, and of the role which business can perform in achieving this goal. More recently, attention has focused on the part played by an extractive company’s supply chain and security contractors, and its rela - tionship with public security forces, in protecting security and human rights.

As an explorer and developer, Banro has taken Delivering food and non-food supplies to seriously its responsibilities to promote and protect the Bulengo refugee camp, near Goma, North Kivu province, in December 2012. the security and human rights of its employees and of individuals living in communities near its operations. This is reflected in the Company’s SEC requirement on listed manufacturers to report Extractive Industries Transparency Initiative (EITI) compliance with such global frameworks as the whether their manufactured products contain certain The EITI, created in 2003 through a coalition of International Financial Corporation (IFC) Environ - minerals originating from the DRC and neighbour - governments, companies, civil society groups, mental & Social Performance Standards and with ing countries. This law does not apply directly to investors and international organizations, supports relevant Congolese legislation. Banro’s subsidiaries in the DRC, as these are miners improved governance in resource-rich countries rather than manufacturers. However, Banro’s through the verification and full publication of In becoming an extractive company, Banro recog - Twangiza mine is part of the refinery supply chain company payments and government revenues from nized the need to formalize its commitment to human and refineries require audited verification that the oil, gas and mining. Implementation of EITI is the rights. In 2012, the Company began the process of dore or partially refined gold which is supplied to responsibility of each participating country. The DRC implementing the Voluntary Principles on Security them has been produced in compliance with inter - is one of 23 countries which have achieved EITI and Human Rights. These principles were developed nationally acceptable standards and guidelines and Candidate status. It has implemented EITI on a trial and are supported by a number of countries, is “DRC conflict-free.” basis with a limited number of extractive companies. including Canada, the United States and the United Kingdom, as well as several leading extractive World Gold Council Conflict-Free Gold Standard There are also new requirements under the Dodd- companies and NGOs and are intended to guide The Rand Refinery Limited, which refines Banro’s Frank Act requiring annual public disclosure, companies on security and human rights. During gold production, requires the Twangiza mine to beginning in 2014, of payments made by a resource 2012, a competent and independent third party certify that the gold exported to its South African company to a government. refinery was produced in compliance with the retained by Banro began an in-depth investigation of the security situation within Banro’s operational Conflict Free Gold Standard as established by the Banro fully supports implementation of EITI in the footprint in the DRC, the behavior of the actors in the World Gold Council (WGC) in September 2012. Banro DRC and is compliant with the standards and guide - security establishment, and the way in which Banro does indeed provide such assurance, in the manner lines of the WGC, the OECD and the ICGLR, which relates to the situation and the actors. This third required by the WGC standards and guidelines. together incorporate all EITI essential principles. Banro is also compliant with the conflict-free party auditor delivered a report in late 2012 with recommendations for the formal implementation of standards and guidelines of the Organization for Security and Human Rights revised policies and practices. This will be done in Economic Cooperation and Development (OECD) Governments, extractive companies, and non-gov - 2013. It is clear from the report that Banro has and the International Conference of the Great ernmental organizations around the world have already achieved a sound basis on which to construct Lakes Region (ICGLR), which closely resemble the come to recognize the importance of promoting and a formal framework for the conduct of humane standards and procedures of the WGC. protecting security and human rights in developing relations with its surrounding communities. 26 Banro Corporation Mineral Resources &Reserves

Resources Twangiza Reserves

Property Measured Indicated Inferred Category Tonnage Grade Gold (Mt) (g/t Au) (M oz) Tonnage Grade Gold Tonnage Grade Gold Tonnage Grade Gold (Mt) (g/t Au) (oz) (Mt) (g/t Au) (oz) (Mt) (g/t Au) (oz) Proven 9.98 2.36 0.76

Twangiza Oxide 9.51 2.39 0.73 16.38 1.61 0.85 4.66 0.85 0.13 Probable 15.60 1.56 0.78 Twangiza Transition 6.29 2.21 0.45 134.24 1.29 5.56 21.21 1.09 0.74 & Fresh Proven and Probable 25.58 1.87 1.54 Namoya Oxide 24.58 1.96 1.55 6.36 1.52 0.31 6.64 1.59 0.34 & Free-milling

Cautionary Note to U.S. Investors Lugushwa Oxide 17.03 1.32 0.73 8.86 1.39 0.40 The United States Securities and Exchange Commission (the “SEC”) permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or Lugushwa Transition produce. Certain terms are used by the Company, such as “measured”, 107.60 1.34 4.48 & Fresh “indicated”, and “inferred” “resources”, that the SEC guidelines strictly prohibit U.S. registered companies from including in their filings with the SEC. U.S. Investors are urged to consider closely the disclosure in the Company’s Form 40-F Registration Statement, File No. 001-32399, which may be Kamituga Surface 4.14 2.4 0.32 secured from the Company, or from the SEC’s website at www.sec.gov/ edgar.shtml.

Further information on the Company’s Resources and Reserves is contained Kamituga Underground 3.12 6.00 0.60 in the Company’s Annual Information Form, dated March 26, 2013, which can be viewed by visiting the SEDAR website at www.sedar.com or by visiting the SEC’s website at www.sec.gov/edgar.shtml. Inferred Ounces – TOTAL Measured & Indicated – 10.18 million oz of gold 7.01 million oz of gold Qualified Person Daniel K. Bansah who is Banro’s Vice President, Exploration.

27 www.banro.com

More information on the Company’s activities and its commitment to Corporate Social Responsibility is available on the Company’s website, www.banro.com, and on the website of the Canadian Securities Administrators, www.sedar.com, and the website of the U.S. Securities and Exchange Commission at www.sec.gov/edgar.shtml

Contact: Martin Jones, Chairman of the Banro Foundation +1 416 366 2221 ext 3213 [email protected]

Corporate Office: 1 First Canadian Place 100 King St. West, Suite 7070, P.O. Box 419 Toronto, ON Canada M5X 1E3 Telephone: +1 416 366 2221 Fax: +1 416 366 7722

Bukavu Office: Banro Congo Mining SARL 15 Avenue Mwanga Muhumba, Ibanda

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