A Congo Gold Mine

One of the most compelling investment opportunities of the bunch may lie with tiny Banro(BAA Quote), a Toronto-based company that has substantial U.S. and British capital backing, a strong management team and, most importantly, four 100%-owned properties in the heart of the country's key 130-mile-long gold belt. If geological testing continues to pan out as it has so far, the company's annual gold production is expected to start as soon as 2009, at around 50,000 ounces a year, and run up to 500,000 ounces annually by 2012, at an average cost of less than $250 an ounce.

Raymond James and RBC Capital Markets analysts who have studied the company believe Banro has access to at least 12 million ounces of gold, and probably much more. At current prices, that would make the company, which now sports a $400 million market cap, worth well over $1 billion in the next couple of years.

High Risk, High Reward

Before your eyes get too big, keep in mind that there are many significant physical and psychological hurdles for the country, once known as the Belgian Congo, to leap. Four million people have died from war, disease and famine in the past decade, and the election -- which is costing the U.N. around $400 million as part of an effort to stabilize all of central Africa -- may fail.

The interim government, led by soft-spoken Joseph Kabilia, has won surprising kudos from Western civil rights organizations and is ahead in the running to form the country's first freely elected leadership. But it has also imprisoned journalists to muffle dissent, so its acceptance on the world stage is not a done deal. Still, almost anything would be better than the outrageous thievery of brutal dictator Mobutu Sese Seko, who was ousted in 1997, or the vicious ethnic strife that followed.

And also note that several other small Canadian developmental miners with significant stakes in the Congo, including Moto Goldmines and First Quantum Minerals, may do better than Banro. So might larger, and thus more diversified, miners with claims in the area, such as South Africa-based AngloGold Ashanti(AU Quote) and Gold Fields(GFI Quote), or BHP Billiton, the Aussie.

Of the so-called "junior golds" in the DRC, Banro appears to be special in the quality of its executives, its remarkable focus on providing jobs and scientific development opportunity for native Congolese, and the potential for its properties. After so many stormy years of death and frustration, a Raymond James analyst calls Banro "the gold at the end of the rainbow."

Companies with major mining claims in the DRC
Precious Metals	7/11 Close	Mkt. Cap.	Home
Banro	$9.52	$322 M	Canada
Moto Goldmines	$4.95	$276 M	Canada
BHP Billiton	$43.07	$77 B	Australia
AngloGold Ashanti	$48.25	$12 B	South Africa
Gold Fields	$23.58	$11.6 B	South Africa
Base Metals
Adastra Minerals	$3.54	$288 M	Canada
Anvil Mining	$7.35	$388 M	Canada
African Copper	$1.40	$72 MM	Canada
Phelps Dodge	$80.37	$16.3 B	USA
Equinox Minerals	$1.29	$204 M	Canada
First Quantum Min	$52.50	$3.2 B	Canada
Tenke Mining	$12.11	$708 M	Canada
Diamonds
BRC Diamond	$4.25	$52 M	Canada
Source: RBC Capital Markets

Banro's projects were cobbled together out of stakes owned by European investors in a series of deals in the mid-1990s hammered out by Arnold T. Kondrat, a Toronto venture capitalist with a history of taking on risky efforts. He put together a management team that includes former leaders of Ashanti, Nevsun Resources(NSU Quote) and BHP Billiton who have more than 150 years of experience in directing exploration programs in the Congo, Ghana, Tanzania and South Africa.