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Banro halts gold mine in Congo due to violence, shares collapse

Namoya mine. (Image courtesy of Banro Corporation)

Shares in Canadian gold miner Banro Corporation (TSX:BAA) (NYSE MKT:BAA) were getting hammered Monday after the company revealed it had to suspend operations and temporarily evacuate employees at its Namoya gold mine in eastern Democratic Republic of Congo due to violence.

The Toronto-based miner said the measures were taken after learning that 23 trucks belonging to a contractor of the mine were caught in crossfire between soldiers and a local self-defence militia near the town of Lulimba.

Twenty-three trucks belonging to a contractor of Namoya mine were caught in crossfire between soldiers and a local self-defence militia.

While drivers of those vehicles are safe, militiamen have not yet cleared the release of the trucks, the company said.

The company’s shares suffered with the news, falling more than 13% to 6.26 cents in New York at 10:50AM ET. The Toronto Exchange was closed Monday, in lieu of Canada Day observed Saturday July 1.

The incident is the latest in a string of direct and indirect violent acts against Banro’s operations in eastern Congo.

In February an armed attack on the Twanziga gold mine, another Banro property, left four dead, including three policemen.

Only a month later, five workers including a French national, three Congolese men and a Tanzanian worker were kidnapped from Banro’s Namoya mine. And while the Tanzanian hostage was released shortly after, the other four remained captive until late May.

Banro operates in a particularly violent area of the Congo, were militia groups are still active despite a peace deal with internal rebel groups signed in 2002 and the official end in 2003 to a regional war that killed five million people.

Those group have repeatedly complain against Banro for what they consider displacement and a lack of jobs for area workers, particularly those miners that who had been working on the are before the company started operating there.