* Second mine in Democratic Rep. of Congo seen in year
* Company's output expected to quadruple by 2015
* Banro may turn to cost-cutting hydroelectric power
By Cameron French
TORONTO, March 7 (Reuters) - Banro Corp aims to start producing gold at a second gold mine in the Democratic Republic of Congo within the next year and may build hydroelectric power plants to cut mining and processing costs at its operations, the company's CEO said on Wednesday.
The company, which currently operates the Twangiza mine and is developing three others in the central African country, could show a nearly four-fold increase output over the next three years from the 120,000 ounces it is on pace to produce in 2012, CEO Simon Village said at the PDAC convention in Toronto, the industry's largest annual gathering.
"Last year, (Banro's) major milestone was to turn this company into a gold producer," Village said at the event, organized by the Prospectors and Developers Association. "I believe the next twelve months are going to be as exciting."
Banro is one of several junior miners rushing to boost production in resource-rich Africa. The introduction of investor-friendly laws in several countries has boosted the continent's share of global metals production.
The company is also one of several Western-based miners - BHP Billiton and Freeport-McMoRan among them - currently at work in DRC, where a new mining code in 2003 and the first democratic elections in decades in 2006 have spurred a mining boom.
Even so, the country can still be an unpredictable place to do business. Canada's First Quantum Minerals, for instance, closed its DRC operations two years ago after its mining permits were revoked by the government.
Getting its second mine into production would bring Banro's output above 200,000 ounces and give the company free cash flow above $200 million a year at current gold prices, Village said.
A $175 million debt financing that closed last week is expected to speed up development of the second mine, known as Namoya. The company is targeting annual production of about 450,000 ounces from four mines by 2015.
Like many of the Africa-focused juniors crowding the floor at this year's PDAC, Banro is based in Canada with offices in Toronto.
Analysts say juniors in Africa will likely become hot M&A targets this year. Village didn't comment on whether he saw the company as a target, but he said making acquisitions was not part of the Banro's growth plan.
Rather, the company has its hands full with its own projects and exploration concessions along a 210 km (130 mile) stretch of the Twangiza-Namoya gold belt in the eastern part of DRC.
Village likens the region to the Ashanti belt in Ghana, one of the richest gold districts in the world.
Banro will also begin this year to investigate the possibility of building hydroelectric generators near its projects, which would substantially cut the costs of buying diesel fuel and trucking it to the sites.
"It is a project we're looking at. We've now got the money to embark on that study and I believe it's something that's able to be delivered under the next two to three years, and will certainly curb our inflation from a cost perspective," said Village.
"That would then make this company one of the lowest cost gold producers in the world."