Mining groups Banro Corp. and China Gold International Resources Corp., both listed on the Toronto Stock Exchange (TSX), have signed a memorandum of understanding (MOU) to pursue talks on a proposed joint venture partnership to develop gold mines in the Democratic Republic of Congo.

The two companies, under the terms of the MOU, are expected to jointly develop Banro's Twangiza gold mine located near the eastern DRC city of Bukavu where work on Phase 1 of its development is now in progress, as well as a proposed Phase 2 mine and a planned hydro power project.

Banro said in announcing the MOU on Thursday that while it has "sufficient funds" to develop the Twangiza Phase 1 mine, a potential partnership "would fast-track development of all of Banro's properties located along the Twangiza-Namoya gold belt."

China Gold International, which is also listed in Hong Kong, is the 39.3 percent-owned overseas vehicle of China National Gold, a Chinese state-owned enterprise and the largest gold producer in China, said Banro.

Twangiza Phase 1, scheduled for completion late this year, is designed to produce over 100,000 ounces of gold per year, with future expansion to more 300,000 ounces of gold per annum, according to Banro's website.

Banro says it owns four major, wholly-owned gold projects, each with mining licenses, along the 210 kilometer-long Twangiza-Namoya gold belt in the South Kivu and Maniema provinces of the DRC.

The Namoya property, located some 225 kilometers southwest of Bukavu, consists of one exploration permit covering an area of 174 square kilometers, Banro says.

The MOU with China Gold International, Banro said on Thursday, still represents an early stage of discussions between the parties, with a definitive agreement providing for the specific transaction structure and other terms still to be negotiated by the parties.

"The MOU does not create an obligation on the part of either party to consummate any transaction. There is no assurance that any transaction will be consummated," Banro said.