Maniema-South Kivu Gold Belt,
Democratic Republic of Congo

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Democratic Republic of Congo

Background

The DRC has long been known as a mineralogical jewel box in the heart of Africa. The country has a long history of mineral production stretching from the Kilo Moto and Twangiza Namoya Gold belts in the North East of the Country, through the Columbite and Tantalite (Coltan) and diamond producing areas in the centre of the Country down to the major copper province of Katanga, abutting the Zambian Copper belt in the south.

The country's mineral production was decimated post independence from Belgium in the early 70's. Most of the mineral operations closed for lack of capital funds and exploration was halted as political uncertainty grew. The two civil wars in the late 90's and early this century resulted in further disruption to the development and infrastructure of the country. Eventual intervention by the United Nations brought about an end to hostilities and MONUC the United Nations Mission to Congo maintains a significant presence in the Country along with representation from the European Union; all committed to peace and a democratic election process.

The current political changes and election process underway in Congo will be the key to future development of the Country's vast untapped mineral wealth. Throughout Africa the pattern has been repeated as over a dozen new mines have been opened by mining Companies prepared to assist and finance exploration and development in Africa. Countries such as Mali, Tanzania, Mauritania, Guinea, Sierra Leone and numerous other areas have successfully re-developed their mineral industry and built new mines as political and fiscal reform has taken place.

Changes in DRC have been slower to emerge, however in 2003, the DRC implemented a new mining code with the support of the World Bank. This has led to a revival of interest in the country by several major and junior international mining and exploration companies. Meanwhile, World Bank, IMF, USAID, and Paris Club, as well as the European Union and South Africa, are committing billions of dollars to social and economic recovery in the country. Free elections were held in the DRC in July 2006, that has led to a democratically elected Parliament and Senate. Currently the Election process continues with voting for the second round to elect the Country's new president.

These changes will allow the Democratic Republic of Congo to rapidly emerge as one of the mineralogical powerhouses of Africa. Already many major Companies including De Beers, BHP, RTZ, First Quantum, Metorex, and others have established production and exploration opportunities for Copper, cobalt, gold and diamonds. On the exploration front, work over the past two years by Moto Goldmines (symbol MGL:TSX) in the Kilo Moto Gold belt has led to a resource statement containing:

• Indicated resources - 55.40 million tonnes at 2.9 grams per tonne gold for 5.076 million ounces of gold; and

• Inferred resources - 88.63 million tonnes at 3.8 grams per tonne gold for 10.794 million ounces of gold. (Source: http://www.motogoldmines.com/ )

La Quinta Resources Joint Venture Agreement in the DRC

In August of 2006 MJA Swallow, one of La Quinta's directors travelled to Kinshasa, the capital of the DRC at the invitation of Wa Balengela Kasai-Investments Congo sprl, ("WB. Kasai-Congo sprl, or WBK".) WBK is a Congolese mineral company based in Kinshasa that holds a number of extensive mineral leases in the DRC. WBK's principals are Dr. F. Bodika, a Congolese thoracic surgeon and Mr. J Malaba, a Congolese businessman both of whom have extensive experience in the mineral industry. WBK originally established a number of major land positions in the DRC, covering large areas of a number of the prominent mineral belts in the Country. One such area covers the southern extension of the Twangiza Namoya gold belt in Maniema and South Kivu Province. This area was covered by ZER VII and ZER XIII exploration permits established in 1997 under the previous mining tenure act.

Following the move towards democratic government and the changes in the mining tenure act, WBK subsequently converted these licences to the current Code Miniere of the Repubique Democratique du Congo in the form of 32 Permis de Recherches covering some 7,010 square kilometres abutting and occupying all the ground between Banro Corporation's (TSX:BAA) Lugushwa and Namoya properties in the south of the Twangiza - Namoya gold belt and extending some 120 kilometres to the West.



The properties in the licence area have a long history of both formal and informal mining, having been extensively mined, mostly for alluvial gold, by BelgikaOr from the early 1940's to the 1970's when formal mining and exploration ceased. At least six sites of previous mining can be easily identified and artisanal mining continues on much of the target areas today.

At the meetings in Kinshasa LAQ and WBK negotiated a Memorandum of Understanding to form a Joint Venture Company to explore the licence areas held by WBK in the Twangiza-Namoya Gold belt. The Memorandum of Understanding with WBK gives La Quinta the option to earn into up to 80% in a Joint Venture Company with WBK, by funding US$ 10 million in exploration expenditure over five years, with a minimum expenditure of $2 million per year. Assuming that the exploration work is successful and properties can be taken to Feasibility Study status over the first five years of the agreement, then the Joint Venture will be entitled develop the properties within the 7,010 square kilometre exploration licence areas by converting them to an Exploitation licence or licences, in accordance with the Code and Regliement Miniere of the DRC.

Upon the commencement of the Joint Venture, La Quinta will hold a 10% interest in the Joint Venture Company and WBK will hold 90% and La Quinta shall have the right to increase its interest in the Joint Venture Company to an 80% interest by making payments to WBK totalling US$1,500,000 and issuing 8,000,000 shares of La Quinta over the first three years of the agreement. Upon completion of all share issuances and cash payments, La Quinta will be vested with an 80% interest and WBK with a 20% interest in the Joint Venture Company.


Dr Francois Bodika and Malcolm Swallow sign the Memorandum of Understanding.

During the exploration period ownership of the concessions shall remain vested with WBK and will be transferred to the Joint Venture Company on completion of the Feasibility Study as contemplated in the MOU and formal documentation. WBK shall be responsible with assisting the Joint Venture Company with government relations, local liaison and local management and expediting of the projects in the DRC.

On any gold production, the Joint Venture Company shall pay WBK a net smelter return of 2.5%. La Quinta has agreed to pay Finders or Agents fees in respect of the transaction in the amount of 500,000 shares payable by La Quinta in six instalments, over the first three years of the agreement; prorated and made at the same time as La Quinta is required to make share payments to WBK. There is an Area of Mutual Interest (AMI) established stretching 20 kilometres from the outside borders of any of the rights held in the Joint Venture Company. The parties have also agreed that the Joint Venture Company will establish operating, local relations and finance committees with representatives of each of the parties. As part of the agreement, LAQ will offer two representatives of WBK representation on the Board of LAQ.

The MOU provides for a due diligence period during which La Quinta and its advisors have the right to conduct appropriate due diligence into the terms, conditions, validity and enforceability of WBK's concessions and exploration rights in the DRC.

The Next Steps

La Quinta and WB Kasai are now working together to fulfill the requirements of the due diligence period and to move as rapidly as possible into exploration of the Joint Venture area. Initial work will include visiting known sites of mineralisation, with a "name consultant" in order to prepare an industry standard 43-101 acquisition report. As part of this effort, work will commence on data compilation, to gather together as much old mining data and records as possible and to combine this with more modern airborne geophysics and satellite imagery to generate a comprehensive GIS model of the total licence areas. This work will take place before the end of 2006 and will form the basis of the ongoing geological objectives of the Joint Venture Company.

Objectives of the DRC-JV

The aim of the DRC-JV company will be to develop the maximum number of viable mining projects which can be taken to exploitation permit. To do this the DRC-JV will:

1. Commence preliminary exploration on the known mineral occurrences on the licence areas. This work would include:

   1. Detailed mapping and sampling of the known mineral occurrences

   2. Trenching of known mineral occurrences

   3. Drilling of mineral occurrences as appropriate.

   4. Development of resource tonnages

   5. Increased drilling to raise confidence levels in the resources from inferred to indicated resources.

   6. Development of metallurgical testwork to allow definition of economic mineralisation.

   7. Development of a feasibility study to allow the taking of an Exploitation Licence

2. Carry out regional prospecting across the licence areas by means of:

   1. Airborne geophysics

   2. Stream sediment sampling

   3. Regional geological mapping

   4. Regional geological prospecting

   5. Other regional exploration methods to allow identification of targets for detailed exploration as contemplated above.

3. Develop a Social program including:

   1. Working with the local landowners to establish local agricultural cooperatives to provide limited mechanisation, seed purchase and other agrarian programs,

   2. Working with local government to establish the infrastructure for clinics and schools across the main licence areas.

   3. While exploring the licence areas, the JV will assist the artisanal miners to secure a return on their production.

   
   

   In Conclusion
   
   Glen R.Watson, Senior Vice President and Director of Corporate Development "I am very excited to enter into the MOU and to join together in a Joint Venture Company with Dr. Bodika, Mr. Malaba and WBK. Their long history and knowledge of the DRC and its mineral industry when coupled with their outstanding land position in the Twangiza - Namoya gold belt, on trend and between two of Banro Corporation's premier properties, when coupled with the historic gold production from the area, makes this a highly prospective and very attractive package. Working with WBK will give us a huge advantage in the DRC and we are working to mobilise exploration teams with WBK, at the earliest possible opportunity."