MAC: Mines and Communities

Australia's Lafayette Unveils A$42m Funding, New Md

Published by MAC on 2006-03-23
Source: Dow Jones Newswires ()

Australia's Lafayette Unveils A$42M Funding, New MD

By James Attwood, Dow Jones Newswires

23rd March 2006

SYDNEY - Australia's Lafayette Mining Ltd. (LAF.AU) Thursday announced a A$41.8 million funding package, a new managing director and base metal commissioning at Rapu Rapu mine in the Philippines.

The funding package includes ABN AMRO Morgans placing A$11 million in shares to domestic and overseas investors and institutions, with a further A$5.5 million earmarked for placement with an unnamed overseas institution subject to shareholder approval.

In addition the company said AuSelect Ltd has agreed to take a A$3 million placement, while Lion Manager Ltd has agreed to A$2 million.

At the same time Lafayette's 26% joint venture partners in Rapu Rapu, LGI and KORES, will kick in A$6.7 million in subordinated debt, while the company seeks a US$10 million standby project facility from its Rapu Rapu banking syndicate.

In the same statement, which effectively lifts a trading halt on Lafayette shares, the company said the coordinator of the funding initiatives, investment banker David Baker, will take over from Andrew McIlwain as managing director.

It said McIlwain resigned Thursday both as managing director and as a director.

Meanwhile Lafayette said commissioning of Rapu Rapu's base metal component has started, with first production slated for mid April, after satisfying "technical remedial requirements" imposed by the Philippine authorities.

In November Lafayette stopped processing gold at Rapu Rapu due to two separate discharge incidents, one of which contained cyanide, killing marine life.

The stoppage effectively brought forward a scheduled gold plant halt to transfer to a base metals circuit ahead of copper and zinc processing at the polymetallic project.

Rapu Rapu was ramping up to 50,000 ounces a year of gold and had planned to start processing base metals late November, adding 10,000 tons of copper concentrate, 14,000 tons of zinc and 600,000 ounces of silver over six years.

The A$41.8 million funding package "provides a substantial financial buffer through the commissioning and ramp up phases," the statement read.

Rapu Rapu is the Philippines' first new foreign-owned mine in three and a half decades and, despite its relatively small size, is regarded by authorities as key to attracting global mining investment back into the country.

Behind Rapu Rapu is a wave of potential new foreign-owned projects, including redevelopment of the Tampakan copper mine by joint venture partners Indophil Resources NL (IRN.AU) and Xstrata PLC (XTA.LN).

At 0012 GMT Lafayette shares were trading at 12 cents up one cent.

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