The Rapu Rapu Project afayette Mining Limited
Dec 17, 2015
The Rapu Rapu Project
Lafayette Mining Limited
Overview
• People
• Project- Location- Description- Social and Political - Statistics
• Prospects- Schedule- Financing- Company- Valuation
Management
• Andrew McIlwain – CEO with a proven track record of project management and operations
• David Ronayne Mahony – Executive Director with extensive finance and banking background
• Rod Watt - Country Manager with more than 7 years in-country experience
Location
PASAR Cu SMELTER
Lafayette Mining Ltd.
BatangasBatangasBatangasBatangasBatangasBatangasBatangasBatangasBatangas QuezonQuezonQuezonQuezonQuezonQuezonQuezonQuezonQuezon
Oriental MindoroOriental MindoroOriental MindoroOriental MindoroOriental MindoroOriental MindoroOriental MindoroOriental MindoroOriental Mindoro
Occidental MindoroOccidental MindoroOccidental MindoroOccidental MindoroOccidental MindoroOccidental MindoroOccidental MindoroOccidental MindoroOccidental Mindoro
MANILA
IloiloIloiloIloiloIloiloIloiloIloiloIloiloIloiloIloilo
AklanAklanAklanAklanAklanAklanAklanAklanAklan
CapizCapizCapizCapizCapizCapizCapizCapizCapiz
AntiqueAntiqueAntiqueAntiqueAntiqueAntiqueAntiqueAntiqueAntique
MasbateMasbateMasbateMasbateMasbateMasbateMasbateMasbateMasbate
AlbayAlbayAlbayAlbayAlbayAlbayAlbayAlbayAlbay
Camarines SurCamarines SurCamarines SurCamarines SurCamarines SurCamarines SurCamarines SurCamarines SurCamarines Sur
Camarines NorteCamarines NorteCamarines NorteCamarines NorteCamarines NorteCamarines NorteCamarines NorteCamarines NorteCamarines Norte
SorsogonSorsogonSorsogonSorsogonSorsogonSorsogonSorsogonSorsogonSorsogon
CatanduanesCatanduanesCatanduanesCatanduanesCatanduanesCatanduanesCatanduanesCatanduanesCatanduanes
Rapu Rapu Project
LEGASPI
Northern SamarNorthern SamarNorthern SamarNorthern SamarNorthern SamarNorthern SamarNorthern SamarNorthern SamarNorthern Samar
LeyteLeyteLeyteLeyteLeyteLeyteLeyteLeyteLeyte
Western SamarWestern SamarWestern SamarWestern SamarWestern SamarWestern SamarWestern SamarWestern SamarWestern Samar
Ungay Pit Resource
Mt Cu (%)
Zn
(%)
Au
(g/t)
Ag
(g/t)
Measured 6.51 1.27 2.13 2.59 28.00
Indicated 0.33 0.94 1.42 2.14 20.57
Inferred 0.30 0.80 1.02 1.88 21.12
Total 7.14 1.23 2.05 2.54 27.37
Reserve 5.94 1.4 2.4 2.46 27.19
Mine Plan
Statistics
• First new mine in the Philippines• Favourable tax incentives• Offtake Agreement for all production• Average Annual Production
10,000 t Copper50,000 oz Gold14,000 t Zinc600,000 oz Silver
Support
Pres. Gloria Arroyo, Gov. Bichara and local leaders meet on Rapu Rapu
Support
VILLAGE- MOA’s with villages – relocation, mine development & operation- Land purchase complete
PROVINCIAL- MOA with Province, Public Hearing and Senate Inquiry
- Public support from Governor
FEDERAL- Seeking foreign investment through resource development
- President Arroyo publicly endorsed the project
- ECC & EPEP signed by DENR
- Declaration of Mining Feasibility issued by MGB
Project Financials
• Copper cash costsUS $0.30/lb• Gold cash costs US $53/oz • Zinc cash costs US $0.11/lb
Add back by-product credits:
• Copper cash cost < US $0.05/lb
or• Gold cash cost < US $20/oz
Project Financials
• Capex: US $45m (owner operated)
• NPV @10%: A$ 75m - LAF mkt cap A$ 24m
• IRR: 35%
• Payback: < 2 years
Advantages
• High Margin Operation– Lower quartile of cost curve– Profitable throughout the metal price cycle
• Medium Size– Capex under US$50 million– Short development timetable– Simple and readily achievable financing
• Solid Partnership– LG International Corp– KORES
Advantages
• Complimentary Revenue Streams
– Liquid markets for all products (Cu, Au, Zn, Ag)
• Low Operating Risk
– Conventional technology
– Low risk mining
• Low Political Risk
– Established mining culture and laws
– Export of commodities
– Repatriation of earnings
Project Schedule
• Land purchase complete Qtr 1 ’03
• Credit approval Qtr 2 ‘03
• Commence construction Qtr 2 ‘03
• First ore mined Qtr 4 ‘03
• Plant commissioned Qtr 2 ’04
Financing
• Capex: US$45m (owner operated scenario)
• Indicative Underwritten Project Debt: US$30m– plus interest capitalisation– subject to credit approval
• LG/Kores: US$10m
• Additional funding:– supplier finance/BOO contracts for power plant, camp and design plus
mine fleet, prestrip cost deferral– value estimate up to US$10m
Capital Structure
• Lion Selection Group 32.6%
• Bell Potter Nominees 14.1%
• KAP Investments 4.1%
• National Nominees 3.6%
• Allundy 3.4%
• Commonwealth Custodians 3.3%
• Issued Shares 303.7m
• Top 20 74.3%• Total Shareholders 1,304
Exploration
Buenavista IP Anomaly
Ungay Deposit
Hixbar Mine
Hondo/ DupontArea
QUARTZ SERICITE PYRITE SCHIST
ANTICLINE
GREEN SCHIST
PERIDOTITE
BUENAVISTA IP ANOMALY
1000
0
1200
0
1400
0
1600
0
1800
0
2000
0
14000
12000
10000
8000
6000
4000
6000
8000
High grade sulphides28 outcrop samples
averaging 8.6 g/t Au
Outcropping massive sulphides
18 km strike length of
untested host horizon
Valuation
• LAF market cap @ 8cps A$ 24m
• Rapu Base Case NPV @ 10% A$ 75m
• NPV / Issued Cap A$ 0.24
• Hixbar and U/G NPV @ 10% A$ 15m
• Total NPV A$ 90m
• Total NPV / Issued Cap A$ 0.29
The Rapu Rapu Project
Lafayette Mining Limited