The Rapu Rapu Project Lafayette Mining Limited. Overview People Project - Location - Description -...

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