Transcript Document
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 MANILA Lafayette Mining Ltd. Camarines Camarines Norte Norte Batangas Batangas Catanduanes Catanduanes Quezon Quezon Camarines Camarines Sur Sur Rapu Rapu Project Occidental Occidental Mindoro Mindoro Albay Albay LEGASPI Sorsogon Sorsogon Oriental Oriental Mindoro Mindoro Masbate Masbate Northern Northern Samar Samar Western Western Samar Samar PASAR Cu SM ELTER Aklan Aklan Capiz Capiz Antique Antique Iloilo Iloilo Leyte Leyte Ungay Pit Resource Mt Cu (%) 1.27 Zn (%) 2.13 Au (g/t) 2.59 Ag (g/t) 28.00 Measured 6.51 Indicated Inferred 0.33 0.30 0.94 0.80 1.42 1.02 2.14 1.88 20.57 21.12 Total 7.14 1.23 2.05 2.54 27.37 Reserve 5.94 2.46 27.19 1.4 2.4 Mine Plan Statistics • • • • First new mine in the Philippines Favourable tax incentives Offtake Agreement for all production Average Annual Production 10,000 t Copper 50,000 oz Gold 14,000 t Zinc 600,000 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 costs • Gold cash costs • Zinc cash costs US $0.30/lb US $53/oz US $0.11/lb Add back by-product credits: • Copper cash cost or • Gold cash cost < US $0.05/lb < US $20/oz Project Financials • • • • Capex: NPV @10%: IRR: Payback: US $45m (owner operated) A$ 75m - LAF mkt cap A$ 24m 35% < 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 Credit approval Commence construction First ore mined Plant commissioned Qtr 1 ’03 Qtr 2 ‘03 Qtr 2 ‘03 Qtr 4 ‘03 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$10m Capital Structure • Lion Selection Group 32.6% • Bell Potter Nominees 14.1% • KAP Investments 4.1% • National Nominees 3.6% • Allundy 3.4% • Commonwealth Custodians 3.3% • Issued Shares 303.7m • Top 20 74.3% • Total Shareholders 1,304 Exploration 14000 Outcropping massive sulphides Buenavista IP Anomaly 18 km strike length of untested host 10000 horizon 12000 Hondo/ Dupont Area Hixbar Mine Ungay Deposit 8000 High grade sulphides QUART Z SERICIT E PYRIT E SCHIST 28 outcrop samples averaging 8.6 g/t Au 6000 GREEN SCHIST PERIDOT IT E ANT ICLINE 20000 18000 16000 14000 12000 10000 8000 6000 4000 BUENAVIST A IP ANOMALY Valuation • LAF market cap @ 8cps A$ 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