Rapu Rapu Restarts, Mcllwain Exits

Rapu Rapu restarts, Mcllwain exits

By Michael Quinn, MiningNews.net

23rd March 2006

THE problems at Lafayette Mining's Rapu Rapu project have claimed another scalp, with managing director Andrew Mcllwain resigning and replaced by investment banker David Baker. McIlwain's exit followed the closure of the new Rapu Rapu gold and base metals operation late last year after unplanned "discharge events" at the operation, one of which was during sustained torrential rain.

While Lafayette steadfastly maintained the discharges were essentially harmless, the operation was shut down while remedial work was carried out.

In January, Carlos Dominguez, a former minister for natural resources under the administration of President Corazon Aquino, was appointed chief executive of Lafayette's operational arm Lafayette Philippines, and joined Lafayette's board.

Also joining the board at that time was Robin Widdup - head of Lafayette's major shareholder Lion Selection - with then-directors Kevin Robinson and Paul Taylor standing down.

Baker has spent the past four months working closely with Lafayette management in his role as the lead member of the Gryphon Partners' advisory mandate.

As commissioning of the operation restarts, Lafayette has been backed by $A42 million worth of debt and equity, with ABN Amro placing $16.5 million worth of shares and AuSelect subscribing for another $3 million.

In addition, Robin Widdup and Lion Manager have taken a placement of $2 million.

Shares in all equity issues were priced at 11c.

Lafayette's 26% joint venture partner is providing $6.7 million of subordinated debt, while credit approval has been sought from the Rapu Rapu banking syndicate in respect of $US10 million.

At full capacity, Rapu Rapu is expected to annually produce around 10,000 tonnes of copper and 14,000t of zinc - in concentrate - as well as 50,000 ounces of gold and 300,000oz of silver.

Shares in Rapu Rapu were up 1.5c (13.6%) at 12.5c in morning trade.