The Rapu Rapu Project

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The Rapu Rapu Project
Lafayette Mining Limited
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Overview

• People
• Project
• - Location
• - Description
• - Social and Political
• - Statistics
• Prospects
• - Schedule
• - Financing
• - Company
• - Valuation

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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

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Location
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Ungay Pit Resource
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Mine Plan
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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

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Support

• Pres. Gloria Arroyo, Gov. Bichara and local
  leaders meet on Rapu Rapu

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Support

• VILLAGE
• - MOAs 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

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Project Financials

• Copper cash costs US 0.30/lb
• Gold cash costs US 53/oz
• Zinc cash costs US 0.11/lb
• Add back by-product credits
• Copper cash cost lt US 0.05/lb
• or
• Gold cash cost lt US 20/oz

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Project Financials

• Capex US 45m (owner operated)
• NPV _at_10 A 75m - LAF mkt cap A 24m
• IRR 35
• Payback lt 2 years

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Advantages

• High Margin Operation
• Lower quartile of cost curve
• Profitable throughout the metal price cycle
• Medium Size
• Capex under US50 million
• Short development timetable
• Simple and readily achievable financing
• Solid Partnership
• LG International Corp
• KORES

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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

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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

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Financing

• Capex US45m (owner operated scenario)
• Indicative Underwritten Project Debt US30m
• plus interest capitalisation
• subject to credit approval
• LG/Kores US10m
• Additional funding
• supplier finance/BOO contracts for power plant,
  camp and design plus mine fleet, prestrip cost
  deferral
• value estimate up to US10m

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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

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Exploration
Outcropping massive sulphides
18 km strike length of untested host horizon
High grade sulphides
28 outcrop samples averaging 8.6 g/t Au
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Valuation

• LAF market cap _at_ 8cps A 24m
• Rapu Base Case NPV _at_ 10 A 75m
• NPV / Issued Cap A 0.24
• Hixbar and U/G NPV _at_ 10 A 15m
• Total NPV A 90m
• Total NPV / Issued Cap A 0.29

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The Rapu Rapu Project
Lafayette Mining Limited
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