3rd qtr activities

Market have reacted very positively to LAF's 3rd QTR activities and cashflow report.

With commodity prices soaring, LAF's fundamentals continue to strengthen, so despite the dilution, the strength of copper and zinc will help negate this. 25c would be still quite possible, if not, even more once the cash starts hitting the accounts.

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Project Restart

The Company advised late in the quarter that commissioning of the base metals plant had commenced. Lafayette confirmed that the work required to satisfy all of the technical remedial requirements imposed by the Philippine authorities had been undertaken.

A submission for restart was lodged with the relevant authorities on 20 March 2006.

Subsequent to quarter end, the Philippine authorities released a report refuting allegations of elevated mercury levels in waters near the island of Rapu Rapu. The Rapu Rapu mine does not use mercury in its production process. Further, the government has confirmed that the Rapu Rapu operations were not responsible for those alleged occurrences.

The response of the Philippine authorities to our submission has been somewhat delayed by the government’s desire to obtain the results of a Presidential Fact Finding Commission, before ruling on the merits of our motion. Whilst this is disappointing, we do not expect significant delay, as the FFC has completed its public hearings and is now finalising its report. We expect that the Department of Environment and Natural Resources will move energetically to confirm
that all of the required remedial measures have been satisfactorily addressed. A positive response would allow us to produce our first concentrate within a few days of full start up.

When in full production, the Rapu Rapu Project will support an initial eight-year mine life, producing approximately 10,000 tonnes of copper in concentrates, 14,000 tonnes of zinc in concentrates, 50,000 ounces of gold and 600,000 ounces of silver annually.