no laffing mattter!!!!!!!...get out!!!

Lafayette foreclosure up
By Elaine Ruzul S. Ramos

Creditor-banks are threatening to foreclose on the assets of Lafayette (Philippines) Inc. if its Rapu-Rapu mining project is not reopened by the end of this week.

A senior government official said the banks would likely demand full payment of the mining company’s loans if resumption of operations on the island of Rapu-Rapu was further delayed.

Lafayette loans include $35 million in debt placements, A$140 million in additional hedge, mainly market-to-market exposure, and A$60 million in metal forward sale contracts.

“This week is crucial for LPI. The banks are ready to take drastic action against LPI if the plant remains inoperable,” the official said.

Banks with loan exposure in the project are NM Rothschild & Sons (Australia) Ltd., Australia and New Zealand Banking Group Ltd., ABN AMRO Bank NV (Australia), Investec Bank (Mauritius) Ltd. and Standard Chartered First Bank Korea Ltd.

Earlier, Rapu-Rapu Processing Inc., a unit of LPI, said it might be forced to shut down its mining operations in Albay and incur investment losses of $259 million if the resumption of its operations was further delayed.

The company said the mining project had complied with all 21 conditions and remedial measures imposed by government agencies.

A total of 1,000 workers are in danger of losing their jobs once the operations are closed down.

The investment losses will amount to $259 million consisting of bank loans ($43.4 million), shareholder advances ($39.5 million) and bank hedging exposures ($176.1 million).

The monthly overhead cost to maintain the project during the shutdown period is approximately $2.7 million per month. Foregone revenues are expected to amount to $13 million during the shutdown period.

LPI’s mining operations were shut down in October last year due to cyanide spill from its gold, copper and zinc mine, which polluted a nearby river.

The first incident involved the spillover of pond for processed slurry due to mechanical and human error, while the second involves the spillover of water tailings from the dam induced by heavy rain.

The company said due to the closure, it had missed the $4 million revenue projection for the four-month period.

LPI, a subsidiary of Lafayette Mining Ltd. of Australia, has a 40 percent interest in Rapu-Rapu Processing, one of the two mining concerns of local firm Rapu-Rapu Holdings, which is owned by a local investor Roderick Salazar, holder of the mining claims.