Second group shows interest in Lafayette

Another investor group is looking at acquiring majority control of Lafayette Mining Ltd (LML) following a stall in the negotiations with the previously announced Cornerstone Investor.

David Baker, managing director of LML, said he had been informed by the Southeast Asian Strategic Asset Fund (SEASAF) about talks with a number of other investors, although the Cornerstone Investor has “not yet closed the door.”

LML is the Australian-based mother company of the Lafayette Group in the Philippines which has a polymetallic project in Rapu Rapu, Albay.

SEASAF arranged a $15 million investment in LML convertible notes and has been keeping in touch with a number of potential investors for a major restructure of Lafayette and the Rapu Rapu project.

SEASAF in essence wants Lafayette and the project to be debt free and hence financially stronger. It has proposed to the potential investors to buy the existing project debts and hedges at a negotiated discount.

“If those proposals proceed, the funds that we would in the future have to allocate to servicing loans could be made available to the Philippine project instead and to the Rapu Rapu community and its residents,” said Baker.

The project directly employs approximately 1,000 people, most of whom are from the island itself. It also conducts various activities designed to improve life on the impoverished island for residents. These valuable community activities range from raising the quality of education to providing livelihood projects and basic necessities such as roads, water and electricity.

Despite these efforts, militant anti-mining groups and some Church personalities have been asking for the closure of the project and had even accused it of causing an alleged fishkill that was more than 10 kilometers away.