Lafayette to proceed soon with final phase of Rapu-Rapu test run

Rapu-Rapu Processing Inc. (RRPI), the local subsidiary of Australian mining company Lafayette Mining Ltd., expects to proceed very soon with the final phase of the test run of its polymettalic mine and processing facility in Albay.

"Permission (from the Department of Environment and Natural Resources) to initiate stage three of the commissioning sequence is expected shortly. Processing of the ore will result in the production of first concentrates within a few days," stated David Baker, Lafayette managing director, in the company’s quarterly report submitted to the Australian Stock Exchange.

Baker said RRPI has completed the second phase with continuous steady state operations achieved at designed throughput for all critical sections of the plant. The third and final stage involves the production of base metal concentrates and chemical reagents, and with no hitches, the company will ask the DENR for a permanent lift its order suspending the operations of the mining company

The first phase of the test run involved the circulation of water into the system to test for leakages. The second stage involved the processing of non-ore bearing materials to test the electro-mechanical systems within the base metals plant.

Baker said Lafayette is confident that the project’s comprehensive environmental system will meet the standards of the DENR. He added that Lafayette continues to enjoy the support of its joint venture partners.

LG International and Korea provided a soft loan of $4.81 million during the period of RRPI’s suspension, while its consortium of lenders, provided a $7.8-million credit standby facility.

In November 2005, Lafayette voluntarily suspended its operations following two mining spill incidents in October.

The DENR-approved test run was subjected to specific conditions such as the payment of P10.4 million in fines and penalties for violation of environmental laws.

The other conditions set by the DENR included extending the validity of its surety bond, installing dam monitoring instruments to gauge the stability of the dam, emergency control mechanisms to stop or minimize the damages in case accidents happen during the test run.

Lafayette officials are hoping RRPI can resume full operations and start delivering the first of its contract shipments this September.

The Rapu Rapu polymetallic project started commercial production in July last year, producing an average of about 2,500 ounces of gold a month.

RRPI’s investors include Lafayette Mining Ltd., with South Korea’s LG Collins and Korean Resources as its partners.

The Rapu-Rapu resource currently supports an eight-year mine life, capable of producing 10,000 metric tons (MT) of copper concentrates, 14,000 MT of zinc concentrates, 50,000 ounces of gold and 600,000 ounces of silver annually.