Operators of the Rapu-Rapu mining project in the Philippines have sought court protection from creditors as investors hold talks with a South Korean group for a possible buy-in, the managers said.
One of the first projects to reach the production stage after a new Philippines mining law took effect in 2005, Rapu-Rapu has been hit by troubles by its Australian majority shareholders, Lafayette Mining Ltd., which went under administration late last year.
The administrators are looking for ways to lighten the company's debt burden through the sale or restructuring of its debts or by raising new capital.
"The (Philippines) petition was deemed necessary by the Filipino management team to protect local interests since negotiations with the Korean group and the Australian administrator that is now supervising the project's mother company might take some time," the team said in a statement.
Bayani Agabin, spokesman for the team, said the talks might require the unidentified Korean investor to put in more funds for equity, operations, and debt restructuring.
"When the new investments come in and our debts are restructured, then we can resume debt payments," Agabin said.
He said the court protection sought would "make sure our revenues go into funding our operations first."
Lafayette Mining holds a 74 percent stake in the Rapu-Rapu polymetallic project on Rapu-Rapu island, off the Bicol peninsula southeast of Manila.
The company previously said the project was expected to produce copper, gold, silver and zinc valued at 350 million dollars over a six-year period.bur/cgm/lh