TIDMPFP
RNS Number : 5717U
Pathfinder Minerals Plc
08 April 2016
Embargoed: 0700hrs 8 April 2016
Pathfinder Minerals Plc
("Pathfinder" or the "Company")
Mozambique Court Update
The Board of Pathfinder announces that the First Commercial
Section of the Judicial Court of the City of Maputo (the "Maputo
Court") has recently handed down judgment (the "Maputo Judgment"),
on a preliminary issue raised in one of the various outstanding
legal actions pending in Mozambique, declining to hear a challenge
brought by the Company's subsidiary, IM Minerals Limited ("IMM"),
to the validity of a shareholder resolution of Companhia Mineira de
Naburi SARL ("CMDN"), purportedly passed in May 2009 (the "May 2009
Resolution"), further details of which are provided below.
The background to the Maputo Judgment is that, as previously
announced, there are a number of legal actions pending in the
Mozambique courts in which the key issue of the ownership of CMDN
by IMM arises. These actions include a challenge by IMM to the May
2009 Resolution. The May 2009 Resolution purports to evidence
confirmation by the shareholders of CMDN that an earlier alleged
agreement, purportedly made between Jacinto Soares Veloso, J.V.
Consultores, Limitada ("JVC"), Diogo Cavaco (the "Defendants") and
CMDN and dated 27 February 2006 (the "2006 Agreement"), should
apply to mining concession licence 4623C, known as the "Moebase
Licence", which was then in the process of being acquired from BHP
Billiton using funds provided by IMM, as well as to licence
760C.
Absurdly, a term of the 2006 Agreement, the authenticity of
which Pathfinder strongly disputes, was that it had to be kept
secret by the Defendants from the board of CMDN (on penalty of US$1
million) unless and until one of the Defendants ceased to be a
director of CMDN. The 2006 Agreement provides, broadly, that CMDN
is obliged to transfer licence 760C to JVC in the event that: (a)
US$2 million is not paid by CMDN to JVC; or (b) the project is not
progressed to export, both within 5 years of the agreement. The
2006 Agreement further absurdly provides that, in that event, the
sum of US$100 million will be paid by CMDN to JVC.
Neither the 2006 Agreement nor the May 2009 Resolution had been
disclosed to the Company or to its Directors prior to February
2012, despite representations having been received from the
Defendants that there were no undisclosed material contracts. The
Company has disputed the authenticity of the 2006 Agreement and the
May 2009 Resolution and, amongst other actions, commenced an action
in the Mozambique courts to seek annulment of the May 2009
Resolution. The Defendants raised, as a preliminary issue in that
action, the question of IMM's status as a shareholder of CMDN to
challenge the validity of the May 2009 Resolution. Following a
hearing in Maputo in May 2013, the Company was notified by the
Maputo Court on Wednesday (an English translation of which was
received yesterday) that judgment had been delivered on the
preliminary issue.
The Maputo Judgment determines, in summary, that IMM was not a
shareholder in CMDN in May 2009 and does not therefore have legal
standing to bring an action for the annulment of the May 2009
Resolution. In reaching this conclusion the judge appears to have
found that:
-- the effect of an agreement entered into in 2006 (the "Share
Option Agreement") was that IMM would only become a shareholder of
CMDN after it had paid the full amount referred to in the
agreement. As that payment had not been made, IMM did not acquire
shares in CMDN; and
-- the judgment delivered by the Mozambique Court on 21 October
2013 (the "October 2013 Judgment"), which found that IMM was not a
shareholder in CMDN, was binding on IMM.
In giving judgment, the Maputo Court appears to have disregarded
the fact that the Share Option Agreement is governed by English law
and that its validity and effect have already been determined by
the English Court in a judgment which found that IMM validly
acquired 99.99 per cent. of the shares in CMDN, including under the
Share Option Agreement. The Judgment is also inconsistent with two
previous judgments of the Mozambique court delivered in October
2012 and December 2014 (the "December 2014 Judgment"), in which
IMM's challenges to certain resolutions purportedly passed by
CMDN's shareholders without the knowledge of IMM, its 99.99 per
cent. shareholder, were upheld and IMM's ownership of CMDN at that
time (9 December 2011) was expressly confirmed.
In finding that the October 2013 Judgment was res judicata and
binding on IMM, the Maputo Judgment also contradicts the December
2014 Judgment as well as a previous judgment of the Mozambique
Supreme Court, both of which determined that the October 2013
Judgment was not res judicata and binding on Pathfinder/IMM because
Pathfinder/IMM were not a party to the proceedings in which the
judgment was given. Those proceedings were brought by the
Supervisory Board of CMDN and the defendant to that action was
CMDN, both of which were under the de facto control of the
Defendants, who unsurprisingly determined not to provide a defence
to their own action. This led to the facts presented by the
Defendants simply being accepted by the court.
In light of these defects, the Company has instructed its
lawyers in Mozambique to appeal the Maputo Judgment.
Speaking after the judgment, Nick Trew, CEO of Pathfinder, said:
"The Company has binding judgments in its favour from both the
English and Mozambique courts that it validly acquired 99.99 per
cent. of the shares in CMDN and that it was at all material times a
shareholder of CMDN. We will appeal this latest judgment and
continue to take all active steps in the courts and through other
channels to seek recovery of the Licences for the benefit of
Pathfinder and its shareholders and I remain very grateful to the
Company's shareholders for their continued support."
Enquiries:
Pathfinder Minerals Plc
Nick Trew, Chief Executive
Tel. +44 (0)20 3440 7775
WH Ireland Limited (Nomad and Broker)
Paul Shackleton or Mark Leonard
Tel. +44 (0)20 7220 1666
Vigo Communications
Ben Simons or Ali Roper
Tel. +44 (0)20 7830 9700
Email. pathfinderminerals@vigocomms.com
Notes to Editors:
Pathfinder Minerals Plc is incorporated in England & Wales
and is admitted to trading on the AIM market of the London Stock
Exchange.
Companhia Mineira de Naburi S.A.R.L., a subsidiary of Pathfinder
Minerals, was issued mining concession licences 760C and 4623C on
13 September 2004 and 13 July 2011 respectively, each for a period
of twenty-five years. Taken together, these mining concessions
cover approximately 32,000 hectares of land on the Indian Ocean
coast of the Zambezia province of Mozambique, known to contain the
heavy minerals, ilmenite, rutile and zircon.
As announced on 3 February 2012, ownership of these licences is
being disputed.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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