TIDMPFP
RNS Number : 8290S
Pathfinder Minerals Plc
28 June 2018
28 June 2018
Pathfinder Minerals Plc
("Pathfinder", the "Company" or the "Group")
Final results for the year ended 31 December 2017
Chairman's Statement
Introduction
Throughout 2017, the Board continued to pursue the reinstatement
to the Company of the areas previously licensed to Pathfinder in
Mozambique under Mining Concession nos. 760C and 4623C. These
licences were consolidated under Mining Concession no. 4623C (the
"Licence") in November 2011 and transferred without the Company's
knowledge or consent to Pathfinder Moçambique, S.A. ("Pathfinder
Moçambique") - an entity with which neither Pathfinder nor its
subsidiaries are affiliated. Pathfinder Moçambique is owned by the
Company's former local partners.
Steps to recover the Company's assets
In addition to pursuing recognition in Mozambique of the October
2012 English High Court judgment, which confirms, contrary to the
former local partners' assertions, that Pathfinder legally acquired
99.99% of the shares of the entity from which the Licence was
appropriated (the "English Judgment"), significant attempts were
made in 2017 to settle the dispute through discussions with General
Veloso, the principal former local partner (and his daughter Miriam
Veloso on his behalf) and, separately, with the Government of
Mozambique.
Following a number of discussions during which the terms upon
which the parties would be prepared to settle the dispute were
discussed, the Company sent a letter to General Veloso in March
2017 confirming its agreement in principle to a resolution and
providing an outline proposal with respect to the same.
In September 2017, the Company sent a proposed framework for an
agreement to resolve the dispute to Miriam Veloso. During October
2017, the Company's regional representative and Miriam Veloso
exchanged communications regarding the framework agreement.
Following further exchanges in October 2017 in which General Veloso
and Miriam Veloso requested that an acceptable proposal should be
tabled, a meeting took place in November 2017 in Maputo between the
Company's regional representative, General Veloso and Miriam
Veloso.
A further meeting with General Veloso took place after the
year-end, in January 2018, at which the Company was represented by
Professor Waty (an eminent expert on Mozambican law). Following
that meeting, a request was made that the framework agreement
should be broken down into a "road map" to enable General Veloso
and Miriam Veloso to identify the stages required towards closure
and this was provided later the same month.
These discussions ended in February 2018 upon receipt of a
communication from Diogo Cavaco, one of the former local partners,
informing the Company that there was no ongoing settlement
negotiation. While the Board remains open to resuming a dialogue
with the former local partners on a reasonable basis, it is focused
on enforcing the Company's rights through the judicial process.
Paramount to the legal process is the Company's application,
lodged with the Supreme Court in Mozambique in August 2013, for
recognition of the English Judgment. While the timing of the ruling
is unknown, and there can be no certainty of a favourable decision,
the Board believes a favourable decision - effectively recognising
Pathfinder's ownership of the entity from which the Licence was
appropriated - would ultimately cause the Ministry of Mineral
Resources of Mozambique to put the Licence back to that entity,
under Pathfinder's control, and enable the Company to resume
development of the project.
I should like to remind you that the Company's first application
for recognition in Mozambique of an English judgment - in that
instance, orders by the English court for costs aggregating
GBP106,000 to be paid by the former local partners - was
unsuccessful (as announced in September 2015). Following its
ruling, the Supreme Court admitted a 'harmonisation of laws' appeal
from the Company against this unfavourable decision (an appeal
based on the existence of a previous conflicting decision), but
subsequently dismissed the appeal (as announced in October 2017) on
procedural grounds.
The Company is advised in respect of its application for
recognition of the English Judgment that the Supreme Court is not
bound to follow its previous decisions.
Financial results and current financial position
The Company was required to conduct three share issues for cash
during the year under review to enable us to continue our strategy
to recover the Licence and meet our ongoing obligations as an
AIM-listed company. Accordingly, Pathfinder raised approximately an
aggregate GBP620,000 in net proceeds from three fundraisings in
March, September and December 2017. We are grateful for the support
of investors and continue to believe that the Licence, if
recovered, will deliver considerable value to shareholders as a
world-class mineral sands asset.
We continue to manage costs conservatively. Payments of an
aggregate 30% of directors' fees incurred in the period under
review, in addition to other benefits such as pension
contributions, have been deferred until the Company is in
materially better financial health. With effect from 1 April 2018,
the fixed salaries of Nicholas Trew and myself were reduced by 50%
until such time as the Licence has been recovered.
The financial statements of the Pathfinder Group for the year
ended 31 December 2017 follow later in this report. The Income
Statement shows a loss of GBP615,000 (2016 - GBP582,000) of which
GBP94,000 relates to directors' fees and pension contributions that
are recorded as a liability in 'Trade and other payables' but
actual payment of which have been deferred as described above and
in 'Note 20' to these accounts.
The Group's Statement of Financial Position shows net assets
(excluding GBP277,000 of deferred fees and pension contributions
described in 'Note 20') at 31 December 2017 of GBP224,000 (31
December 2016 - GBP122,000). The assets are held largely in the
form of cash deposits (totalling GBP248,000 at the end of the
period). A further GBP250,000 was raised after the year end, in May
2018, through a placing of new shares with investors.
Outlook
Earlier this month, Pathfinder announced that the Supreme Court
in Mozambique had notified the Company of its request for final
written submissions in relation to Pathfinder's application for
recognition of the English Judgment. The Company has duly complied
and has lodged final written submissions with the Supreme Court.
Pathfinder is confident in its application and is encouraged by the
request for final written submissions, which shows that the court
is advancing - albeit slowly - through its process.
The length of time it is taking for the Supreme Court to opine
on the application for recognition is frustrating for us all.
However, the Board believes that, absent a speedier resolution via
Mozambique's Ministry of Mineral Resources, pursuing the judicial
process is the main avenue available to Pathfinder to recover
meaningful value for Pathfinder's shareholders.
The Board's primary focus remains to pursue the reinstatement of
the appropriated Licence. However, the Board also receives other
approaches from time to time for broader opportunities in mineral
sands projects. Any meaningful acquisition of a new project would
likely be considered a reverse takeover under the AIM rules for
companies and the Board would of course come back to shareholders
for approval on any significant investment, consistent with our AIM
rule obligations.
We announced last month the Company's intention, subject to
customary directorate appointment regulatory due diligence, to
appoint Blair Sergeant and Simon Farrell to the Board as Chief
Executive Officer and Non-executive Co-chairman respectively. A
further announcement concerning the proposed appointments of Mr
Sergeant and Mr Farrell will be made in due course.
On behalf of the Board, I should like to thank all shareholders
for their continuing support while the Board is doing everything in
its power to recover the Licence on terms which represent
meaningful value for Pathfinder's shareholders.
Sir Henry Bellingham
Chairman
28 June 2018
Consolidated Income Statement
for the Year Ended 31 December 2017
2017 2016
GBP'000 GBP'000
CONTINUING OPERATIONS
Revenue - -
Other operating income - 161
Administrative expenses (615) (743)
-------- --------
OPERATING LOSS (615) (582)
Finance income - -
-------- --------
LOSS BEFORE INCOME TAX (615) (582)
Income tax - -
-------- --------
LOSS FOR THE YEAR (615) (582)
======== ========
Loss attributable to:
Owners of the parent (615) (582)
======== ========
Loss per share expressed in pence per
share:
Basic (0.33) (0.44)
Diluted (0.33) (0.44)
======== ========
Consolidated Statement of Comprehensive Income
for the Year Ended 31 December 2017
2017 2016
GBP'000 GBP'000
LOSS FOR THE YEAR (615) (582)
OTHER COMPREHENSIVE INCOME - -
-------- --------
TOTAL COMPREHENSIVE INCOME FOR THE YEAR (615) (582)
======== ========
Total comprehensive income attributable
to:
Owners of the parent (615) (582)
======== ========
Consolidated Statement of Financial Position
31 December 2017
2017 2016
GBP'000 GBP'000
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment - 1
Investments - -
--------- ---------
- 1
--------- ---------
CURRENT ASSETS
Trade and other receivables 56 65
Cash and cash equivalents 248 134
--------- ---------
304 199
--------- ---------
TOTAL ASSETS 304 200
========= =========
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 18,416 18,345
Share premium 11,997 11,445
Retained earnings (30,466) (29,851)
--------- ---------
TOTAL EQUITY (53) (61)
--------- ---------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 357 261
--------- ---------
TOTAL LIABILITIES 357 261
--------- ---------
TOTAL EQUITY AND LIABILITIES 304 200
========= =========
The financial statements were approved by the Board of Directors
on 28 June 2018 and were signed on its behalf by:
RP Easby - Director
Company Statement of Financial Position
31 December 2017
2017 2016
GBP'000 GBP'000
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment - 1
Investments - -
--------- ---------
- 1
--------- ---------
CURRENT ASSETS
Trade and other receivables 56 65
Cash and cash equivalents 248 134
--------- ---------
304 199
--------- ---------
TOTAL ASSETS 304 200
========= =========
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 18,416 18,345
Share premium 11,997 11,445
Retained earnings (34,465) (29,850)
--------- ---------
TOTAL EQUITY (52) (60)
--------- ---------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 356 260
--------- ---------
TOTAL LIABILITIES 356 260
--------- ---------
TOTAL EQUITY AND LIABILITIES 304 200
========= =========
The financial statements were approved by the Board of Directors
on 28 June 2018 and were signed on its behalf by:
RP Easby - Director
Consolidated Statement of Changes in Equity
for the Year Ended 31 December 2017
Called Retained Share Total
up share earnings premium equity
capital
GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 January 2016 18,289 (29,269) 11,022 42
Changes in equity
Issue of share capital 56 - 423 479
Total comprehensive income - (582) - (582)
---------- ----------- --------- --------
Balance at 31 December 2016 18,345 (29,851) 11,445 (61)
---------- ----------- --------- --------
Changes in equity
Issue of share capital 71 - 552 623
Total comprehensive income - (615) - (615)
---------- ----------- --------- --------
Balance at 31 December 2017 18,416 (30,466) 11,997 (53)
========== =========== ========= ========
Company Statement of Changes in Equity
for the Year Ended 31 December 2017
Called Retained Share Total
up share earnings premium equity
capital
GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 January 2016 18,289 (29,269) 11,022 42
Changes in equity
Issue of share capital 56 - 423 479
Total comprehensive income - (581) - (581)
-------------- ----------- --------- --------
Balance at 31 December 2016 18,345 (29,850) 11,445 (60)
-------------- ----------- --------- --------
Changes in equity
Issue of share capital 71 - 552 623
Total comprehensive income - (615) - (615)
-------------- ----------- --------- --------
Balance at 31 December 2017 18,416 (30,465) 11,997 (52)
============== =========== ========= ========
Consolidated and Company Statement of Cash Flows
for the Year Ended 31 December 2017
2017 2016
GBP'000 GBP'000
Cash flows from operating activities
Cash absorbed by operations (509) (423)
-------- --------
Net cash from operating activities (509) (423)
-------- --------
Cash flows from investing activities
Purchase of tangible fixed assets - (2)
Interest received - -
-------- --------
Net cash from investing activities - (2)
-------- --------
Cash flows from financing activities
Share issue 664 495
Share issue expenses (41) (16)
-------- --------
Net cash from financing activities 623 479
-------- --------
Increase in cash and cash equivalents 114 54
Cash and cash equivalents at
beginning of year 134 80
-------- --------
Cash and cash equivalents at
end of the year 248 134
======== ========
Notes to the Statements of Cash Flows
for the Year Ended 31 December 2017
1. RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH ABSORBED BY
OPERATIONS
Group
2017 2016
GBP'000 GBP'000
Loss before income tax (615) (582)
Depreciation charges 1 1
Finance income - -
-------- --------
(614) (581)
Decrease in trade and other receivables 9 29
Increase in trade and other payables 96 129
-------- --------
Cash absorbed by operations (509) (423)
======== ========
Company
2017 2016
GBP'000 GBP'000
Loss before income tax (615) (581)
Depreciation charges 1 1
Finance income - -
-------- --------
(614) (580)
Decrease in trade and other receivables 9 29
Increase in trade and other payables 96 128
-------- --------
Cash absorbed by operations (509) (423)
======== ========
2. CASH AND CASH EQUIVALENTS
The amounts disclosed on the Statements of Cash Flows in respect
of cash and cash equivalents are in respect of these Statement of
Financial Position amounts:
Group Company
Year ended 31 December 2017
31.12.17 1.1.17 31.12.17 1.1.17
GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 348 134 248 134
========= ======== ========= ========
Year ended 31 December 2016
31.12.16 1.1.16 31.12.16 1.1.16
GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 134 80 134 80
========= ======== ========= ========
Annual Report and Accounts
Copies of the Annual Report and Accounts, together with a notice
convening an annual general meeting, are being posted to
shareholders tomorrow and will be available within the Investor
Relations section of the Company's website
www.pathfinderminerals.com.
Annual General Meeting
The annual general meeting of the Company will be held at 10.30
a.m. on 1 November 2018 at Becket House, 36 Old Jewry, London, EC2R
8DD.
Enquiries:
Pathfinder Minerals Plc
Nick Trew, Chief Executive
Tel. +44 (0)20 3440 7775
WH Ireland Limited (NOMAD and Corporate Broker)
James Joyce or Jessica Cave
Tel. +44 (0)20 7220 1666
Vigo Communications (Public Relations)
Ben Simons or Kate Rogucheva
Tel. +44 (0)20 7390 0230
Email. pathfinderminerals@vigocomms.com
Notes to Editors:
Pathfinder Minerals Plc is incorporated in England and is
admitted to trading on the AIM market of the London Stock
Exchange.
CMdN, a subsidiary of Pathfinder, 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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR FKODNKBKBKAB
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