TIDMPFP
RNS Number : 4772B
Pathfinder Minerals Plc
21 September 2018
21 September 2018
Pathfinder Minerals Plc
("Pathfinder", the "Company" or the "Group")
Half-year results for the six months ended 30 June 2018
Chairman's statement
New leadership
Pathfinder announced during August 2018 a number of changes to
the composition of the board and management of the Company.
Notwithstanding the considerable efforts made to date to preserve
the prospects of a resolution, we believe fresh leadership was
necessary to draw a line under the events of the past and optimise
the prospects of enabling the Company's shareholders to realise
value from the mining licence in Mozambique of which we are
pursuing the recovery (the "Licence").
During August and September 2018, Simon Farrell and Scott
Richardson Brown were appointed as Non-Executive Co-Chairman and
Executive Director, respectively; Blair Sergeant joined the
management team in an operational role; Nicholas Trew and Robert
Easby stepped down from the board from their positions as Chief
Executive Officer and Finance Director, respectively; and the
Company terminated the services of its regional representative in
Mozambique, removing associated contingent liabilities. We thank
them for their efforts and perseverance over recent years.
We believe the team has the relevant skills to achieve a
resolution and, if successful, thereafter to take the asset
forward. In particular, Simon Farrell is a mining entrepreneur who
has held a number of senior management and board positions,
principally within the natural resources sector, over the past 30
years. Of the greatest relevance to Pathfinder is Simon's 13 years
as a non-executive director of Kenmare Resources plc. During his
period of directorship until 2013, Kenmare Resources plc
transitioned from exploration to commercial production of the same
mineral sand products from its Moma mine as those which Pathfinder
is seeking to mine along the same coastline of northern
Mozambique.
Scott Richardson Brown is a Fellow of the Institute of Chartered
Accountants in England and Wales with significant experience of
working with AIM, FTSE 250 and FTSE 100 companies. Beginning his
career at Coopers & Lybrand (later PricewaterhouseCoopers) in
the banking and capital markets division, he later became a partner
in the corporate broking and corporate finance division of Oriel
Securities Limited covering a range of sectors. Since leaving Oriel
Securities Limited, Scott has held a number of directorships of
AIM-quoted companies operating within the natural resources sector
and has been involved in a number of listed turnaround and
restructuring situations where he has had to stabilise and rebuild
companies. He brings refreshed focus to Pathfinder's
management.
Blair Sergeant is an experienced mining financier and company
director. He was the Founding Managing Director of Lemur Resources
Limited, an ASX-listed Madagascar coal exploration and development
company, and was the Finance Director of AIM-listed Coal of Africa
Limited from 2008 until 2011, where he worked alongside Simon
Farrell.
The new team has been in situ for a month and is in the early
stages of reviewing potential solutions which it is hoped will
include a fresh start in discussions towards a negotiated
settlement.
Review of the first half
In the early part of 2018, Pathfinder reported that it continued
to pursue a dual-track strategy to recover control of the Licence
either through the legal process or by way of a negotiated
settlement. The Company subsequently reported that the prospects of
a negotiated settlement had stalled.
A general meeting of the Company was requisitioned on 4 April
2018 proposing changes to the composition of the board of
directors.
On 9 May 2018, Pathfinder announced it had raised GBP250,000 in
order to provide additional working capital; along with certain
prospective management changes. The requirement for the Company to
proceed with the abovementioned requisitioned general meeting was
withdrawn on the same date. The Company suffered significant
expense associated with the requisitioned general meeting.
On 22 May 2018, the Supreme Court in Mozambique notified the
Company of its request for final written submissions in relation to
Pathfinder's application for recognition of the 2012 English High
Court ruling in its favour. The Company complied and lodged final
written submissions.
Financial results and current financial position
Pathfinder raised GBP250,000 on 9 May 2018 via a subscription
for 25,000,000 ordinary shares of 0.1p ("Ordinary Shares") each in
the Company at a price of 1p per share. The proceeds provided
additional working capital.
Notwithstanding the expenses associated with maintaining a stock
market listing, the directors are minimising cash outflow. With
effect from August 2018, directors and management's compensation
has been reduced to a fixed sum of GBP25,000 per individual.
Payment of 100 per cent of the compensation will be deferred until
the Company can reasonably afford to make these payments without
materially adversely affecting its cash position. Alternatively,
each individual may elect to convert their accrued deferred
compensation into Ordinary Shares at any time when the Company is
in an open period at the lower of the prevailing price of the
Company's Ordinary Shares or 1.5p.
The financial statements of the Pathfinder Group for the six
months ended 30 June 2018 follow later in this report. The Income
Statement shows an increased loss of GBP392,000 (H1 2017:
GBP275,000), of which GBP51,000 relates to directors' fees and
pension contributions that are recorded as a liability in 'Trade
and other payables' but actual payments of which have been deferred
as described in 'Note 2' to these accounts. Approximately GBP77,000
of the loss relates to expenses incurred in connection with the
requisitioned general meeting of the Company during the period.
The Group's Statement of Financial Position shows a net assets
position (excluding deferred salaries and related benefits as
described in 'Note 2' to these accounts), of GBP132,000 (31
December 2017: GBP223,000). The Company had cash of GBP173,000 at
30 June 2018 (31 December 2017: GBP248,000). The directors
anticipate the Company will be required to raise further funding in
order to continue to meet its working capital requirements.
Sir Henry Bellingham Simon Farrell
Non-Executive Co-Chairman Non-Executive Co-Chairman
20 September 2018
Consolidated Income Statement
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2018 2017 2017
---------- ---------- -------------
GBP '000 GBP '000 GBP '000
Revenue - - -
Administrative expenses (392) (275) (615)
---------- ---------- -------------
Operating loss (392) (275) (615)
Finance income - - -
---------- ---------- -------------
Loss on ordinary activities before
taxation (392) (275) (615)
Taxation - - -
Comprehensive loss for the period (392) (275) (615)
========== ========== =============
Loss per share (0.15p) (0.16p) (0.33p)
Statement of Consolidated Financial Position
Unaudited Unaudited Audited
30 June 30 June 31 December
2018 2017 2017
---------- ---------- -------------
GBP '000 GBP '000 GBP '000
Assets
Non-current assets
Property, plant and equipment - 1 -
---------- ---------- -------------
Current assets
Trade and other receivables 50 52 56
Cash and cash equivalents 173 51 248
----------
223 103 304
---------- ---------- -------------
Total assets 223 104 304
---------- ---------- -------------
Equity
Share capital - issued and fully
paid 18,441 18,365 18,416
Share premium 12,222 11,610 11,997
Retained loss (30,858) (30,126) (30,466)
Total equity (195) (151) (53)
========== ========== =============
Liabilities
Current liabilities
Trade and other payables 418 255 357
Total liabilities 418 255 357
---------- ---------- -------------
Total equity and liabilities 223 104 304
========== ========== =============
Consolidated Statement of Changes in Shareholders' Equity
Share Share Retained Total
Capital Premium Earnings
--------- --------- ---------- --------
GBP'000 GBP'000 GBP'000 GBP'000
1 January 2017 18,345 11,445 (29,851) (61)
Loss for the period - - (275) (275)
Share issue 20 165 - 185
30 June 2017 18,365 11,610 (30,126) (151)
--------- --------- ---------- --------
1 January 2017 18,345 11,445 (29,851) (61)
Loss for the year - - (615) (615)
Share issue 71 552 - 623
31 December 2017 18,416 11,997 (30,466) (53)
--------- --------- ---------- --------
1 January 2018 18,416 11,997 (30,466) (53)
Loss for the period - - (392) (392)
Share issue 25 225 - 250
--------- --------- ---------- --------
30 June 2018 18,441 12,222 (30,858) (195)
========= ========= ========== ========
Consolidated Cash Flow Statement
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2018 2017 2017
---------- ---------- -------------
GBP '000 GBP '000 GBP '000
Cash flows from operating activities
Operating loss (392) (275) (615)
Depreciation charges - - 1
(Increase) decrease in trade and other
receivables 6 13 9
Increase (decrease) in trade and other
payables 61 (6) 96
---------- ---------- -------------
Cash absorbed by operations (325) (268) (509)
Cash flows from investing activities
Purchase of tangible fixed assets - - -
Share issue, net of expenses 250 185 623
Net movement in cash (75) (83) 114
Cash at the beginning of the period 248 134 134
Cash at the end of the period 173 51 248
========== ========== =============
Notes
1. Basis of Preparation
These financial statements have been prepared under the
historical cost convention and on a going concern basis (see note 2
below); and in accordance with International Financial Reporting
Standards and IFRIC interpretations adopted for use in the European
Union.
The financial information for the period ended 30 June 2018 has
not been audited or reviewed in accordance with the International
Standard on Review Engagements 2410 issued by the Auditing
Practices Board. The figures were prepared using applicable
accounting policies and practices consistent with those adopted in
the statutory financial statements for the year ended 31 December
2017. The figures for the year ended 31 December 2017 have been
extracted from these financial statements, which have been
delivered to the Registrar of Companies and which contain an
unqualified audit report.
The financial information contained in this document does not
constitute statutory financial statements as defined by Section 435
of the Companies Act 2006. In the opinion of the directors, the
financial information for this period fairly presents the financial
position, result of operations and cash flows for the period.
This Interim Financial Report was approved by the board of
directors on 20 September 2018.
2. Going Concern
As explained in the 2017 annual report, the availability of
funds to continue to finance the Company's activities has a direct
impact on the ability of the Company to continue to trade as a
going concern. The board has concluded, as set out in the
Chairman's Statement in the Annual Report, that it currently
believes that it has sufficient access to resources to see through
its strategy to recover the assets improperly expropriated from
it.
The board has therefore continued to adopt a going concern basis
for the preparation of these financial statements.
Included within the figure for Trade and other payables are
amounts due to current and former directors in respect of deferred
salaries and related benefits, totalling GBP327,000. The
individuals have agreed to defer these amounts until such time as
the Company can reasonably afford to make these payments without
materially adversely effecting its cash position which is not
expected to be until the Company raises at least GBP2m in any
future further financing.
3. Segmental Analysis
The development of the Group's mining interest in Mozambique
comprises the whole of the Group's activity. The Group has one
activity only. Of the Group's administrative expenses, GBP60,000
(2017 - GBP17,000) was spent in Mozambique. Since, in the interest
of accounting prudence, full provision has been made against cost
of its Mozambique assets, the whole of the value of the Group's net
assets is attributable to its UK assets and liabilities (also the
case at 30 June 2017).
4. Contingent Liabilities
As part of the agreement for the purchase of the shares in its
subsidiary, Companhia Mineira de Naburi SARL, the Company agreed to
pay the vendors a further sum of $9,900,000 if, following further
exploration and appraisal, an agreement is reached for the
construction of a facility for the processing of ore extracted from
the Naburi mineral sands deposit. Similarly, as part of its
agreement for the purchase of the whole of the issued share capital
of Sociedade Geral de Mineracao de Moçambique SARL, Companhia
Mineira de Naburi SARL agreed to pay the vendors, BHP Billiton, a
further sum of $9,500,000 if, following further exploration and
appraisal, an agreement is reached for the construction of a
facility for the processing of ore extracted from the Moebase
mineral sands deposit.
Enquiries:
Pathfinder Minerals Plc
Scott Richardson Brown, Executive Director
Tel. +44 (0)20 3440 7775
Strand Hanson Limited (Nominated & Financial Adviser and
Broker)
James Spinney / Ritchie Balmer / Jack Botros
Tel. +44 (0)20 7409 3494
Vigo Communications (Public Relations)
Ben Simons or Kate Rogucheva
Tel. +44 (0)20 7390 0234
Email. pathfinderminerals@vigocomms.com
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
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END
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