TIDMPFP
RNS Number : 5852R
Pathfinder Minerals Plc
30 June 2015
30 June 2015
Pathfinder Minerals Plc
("Pathfinder", the "Company" or the "Group")
Final results for the year ended 31 December 2014
Chairman's Statement
Introduction
Over the past year as your chairman, I have developed a
comprehensive understanding both of the circumstances in which
Pathfinder was deprived of its principal assets in late 2011; and
of the potential remedies available to the Company. I was keen to
make shareholders aware in my June and September 2014 statements
that the process to recover Pathfinder's assets may be a lengthy
one. It should come as no surprise therefore that it is proving to
be so. The process is, however, advancing.
Steps to recover the Company's assets
There are a number of routes via which the Company may in due
course restore control of its assets or gain compensation for their
loss.
Absent a more immediate diplomatic resolution which compels the
Government of Mozambique to restore control to Pathfinder of the
areas previously licensed to it, it is hoped that Mozambique's
judicial system will ultimately find, as the English courts have
done, that Pathfinder (through its wholly-owned subsidiary, IM
Minerals Limited) did validly acquire its shareholding in Companhia
Mineira de Naburi S.A.R.L ("CMDN"). This, in turn, would allow
Pathfinder to demonstrate to the Government of Mozambique that, as
a matter of Mozambique, as well as English, law, General Veloso and
Diogo Cavaco (the "Defendants") were not entitled to divert the
mining licences away from CMDN for their personal gain. I am
confident that in such a scenario the Government of Mozambique
would take steps akin to reversing the licence transfer.
Following a resounding judgment from the English High Court in
the Company's favour, Pathfinder is continuing to pursue its legal
rights in Mozambique vigorously-and intends to do so until it is
successful in restoring to shareholders the assets of which they
have been deprived. This will not, however, be a short process.
Notwithstanding the multiple proceedings ongoing in Mozambique it
is likely that, whatever their outcome, appeals will follow. For
this reason, the Company has continuously kept an open mind with
regards to the merits of a mediated settlement with the Defendants.
However, the willingness to date of the Defendants to entertain
reasonable terms for Pathfinder's shareholders makes this an
unlikely scenario.
A further legal route, by which the Company may recover its
assets or seek compensation for its loss from the Government of
Mozambique, remains under advanced consideration.
Legal proceedings in Mozambique
There remain several legal proceedings ongoing in the Mozambican
courts, each of which raises the issue of the jurisdiction of the
English court and/or Pathfinder's status as a shareholder of CMDN.
Shortly before the year-end two significant judgments were handed
down.
On 15 December 2014 Pathfinder announced that the Maputo
Commercial Court had confirmed the validity of the Company's
shareholding in CMDN following a hearing which took place on 6
December 2012. In those proceedings Pathfinder had sought the
annulment of certain resolutions purportedly passed at an
extraordinary general meeting of CMDN on 9 December 2011. The
purpose of these resolutions was to dismiss Pathfinder's
representatives on CMDN's Board and to cancel Pathfinder's shares
in CMDN and reissue them to the Defendants. It was therefore wholly
appropriate that the Maputo Commercial Court granted the annulment
sought. Importantly, in its judgment the Maputo Commercial Court
held that Pathfinder did validly acquire its shareholding in
CMDN.
It came as little surprise that, upon notification of this
judgment, the Defendants applied to the Maputo Commercial Court to
appeal the decision. A decision on the appeal is awaited.
Pathfinder will continue to announce any material developments as
and when it is notified of them.
On 31 December 2014 Pathfinder announced a decision from the
Mozambique Supreme Court in respect of the Company's application
for recognition of orders by the English court for costs
aggregating GBP106,000 to be paid by the Defendants. In its
judgment, the Mozambique Supreme Court rejected the Company's claim
for recognition while upholding, with one exception, all of the
Company's arguments.
The basis upon which the Mozambique Supreme Court rejected
Pathfinder's claim appears to be absurd. The court determined that
the jurisdiction clauses contained in the agreements which were the
subject of the dispute were not valid as a matter of Mozambique law
because they conferred jurisdiction on the courts of England and
Wales without specifying which court in England and Wales was to
have jurisdiction (or providing the criteria for selecting the
competent court). Such a ruling has serious implications for other
investors in Mozambique whose jurisdiction clauses would typically
be no different to the standard formulation contained in
Pathfinder's contracts. Pathfinder has asked the Supreme Court for
permission to appeal against its decision.
In the meantime, a further application for recognition - which
includes Pathfinder's application for recognition of the English
High Court's declarations in respect of the Company's acquisition
of shares in CMDN - is still pending. It is not known when judgment
on this further claim might be delivered. It may still be a
considerable time.
Financial results and current financial position
The financial results of Pathfinder are, as for any pre-revenue
company which does not currently have operations, very
straightforward. The most important financial measurement continues
to be whether Pathfinder has sufficient cash to see through its
strategy to recover its assets. The Board continues to exercise
prudence with expenditure and believes the Company does have
sufficient reserves for the foreseeable future.
Nevertheless, the Company wishes to maintain the ability to
raise equity finance in the future should it be required. In that
context, although there are no immediate plans to seek such
funding, in order that the Company might promptly take advantage of
any offer of additional finance, the Board is seeking from
shareholders at the forthcoming Annual General Meeting the powers
required by company law to achieve this. In the light of the
current share price, it is likely that the subscription price for
any further issue of ordinary shares, should such an issue occur,
would be less than their nominal value. Consequently, a share
capital reorganisation will also be necessary in order to effect
such allotment. This is explained more fully in the Notice of
Annual General Meeting which is being sent to shareholders
simultaneously with this report.
The financial statements of the Pathfinder Group for the year
ended 31 December 2014 follow later in this report. The Income
Statement shows a loss of GBP1.1 million (2013 - GBP1.5 million).
The conclusion of the legal action in England during 2013 brought
about a reduction in the rate of expenditure. Since the Company has
been prevented from conducting any activity relating to mining, the
whole of this loss can be attributed to the Company's attempts to
recover its expropriated licences.
The Group's Statement of Financial Position shows net assets at
31 December 2014 of GBP1.1 million (2013 - GBP2.2 million). The
assets are held largely in the form of cash deposits (totalling
GBP1.2 million at the year-end).
Outlook
Pathfinder is advancing the legal proceedings in Mozambique as
efficiently and as expeditiously as the judicial infrastructure
allows. It is a slow process and judgments have been shown to take
up to two years to be handed down. While the Company is prepared to
enforce its rights through the courts, we continue to pursue in the
background other possible routes to achieve a faster resolution;
while at the same time considering other ways to add value to the
Company. Above all the Board's objective is to seek the best
possible outcome for shareholders from the appalling actions which
have afflicted the Company. I believe that a positive outcome is
achievable.
Henry Bellingham
Chairman
29 June 2015
Statement of Consolidated Comprehensive Income
For the Year Ended 31 December 2014
Year ended 31 December 2014 2013
GBP'000 GBP'000
CONTINUING OPERATIONS
Revenue - -
Administrative expenses (1,070) (1,480)
---------- ----------
OPERATING LOSS (1,070) (1,480)
Finance income 14 21
---------- ----------
LOSS BEFORE INCOME TAX (1,056) (1,459)
Income tax - -
---------- ----------
LOSS FOR THE YEAR (1,056) (1,459)
OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE LOSS FOR THE
YEAR (1,056) (1,459)
========== ==========
Loss per share (expressed in pence
per share)
Basic (0.1) (0.1)
Diluted (0.1) (0.1)
========== ==========
Statement of Consolidated Financial Position
31 December 2014
2014 2013
GBP'000 GBP'000
ASSETS
CURRENT ASSETS
Trade and other receivables 61 185
Cash and cash equivalents 1,172 2,134
--------- ---------
1,233 2,319
--------- ---------
TOTAL ASSETS 1,233 2,319
========= =========
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 18,289 18,289
Share premium 11,022 11,022
Retained earnings (28,176) (27,120)
--------- ---------
TOTAL EQUITY 1,135 2,191
--------- ---------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 98 128
--------- ---------
TOTAL LIABILITIES 98 128
--------- ---------
TOTAL EQUITY AND LIABILITIES 1,233 2,319
========= =========
Statement of the Company's Financial Position
31 December 2014
2014 2013
GBP'000 GBP'000
ASSETS
NON-CURRENT ASSETS
Investments - -
--------- ---------
- -
--------- ---------
CURRENT ASSETS
Trade and other receivables 61 185
Cash and cash equivalents 1,172 2,134
--------- ---------
1,233 2,319
--------- ---------
TOTAL ASSETS 1,233 2,319
========= =========
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 18,289 18,289
Share premium 11,022 11,022
Retained earnings (deficit) (28,307) (27,251)
--------- ---------
TOTAL EQUITY 1,004 2,060
--------- ---------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 229 259
--------- ---------
TOTAL LIABILITIES 229 259
--------- ---------
TOTAL EQUITY AND LIABILITIES 1,233 2,319
========= =========
Statement of Changes in Equity
For the Year Ended 31 December 2014
Called Profit Share Total
up and premium equity
share loss
capital account
GBP'000 GBP'000 GBP'000 GBP'000
Group
Balance at 1 January
2013 18,289 (25,661) 11,022 3,650
Changes in equity
Total comprehensive loss - (1,459) - (1,459)
--------- ----------- --------- --------
Balance at 31 December
2013 18,289 (27,120) 11,022 2,191
Changes in equity
Total comprehensive loss - (1,056) - (1,056)
--------- ----------- --------- --------
Balance at 31 December
2014 18,289 (28,176) 11,022 1,135
========= =========== ========= ========
Company
Balance at 1 January
2013 18,289 (25,792) 11,022 3,519
Changes in equity
Total comprehensive loss - (1,459) - (1,459)
--------- ----------- --------- --------
Balance at 31 December
2013 18,289 (27,251) 11,022 2,060
Changes in equity
Total comprehensive loss - (1,056) - (1,056)
--------- ----------- --------- --------
Balance at 31 December
2014 18,289 (28,307) 11,022 1,004
========= =========== ========= ========
Statement of Cash Flows - Group and Company
For the Year Ended 31 December 2014
2014 2013
GBP'000 GBP'000
Cash flows from operating activities
Loss before income tax (1,056) (1,459)
Finance income (14) (21)
(1,070) (1,480)
Decrease (increase) in trade and
other receivables 124 (22)
Decrease in trade and other payables (30) (152)
Net cash from operating activities (976) (1,654)
Cash flows from investing activities
Interest received 14 21
-------- ----------
Net cash from investing activities 14 21
-------- ----------
Decrease in cash and cash equivalents (962) (1,633)
Cash and cash equivalents at beginning
of the year 2,134 3,767
-------- ----------
Cash and cash equivalents at end
of the year 1,172 2,134
======== ==========
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 today and are 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 Becket
House, 36 Old Jewry, London, EC2R 8DD on 7 September 2015 at 11
a.m.
Enquiries:
Pathfinder Minerals Plc
Nick Trew, Chief Executive
Tel.: +44 (0)20 3440 7775
WH Ireland Limited (Nomad and Broker)
Paul Shackleton
Tel.: +44 (0)20 7220 1756
Vigo Communications
Ben Simons or Ali Roper
Tel.: +44 (0)20 7016 9595
Email: pathfinderminerals@vigocomms.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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