TIDMPFP
RNS Number : 0239S
Pathfinder Minerals Plc
28 September 2017
Embargoed: 0700hrs 28 September 2017
Pathfinder Minerals Plc
("Pathfinder", the "Company" or the "Group")
Half-year results for the six months ended 30 June 2017
Chairman's Statement
Introduction
Approximately three months ago, Pathfinder published its 2016
annual report. In my accompanying statement, I reminded
shareholders that Pathfinder's principal objective is to regain
control of the licensed areas in Mozambique (containing heavy
mineral sand deposits) which were appropriated from the Company's
local subsidiary in 2011 and placed into the control of the
Company's former local partner, Jacinto Veloso. Recent activity has
been dominated by the Company's dialogue with both the Mozambique
Government and with Jacinto Veloso to bring about an end to the
dispute and enable Pathfinder to regain control of its assets.
Steps to recover the Company's assets
We continue to await a decision from the Supreme Court in
Mozambique, principally on whether it will recognise the English
High Court's 2012 ruling that Pathfinder is the valid owner of the
licence-holding subsidiary from which the mining licences were
appropriated. Such recognition would, in the Board's opinion,
ultimately cause the other proceedings in Mozambique to fall away
and compel the Mozambique Government to restore the licensed areas
to Pathfinder's control. Pathfinder is confident it will be
successful in the recognition application based, among other
things, upon relevant Mozambique Supreme Court precedent.
Notwithstanding the Board's confidence in Pathfinder's legal
position, it remains immensely frustrating for all shareholders
that the Company does not have any visibility over when the Supreme
Court will rule on this matter. The directors are asked regularly
by shareholders if anything can be done to accelerate the process
of Supreme Court judgment being handed down. I am afraid neither
we, nor our legal team in Maputo, can compel the Supreme Court to
move any faster.
We are, however, striving to enhance the prospect of an
alternative resolution that does not rely on the courts. It is on
this strategy that Pathfinder's management has spent most of its
time during the period under review and on which encouraging
progress is being made.
As announced on 20 September 2017, our regional representative
in Mozambique is leading discussions on the Company's behalf with
the two principal parties to a would-be resolution: the Mozambique
Government and Jacinto Veloso. While the content of such
discussions is sensitive, Pathfinder has confirmed that the Board
is currently preparing, with the Company's legal counsel, the
framework of an agreement with Jacinto Veloso that would, if
successful, result in the restoration of the licensed areas to
Pathfinder's control.
The terms attached to a potential resolution remain fluid and
there is no certainty of a successful outcome to these discussions.
As Pathfinder is able to control only its role in these
discussions, the Company has no visibility over the timing of which
a resolution may be achieved. The Board is, however, encouraged by
the progress being made towards an alternative resolution and is
optimistic that one can be concluded.
Financial results and current financial position
The Board continues to manage costs prudently in order to
preserve cash. The Company does not have a physical head office.
The overall cost of directors' fees was 28% less during the period
under review than in the first half of 2016; and payments of an
aggregate 19% of directors' fees incurred in the period under
review, in addition to other benefits such as pension
contributions, have been deferred until such time as the Company
can reasonably afford to make these payments without materially
adversely affecting its cash position.
The financial statements of the Pathfinder Group for the six
months ended 30 June 2017 follow later in this report. The Income
Statement shows a reduced loss of GBP275,000 (H1 2016 -
GBP404,000), of which GBP33,000 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 above and in 'Note 2' to these accounts.
The Group's Statement of Financial Position shows a net assets
position (excluding GBP241,000 of deferred salaries and related
benefits as described above and in 'Note 2' to these accounts), of
GBP89,000 (31 December 2016: GBP122,000). The Company had cash of
GBP51,000 at 30 June 2017 (31 December 2016: GBP134,000).
On 21 September 2017, Pathfinder announced that it had raised
gross proceeds of GBP212,500 via a placing of 28,333,333 ordinary
shares at a price of 0.75p per share. The proceeds will provide the
Company with additional working capital as we pursue the recovery
of the mining licences in Mozambique.
Outlook
I recognise that shareholders, having for so long suffered the
loss of value resulting from the appropriation of the Company's
assets, are naturally keen for Pathfinder to provide regular
updates on the status of the ongoing discussions referred to above.
To publish such updates while the terms attached to any potential
resolution remain fluid could, however, disadvantage the Company.
While there are, at present, no material developments to report -
and there is no certainty of a successful outcome - the Board
remains confident that a resolution can be achieved.
We will continue to monitor the Company's financial position and
will seek to ensure the Company has sufficient funds to see through
its strategy to recover the Company's assets.
On behalf of the Board, I am grateful for the continuing support
of shareholders; and I hope to be able to update you with positive
news in due course.
Sir Henry Bellingham
Chairman
27 September 2017
Consolidated Income Statement
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2017 2016 2016
---------- ---------- -------------
GBP '000 GBP '000 GBP '000
Revenue - - -
Other operating income - - 161
Administrative expenses (275) (404) (743)
---------- ---------- -------------
Operating loss (275) (404) (582)
Finance income - - -
---------- ---------- -------------
Loss on ordinary activities
before taxation (275) (404) (582)
Taxation - - -
Comprehensive loss for
the period (275) (404) (582)
========== ========== =============
Loss per share (0.16p) (0.34p) (0.44p)
Statement of Consolidated Financial Position
Unaudited Unaudited Audited
30 June 30 31 December
2017 June 2016
2016
---------- ---------- -------------
GBP '000 GBP GBP '000
'000
Assets
Non-current assets
Property, plant and equipment 1 - 1
---------- ---------- -------------
Current assets
Trade and other receivables 52 23 65
Cash and cash equivalents 51 135 134
----------
103 158 199
---------- ---------- -------------
Total assets 104 158 200
---------- ---------- -------------
Equity
Share capital - issued and
fully paid 18,365 18,322 18,345
Share premium 11,610 11,289 11,445
Retained loss (30,126) (29,673) (29,851)
Total equity (151) (62) (61)
========== ========== =============
Liabilities
Current liabilities
Trade and other payables 255 220 261
Total liabilities 255 220 261
---------- ---------- -------------
Total equity and liabilities 104 158 200
========== ========== =============
Consolidated Statement of Changes in Shareholders' Equity
Share Share Retained Total
Capital Premium Earnings
--------- --------- ---------- --------
GBP'000 GBP'000 GBP'000 GBP'000
1 January 2016 18,289 11,022 (29,269) 42
Loss for the period - - (404) (404)
Share issue 33 267 - 300
30 June 2016 18,322 11,289 (29,673) (62)
--------- --------- ---------- --------
1 January 2016 18,289 11,022 (29,269) 42
Loss for the year - - (582) (582)
Share issue 56 423 - 479
31 December 2016 18,345 11,445 (29,851) (61)
--------- --------- ---------- --------
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)
========= ========= ========== ========
Consolidated Cash Flow Statement
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 31 December
2017 June 2016
2016
---------- ---------- -------------
GBP '000 GBP GBP '000
'000
Cash flows from operating
activities
Operating loss (275) (404) (582)
Depreciation charges - - 1
(Increase) decrease in trade
and other receivables 13 71 29
Increase (decrease) in trade
and other payables (6) 88 129
---------- ---------- -------------
Cash absorbed by operations (268) (245) (423)
Cash flows from investing
activities
Purchase of tangible fixed
assets - - (2)
Share issue, net of expenses 185 300 479
Net movement in cash (83) 55 54
Cash at the beginning of
the period 134 80 80
Cash at the end of the period 51 135 134
========== ========== =============
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 2017 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
2016.
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 27 September 2017.
2. GOING CONCERN
As explained in the 2016 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. On 21 September 2017, Pathfinder announced that it
had raised gross proceeds of GBP212,500 via a placing of 28,333,333
ordinary shares of 0.1p each in the Company at a price of 0.75p per
share. Accordingly, the Board has concluded that it currently
believes that it has sufficient resources to see through its
strategy to recover the assets improperly transferred away from the
Company. The Board will continue to monitor the Company's financial
position and will seek to ensure the Company has sufficient capital
to see through its strategy to recover the Company's assets.
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 the directors in respect of deferred salaries and
related benefits, totalling GBP241,000. The directors have agreed
to defer these amounts until such time as the Company can
reasonably afford to make these payments without materially
adversely affecting its cash position.
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, GBP17,000
(2016 - GBP28,000) was spent in Mozambique. Since, in the interest
of accounting prudence, full provision has been made against the
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 2016).
4. CONTINGENT LIABILITIES
As part of the agreement for the purchase of the shares in its
subsidiary, Companhia Mineira de Naburi SARL, the Company has
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 has 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.
In the event that Pathfinder is successful in regaining control
of the disputed Licences, the Company has agreed to issue ordinary
shares to its regional representative equivalent to up to 25 per
cent of the enlarged issued share capital of Pathfinder. In such
circumstances, it is envisaged that the regional representative
will assist with the ongoing administration of Pathfinder's local
operating subsidiaries and with the Company's relationships with
regional and national authorities and with local communities.
Enquiries:
Pathfinder Minerals Plc
Nick Trew, Chief Executive
Robert Easby, Finance Director
Tel. +44 (0)20 3440 7775
WH Ireland Limited (Nomad and Joint Corporate Broker)
Paul Shackleton or James Bavister
Tel. +44 (0)20 7220 1666
Beaufort Securities Limited (Joint Corporate Broker)
Jon Belliss or Elliot Hance
Tel. +44 (0)20 7382 8300
Vigo Communications (Public Relations)
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 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.
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
IR QDLFLDKFZBBV
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