TIDMPFP
RNS Number : 4484R
Pathfinder Minerals Plc
30 June 2020
30 June 2020
Pathfinder Minerals Plc
("Pathfinder" the "Company" or the "Group")
Final Results for the Year Ended 31 December 2019
CHAIRMAN'S STATEMENT
INTRODUCTION
Considerable progress was made during 2019 across several areas
which significantly enhanced Pathfinder's ability and positioning
to regain an interest in Mining Concession no. 4623C in Mozambique
(the "Licence").
The Company engaged new consultants to provide assistance in
pursuing completion of a transaction in respect of the Licence;
agreement on a proposed transaction was reached between Pathfinder
and General Jacinto Veloso who, with his family interests, owns 50
per cent of the entity to which the Licence is currently registered
(the balance being owned by a Hong Kong registered entity); a
revised independent Scoping Study was published resulting in a near
doubling of the Net Present Value attributable to the Licence;
non-binding financing proposals to facilitate a deal and fund
subsequent development of the Licence were received; additional
working capital was brought into the Company; and a leadership
change was implemented.
Subsequent to the period end, Pathfinder was notified that the
Mozambique Supreme Court had rejected the Company's application for
recognition of a judgment by the English High Court (the "English
Judgment") which gave certain declarations to the effect that
Pathfinder's subsidiary, IM Minerals Limited, validly acquired its
shareholding in Companhia Mineira de Naburi S.A.R.L., which
previously held the Licence. This outcome has no bearing on the
English Judgment, which remains in force. While disappointing in
the context of a legal strategy to regain an interest in the
Licence, a negotiated outcome was, and continues to be, the focus
of all parties, including the Veloso family which appears to remain
committed to working towards a commercial resolution that avoids
further protracted delays from legal proceedings.
REVIEW OF ACTIVITY FOR THE PERIOD
Progress towards a potential transaction in respect of the
Licence
On 11 February 2019, the Company announced that it had engaged
Africa Focus Group Limited, a Hong Kong-based company with a
Johannesburg consultancy office specialising in mergers and
acquisitions in southern Africa, to provide assistance to the
Company in pursuing completion of a transaction with the owners of
Pathfinder Moçambique S.A (the current Licence holder) pursuant to
which Pathfinder, or a wholly owned subsidiary of Pathfinder, would
re-establish an interest in the Licence.
On 10 April 2019, the Company announced that it was evaluating
multiple transaction structures, taking into account commercial and
regulatory factors, through which the Company could hold its
interest in the Licence and deliver value for shareholders and that
the principle of a proposed transaction had been agreed between
Path nder and General Jacinto Veloso.
In parallel, the Board commenced discussions with regards to
potential funding strategies (including through partnerships or
debt provision) to facilitate a transaction and finance further
development of the Licence.
Revised independent Scoping Study on the Licence
On 10 April 2019, Pathfinder announced the results of a revised
Scoping Study on the Licence prepared by independent technical
consultant, 2M Mineral Services Limited, which included a revision
of the capital and operating costs and pricing assumptions that
were presented in the original URS/Scott Wilson 2011 scoping study
report. This revision resulted in an estimated pre-tax net present
value ("NPV") at a 10 per cent discount rate of US$1.05 billion;
with projected annual revenues of US$323 million over a mine life
of 30 years. The project internal rate of return ("IRR") is
expected to be approximately 25 per cent. The revised ndings
represented a near doubling of the previously reported equivalent
NPV and an increase of 6.1 per cent in the project IRR.
Leadership changes
On 3 June 2019, the Company announced the appointment of John
Taylor as CEO; on 23 July 2019, the Company announced the
resignation of Simon Farrell as a non-executive director; and, on 2
August 2019, the Company announced the appointment of Dennis
Edmonds as a non-executive director. The new appointments prompted
a review of the Company's strategy and a renewed focus and effort
on negotiations in Mozambique.
The review included a detailed analysis of the different routes
available to Pathfinder to restore an interest in the Licence and
to fund its further development within the context of the Company's
access to capital. Throughout the year, and early into 2020,
wide-ranging meetings were held in South Africa and Mozambique with
representatives of Pathfinder Moçambique S.A., the Company's
Mozambique legal advisers, representatives of the UK Government in
Mozambique, and prospective funding partners.
New funds for working capital
A total of GBP335,000 was raised during the period through cash
subscriptions for 14,909,091 shares in aggregate. A further
GBP239,000 was taken in by the Company during the period as a
result of the exercise of warrants to subscribe for, in aggregate,
15,624,792 shares. New funds provided necessary general working
capital.
Subsequent to period end, the Company completed two new
financings. The first was a convertible loan note for GBP175,000
(announced on 3 April 2020); and the second, an equity fundraising
to issue 38,461,538 new shares for gross proceeds of GBP250,000
(announced on 28 May 2020), which completed on 3 June 2020. Please
refer to both announcements for further details of the
financings.
FINANCIAL RESULTS AND CURRENT FINANCIAL POSITION
In addition to the above-mentioned shares issued in respect of
the cash subscriptions and warrant exercises, during the period the
Company issued 13,293,927 shares to some former directors and a
current director to settle in aggregate GBP309,000 of accrued cash
liabilities. The Company has made a submission to HMRC for the
calculated PAYE on these settlements amounting to GBP139,000 which
was incorrectly not paid at the time. The Company will look to
recover these amounts from the former directors in the coming
period.
The financial statements of the Pathfinder Group for the twelve
months ended 31 December 2019 follow later in this report. The
Income Statement shows a loss of 652,000 (2018 - GBP645,000). The
board reorganisation during the year has resulted in a reduction in
remuneration from GBP195,000 (2018) to GBP121,000 this reporting
period.
The Group's Statement of Financial Position shows net assets at
31 December 2019 of GBP381,000 (31 December 2018 - GBP244,000). The
assets are held largely in the form of cash deposits and
receivables. The Company's cash position as at 25 June 2020 stands
at GBP283,000, which includes the first tranche of the convertible
loan note.
OUTLOOK
The Company remains focused on a negotiated, commercial
resolution to achieve a return of an interest in the Licence. The
recent fundraisings have given the Board the flexibility to
accelerate these efforts in the short term and it is the Board's
intention to intensify negotiations in-person with all relevant
parties in Mozambique as soon as COVID-19 restrictions permit them
to safely do so.
The Board maintains its view that a positive outcome is both
achievable and would be transformational for the Company in
recovering value. We thank all shareholders for their continued
support and look forward to updating them with developments in the
future.
ON BEHALF OF THE BOARD:
Sir H C Bellingham - Chairman
29 June 2020
FINANCIAL STATEMENTS
Consolidated Statement of Comprehensive Income for the Year
Ended 31 December 2019
2019 2018
GBP'000 GBP'000
CONTINUI NG OP ERATIONS
Re v e nue - -
Ad ministrati ve exp e
ns es (652) (645)
OPE R ATING LOSS (652) (645)
Finance income - -
LOSS B EFORE INCOME TAX (652) (645)
Income tax - -
LOSS FOR THE Y EAR (652) (645)
Total comprehensive lo
ss for the year attributable
to:
Equity holders of the pare
nt (652) (645)
Loss p e r s hare from
continuing operations
in p e nce p er s hare:
Basic ( 0.22) ( 0.26)
Dilut ed ( 0.22) ( 0.26)
Consolidated Statement of Financial Position for the Year Ended
31 December 2019
Year ended Year ended
31 December 31 December
2019 2018
GBP'000 GBP'000
NON-CURRENT ASSETS
Property, plant and equipment - -
Investments - -
CURRENT ASSETS
Trade and other receivables 222 192
Cash and cash equivalents 158 52
TOTAL ASSETS 380 244
EQUITY AND LIABILITIES
Capital and reserves attributable
to equity holders of the
Company:
Share capital 18,504 18,458
Share premium 13,307 12,431
Other reserves 45 25
Accumulated deficit (31,762) (31,110)
TOTAL EQUITY 94 (196)
CURRENT LIABILITIES
Trade and other payables 286 440
TOTAL LIABILITIES 286 440
TOTAL EQUITY AND LIABILITIES 380 244
Consolidated Statement of Changes in Equity for the Year Ended
31 December 2019
Called Share Other Accumulated Total
up share premium reserves deficit equity
capital
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 January
2018 18,416 11,997 - (30,465) (52)
------------------------- ---------- --------- ---------- ------------ --------
Changes in equity
Loss for the year (645) (645)
Total comprehensive
loss for the year (645) (645)
------------------------- ---------- --------- ---------- ------------ --------
Issue of share capital 42 439 481
Cost of share issue (5) (5)
Share based payments 25 25
Total transactions with
owners 42 434 25 - 501
------------------------- ---------- --------- ---------- ------------ --------
Balance at 31 December
2018 18,458 12,431 25 (31,110) (196)
------------------------- ---------- --------- ---------- ------------ --------
Changes in equity
Loss for the year (652) (652)
Total comprehensive
loss for the year (652) (652)
------------------------- ---------- --------- ---------- ------------ --------
Issue of share capital 46 876 922
Cost of share issue -
Share based payments 20 20
Total transactions with
owners 46 876 20 - 942
------------------------- ---------- --------- ---------- ------------ --------
Balance at 31 December
2019 18,504 13,307 45 (31,762) 94
------------------------- ---------- --------- ---------- ------------ --------
Consolidated Statement of Cash Flows for the Year E nded 31
Decem ber 2019
Year ended Year ended
31 December 31 December
2019 2018
GBP'000 GBP'000
Cash flows from operating
activities
Operating loss (652) (645)
Adjustments for:
Share-based payments 20 106
Services settled in shares 52
Foreign exchange movement 3 (2)
Net cash flow from operating
activities before changes
in working capital (577) (541)
Changes in working capital:
(Increase)/Decrease in
trade and other receivables (30) (136)
Increase/(Decrease) in
trade and other payables 139 86
Net cash flow used in operating
activities 109 (50)
Cash flow from investing
activities
Interest received
Net cash flow from investing
activities
Cash flow from financing
activities
Proceeds arising as a result
of the issue of ordinary
shares 574 400
Costs related to issue
of ordinary share capital (5)
Interest paid
Net cash flow from financing
activities 574 395
Net increase in cash and
cash equivalents in the
year 106 (196)
Cash and cash equivalents
at beginning of the year 52 248
------------- -------------
Cash and cash equivalents
at end of the year 158 52
------------- -------------
T he financial statem e nts we re appro ved by the Board of
Directors on 29 J une 2020 and w ere signed on its b e half by:
Dennis Edmonds - Director
NOTES
1. TRADE AND OTHER RECEIVABLES
Group Parent Company
2019 2018 2019 2018
GBP'000 GBP'000 GBP'000 GBP'000
Current:
Other debtors 165 109 165 109
VAT 4 4 4 4
Prepayments and accrued
income 53 79 53 79
--------------------- -------- -------- --------
222
222 222 192 222 192
--------------------- -------- -------- --------
2. TRADE AND OTHER PAYABLES
Group Parent Company
2019 2018 2019 2018
GBP'000 GBP'000 GBP'000 GBP'000
Current:
Trade creditors 34 29 34 29
Social security and other
taxes 196 - 196 -
Other creditors 43 401 43 401
Accruals and deferred income 13 10 13 10
-------- -------- -------- --------
286 440 286 440
-------- -------- -------- --------
3. 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 will be available within the Investor
Relations section of the Company's website
www.pathfinderminerals.com .
Enquiries:
Pathfinder Minerals Plc
Dennis Edmonds, Chief Executive Officer
Tel. +44 (0)20 7390 0234
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 / Simon Woods
Tel. +44 (0)20 7390 0234
Email. pathfinderminerals@vigocomms.com
Novum Securities Limited (Corporate Broker)
Colin Rowbury / Jon Belliss
Tel. +44 (0)20 7399 9400
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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