Final Results

RNS Number : 3419J

Pathfinder Minerals Plc

28 June 2017

 

Embargoed: 0700hrs 28 June 2017

Pathfinder Minerals Plc

("Pathfinder", the "Company" or the "Group")

Final results for the year ended 31 December 2016

Chairman's Statement

Introduction

The primary activity of Pathfinder remains that of seeking to regain control of the valuable heavy mineral sands licences in Mozambique which were transferred in 2011, without Pathfinder's knowledge or consent, to the Company's former local partners. Another important activity during the year under review was the shoring up of the Company's balance sheet to enable it to continue its strategy to recover the licences.

Steps to recover the company's assets

While the English High Court determined in 2012 that, contrary to the defendants' assertions, Pathfinder does validly own the subsidiary company from which the licences were unlawfully removed, the Supreme Court in Mozambique is yet to recognise that decision - a step which the Company believes will likely have the effect of bringing to a successful conclusion the various proceedings in the commercial court in Maputo surrounding the same issue on which the English court has already ruled; and ultimately compel the Mozambique Government to restore control to Pathfinder of the licensed areas.

That application for recognition by the Supreme Court remains pending. The Board continues to believe the prospects of the English court decision being recognised in Mozambique are high, based on a precedent in Mozambique relating to the formulation of jurisdiction clauses. The timing, however, remains entirely out of the Company's control. Some shareholders have expressed frustration over recent months with the length of time the Supreme Court is taking to opine on this issue. I assure you the Board shares their sentiment. I am afraid neither Pathfinder nor its legal counsel has any visibility over when the Supreme Court will deliver judgment on this matter. The Supreme Court there is not answerable to such schedules as might be adhered to in other judicial systems. There is nothing the Company can do to speed up the process.

The only material update to have been received during 2016 in respect of the legal proceedings ongoing in the commercial court in Maputo was announced on 8 April 2016. This announcement recorded the Maputo court's refusal to hear a challenge brought by Pathfinder's subsidiary, IM Minerals Limited, to the validity of a shareholder resolution of CMDN, purportedly passed in May 2009. Pathfinder applied to the Maputo court on 13 April 2016 to appeal this defective decision, which is inconsistent with previous judgments in each of the Supreme Court, the English court and the Maputo court. Permission to appeal was granted on 13 June 2016 and a decision is awaited.

It is important to note that we are not simply waiting for the Supreme Court or Maputo court to deliver its judgments. Pathfinder is actively pursuing parallel strategies to bring about a resolution which does not rely on the courts.

To this end, on 6 May 2016, Pathfinder announced the appointment of Eduardo C. Mondlane Jr as its regional representative in Mozambique. Mr Mondlane Jr is a highly respected Mozambican who has been providing strategic advisory services in Africa for thirty years across industries including aerospace, infrastructure, energy, power and financial services. He has advised companies including Boeing Commercial Airplanes, United Technologies, Siemens and GE Capital Aviation. He has also served on the boards of Absa Group and Bank (Barclays Africa) and other Barclays African subsidiary banks.

Mr Mondlane Jr, Pathfinder's board and members of Pathfinder's legal counsel in Mozambique are actively engaged in discussions with relevant departments within the Mozambique Government including regarding the current status of the licensed areas which, at present, reside under the control of Pathfinder's former local partners. Furthermore, through Mr Mondlane Jr, Pathfinder is engaged in constructive discussions with Jacinto Veloso, the Company's lead former local partner, in an attempt to bring about a resolution without further reliance on the judicial processes. At this point, there are no material developments and no certainty of a resolution outside of the courts; however, the board continues to push for a breakthrough.

Financial results and current financial position

Good progress was made during 2016 to shore up the Company's balance sheet to enable us to continue our strategy to recover our assets. Gross proceeds of approximately £700,000 were raised through the issue of new shares to investors (including the chief executive) both during 2016 and earlier this year; and net proceeds of approximately a further £161,000 were raised through sale of all the shares previously owned by Pathfinder's former local partners (the defendants in the English court legal proceedings) following the English court's granting, on 23 August 2016, of orders for sale as part of the Company's enforcement in England of certain orders for payment of legal costs to the Company by the defendants.

In parallel with bringing in additional funds, the Board continues to manage the central overheads of the Company rigorously in order to preserve cash as much as possible. The Company has foregone a physical head office; the overall cost of directors' fees has reduced and was approximately 17% less than the cost of directors' fees for 2015; and payments of an aggregate 41% of those 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.

The financial statements of the Pathfinder Group for the year ended 31 December 2016 follow later in this report. The Income Statement shows a reduced loss of £582,000 (2015 - £1,093,000) of which £138,000 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 £183,000 of deferred fees and pension contributions described in 'Note 20') at 31 December 2016 of £122,000 (31 December 2015 - £87,000). The assets are held largely in the form of cash deposits (totalling £134,000 at the end of the period). These assets were boosted by the raising of a further £200,000 after the year end, on 1 March 2017, through a placing of new shares with investors.

Corporate events

On 10 March 2016, James Normand resigned from the Board as Finance Director and, on 29 March 2016, we welcomed Robert Easby as his replacement. Robert qualified as a Chartered Accountant in 2000 and spent his early career in audit compliance and as a Company Law specialist within a large regional Chartered Certified Accountancy practice.

Outlook

The Company will continue to report through the regulatory news service any material developments, either in respect of the Mozambique courts or the parallel discussions to bring about a faster resolution. The Board remains as determined as ever - as evidenced by the chief executive's own subscription for £100,000 worth of shares during the year under review - to bring about a successful resolution that recovers value for shareholders in the wake of these unpalatable events. We will continue to monitor the Company's financial position to ensure the Company has sufficient capital to bring our strategy to recover our assets to a successful conclusion. On behalf of the Board, I should like to thank our investors once again for their support.

Sir Henry Bellingham

Chairman

27 June 2017

Consolidated Income Statement

for the Year Ended 31 December 2016

		2016		2015
		£'000		£'000
CONTINUING OPERATIONS
Revenue		-		-
Other operating income		161		3
Administrative expenses		(743)		(1,104)
OPERATING LOSS		(582)		(1,101)
Finance income		-		8
LOSS BEFORE INCOME TAX		(582)		(1,093)
Income tax		-		-
LOSS FOR THE YEAR		(582)		(1,093)
Loss attributable to: Owners of the parent		(582)		(1,093)
Loss per share expressed in pence per share:
Basic		(0.44)		(1.05)
Diluted		(0.44)		(1.05)

Consolidated Statement of Comprehensive Income

for the Year Ended 31 December 2016

	2016		2015
	£'000		£'000
LOSS FOR THE YEAR	(582)		(1,093)
OTHER COMPREHENSIVE INCOME	-		-
TOTAL COMPREHENSIVE INCOME FOR THE YEAR	(582)		(1,093)
Total comprehensive income attributable to:
Owners of the parent	(582)		(1,093)

Consolidated Statement of Financial Position

31 December 2016

		2016		2015
		£'000		£'000
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment		1		-
Investments		-		-
		1		-
CURRENT ASSETS
Trade and other receivables		65		94
Cash and cash equivalents		134		80
		199		174
TOTAL ASSETS		200		174
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital		18,345		18,289
Share premium		11,445		11,022
Retained earnings		(29,851)		(29,269)
TOTAL EQUITY		(61)		42
LIABILITIES
CURRENT LIABILITIES
Trade and other payables		261		132
TOTAL LIABILITIES		261		132
TOTAL EQUITY AND LIABILITIES		200		174

The financial statements were approved by the Board of Directors on 27 June 2017 and were signed on its behalf by:

RP Easby - Director

Company Statement of Financial Position

31 December 2016

		2016		2015
		£'000		£'000
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment		1		-
Investments		-		-
		1		-
CURRENT ASSETS
Trade and other receivables		65		94
Cash and cash equivalents		134		80
		199		174
TOTAL ASSETS		200		174
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital		18,345		18,289
Share premium		11,445		11,022
Retained earnings		(29,850)		(29,269)
TOTAL EQUITY		(60)		42
LIABILITIES
CURRENT LIABILITIES
Trade and other payables		260		132
TOTAL LIABILITIES		260		132
TOTAL EQUITY AND LIABILITIES		200		174

The financial statements were approved by the Board of Directors on 27 June 2017 and were signed on its behalf by:

RP Easby - Director

Consolidated Statement of Changes in Equity

for the Year Ended 31 December 2016

	Called up share capital		Retained earnings		Share premium		Total equity
	£'000		£'000		£'000		£'000
Balance at 1 January 2015	18,289		(28,176)		11,022		1,135
Changes in equity
Total comprehensive income	-		(1,093)		-		(1,093)
Balance at 31 December 2015	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)

Company Statement of Changes in Equity

for the Year Ended 31 December 2016

	Called up share capital		Retained earnings		Share premium		Total equity
	£'000		£'000		£'000		£'000
Balance at 1 January 2015	18,289		(28,307)		11,022		1,004
Changes in equity
Total comprehensive income	-		(962)		-		(962)
Balance at 31 December 2015	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)

Consolidated and Company Statement of Cash Flows

for the Year Ended 31 December 2016

		2016		2015
		£'000		£'000
Cash flows from operating activities
Cash generated from operations		(423)		(1,100)
Net cash from operating activities		(423)		(1,100)
Cash flows from investing activities
Purchase of tangible fixed assets		(2)		-
Interest received		-		8
Net cash from investing activities		(2)		8
Cash flows from financing activities
Share issue		495		-
Share issue expenses		(16)		-
Net cash from financing activities		479		-
Increase/(decrease) in cash and cash equivalents		54		(1,092)
Cash and cash equivalents at beginning of year		80		1,172
Cash and cash equivalents at end of the year		134		80

Notes to the Statements of Cash Flows

for the Year Ended 31 December 2016

1. RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS

Group
	2016		2015
	£'000		£'000
Loss before income tax	(582)		(1,093)
Depreciation charges	1		-
Finance income	-		(8)
	(581)		(1,101)
Decrease/(increase) in trade and other receivables	29		(33)
Increase in trade and other payables	129		34
Cash generated from operations	(423)		(1,100)

Company
	2016		2015
	£'000		£'000
Loss before income tax	(581)		(962)
Depreciation charges	1		-
Finance income	-		(8)
	(580)		(970)
Decrease/(increase) in trade and other receivables	29		(33)
Increase/(decrease) in trade and other payables	128)		(97)
Cash generated from operations	(423)		(1,100)

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 2016
	31.12.16		1.1.16		31.12.16		1.1.16
	£'000		£'000		£'000		£'000
Cash and cash equivalents	134		80		134		80
Year ended 31 December 2015
	31.12.15		1.1.15		31.12.15		1.1.15
	£'000		£'000		£'000		£'000
Cash and cash equivalents	80		1,172		80		1,172

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 shortly 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 11 a.m. on 8 November 2017 at Becket House, 36 Old Jewry, London, EC2R 8DD.

Enquiries:

Enquiries:                                                                                                           

Pathfinder Minerals Plc

Nick Trew, Chief Executive

Tel. [phone]

WH Ireland Limited (Nomad and Joint Corporate Broker)

Paul Shackleton or James Bavister

Tel. [phone]

Beaufort Securities Limited (Joint Corporate Broker)

Jon Belliss or Elliot Hance

Tel. [phone]

Vigo Communications (Public Relations)

Ben Simons or Ali Roper

Tel. [phone]

Email. [e-mail]

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.

 

END

 

 

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