Posting of Shareholder Circul

RNS Number : 2371D

Pathfinder Properties PLC

30 November 2009

FOR IMMEDIATE RELEASE 30 November 2009

PATHFINDER PROPERTIES PLC

("Pathfinder" or the "Company")

Posting of Shareholder Circular and Notice of AGM and GM

The Company announces today that it has sent a Circular to Shareholders setting out the full details of the proposed Proposals. Extracts of the Circular are set out below:

- Introduction

Following the disposal of the Ilford site and the Brewery site in Newark as announced on 22 May 2009, the Group has been left with a single development at the Newark development site, being the River Edge and the Road Frontage. This development has been progressed to a position whereby the Group can no longer fund any further development from its existing resources and the Directors believe that it is not worthwhile progressing with further development of this site in the current economic climate. As a result, the Company effectively has no sustainable business to justify its status as an AIM traded entity. Accordingly, the Directors believe that it is in Shareholders' interests to dispose of its property and, at the same time, release the Group from the liability for the associated bank financing on the Newark site, in order to establish a new investing policy in an area in which the Directors' believe could best provide the basis for establishing Shareholder value. The Company has been approached by a group of investors involved in mining proposals and who have the ability to attract investors. The Directors unanimously believe that the proposed change of direction is in the best interests of the Company and its Shareholders. The proposed establishment of a new investing policy will be supported by the provision to the Company of £506,000 of Convertible Loan monies and this allows the Company to publish its Annual Report and Accounts for the year ended 31 December 2008 and its interims to 30 June 2009. This will allow trading in the Company's Existing Ordinary Shares on AIM to recommence with effect from 30 November 2009.

- Proposed Disposal of River Edge and Road Frontage sites at the Newark Development

The Company is proposing to dispose of the Newark development sites known as the River Edge site and the Road Frontage site which are the Company's only remaining property interests.

The Company has agreed to dispose of the River Edge and Road Frontage sites at the Newark development for £4. These two remaining developments are held in a wholly owned subsidiary of the Company, Newark Property Development Limited ("NPD"), which was specifically formed for holding these properties. The Company also owns the Subsidiaries which, in the opinion of the Existing Directors, have no assets of real value. The only assets consist of freehold interests in property where long leases have been granted. The Company is therefore proposing to sell NPD and the Subsidiaries to Kerrington Limited ("Kerrington"), a company controlled by a Director of the Company, Gerry Lee. The Company purchased the development sites in 8 February 2002 and has spent £3,507,568.46 on developing the sites.

The Disposal of the remaining development sites at Newark through the sale of NPD and the sale of the Subsidiaries to a company controlled by a Director, Gerry Lee, is, under AIM Rule 13, a Related Party Transaction. Accordingly, the Independent Directors, being Edward Azouz, Jeffrey Azouz, Dr John Guy Davies and Victor Lipien, confirm that, having consulted with Beaumont Cornish, they consider the terms of the transaction to be fair and reasonable insofar as the Shareholders of the Company are concerned.

Kerrington will assume responsibility for repayment of the debt of £2.9m due from NPD to Royal Bank of Scotland PLC. Although, the remaining Newark development sites are valued at £2.9m in the Company's balance sheet as at 31 December 2008, a current valuation has been undertaken by Knight Frank which values them at £1.85m, as set out in Part II of this Document.

There will be no corresponding loss (on disposal) as full provision has been made in the financial statements for the year ended 31 December 2008.

Set out in Part III of this Document is an unaudited pro forma statement of net assets showing the effects of the Disposal along with the other Proposals.

The Company has entered into a Share Purchase Agreement with Kerrington under the terms of which Kerrington has agreed to pay the Company £4 in consideration of the transfer to Kerrington of the entire issued share capitals of NPD and the Subsidiaries. The completion of the Share Purchase Agreement is conditional on the passing of a resolution by the Shareholders of the Company authorising the disposal of the sites owned by NPD known as the River Edge and the Road Frontage sites at Northgate, Newark.

Kerrington has agreed to purchase the shares in NPD subject to charges ("RBS Charges") registered in favour of the Royal Bank of Scotland Plc ("RBS") in relation to an outstanding debt of £2.9m. ("RBS Debt"). The Company has received a letter from RBS consenting to the transaction.

The Disposal constitutes a fundamental change of business under AIM Rule 15. Accordingly, completion of the Disposal is conditional, inter alia, on the approval of the Shareholders at a general meeting of the Company, notice of which is set out at the end of this Document.

Following the Disposal, the Company will be classified under the AIM Rules as an investing company. Accordingly, the Investing Policy, details of which are set out in paragraph 3 below, is also subject to the approval of Shareholders at the General Meeting. The Company will have to make an acquisition or acquisitions which constitute a reverse takeover under the AIM Rules or otherwise implement its Investing Policy within 12 months of the General Meeting, failing which the Company's Ordinary Shares would then be suspended from trading on AIM. If the Company's Investing Policy has not been implemented within 18 months of the General Meeting, the admission to trading on AIM of the Company's Ordinary Shares would be cancelled and the Directors would convene a General Meeting of the Shareholders to consider whether to continue seeking investment opportunities or to wind up the Company and distribute any surplus cash back to Shareholders. An implemented Investing Policy is normally considered to mean that the investing company has invested all or a substantial portion (usually at least in excess of 50%) of all funds available to it, including funds available through agreed debt facilities, in accordance with its investing policy.

- Proposed Investing Policy

Following the Disposal, the Company would be an investing company under the AIM Rules. The Company's proposed Investing Policy, which is subject to Shareholder approval, is set out below:

Investing Policy

Pathfinder's proposed strategy is to establish a new investing policy to acquire mainly significant minority interests in both listed and unlisted companies and/or assets which the Directors believe represent opportunities to create Shareholder value, specifically within the natural resource sectors, with a focus on Central Asia and Sub-Saharan Africa although such companies may operate worldwide. The focus will be on metals and mature resource situations with both established resources and the ability to increase these through additional exploration and also bring these into production. The Company will be an active investor.

Such investments may result in Pathfinder acquiring the whole or part of a company or project. Pathfinder's investments may take the form of equity, joint venture debt, convertible instruments, licence rights, or other financial instruments as the Directors deem appropriate.

The proposed initial investment in IM Minerals as set out in paragraph 7 of the Document provides Shareholders with a clear indication as to how this investing policy will be implemented.

The Directors believe that their broad collective experience in the areas of acquisitions, accounting, corporate and financial management together with the opinion of consultant experts in the evaluation and exploitation of potential investments, which will assist them in the identification and evaluation of suitable opportunities, will enable the Company to achieve its objectives. Internationally recognised competent persons will be commissioned to prepare reports on the projects being considered by the Company, where the Directors consider it necessary. The Directors may undertake the initial project assessments themselves with additional independent technical advice as required.

If the strategy is approved, there is no limit on the number of projects in which the Company may invest, and the Company will consider possible opportunities anywhere in the World. The Directors are currently reviewing potential investment and acquisition opportunities in line with Pathfinder's strategy but have not, at this stage, commissioned any due diligence nor entered into any firm commitment in connection with any investments or acquisitions, save as set out in this Document. The Company intends to be a long-term investor and the Directors will place no minimum or maximum limit on the length of time that any investment may be held.

As the Ordinary Shares are traded on AIM this provides a facility for Shareholders to realise their investment in the Company. The attention of Shareholders is drawn to "Risk Factors" set out in Part IV of this Document. In addition, the Directors may consider from time to time other means of facilitating returns to Shareholders including dividends, share repurchases, demergers, schemes of arrangement or liquidation.

- Directors and Proposed Directors

Subject to the passing of the Resolutions Nicholas Trew, James Normand and Mark Edmonds will be appointed as Directors.

Nicholas 'Nick' Trew, age 53, proposed Executive Director

From 1978 until 1989 Nick worked for Sedgwick, which today is part of the Marsh insurance group, as an energy insurance broker. Nick then left to co-found Heath Oil & Gas Limited together with four other Directors from Sedgwick Offshore Resources Ltd, which at that time was the largest and most successful energy broker in the world.

At Heath Oil & Gas Limited Nick headed up the oil and gas construction broking team and, amongst other successes, was responsible for the successful insurance placing of the Troll Natural Gas Platform in the North Sea, the largest construction ever moved by man.

After 20 years as a Lloyds Broker, in 1998 Nick formed International Mercantile Group Limited, which arranges insurance, engineering and financing services for various worldwide infrastructure, factory and energy projects. In addition, Nick is currently involved in the promotion of a closed loop, no harmful toxic emission to atmosphere provision of clean fuel ethanol or electricity produced from municipal solid waste.

James Normand, age 55, proposed Finance Director

James Normand qualified as a Chartered Accountant in 1978, having trained with Spicer and Pegler (now part of Deloitte). Following a secondment (from 1985 to 1987) to 3i plc, James specialised for the next 15 years in the provision of advice to management buy-out and buy-in teams; and on corporate aquisitions, disposals and capital raisings.

In 2002, James established his own corporate finance consultancy, in which capacity he has filled finance officer roles for a number of different commercial and charitable organisations, including the International Mercantile Group.

In an unremunerated extra-curricular capacity, James is active in the governance of the Anglican Diocese of London, being Chairman of the Chelsea Deanery Synod and a member of the Bishop of London's Council.

Mark Edmonds, age 49, proposed Non-executive Director

Mark Edmonds spent 27 years in BBC TV culminating in a specialist team of coordinating programme delivery mechanics for major Network TV transmission output delivered by Post Production Resources Group. In 2006, he joined the ASNU Corporation, a world leader in Gasoline Injection Diagnostics and was instrumental in the R&D and management of a subsidiary division within the ASNU Corporation's business.

Since November 2008 he has been Operations Director for RAM Investment Group Plc and as of November 2009 has become the Group's Communications Director.

Further details on the Proposed Directors are set out in paragraph 2 of Part V of this Document.

The Company will consider further appointments to the Board as appropriate.

In conjunction with the new appointments to the Company's board and following implementation of the Proposals, Edward Azouz will retire as Executive Chairman and Jeffrey Azouz and Dr John Guy Davies will both retire as Non-Executive Directors of the Company at the AGM and, subject to the Resolutions being passed, it is intended that the resignation of Victor Lipien as Non-Executive Director of the Company be accepted at a Board meeting to be held immediately following the General Meeting. The Board would like to thank Jeffery, John, Edward and Victor for their contribution and support to both the Board and the Company. In addition, Gerry Lee will resign from his position as Executive Director and become Non-Executive Chairman of the Company.

- Proposed Capital Reorganisation

The Company presently has circa 1,270 Shareholders. This adds a considerable cost to the overheads of the Company caused by the need to produce annual accounts and the associated registrars' costs. Over 54.26% of Shareholders, by number, have holdings of less than 20,000 Existing Ordinary Shares. Accordingly, it is proposed that the 79,971,393 Existing Ordinary Shares will be sub-divided and consolidated on the basis of and according to the steps set out in the Resolutions.

It is proposed that every Existing Ordinary Share will be sub-divided and reclassified as one Ordinary Share of 0.1p ("Subdivided Share") and one deferred share of 9.9p ("Deferred Share").

It is then proposed that every 20,000 Subdivided Shares will be consolidated into 1 New Ordinary Share of £20. Unless a shareholding therefore equals or exceeds 20,000 Existing Ordinary Shares then Shareholders will be left with a fractional entitlement to the resulting Ordinary Shares if the Resolutions are approved. Any fractions arising as a result of the consolidation will be aggregated and sold in the market on behalf of the relevant Shareholders and, where the amount of the proceeds is £3.00 or more, the net proceeds of the sale (after costs) will be returned to the relevant Shareholder in proportion to their fractional entitlement. Proceeds of less than £3.00 will be retained by the Company.

A Shareholder will, of course, be free at any time on or before 18 December 2009 to acquire or sell such number of Existing Ordinary Shares as will result in their holding of Existing Ordinary Shares being exactly divisible by 20,000. In this event, that Shareholder will not be left with any fractional entitlements. However, all such transfers must be registered with Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU by close of business on 18 December 2009.

Following the sub-division of the Existing Ordinary Shares and subsequent consolidation of the Subdivided Shares, the nominal value of each Ordinary Share will be £20 each. The 2006 Act provides that a company may only lawfully issue new shares for a subscription price at or above the nominal value of those shares. In order that the Company may issue the New Ordinary Shares, pursuant to the Proposals, the Company proposes that each ordinary share in the capital of the Company then having a nominal value of £20, be sub-divided into 2,000 Ordinary Shares of 1 pence each. Each unissued Ordinary Share of 10 pence each shall also be sub-divided into 10 Ordinary Shares of 1 pence each.

If any Shareholder is in any doubt with regard to their current shareholding in Existing Ordinary Shares or have any queries on the Capital Reorganisation then they should contact the Registrars, Capita Registrars, on 0871 664 0321 or if calling from outside the UK +44 20 8639 3399. Calls to the Capita Registrars 0871 664 0321 number are charged at 10 pence per minute (including VAT) plus any service provider's network extras. Calls to the Capita Registrars +44 20 8639 3399 number from outside the UK are charged at applicable international rates. Lines are open Monday to Friday 8.30 a.m. to 5.30 p.m. (London time). Different charges may apply to calls made from mobile telephones and calls may be recorded and monitored randomly for security and training purposes. Capita Registrars cannot provide advice on the merits of the matter nor give any financial, legal or tax advice.

The proposed Capital Reorganisation will not affect the rights attaching to the Existing Ordinary Shares, other than to alter their nominal value. The proposed Capital Reorganisation will not affect the voting rights of the holders of Existing Ordinary Shares and will be made by reference to holdings of Existing Ordinary Shares on the register of members as at the close of business on 18 December 2009. A Deferred Share shall not entitle the holder thereof to receive notice of or attend and vote at any general meeting of the Company or to receive a dividend or other distribution or to participate in any return of capital on a winding up other than the nominal amount paid on such shares. Subject to the adoption of the New Articles at the General Meeting, the Company will have the right to purchase the Deferred Shares from all the Shareholders for a consideration of £1 in aggregate.

A CREST Shareholder will have their CREST accounts credited with their New Ordinary Shares following their admission to AIM, which is expected to take place on 22 December 2009 (see below). Each other holder of New Ordinary Shares will be issued with a New Share Certificate which will be despatched by 31 December 2009.

Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that such Admission will become effective and that dealings will commence on 22 December 2009.

- Details of the Convertible Loan Agreements and Proposed Issue of Warrants

In order to provide the Company with the initial capital to pursue its new Investing Policy, the Company has entered into Convertible Loan Agreements with the Lenders under the terms of which the Lenders have agreed to provide an aggregate loan amount of £506,000 for a term of two years from the date of drawdown. Following a six month period from the date of drawdown of Convertible Loan monies, the Company shall also be entitled to repay the Convertible Loan monies. At any time after one calendar month following the drawdown of Convertible Loan monies, the Lender is entitled to request that any amount still outstanding of such loan be converted into Ordinary Shares in the Company at a conversion price of 1.5p per Ordinary Share, such conversion rights being subject to the passing of the Resolutions.

In consideration of the Lenders making available the Convertible Loan monies, the Company has agreed, subject to the passing of the Resolutions, to issue the Lender Warrants to such Lenders on the terms set out in the Form of Warrant Instrument contained in the Schedule to the Convertible Loan Agreements. In the event that the Lenders exercise the Lender Warrants in full, the Company would receive a further amount of £506,000.

The Company has entered into 17 separate Convertible Loan Agreements with the Lenders but on substantively the same terms and the £506,000 raised will be used to provide the funding necessary for implementing these Proposals and provide the required working capital.

Specific details of the Convertible Loan Agreements and Lender Warrants are set out in paragraph 3 of Part V of the Document.

The Company believes that the additional costs and delay of offering participation in this fundraising mean that it is not practical to offer convertible loan participation and related warrants to Shareholders and it also believes therefore that such an offer would not be in the best interests of the Company in the circumstances.

The Company intends to raise further funds by way of a placing as and when it is able to do so.

- Proposed Initial Investment

Subject to the adoption of the new Investing Policy and the issue of the CLAs, the Board has agreed, following the receipt of the Convertible Loan monies, to invest £200,000 into IM Minerals to acquire a 4.67% shareholding in IM Minerals. The Company has also obtained a right of first refusal from a majority in number of the shareholders in IM Minerals whereby Pathfinder will be offered the right to acquire their remaining shareholdings at a later date, which would be classified as a Reverse Takeover under the AIM Rules.

IM Minerals is a privately owned, junior mining company that currently owns a 75% interest in Companhia Mineira de Naburi S.A.R.L which holds a Concession Licence dated 20 November 2009 over a potential TiO2 ore resource in Mozambique. In addition, IM Minerals has recently purchased for $500,000, from BHP Billiton, the shares in their local company, Sociedade Geral de Mineracao de Mocambique, S.A.R.L. Companhia Mineira de Naburi S.A.R.L holds an Exploration and Research Licence also dated 20 November 2009 over an adjoining potential TiO2 resource and over which the Company intends to apply for an extraction licence. For the year ended 31 January 2009, IM Minerals had gross assets of £87,288 and had made a loss in that year of £67,052. In addition, in September 2009, IM Minerals raised £330,000 by way of a placing.

To develop the opportunity, IM Minerals has agreed to retain Scott Wilson Mining Limited to undertake a mining plan to support the application for an extraction licence for the area purchased from BHP Billiton.

TiO2, titanium oxide, is an ore consisting of various quantities of Rutile, Zircon and Iluminite. The ore is used in its refined state to produce whiteners for the paint industry, foam and thin film for jewellery and metal coatings and in the form of metal in the aerospace and automotive industry. As a metal it is midway between aluminium and steel for both strength and weight.

The long term intention is to extract the ore for enrichment and sale to identified markets. As production and cash flow develops, the intention is to then enhance the enrichment process with the long term aim of increasing added value in the product. This may include small scale smelting in due course.

Accordingly, the Company has entered into an investment agreement with IM Minerals and its executive directors and has obtained a right of first refusal with a majority in number of its shareholders, further details of which are set out in paragraph 3 of Part V of this Document. The agreement is conditional upon the passing of the Resolutions.

Nicholas Trew is a 17.77% shareholder in IM Minerals Limited.

- Restoration of Trading on AIM

Trading in the Company's Existing Ordinary Shares was suspended on 30 June 2009 pending publication of the Company's Annual Report and Accounts for the year ended 31 December 2008 ("Annual Report"). The Company is also now suspended pending the publication of its Interim Report for the 6 months ended 30 June 2009 ("Interims").

The Company has today announced and posted, with this Circular, both its Annual Report and its Interims. As a result, the Company's Existing Ordinary Shares, will, with effect from 30 November 2009, resume trading on AIM.

- Unaudited Pro Forma Statement of Net Assets

Set out in Part III of the Document is an unaudited pro forma statement of Net Assets/Liabilities showing the effects of the Disposal and the other Proposals.

Discharge of Debts and other Liabilities

ARV Investments Ltd has agreed to release the Company from its obligation to repay the sum of £50,000 and Kerrington has agreed to release the Company from its obligation to repay the sum of £102,789.80.

- Annual General Meeting

Set out at the end of this Document is the AGM Notice convening the Annual General Meeting to be held at
Avenue House, 17 East End Road, Finchley, London N3 3QE on Monday 21 December 2009 at 11.00 a.m. at which the resolutions described below will be proposed.

The AGM Notice contains ordinary resolutions which require the approval of a simple majority of Shareholders who vote.

Resolution 1

This resolution approves the Group's Accounts and related reports and notes for the year ended 31 December 2008.

Resolution 2

This resolution approves the re-appointment of Chapman Davis LLP as the Company's auditors and authorises the Directors to agree the remuneration.

Action to be taken in respect of the Annual General Meeting

A white Form of Proxy for use at the AGM accompanies this Document. The Form of Proxy should be completed and signed in accordance with the instructions thereon and returned to the Company's registrars, Capita Registrars, PSX, 34 Beckenham Road, Beckenham, Kent BR3 4TU as soon as possible, but in any event so as to be received by no later than 11.00 a.m. on Friday 18 December 2009. The completion and return of the White Form of Proxy will not preclude a Shareholder from attending the AGM and voting in person should he or she so wish.

- General Meeting

Set out at the end of this Document is the GM Notice convening the General Meeting to be held at Avenue House, 17 East End Road, Finchley, London N3 3QE on Monday 21 December 2009 at 12.00 p.m. (or immediately after the AGM, convened for the same date, shall have finished), at which the Resolutions described below, of which some are inter-conditional, will be proposed.

The GM Notice contains both ordinary resolutions (which require the approval of a simple majority of Shareholders who vote) and special resolutions (which require the approval of at least 75% of Shareholders who vote). Resolutions 1, 2, 3, 5, 6, 7, 8 and 9 will be proposed as ordinary resolutions and Resolutions 4, 10, 11, 12 and 13 will be proposed as special resolutions.

Resolution 1

Resolution 1 approves the Disposal by the Company to Kerrington for the purposes of Rule 15 of the AIM Rules and authorises the Directors of the Company to take all such steps as any of them may consider necessary or desirable to implement and give full effect to the intentions of the parties.

Resolution 2

This resolution approves the sub-division and reclassification of the 79,971,393 Existing Ordinary Shares of 10p each in the capital of the Company into 79,971,393 Ordinary Shares of 0.1p each and 79,971,393 Deferred Shares of 9.9p each in the capital of the Company.

Resolution 3

This resolution 3 approves the consolidation of every 20,000 ordinary share of 0.1p in the capital of the Company into 1 Ordinary Share of £20 in the capital of the Company.

Resolution 4

This resolution 4 approves the sale of fractional share entitlements, arising from the consolidation of shares proposed under resolution 3, by the Company on behalf of each Shareholder that holds them, as permitted under article 8(B) of the Current Articles, and to authorise the Company to retain any sale proceeds of less than £3.00 otherwise due to such Shareholder (after deduction of costs incurred by the Company in respect of such sale).

Resolution 5

In order to enable the Company to lawfully issue further shares in the future, it is proposed in Resolution 5 of the GM Notice that each ordinary share in the capital of the Company, then having a nominal value of £20 each, be sub-divided into 2,000 ordinary shares of 1p each.

Resolution 6

It is proposed in Resolution 6 of the GM Notice that each unissued ordinary share in the capital of the Company having a nominal value of 10 pence each be sub-divided into 10 ordinary shares of 1 pence each.

Resolution 7

In order to have sufficient Ordinary Shares to issue pursuant to the terms of the Convertible Loan Agreements, the Lender Warrants, the Beaumont Cornish Warrant and for future general purposes, the capital of the Company must be increased to £30,000,000 by the creation of 500,000,000 additional New Ordinary Shares to rank pari passu with the Ordinary Shares.

Resolution 8

The Directors require Shareholder authority under Section 551 of the Companies Act 2006 in order to be able to allot Ordinary Shares. Resolution 8 authorises the Directors to allot shares up to the aggregate nominal amount of the authorised but unissued ordinary share capital of the Company immediately following the passing of this resolution. The authority sought under this Resolution 8 will expire on the earlier of 15 months after the passing of the resolution or at the conclusion of the annual general meeting of the Company to be held in 2010.

Resolution 9

Resolution 9 approves the Investing Policy and authorises the Directors of the Company to take all such steps as any of them may consider necessary or desirable to implement the Investing Policy.

Resolution 10

Resolution 10 approves the disapplication of pre-emption rights by giving the Directors authority to allot Ordinary Shares with an aggregate nominal value of £29,128,311.85, of which up to 33,733,333 Ordinary Shares relate to Ordinary Shares to be issued pursuant to the Convertible Loan Agreements and up to 35,400,000 Ordinary Shares relate to Ordinary Shares to be issued on the exercise of the Lender Warrants and the Beaumont Cornish Warrant and all of the remaining authorised but unissued share capital of the Company for general purposes, without being required to first offer such securities to existing Shareholders. The authority sought under this Resolution 8 will expire on the earlier of 15 months from the passing of the resolution or at the conclusion of the annual general meeting of the Company to be held in 2010.

Shareholders should note that the issue of all the shares by the Directors permitted by Resolutions 8 and 10 other than on a pre-emptive basis would result in a further large dilution in their percentage shareholdings in the Company.

Resolution 11

Resolution 11 deletes the Company's current main objects clause to act as a property development company to better reflect the proposed Investing Policy.

Resolution 12

Resolution 12 proposes the adoption of the New Articles to update the Current Articles and, in particular, to reflect the provisions of the 2006 Act. A copy of the proposed New Articles will be available from the date of despatch of this Document until conclusion of the General Meeting on the Company's website (www.pathfinderplc.com).

Resolution 13

As the Company's business will change from a property development company to an investing company, resolution 13 approves the change of name of the Company to 'Pathfinder Minerals Plc'.

Action to be taken in respect of the General Meeting

A green Form of Proxy for use at the General Meeting accompanies this Document. The Form of Proxy should be completed and signed in accordance with the instructions thereon and returned to the Company's registrars, Capita Registrars, PSX, 34 Beckenham Road, Beckenham, Kent, BR3 4TU as soon as possible, but in any event so as to be received by no later than 12.00 p.m. on 18 December 2009. The completion and return of the green Form of Proxy will not preclude a Shareholder from attending the General Meeting and voting in person should he or she so wish.

- Irrevocable undertakings

The Company has received irrevocable undertakings to vote in favour of the Resolutions 2 to 13 to be proposed at the General Meeting from each of the Shareholder Directors holding in aggregate 36,796,761 Existing Ordinary Shares representing approximately 46.01% of the Company's existing issued ordinary share capital.

As Gerry Lee is interested in the transaction proposed in Resolution 1, to be proposed at the General Meeting, he has agreed to abstain from voting on that proposal. The Company has, however, received irrevocable undertakings to vote in favour of that Resolution 1 from each of the other Shareholder Directors holding in aggregate 23,493,772 Existing Ordinary Shares representing approximately 29.38% of the Company's existing issued ordinary share capital.

- Recommendation

The Existing Directors, excluding Gerry Lee, unanimously consider the Proposals to be in the best interests of the Company and its Shareholders as a whole and accordingly unanimously recommend Shareholders to vote in favour of the Resolutions to be proposed at the General Meeting as they and those connected with them intend to do in respect of their own beneficial holdings of Ordinary Shares being 36,796,761 Existing Ordinary Shares representing approximately 46.01% of the issued share capital of the Company in respect of Resolutions 2 to 13 of the Resolutions and 23,493,772 Existing Ordinary Shares representing approximately 29.38% of the issued share capital of the Company in respect of Resolution 1 of these Resolutions.

Should the Proposals not be approved by Shareholders at the General Meeting, the Existing Directors will have to consider winding up the Company and seeking a cancellation of the Company's trading facility on AIM.

- Unaudited Pro Forma Statement of Net Liabilities

The following unaudited pro forma statement of net liabilities has been prepared on the basis set out below and is for illustrative purposes only. Because of its nature the pro forma financial information may not give a true picture of the financial position of the Group.

					Unaudited
		Proceeds	Property		Pro Forma
		of the	sale and	Initial	Consolidated
	Pathfinder	convertible	balance sheet	Investment	Net Liabilities
	Properties Plc	loan monies	settlement	in IM	of the Group
	(Note 1)	(Note 2)	(Note 3)	(Note 4)
	30 June 2009
	£'000	£'000	£'000	£'000	£'000
Non-Current Assets
Intangible assets	-	-	-	-	-
Tangible assets	-	-	-	-	-
Investments	-	-	-	200	200
	-	-	-	200	200
Current assets
Inventories	2,900	-	(2,900)	-	-
Receivables	59	-	-	-	59
Cash	12	416	-	(200)	228
	2,971	416	(2,900)	(200)	287
Liabilities
Trade & Other Payables	(71)	-	-	-	(71)
Interest bearing loans	(2,900)	(506)	2,900	-	(506)
Net current assets	-	(90)	-	-	(290)
Net liabilities	-	(90)	-	-	(90)

The Unaudited Pro-forma Consolidated Net Liabilities Statement of the Group has been prepared by the Company to illustrate the combination of the effect of the proceeds of the convertible loan notes less the costs of the circular, the sale of the remaining development site and the cost of the Initial Investment in IM Minerals Limited. Save for the adjustments outlined in notes 2 to 4, no account has been taken of any trading or transactions since the balance sheet date of 30 June 2009.

Notes:

1.	The net assets financial information for the Group as at 30 June 2009 has been extracted from the interim accounts at that date.
2.	The gross cash proceeds from the convertible loan notes of £506,000 less the cost of the circular totalling £90,000, as described in paragraph 6 of Part 1 of this document.
3.	The effective sale of the development property and discharge of the related bank loan as outlined in paragraph 2 of Part 1 of the document.
4.	The purchase of the Initial Investment in IM Minerals Limited as described in paragraph 7 of Part 1 of the document.

- Directors' and proposed Directors' interests

2.1

The interests (all of which are beneficial unless stated otherwise) of the Directors and proposed Directors and their immediate families and of persons connected with them (within the meaning of Section 820 of the 2006 Act) in the issued share capital of the Company and the existence of which is known to, or could with reasonable due diligence be ascertained by, any Director as at the date of this Document and as they are expected to be upon completion of the Proposals are as follows:

	Existing Holding		Following conversion of the Convertible Loan Agreements and Capital Reorganisation
	Number	%	Number	%
Edward Azouz*	10,288,571	12.87	1,028,857	2.47
Gerard Lee**	13,302,989	16.63	1,330,299	3.19
Jeffrey Azouz*	10,288,571	12.87	1,028,857	2.47
Victor Lipien	2,916,630	3.65	291,663	0.70
John Guy Davies	Nil	-	Nil	-
Nicholas Trew	Nil	-	3,333,333	7.99
James Normand	Nil	-	Nil	-
Mark Edmonds	Nil	-	Nil	-

*	The Shares shown against the names of Edward Azouz and Jeffrey Azouz are registered in the name of Sunnyview Limited which is a wholly owned subsidiary of ARV Investments Ltd, a company owned by Edward Azouz and Jeffrey Azouz.

**	10,288,571 shares of the existing Ordinary Shares shown against the name of Gerard Lee are registered in the name of Kerrington Limited and the remaining 3,014,418 shares of the Existing Ordinary Shares shown against the name of Gerard Lee are held by him personally.

2.2	AIM Disclosures on the appointment of the Proposed Directors:

2.2.1

Nicholas Simon Trew

Mr Trew's directorships and partnerships, both current and within the last five years are as follows:

Current	Former
International Mercantile Group Limited	Bunker Insure Ltd
International Mercantile Finance Limited	Madden Invest and Finance Ltd
IM Minerals Limited
Marine Club Services Limited
Anglo Kyrgyz Society Limited
Anglo Turkmen Society Limited
International Mercantile Treasury Services Limited

There is no further information to be disclosed under Schedule 2 (g) (iii)-(vii) under the AIM Rules.

2.2.2

James Patrick Normand

Mr Normand's directorships and partnerships, both current and within the last five years are as follows:

Current	Former
London Diocesan Board of Finance	Sentral Systems Limited
The London Diocesan Fund

There is no further information to be disclosed under Schedule 2 (g) (iii)-(vii) under the AIM Rules.

2.2.3

Mark Ronald Edmonds

Mr Edmonds' directorships and partnerships, both current and within the last five years are as follows:

Current

Former

RAM Investment Group Plc
Train FX Limited

None

There is no further information to be disclosed under Schedule 2 (g) (iii)-(vii) under the AIM Rules.

- EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Despatch of this Document	27 November 2009

Record Date for Capital Reorganisation	21 December 2009

Latest time and date for receipt of Forms of Proxy for the Annual General Meeting	11.00 a.m. on 18 December 2009

Latest time and date for receipt of Forms of Proxy for the General Meeting	12.00 noon on 18 December 2009

Annual General Meeting	21 December 2009

General Meeting	21 December 2009

Admission effective and dealings commence on AIM	22 December 2009

CREST accounts credited	22 December 2009

Share certificates dispatched by	31 December 2009

Notes:

1.	References to time in this Document are to London time.

2.	If any of the above times or dates should change, the revised times and/or dates will be notified to Shareholders by an announcement on a RIS.

3.	All events in the above timetable following the General Meeting are conditional upon approval by Shareholders of the Resolutions to be proposed at the General Meeting.

The New Ordinary Shares will have the following ISIN number: GB00B4MB7K73.

- PROPOSED SHARES IN ISSUE STATISTICS

Conversion price for CLAs	1.5 pence

Number of Ordinary Shares in issue at the date of this Document	79,971,393

Number of Ordinary Shares in issue following Capital Reorganisation	7,997,139

Number of Ordinary Shares to be issued in connection with the Convertible Loan Agreements*	33,733,333

Number of Warrants to be issued in connection with the Convertible Loan Agreements	33,733,333

Percentage of the issued New Ordinary Shares represented by the Convertible Loan Shares following conversion of the CLAs*	80.84%

Percentage of the issued New Ordinary Shares following the issue of the Convertible Loan Shares, exercise of the Lender Warrants and Beaumont Cornish Warrants held by the Lenders and Beaumont Cornish**	89.63%

Number of Ordinary Shares in issue following completion of the Proposals**	77,130,472

Market Capitalisation of the Company on Admission at the Conversion Price***	£1,131,957

*	assuming maximum conversion

**	assuming all loans under the Convertible Loan Agreements are converted into Ordinary Shares and the Lender Warrants and the Beaumont Cornish Warrant are exercised in full

***	assuming maximum conversion and an Admission price of 1.5p

- Availability of Document

This Document will be available for a period of 12 months from the date of this Document on the Company's website (www.pathfinderplc.com) free of charge in accordance with the requirements of Rule 26 of the AIM Rules.

- DEFINITIONS

"2006 Act"	the Companies Act 2006

"Admission"	admission of the New Ordinary Shares to trading on AIM becoming effective in accordance with the AIM Rules

"AGM"	the annual general meeting of Pathfinder convened for 21 December 2009, notice of which is set out at the end of the Document, and any adjournment thereof

"AGM Notice"	the notice convening the Annual General Meeting which is set out at the end of this Document

"AIM"	a market operated by the London Stock Exchange

"AIM Rules"	the rules published by the London Stock Exchange governing admission to, and the operation of, AIM

"Beaumont Cornish"	Beaumont Cornish Limited, Pathfinder's nominated adviser, a member of the London Stock Exchange and authorised and regulated by the Financial Services Authority

"Beaumont Cornish Warrant"	the warrant issued to Beaumont Cornish pursuant to the Deed of Warrant Grant entered into between (1) Beaumont Cornish and (2) the Company on 26 November 2009 as described in paragraph 3 of Part V of this Document

"Board"	the board of directors of the Company

"Capital Reorganisation"	the reorganisation of the share capital of the Company, details of which are set out in paragraph 5 of Part I of this Document

"Capita Registrars"	a trading name of Capita Registrars Limited

"Certificated" or "in certificated form"	an Ordinary Share which is not in uncertificated form

"Company" or "Pathfinder"	Pathfinder Properties Plc

"Convertible Loan Agreements" or "CLAs"	agreements entered into between the Company and each of the Lenders in respect of loans granted by the Lenders to the Company, further details of which are set out in paragraph 6 of Part I of the Document

"Convertible Loan monies"	the £506,000 to be raised through the CLAs

"Convertible Loan Shares"	the 33,733,333 New Ordinary Shares that would be issued should the CLAs be converted by all the Lenders

"CREST Regulations"	the Uncertificated Securities Regulations 2001

"CREST"	the computerised settlement system operated by Euroclear UK and Ireland Limited to facilitate the transfer of title to shares in uncertificated form. The Relevant System (as defined in the CREST Regulations) in respect of which CREST is the Operator (as defined in the CREST Regulations)

"CREST Manual"	the rules governing the operation of CREST consisting of the CREST Reference Manual, the CREST International Manual, the CREST Central Counterpart Service Manual, the CREST Rules, the CCSS Operations Manual, the Daily Timetable, the CREST 88 Application Procedures and the CREST Glossary of Terms (as updated in November 2001)

"Current Articles"	the articles of association of the Company in existence as at the date of this Document

"Director"	a director of the Company

"Disposal"	proposed disposal of the two remaining sections at the Newark development site known as the River Edge site and the Road Frontage site, through the sale of the entire issued share capitals of Newark Property Development Limited and the Subsidiaries

"Enlarged Share Capital"	the 7,997,139 New Ordinary Shares in issue on Admission

"Euroclear"	Euroclear UK & Ireland Limited, the operator of CREST

"Existing Directors"	the Directors of the Company as at the date of this Document

"Existing Ordinary Shares"	the Ordinary Shares of Pathfinder in issue at the date of this Document

"Form of Proxy"	the white form of proxy which accompanies this Document, for use at the Annual General Meeting or the green form of proxy which accompanies this Document, for use at the General Meeting and "Forms of Proxy" shall mean them both together

"FSA"	the UK Financial Services Authority

"FSMA"	the UK Financial Services and Markets Act 2000 (as amended)

"General Meeting"	the general meeting of Pathfinder convened for 21 December 2009, notice of which is set out at the end of this Document, and any adjournment thereof

"GM Notice"	the notice convening the General Meeting which is set out at the end of this Document

"Group"	Pathfinder and its subsidiaries

"IM Minerals" or "IM Minerals Limited"	IM Minerals Limited, a private company registered in England and Wales under company number 05410573

"Independent Directors"	the current Directors of the Company excluding Gerry Lee

"Lender"	each of Peter Downer, Jacqueline Ann Phelps, Oakdown Limited, Hill Street Investments PLC, Christopher Edwards, Christopher Simpson, Nicholas Monson, Colston Trustees and Nicholas Monson as trustees of The Curtis Banks SIPP for Mr N J Monson, Christopher Dennistoun, Hornbuckle Mitchell Trustees Limited and Timothy Edward Baldwin as Trustees of the Private Pension of T E Baldwin, Mark Pearson, Swandale Limited, Lee Bailey and PAL Trustees Limited as trustees of the IPS SIPP-Lee Bailey, Bryce Roxborough, Sebou Oil Services Ltd., Iain Manley and Nicholas Trew and "Lenders" shall mean them all together

"Lender Warrants"	the warrants proposed to be issued to the Lenders in respect of the CLAs

"London Stock Exchange"	London Stock Exchange plc

"New Articles"	the new articles of association of the Company to be adopted at the General Meeting convened by the GM Notice.

"New Ordinary Shares"	the ordinary shares of 1 pence each arising as a result of the Capital Reorganisation

"Official List"	the Official List of the UK Listing Authority

"Ordinary Shares"	ordinary shares of 10 pence each in the capital of Pathfinder, to become ordinary shares of 1 pence each following approval by Shareholders at the General Meeting

"Overseas Shareholders"	Shareholders resident in, or citizens of, jurisdictions outside the United Kingdom

"Post Capital Reorganisation Shares"	the number of New Ordinary Shares in issue following the Capital Reorganisation

"Proposals"	the proposals set out in the Document

"Proposed Directors"	Nicholas Trew, James Normand and Mark Edmonds

"Prospectus Rules"	the Prospectus Rules published by the Financial Services Authority

"Resolutions"	the resolutions to be proposed at the General Meeting as set out in the GM Notice

"Shareholder"	a holder of Ordinary Shares from time to time

"Subsidiaries"	Drayhawk Limited, Pathfinder Recovery 1 Limited, Pathfinder (Clyde Street) Limited, Pathfinder (Glasgow) Limited, Newark Property LCS Limited, Pathfinder (River Quay) Limited, Merchant City Limited and Pathfinder Construction Services Limited.

"UK"	the United Kingdom of England, Scotland, Wales and Northern Ireland

"UKLA"	the UK Listing Authority