Final Results

RNS Number : 6854K

Pathfinder Minerals Plc

27 June 2014

 



27 June 2014

Pathfinder Minerals Plc

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

Final results for the year ended 31 December 2013

Chairman's Statement

Introduction

This is my first statement as chairman of Pathfinder, having been appointed in February 2014 - after the end of the period under review. As a former Under Secretary of State at the Foreign and Commonwealth Office with ministerial responsibility for Africa, I hope that I bring to the board a deep understanding of the African continent and of its opportunities.

My first four months in the role have afforded me the opportunity to review in depth Pathfinder's position. I believe that our investment in the English legal proceedings - which resulted in the unequivocal ruling that Pathfinder did validly acquire its Mozambique licence-holding subsidiary - has established a very strong legal footing. This legal footing is the basis for Pathfinder's application to have the English judgments recognised (and ultimately enforced) in the Mozambique Supreme Court and/or to seek compensation for the loss of value. It is not known, however, when such judgments from the Mozambique Supreme Court in respect of the recognition proceedings will be delivered. Our legal advisers estimate anywhere from months to one or two years. While we intend to continue to pursue the legal proceedings with all the vigour that the Board has employed to date, I believe we must also consider ways to build value, even in the interim period before final judgment on these issues. The Board is also determined to continue to explore every avenue to bringing about an earlier resolution, if indeed one can be achieved, to restore value to the Company more quickly than may be achieved by waiting for the courts in Mozambique to reach a verdict.

Legal proceedings in Mozambique

The Company often receives letters and e-mails from shareholders expressing both their resolute support of the Company's determination to recover its assets and, at times, their frustration with the slow progress of proceedings in Mozambique. Their frustration is felt equally by the Board. The reality is, however, that we are moving the proceedings along in Mozambique as efficiently and as expeditiously as the judicial infrastructure there will allow. I am afraid to say that there is every likelihood of continued extended hiatuses between reportable developments in the Mozambique proceedings.

Let me give an update on the status of legal proceedings in Mozambique. The principal proceedings presently in train in the Mozambique Supreme Court are two claims for recognition of the London judgments, referred to as the First and Second Claims for Recognition. The claims comprise a number of orders for costs (totalling £1,106,000) by the English court; and certain declarations by the English court to the effect that our subsidiary, IM Minerals Limited ("IMM"), did indeed validly acquire its 99.99 per cent. stake in our Mozambique licence-holding subsidiary, Companhia Mineira de Naburi S.A.R.L ("CMDN"). The reason these declarations were essential to Pathfinder was that IMM needed to demonstrate beyond any doubt that it was (and should now still be) the owner of CMDN. General Veloso and Diogo Cavaco have continually argued that they were entitled to request the transfer of the mining licences to their ownership because Pathfinder never validly owned the company from which they were taken. It has been established as a matter of law that this is not the case. As well as seeking to have the English judgments recognised in the Mozambique courts, Pathfinder has drawn them to the attention of the Government of Mozambique.

The First Claim for Recognition was filed with the Supreme Court in March 2013 and was supplemented by final written arguments in late October 2013.  The Second Claim for Recognition was filed in August 2013. We are advised that the claims will be decided by the Supreme Court on the papers; and that there will be no oral argument. The court's chairman will prepare a draft judgment for the other judges to consider and, following a meeting between them, a final judgment will be issued. It is not known when judgments might be delivered. As I stated earlier, it may still be a considerable time.

There are a number of other proceedings ongoing in Mozambican courts, each of which raises the issue of the jurisdiction of the English court and/or IMM's status as a shareholder of CMDN. Judgments are awaited from the Mozambique courts in respect of each of these proceedings and, again, it is not known when these might be delivered. Whatever their outcome, however, it is likely that further appeals will follow.

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 at this juncture is whether Pathfinder has sufficient cash to see through its strategy to recover its assets. The Board is prudent with expenditure and believes the Company does have sufficient reserves for the foreseeable future.

The financial statements of the Pathfinder Group for the year ended 31 December 2013 follow later in this report. The Income Statement shows a loss of £1.5 million (2012 - £4.3 million). The conclusion of the legal action in England brought about a material 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 2013 of £2.2 million (2012 - £3.7 million). The assets are held largely in the form of cash deposits (totalling £2.1 million at the year-end and £1.7 million at 20 June 2014).

Pathfinder's cash position was bolstered by the approval of the Company's application for VAT registration (backdated to February 2011) leading to the receipt, in December 2013, of a refund of VAT previously paid amounting to £978,000.

Outlook

The length of time that the Mozambican legal proceedings are taking has unavoidably deprived shareholders of any enhancement of value in the intervening period. The investments of time and resources in the English legal proceedings were necessary and will be central to the ability to achieve a beneficial resolution, in or out of court. We will continue to press for rulings in the proceedings in the Mozambique courts (including those related to the recovery of costs from General Veloso and Diogo Cavaco) every bit as determinedly as the Board has done so to date.

My overriding objective at Pathfinder is to help steer the company towards a resolution of its issues concerning asset ownership; and thereafter to contribute to the ongoing development of those assets in an efficient and responsible way which creates value for Pathfinder's shareholders and benefits Mozambique. At the same time, and in light of the considerable length of time it may take to achieve a legal resolution if an appropriate solution cannot be achieved out of court, I believe we must also look for other ways to add value to the Company while the legal proceedings run their course. With the Mozambican legal proceedings well into their cycle, the Board is exploring such avenues.

Henry Bellingham

Chairman

27 June 2014

Pathfinder Minerals Plc

Statement of Consolidated Comprehensive Income

For the Year Ended 31 December 2013

Year ended 31 December	2013		2012
	£'000		£'000
CONTINUING OPERATIONS
Revenue	-		-
Administrative expenses	(1,480)		(4,424)
OPERATING LOSS	(1,480)		(4,424)
Finance income	21		106
LOSS BEFORE INCOME TAX	(1,459)		(4,318)
Income tax	-		-
LOSS FOR THE YEAR	(1,459)		(4,318)
OTHER COMPREHENSIVE INCOME	-		-
TOTAL COMPREHENSIVE LOSS FOR THE YEAR	(1,459)		(4,318)
Loss per share (expressed in pence per share)
Basic	(0.1)		(0.4)
Diluted	(0.1)		(0.4)

Pathfinder Minerals Plc

Statement of Consolidated Financial Position

31 December 2013

	2013		2012
	£'000		£'000
ASSETS
CURRENT ASSETS
Trade and other receivables	185		163
Cash and cash equivalent	2,134		3,767
TOTAL ASSETS	2,319		3,930
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital	18,289		18,289
Share premium	11,022		11,022
Retained earnings	(27,120)		(25,661)
TOTAL EQUITY	2,191		3,650
LIABILITIES
CURRENT LIABILITIES
Trade and other payables	128		280
TOTAL LIABILITIES	128		280
TOTAL EQUITY AND LIABILITIES	2,319		3,930

Pathfinder Minerals Plc

Statement of the Company's Financial Position

31 December 2013

	2013		2012
	£'000		£'000
ASSETS
NON-CURRENT ASSETS
Investments	-		-
	-		-
CURRENT ASSETS
Trade and other receivables	185		163
Cash and cash equivalents	2,134		3,767
	2,319		3,930
TOTAL ASSETS	2,319		3,930
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital	18,289		18,289
Share premium	11,022		11,022
Retained earnings (deficit)	(27,251)		(25,792)
TOTAL EQUITY	2,060		3,519
LIABILITIES
CURRENT LIABILITIES
Trade and other payables	259		411
TOTAL LIABILITIES	259		411
TOTAL EQUITY AND LIABILITIES	2,319		3,930

Pathfinder Minerals Plc

Statement of Cash Flows - Group and Company

For the Year Ended 31 December 2013

	2013		2012
	£'000		£'000
Cash flow from operating activities
Loss before income tax	(1,459)		(4,318)
Finance income	(21)		(106)
	(1,480)		(4,424)
Increase in trade and other receivables	(22)		(129)
Decrease in trade and other payables	(152)		(257)
Net cash from operating activities	(1,654)		(4,810)
Cash flow from investing activities
Interest received	21		106
Net cash from investing activities	21		106
Decrease in cash and cash equivalents	(1,633)		(4,704)
Cash and cash equivalents at the beginning of the year	3,767		8,471
Cash and cash equivalents at the end of the year	2,134		3,767

Annual Report and Accounts

Copies of the Annual Report and Accounts, together with a notice of the 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 the offices of Daniel Stewart & Company Plc at Becket House, 36 Old Jewry, London EC2R 8DD on 21 July 2014 at 2.30pm.

Enquiries:

Pathfinder Minerals Plc

Nick Trew, Chief Executive

Tel. [phone]

Daniel Stewart & Company Plc

David Hart Tel: [phone]

Vigo Communications

Ben Simons or Alexandra Roper

Tel: [phone]

 

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