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(Alliance News) - Shares in Pathfinder Minerals PLC leapt higher Wednesday on news it has made progress in securing participation in a deal involving mining concession 4623C in Mozambique.
The miner's shares doubled to 0.75 pence in London on Wednesday morning.
Pathfinder Minerals lost the 4623C licence in 2011 when mining concessions were consolidated and given to unaffiliated firm Pathfinder Mocambique SA. Later, in October 2019, Pathfinder said it had attended a number of meetings in South Africa and Mozambique in order to resolve issues with the licence.
Pathfinder Minerals has been in talks with Jacinto Veloso, a local politician who owns 50% of Pathfinder Mocambique, which is said have been "constructive".
"Both parties view a proposed transaction involving Pathfinder as the most desirable route to a resolution as it would be expected to bring an end to respective legal claims associated with the licence," Pathfinder Minerals said..
Furthermore, Pathfinder Minerals said it had "validated evidence" that the other 50% shareholding in Pathfinder Mocambique "has been transferred to a Chinese state-owned third party" and is now in talks with that party, the name of which was not disclosed.
"Direct dialogue with the transferee has now been established with a view to securing its participation in a proposed multi-party transaction involving the licence," Pathfinder Minerals said.
Pathfinder Minerals noted that any transaction proposed would require involving a funding partner and talks with a "preferred partner" remain ongoing. Moreover, "further parties which the board considers to have the requisite balance sheet backing and technical ability are now also actively engaged in pursuing a commercial settlement."
The company is still seeking support from the government of Mozambique to obtain assistance in resolving the licence dispute and has raised the issue with its president. The UK High Commission in Maputo is also providing assistance.
A commercial agreement with Africa Focus Group, which was assisting in negotiations, was extended to March but will not be further extended. Nonetheless, AFG is still a key adviser to Pathfinder Minerals and, if it delivers a resolution to recovering an interest in the licence, "bespoke commercial terms will be negotiated"
Pathfinder Minerals is also assessing further mining opportunities.
Chief Executive John Taylor said: "A proposed transaction involving the restoration of an interest in the Mozambique Licence requires the alignment of multiple parties, including potential funders, in order to be facilitated. While there is no certainty that a transaction can be concluded to the satisfaction of all stakeholders within a timely manner, I am pleased to report that we are making real progress towards securing that multi-party alignment.
Taylor added: "I am also pleased that we have been able to ensure the Pathfinder issue continues to be in focus within the Mozambique government as we work towards securing the involvement of all the stakeholders required to facilitate a resolution."
By Anna Farley; annafarley@alliancenews.com
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