(Alliance News) - Pathfinder Minerals PLC on Friday said it agreed to sell IM Minerals Ltd to Acumen Advisory Group LLC, which includes the right to bring a claim against the Mozambique government for the expropriation of mining concession 4623C.
The Mozambique-focused natural resources company, with licences to mine heavy minerals sands, said it will receive an initial GBP1 million upon completion of the revised sale and purchase agreement from a previous GBP2 million.
The deal also includes a larger contingent of the greater of USD30 million or 25% of the aggregate amount payable on settlement or determination on the claim against the Mozambique government. This agreement has been revised from a previous USD24 million and 20%, respectively.
Completion of the pact is conditional upon shareholder approval at a general meeting to be held on or before August 31, Pathfinder explained. A further announcement on this will be made by the company in due course.
"The new consideration structure better reflects the long-term potential value of the claim while providing shareholders confidence that we can, subject to shareholder approval, complete the disposal in the knowledge that the full funds are already in the company's solicitors' client account," said Chair Dennis Edmonds.
"The board are currently taking legal and tax advice to ensure any subsequent future payout in the event of a successful resolution of the [bilateral investment treaty] claim is received almost exclusively by Pathfinder shareholders who are shareholders of the company at completion.
"The payment of GBP1 million is more than sufficient to meet all the company's current obligations and will also substantially contribute to the costs of any future transaction."
Shares in Pathfinder closed up 29% to 0.42 pence each in London on Friday afternoon.
By Greg Rosenvinge, Alliance News reporter
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Pathfinder Minerals (PFP)