LONDON (Alliance News) - Pathfinder Minerals PLC on Wednesday said it may give a 25% stake in the company to a local representative in Maputo, the capital of Mozambique, if that representative can successfully recover the licenses that Pathfinder says were taken away from it.
Pathfinder is currently locked in legal proceedings in an attempt to recover its licenses in the country, but said Wednesday there is "no visibility" on when the Mozambique Courts will make a final judgement.
Those proceedings concern the 760C and 4632C licences in the Zambezia Province, which are the subject of an ongoing commercial dispute in the country.
Pathfinder has claimed the rights to the licences in Mozambique were illegally seized by General Jacinto Veloso and Diogo Cavaco and is seeking a judgement from the Mozambique court to rule it validly acquired its shareholding in Companhia Mineira de Naburi Sarl, the company awarded the licences.
Veloso and Cavaco, however, said Pathfinder failed to pay the USD10.0 million required under the option agreement in place to acquire the shares in CMdN, meaning these licences could not have been seized as Pathfinder never owned them.
As it awaits a judgement, Pathfinder has been assessing "other routes" it could take to recover the licenses, and said it may give away equity if it can source a partner to help recover them.
"The company is in discussions to appoint a potential new local representative in Maputo to assist Pathfinder in its dialogue with the Mozambique government," said Pathfinder.
"No formal agreement with the prospective local representative has yet been signed however, in the event that such an appointment is made, it is expected that the company would issue up to 25% of its share capital to the local representative should the licences be successfully restored to the company's control," the company added.
Funding is a further woe for the company, which said Wednesday it is still holding discussions about raising of a small amount of additional working capital in order to help it "address its financial situation".
"It is currently envisaged that such working capital will be provided by way of a subscription, which will include a director of the company," said Pathfinder.
Pathfinder shares were up 7.8% to 0.728 pence per share on Wednesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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Pathfinder Minerals (PFP)