(Alliance News) - Pathfinder Minerals PLC shares surged on Thursday after it struck a deal to sell its wholly owned subsidiary IM Minerals Ltd, as well as the rights to make a claim for a mining licence in Mozambique.
Shares in the company were up 48% to 0.78 pence each in London on Thursday afternoon.
Pathfinder said the option agreement has been entered with Acumen Advisory Group LLC, an asset recovery specialist based in Delaware, US.
Should the deal go through, Acumen will pay Pathfinder GBP2 million to buy IM Minerals and the rights to bring a claim against the Mozambique government for the expropriation of a mining concession in the country.
Acumen also has to confirm it has secured at least USD15 million in funding and will use its "best endeavours to pursue the claim to a satisfactory conclusion within five years".
Acumen will then make a contingent payment to Pathfinder of USD24 million, or 20% of net recoveries, should the licence claim be awarded.
Pathfinder has been fighting to win back an interest in the 4623C mining concession in Mozambique for a number of years now. The company lost the licence in 2011 when mining concessions were consolidated and given to Pathfinder Mocambique SA, which is not affiliated with Pathfinder Minerals.
Acumen has until December 30 to enter the agreement.
Chief Executive Peter Taylor said: "This transaction, if completed, will ensure that the full force of a timely and well-funded claim is brought against the government of Mozambique and that Pathfinder could participate very considerably in any financial upside which has been independently evaluated to be worth in a range of USD110 million to USD1.5 billion."
Separately, Pathfinder said it has entered a unsecured loan facility of up to GBP120,000 with an "FCA authorised financial institution."
It explained that the loan, which carries a 5.0% fixed interest, is for working capital purposes. It is repayable in full on February 2, 2023, unless extended by mutual agreement.
By Sophie Rose; sophierose@alliancenews.com
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Pathfinder Minerals (PFP)