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The dilution from the placing is around 20% and any upfront money from the sale of IMM is just money in the bank. As such, the dilution effect would in theory be small compared to the potential upside if all went to plan.
I remain hopeful the AAG deal pulls off, it was a short extension that was arranged, and they could have walked away at any stage before now. However, let’s say worst case scenario that AAG were to walk, we will need funds to keep the lights on and to provide time to find an alternative buyer for IMM. We have to be running very low on working capital now (if not working off the loan). I personally feel more comfortable with some further dilution now to know we are financially covered (irrespective of the AAG deal outcome) for the next 12 months and likely a bit beyond. Certainly not trying to be antagonistic in saying this, but I just personally like the security of having this contingency money lined up.
I personally do not see why would Adam Dziubinski extend a loan if we had hit the end of the road. He would have been privilege to confidential details of PFP’s progress in granting this extension of the loan amount and date. Maybe the AAG deal still has legs, maybe there are other parties already lining up? Either way there has to be something that is shimmering in this for us to get the loan extended. I think everyone has put too much ‘do or die’ on AAG’s decision specially. Buying and selling does not always go to the first person that is interested, and one persons dis-interest does not devalue the asset. Everyone will have a different take on this, different skills, different strategy. Give the BoD time to update us before we all get too doom and gloom on where we stand. Things may still be very much alive with AAG. AAG are likely reliant on DLA Piper to work through most of the legal due diligence to come up with their own personal legal conclusions. Based on recent RNS’ we tend to get a fairly comprehensive update on progress 2-3 days after an event.
I am continuing to sit tight on this, I personally don’t think the lack of BIT progress is inaction, I think it is strategy. IMO I think PFP could be doing everything possible to leave the door open for a breakthrough with TZM. Bear in mind once we sign agreements with a party that will fund the BIT we will likely be locked into proceeding with the BIT and exposed to significant charges/penalties if we then accept a deal with TZM. The call from TZM might not come, but we are a threat to TZM’s investment which makes me feel it is more likely to happen than not. TZM had the financial means to acquire the licence from the owners of Pathfinder Mozambique and, as such, I suspect they have the financial means to purchase IMM. I am replying to a message on a post by Fcruz back on the 4th March this year, just to bring it back on radar, it was a translation from an article from Jornal de Noticias (the original link to the article is on their message before on the 4th March). TZM were predicting end of June for the environmental licences to allow them to develop the site, for me this makes this period a potentially an interesting one. The pressure for PFP to sign a funder for the BIT is growing (it’s true, we can’t wait forever), the need for TZM to protect the investment is growing (site development will require a considerable investment as they move to site development). I personally feel that something could break in the near term. DYOR though, these are just thoughts.
We appear to have a new subsidiary - Pathfinder Battery Commodities Ltd - 12 days old.
I have been considering whether June might represent a milestone point for all of this. Correct me if I am wrong, but I recall one of the links posted on this board stating TZM’s public consultation period ends in June (if someone knows which link, possibly they could repost). Consultation is obviously a low cash burn part of the project for TZM, however when this consultation is concluded the subsequent stages will require significant investment in the project and the BIT claim represents a real risk to this investment. I agree Dip666, I also think TZM could be biding time to get the best value from any deal. However, in light of TZM’s consultation period ending soon, I am personally mulling on the thought that the next few months could be a key period where any potential offers could emerge (if they are going to) from TZM.
Amazing how time flies, I have also been a shareholder in PFP for nearly 6 years now, fingers crossed the patience pays off.
Just to add an opinion here. For me, I was pleased to see in last week’s RNS that the door is still open for discussion with TZM. Despite no evidence of further meetings since June, anyone who has negotiated knows that the true breakthroughs happen at the final hour. No doubt our RNS was as much a signal to TZM that we are making progress towards that time. If we ink an agreement with a litigation funder, it will be a uni-directional course for PFP through the ICSID. As such, the window for negotiation is obviously closing and I remain hopeful that in the New Year we might see a return to the table with TZM where an amicable compensation arrangement could be found. Merry Christmas.
I hope you are well Richard. Very pleased that Align is still holding here. We all wait with bated breath for the next RNS.
I can’t find anything about TZM online also. I am assuming they must have a well-funded backer to have acquired the licence, but I have nothing to base this upon.
As the Mozambique Ministry of Mineral Resources and Energy was at the meeting last month, I have been mulling over the thought that a possible outcome could be TZM offering compensation to keep the licence while the MMRE might offer an alternative licence as a package to settle outside of a BIT claim. Mark Gasson was appointed to PFP a month before the meeting for assessing new opportunities and could be very relevant if this was a possible outcome. Obviously pure speculation on my part, but such a scenario might represent an attractive solution for all sides.
If an average BIT claim takes 2 years and the down-stream revenue from the asset is predicted to be $323million/yr, the time lost waiting for the BIT claim outcome would still represent $646million lost potential revenue. There is obviously an incentive for TZM to want to avoid this going to a BIT claim even looking at it from the perspective of ‘lost time’ (ignoring the 55-60% chance the licence gets taken away altogether). I do think it would be a wonderful outcome for a fair arrangement to be reached between PFP and TZM now that dialogue is open.
I agree FreeBuffett, the BoD did very well to get all those individuals to a single meeting. Our loss to date is $621million and we have a 55-60% chance of reclaiming the licence to a $1billion dollar asset if we pursue a BIT claim. I hope that if any offer emerges that it is reflective of these facts. However, I am pleased to see the BoD keeping this 'time sensitive'. GLA
Each to their own opinion, I am firm believer in free speech. However, these apparent large sells in recent days look more like someone moving their shares between accounts, likely into ISAs ahead of the end of the tax year. I am indeed personally not expecting discussions with the Mozambique government to return our licence. I suspect we will need to go to the BIT claim, however I anticipate this as good news as it means we are not left in limbo, but moving forward with a path which has already been suggested to provide an outcome in our favour. A successful outcome means a return of our licence. I was also very pleased to here we have an ex-Goldmans MD now on our BoD, he has a strong business and value creation background that he brings with him and, let’s face it, taking his payment in shares suggests he is laser-focused on value creation for the company.
I think a 55-60% chance of success in favour of PFP sends a strong message. This certainly creates risk for the licence holders if they plan to progress the project. It is encouraging that, as per RNS, ‘The Company has already been approached by third parties who have expressed an interest in funding such a claim’. Suggesting that individuals that are in the know see reasonable opportunity for success here also. Today's RNS may have set the stage for an interesting 2021. Merry Christmas everyone.
Legal is not an area of specialty for me, far from it, but it has made some interesting reading these last few days. On the point of weightings of court rulings. I would encourage people to re-read the RNS on the 19th October 2012 in relation to the High Court ruling. The UK High court judge highlighted that ‘All the agreements were governed by English law and that Mozambique law therefore had no bearing on the determination of the issues relating to the agreements’. If we do challenge under TIG which is international, if my interpretation is correct, it sounds like the UK High Court ruling would likely have a greater weighting as the original agreement documents must have indeed stated UK law. I do personally see fruit in this new strategy, and liked the strong stance of the BoD, happy to continue to hold my shares to see this new strategy through and hopefully justice done.
With respect Bucklefern, the English High Court ruling does say that we have a 100% claim to the licence. This would at least provide the grounds to appeal the decision within the Mozambique Courts, if the settlement discussions were to breakdown. I don’t think we should underestimate the UK ruling in that regard. I personally think PFP have a fair and rightful place in these discussions to find a settlement.
I am also still here and keeping the faith. Personally, I still find it hard to see how PFP could be sidelined in the final settlement. Holding the English High Court ruling in our favour no doubt provides us grounds to appeal in the Mozambique courts, if it did indeed come to that. However, I remain hopeful that discussions are still proceeding in a constructive way behind the scenes. GLA.
Good on you both for settling your differences.
I thought someone might suggest that :), but no. Investing is just a past time for me rather than my day job. Good luck everyone.
I agree, September is likely to be an interesting month for Pathfinder. With AFG standing to make £1million on concluding this, I am sure they are making every effort to see this through in the coming weeks. I am encouraged that there has been no RNS to suggest a parallel avenue to that AFG has been required to complete the transaction, so I presume the BoD must trust in AFG’s ability to see this through. The RNS on the 28th June highlighted that the funders were conducting ‘asset-level due diligence’. I presume they would have requested 1-2 months for this, so this is likely to be completed or nearing completion now.
We shouldn’t forget that Mr Edmonds joined the board just 4 weeks ago, post AGM, and agreed to take his payment in share options at 2.75p. I thought this to be a good sign that progress was continuing to be made. One would have to have confidence that the share price would get back to and/or past 2.75p in a reasonable time frame to agree to these terms. Mr Emmonds does also bring a very experienced and appropriate skill set to the table for engaging with funders.
The market previously valued PFP at 80 million with the licence and an £500million NPV. It will be compelling to see where the share price will go if the deal is completed with funding and a £1billion NPV.
A deal, and all parties winning, is an ideal outcome after so many years. Hopefully, a fresh new chapter for Pathfinder is now close.