Pathfinder Minerals Regulatory News (PFP)

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK Market Abuse Regulation

28 July 2023

Pathfinder Minerals Plc

("Pathfinder" or the "Company")

Entry into revised SPA for sale of IM Minerals

Pathfinder Minerals Plc, the Southern Africa focused natural resource company, is pleased to announce it has entered into a revised sale and purchase agreement ("Revised SPA") with Acumen Advisory Group LLC ("AAG) in respect of the disposal of IM Minerals Limited ("IMM") (the "Disposal") and, with it, the rights to bring a claim against the Government of Mozambique for the expropriation of Mining Concession 4623C (the "Claim").

Highlights

· Pursuant to the Revised SPA, Pathfinder will receive:

o  a larger contingent payment of the greater of US$30 million (previously US$24 million) or 25% (previously 20%) of the aggregate amount payable on settlement or determination of the Claim; and

o  an initial consideration of £1 million (previously £2 million) on completion of the Revised SPA ("Completion"), with such funds having already been deposited in full in the Company's solicitor's client account

· All other material terms of the SPA remain as previously announced in the 25 May 2023 circular available on the Company's website at www.pathfinderminerals.com

Completion of the Revised SPA ("Completion") is conditional upon shareholder approval being received at a general meeting of the Company (the "General Meeting"), in line with AIM Rule 15, for the disposal of IMM, to be held on or before 31 August 2023, with Completion due on the date falling two business days from the passing of the requisite resolution (or on such other date as is agreed in writing by the Company and AAG). A further announcement will be made by the Company upon publication of the necessary circular and notice of General Meeting.

Dennis Edmonds, Chairman, commented:

"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. The Board are currently taking legal and tax advice to ensure any subsequent future payout in the event of a successful resolution of the BIT claim is received almost exclusively by Pathfinder shareholders who are shareholders of the Company at Completion.

The payment of £1 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."

Detailed terms and conditions of the Revised SPA

The consideration payable by AAG to the Company is £1 million on Completion and the greater of US$30 million or 25% of the aggregate amount (including all deferred or conditional payments) payable on settlement or determination of the Claim less all reasonable costs and expenses properly incurred in respect of the Claim ("Deferred Consideration").

Under the Revised SPA, AAG confirms that it has secured funding for at least US$15 million to fund the Claim and undertakes to the Company that it will:

a) instruct lawyers to commence legal proceedings and issue a claim in respect of the Claim within three months of Completion;

b) use its best endeavours to settle and/or finalise the Claim within five years of Completion; and

c) keep the Company informed of material developments in respect of the Claim.

Under the Revised SPA, the Company agrees that, if requested by AAG, it will use reasonable endeavours insofar as it is reasonably able, to assist AAG with a divestment to a third party of any licences which are returned or awarded to it in respect of the Claim.

The Company has provided AAG with certain warranties under the Revised SPA with its aggregate liability capped at £2 million. Any individual claim for breach of these warranties must exceed £20,000 and all such claims together must exceed £200,000 before a claim for breach of warranty can be brought (when the whole amount can be claimed) and any such claim for breach of warranty must be notified by AAG to the Company within 12 months of Completion.

AIM Rule 15

On Completion, the Company will cease to own, control, or conduct all or substantially all of its existing trading business, activities or assets and will become an AIM Rule 15 cash shell. As such, the Company will be required to make an acquisition or acquisitions which constitute a reverse takeover under AIM Rule 14 (including seeking a re-admission as an investing company (as defined under the AIM Rules)) on or before the date falling six months from Completion and be re-admitted to trading on AIM as an investing company under the AIM Rules for Companies (the "AIM Rules") (which requires the raising of at least £6 million), failing which the Company's ordinary shares would then be suspended from trading on AIM pursuant to AIM Rule 40.

Accordingly, should the Disposal complete, the Company will become an AIM Rule 15 cash shell and will evaluate opportunities in the sectors the directors consider appropriate, seeking to identify one or more projects or assets which the Company can acquire, which would constitute a reverse takeover under AIM Rule 14. While the initial consideration to be received has been reduced from £2.0 million to £1.0 million, the directors are confident that the initial consideration payable in respect of the Disposal of £1 million will be sufficient to cover the costs of a reverse takeover under AIM Rule 14 and provide initial working capital for the then enlarged group.

Any reverse takeover transaction will require the publication of an AIM Rules compliant admission document and will be subject to shareholder approval at a further general meeting of the Company to be convened at the appropriate time.

The Board will seek to preserve the right to the Deferred Consideration for the benefit of shareholders who are recorded on the Company's shareholder register at the time of Completion.

Schedule Four disclosure

In line with the requirements of Schedule Four of the AIM Rules, IMM has no trading profits or losses, and its assets have been fully impaired. As at 31 December 2022 (and at the date hereof), the profits attributable to IMM are £nil (2021: £nil) and the gross assets of IMM were £nil (2021: £nil). The Disposal will therefore have no impact on the Company's consolidated financial position, save that the Company will reflect a gain on the disposal of IMM.

Further update to recent board change

On 23 June 2023, the Company announced, amongst other matters, that Peter Taylor had resigned as a director of the Company ahead of the commencement of the Annual General Meeting and that Mr Taylor will remain as an employee of the Company in the capacity as Chief Executive Officer and will continue as a director of its subsidiary companies, including IMM. In light of the progress made in relation to the Revised SPA, the Directors of the Company have now agreed with Mr Taylor that he will resign as CEO on Completion but will remain a director of IMM and be available to assist AAG in driving forward the Claim.

Enquiries:

Allenby Capital Limited (Nominated Adviser and Broker)

John Depasquale / Vivek Bhardwaj (Corporate Finance)

Stefano Aquilino / Joscelin Pinnington (Sales & Corporate Broking)

Tel. +44 (0)20 3328 5656

Vigo Consulting (Investor Relations)

Ben Simons / Kate Kilgallen

Tel. +44 (0)20 7390 0234

Email. pathfinderminerals@vigoconsulting.com