Pathfinder Minerals Regulatory News (PFP)

28 June 2018

Pathfinder Minerals Plc

("Pathfinder", the "Company" or the "Group")

Final results for the year ended 31 December 2017

Chairman's Statement

Introduction

Throughout 2017, the Board continued to pursue the reinstatement to the Company of the areas previously licensed to Pathfinder in Mozambique under Mining Concession nos. 760C and 4623C. These licences were consolidated under Mining Concession no. 4623C (the "Licence") in November 2011 and transferred without the Company's knowledge or consent to Pathfinder Moçambique, S.A. ("Pathfinder Moçambique") - an entity with which neither Pathfinder nor its subsidiaries are affiliated. Pathfinder Moçambique is owned by the Company's former local partners.

Steps to recover the Company's assets

In addition to pursuing recognition in Mozambique of the October 2012 English High Court judgment, which confirms, contrary to the former local partners' assertions, that Pathfinder legally acquired 99.99% of the shares of the entity from which the Licence was appropriated (the "English Judgment"), significant attempts were made in 2017 to settle the dispute through discussions with General Veloso, the principal former local partner (and his daughter Miriam Veloso on his behalf) and, separately, with the Government of Mozambique.

Following a number of discussions during which the terms upon which the parties would be prepared to settle the dispute were discussed, the Company sent a letter to General Veloso in March 2017 confirming its agreement in principle to a resolution and providing an outline proposal with respect to the same.

In September 2017, the Company sent a proposed framework for an agreement to resolve the dispute to Miriam Veloso. During October 2017, the Company's regional representative and Miriam Veloso exchanged communications regarding the framework agreement. Following further exchanges in October 2017 in which General Veloso and Miriam Veloso requested that an acceptable proposal should be tabled, a meeting took place in November 2017 in Maputo between the Company's regional representative, General Veloso and Miriam Veloso.

A further meeting with General Veloso took place after the year-end, in January 2018, at which the Company was represented by Professor Waty (an eminent expert on Mozambican law). Following that meeting, a request was made that the framework agreement should be broken down into a "road map" to enable General Veloso and Miriam Veloso to identify the stages required towards closure and this was provided later the same month.

These discussions ended in February 2018 upon receipt of a communication from Diogo Cavaco, one of the former local partners, informing the Company that there was no ongoing settlement negotiation. While the Board remains open to resuming a dialogue with the former local partners on a reasonable basis, it is focused on enforcing the Company's rights through the judicial process.

Paramount to the legal process is the Company's application, lodged with the Supreme Court in Mozambique in August 2013, for recognition of the English Judgment. While the timing of the ruling is unknown, and there can be no certainty of a favourable decision, the Board believes a favourable decision - effectively recognising Pathfinder's ownership of the entity from which the Licence was appropriated - would ultimately cause the Ministry of Mineral Resources of Mozambique to put the Licence back to that entity, under Pathfinder's control, and enable the Company to resume development of the project.

I should like to remind you that the Company's first application for recognition in Mozambique of an English judgment - in that instance, orders by the English court for costs aggregating £106,000 to be paid by the former local partners - was unsuccessful (as announced in September 2015). Following its ruling, the Supreme Court admitted a 'harmonisation of laws' appeal from the Company against this unfavourable decision (an appeal based on the existence of a previous conflicting decision), but subsequently dismissed the appeal (as announced in October 2017) on procedural grounds.

The Company is advised in respect of its application for recognition of the English Judgment that the Supreme Court is not bound to follow its previous decisions.

Financial results and current financial position

The Company was required to conduct three share issues for cash during the year under review to enable us to continue our strategy to recover the Licence and meet our ongoing obligations as an AIM-listed company. Accordingly, Pathfinder raised approximately an aggregate £620,000 in net proceeds from three fundraisings in March, September and December 2017. We are grateful for the support of investors and continue to believe that the Licence, if recovered, will deliver considerable value to shareholders as a world-class mineral sands asset.

We continue to manage costs conservatively. Payments of an aggregate 30% of directors' fees incurred in the period under review, in addition to other benefits such as pension contributions, have been deferred until the Company is in materially better financial health. With effect from 1 April 2018, the fixed salaries of Nicholas Trew and myself were reduced by 50% until such time as the Licence has been recovered.

The financial statements of the Pathfinder Group for the year ended 31 December 2017 follow later in this report. The Income Statement shows a loss of £615,000 (2016 - £582,000) of which £94,000 relates to directors' fees and pension contributions that are recorded as a liability in 'Trade and other payables' but actual payment of which have been deferred as described above and in 'Note 20' to these accounts.

The Group's Statement of Financial Position shows net assets (excluding £277,000 of deferred fees and pension contributions described in 'Note 20') at 31 December 2017 of £224,000 (31 December 2016 - £122,000). The assets are held largely in the form of cash deposits (totalling £248,000 at the end of the period). A further £250,000 was raised after the year end, in May 2018, through a placing of new shares with investors.

Outlook

Earlier this month, Pathfinder announced that the Supreme Court in Mozambique had notified the Company of its request for final written submissions in relation to Pathfinder's application for recognition of the English Judgment. The Company has duly complied and has lodged final written submissions with the Supreme Court. Pathfinder is confident in its application and is encouraged by the request for final written submissions, which shows that the court is advancing - albeit slowly - through its process.

The length of time it is taking for the Supreme Court to opine on the application for recognition is frustrating for us all. However, the Board believes that, absent a speedier resolution via Mozambique's Ministry of Mineral Resources, pursuing the judicial process is the main avenue available to Pathfinder to recover meaningful value for Pathfinder's shareholders.

The Board's primary focus remains to pursue the reinstatement of the appropriated Licence. However, the Board also receives other approaches from time to time for broader opportunities in mineral sands projects. Any meaningful acquisition of a new project would likely be considered a reverse takeover under the AIM rules for companies and the Board would of course come back to shareholders for approval on any significant investment, consistent with our AIM rule obligations.

We announced last month the Company's intention, subject to customary directorate appointment regulatory due diligence, to appoint Blair Sergeant and Simon Farrell to the Board as Chief Executive Officer and Non-executive Co-chairman respectively. A further announcement concerning the proposed appointments of Mr Sergeant and Mr Farrell will be made in due course.

On behalf of the Board, I should like to thank all shareholders for their continuing support while the Board is doing everything in its power to recover the Licence on terms which represent meaningful value for Pathfinder's shareholders.

Sir Henry Bellingham

Chairman

28 June 2018

Consolidated Income Statement

for the Year Ended 31 December 2017

Consolidated Statement of Comprehensive Income

for the Year Ended 31 December 2017

Consolidated Statement of Financial Position

31 December 2017

The financial statements were approved by the Board of Directors on 28 June 2018 and were signed on its behalf by:

RP Easby - Director

Company Statement of Financial Position

31 December 2017

The financial statements were approved by the Board of Directors on 28 June 2018 and were signed on its behalf by:

RP Easby - Director

Consolidated Statement of Changes in Equity

for the Year Ended 31 December 2017

Company Statement of Changes in Equity

for the Year Ended 31 December 2017

Consolidated and Company Statement of Cash Flows

for the Year Ended 31 December 2017

Notes to the Statements of Cash Flows

for the Year Ended 31 December 2017

1. RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH ABSORBED BY OPERATIONS

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statements of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Annual Report and Accounts

Copies of the Annual Report and Accounts, together with a notice convening an annual general meeting, are being posted to shareholders tomorrow and will be available within the Investor Relations section of the Company's website www.pathfinderminerals.com.

Annual General Meeting

The annual general meeting of the Company will be held at 10.30 a.m. on 1 November 2018 at Becket House, 36 Old Jewry, London, EC2R 8DD.

Enquiries:

Pathfinder Minerals Plc

Nick Trew, Chief Executive

Tel. +44 (0)20 3440 7775

WH Ireland Limited (NOMAD and Corporate Broker)

James Joyce or Jessica Cave

Tel. +44 (0)20 7220 1666

Vigo Communications (Public Relations)

Ben Simons or Kate Rogucheva

Tel. +44 (0)20 7390 0230

Email. pathfinderminerals@vigocomms.com

Notes to Editors:

Pathfinder Minerals Plc is incorporated in England and is admitted to trading on the AIM market of the London Stock Exchange.

CMdN, a subsidiary of Pathfinder, was issued mining concession licences 760C and 4623C on 13 September 2004 and 13 July 2011 respectively, each for a period of twenty-five years. Taken together, these mining concessions cover approximately 32,000 hectares of land on the Indian Ocean coast of the Zambezia province of Mozambique, known to contain the heavy minerals, ilmenite, rutile and zircon.