PFP.L Regulatory News (PFP)

28 June 2019

Pathfinder Minerals Plc

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

Final Results for the Year Ended 31 December 2018

CHAIRMAN'S STATEMENT

INTRODUCTION

During 2018, 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 (now consolidated as Mining Concession no. 4623C (the "Licence")). I am very encouraged by the progress being made and optimistic about the range of options being proposed to us. As announced on 3 June 2019, the Board is focused on gaining further clarity from the various interested counterparties on their proposal structures. I look forward to updating shareholders further if and when progress is made towards a resolution that is to the satisfaction of all parties. 

REVIEW OF ACTIVITY FOR THE PERIOD

In the early part of 2018, Pathfinder reported that it continued to pursue a dual-track strategy to recover control of the Licence either through the legal process or by way of a negotiated settlement. The Company subsequently reported that the prospects of a negotiated settlement had stalled.

A general meeting of the Company was requisitioned by certain shareholders on 4 April 2018 proposing changes to the composition of the Board.

On 9 May 2018, Pathfinder announced it had raised £250,000 in order to provide additional working capital; along with certain prospective management changes. The requirement for the Company to proceed with the abovementioned requisitioned general meeting was withdrawn on the same date.

On 22 May 2018, the Supreme Court in Mozambique notified the Company of its request for final written submissions in relation to Pathfinder's application for recognition of the 2012 English High Court ruling in its favour. The Company complied and lodged final written submissions. The Board has no visibility over the timing of judgment and has received no further communication since then from the Supreme Court in Mozambique.

On 10 August 2018, the Company appointed Strand Hanson Limited as its Nominated Adviser and Broker.

On 23 October 2018, Pathfinder announced it had raised a further £150,000 for working capital.

POST THE PERIOD END

Post the reporting period end, on 11 February 2019, the Company announced it had engaged Africa Focus Group Limited ("AFG"), a Hong Kong-based company with a Johannesburg consultancy office specialising in mergers and acquisitions in southern Africa, to provide assistance to the Company in pursuing completion of a transaction with the owners of Pathfinder Moçambique, S.A (the current Licence holder) pursuant to which Pathfinder, or a wholly owned subsidiary of Pathfinder, would re-establish an interest in the Licence.

This process has and continues to progress positively and, on 10 April 2019, the Company announced that it was evaluating multiple transaction structures, taking into account commercial and regulatory factors, through which the Company could hold its interest in the Licence and deliver value for shareholders; and that the principle of a proposed transaction had been agreed between Pathfinder and General Jacinto Veloso who, with his family interests, is a 50 per cent shareholder in Pathfinder Moçambique, S.A..

In parallel, the Board commenced discussions with regards to potential funding strategies (including through partnerships or debt provision) to facilitate a transaction and finance further development of the Licence. Discussions are constructive and ongoing.

The Company has raised a further £335,000 via new share issues in April and June 2019.

VALUE

Shareholders should not lose sight of the value that lies within the opportunity they have waited so patiently to pursue.

Earlier this year, the Board commissioned an independent technical consultant, 2M Mineral Services Limited, to prepare a revised Scoping Study on the Licence (the "2019 Report"), which included a revision of the capital and operating costs and pricing assumptions that were presented in the original URS/Scott Wilson 2011 scoping study report (the "2011 Report"). This revision resulted in an estimated pre-tax net present value ("NPV") at a 10 per cent discount rate of US$1.05 billion; with projected annual revenues of US$323 million over a mine life of 30 years. The project internal rate of return ("IRR") is expected to be approximately 25 per cent. The revised findings represent a near doubling of the previously reported equivalent NPV and an increase of 6.1 per cent in the project IRR.

A summary of the key differences in scoping study outcomes between the 2011 Report and the 2019 Report is set out below.

* On an absolute basis

LEADERSHIP CHANGES

During 2018, new leadership was appointed with a view to optimising the prospect of a successful recovery of the Licence. In August 2018, Nick Trew stepped down from the Board and Simon Farrell and Scott Richardson-Brown joined the Board in the roles of Non-executive Co-Chairman and Executive Director, respectively. Scott Richardson-Brown was later appointed to the role of Chief Executive Officer. Throughout the year considerable progress has been made in driving the Company's strategy to a successful conclusion and a huge amount of effort has been devoted to preserving the financial health of a non-revenue-generating, listed company working to resolve a complex situation.

Scott Richardson-Brown left the Company on 3 June 2019 to pursue other business interests, and the Board wishes him well with his future endeavours. John Taylor was appointed as the Company's new Chief Executive Officer on the same date and I am happy to report there has been no let-up in the pace of operations and activity since then. John is focused on assisting Pathfinder in delivering a timely and positive solution to shareholders in what the Board views as a highly opportunistic period to reach a final settlement.

FINANCIAL RESULTS AND CURRENT FINANCIAL POSITION

During the period the Company issued 42,111,106 new ordinary shares to raise £400,000 in cash and settle £81,000 in corporate fees.

The financial statements of the Pathfinder Group for the year ended 31 December 2018 follow later in this report. The Income Statement shows a loss of £645,000 (2017 - £615,000) of which £61,000 relates to directors' fees and pension contributions that are recorded as a liability in 'Trade and other payables' but actual payment of which had been deferred as described in 'Note 18' to the accounts in order to conserve the Company's cash resources during this period. £24,478 was also expensed relating to the issue of 15,250,000 options to Directors during the period. Since the period end, the accrued unpaid directors' fees and pension liabilities up to 31 May 2019 have been settled in full through the issue of new ordinary shares in the Company.

The Group's Statement of Financial Position shows net assets (excluding £337,000 of deferred fees and pension contributions described in 'Note 18') at 31 December 2018 of £139,000 (31 December 2017 - £224,000). The assets are held largely in the form of cash deposits and receivables. Following the Company's share issues in April and June 2019, and the receipt of cash proceeds from the exercise of warrants, the Company's cash position as at 27 June 2019 stands at £520,000.

OUTLOOK

Discussions are continuing to progress in a positive way both with regards to a transaction in respect of the Licence and with prospective funders who are conducting their own asset-level due diligence. Should a transaction be concluded, the Board anticipates that the effect on the business would likely be transformational.

On behalf of the Board, I should like to thank all shareholders for their patience and support while the Board is continuing to do everything within in its power to recover the Licence on terms which deliver value for Pathfinder's existing shareholders. I look forward to updating the market on progress in the near future.

ON BEHALF OF THE BOARD:

Sir H C Bellingham

Director

27 June 2019

Financial Statements

Consolidated Income Statement

for the Year Ended 31 December 2018

Consolidated Statement of Comprehensive Income

for the Year Ended 31 December 2018

Consolidated Statement of Financial Position

31 December 2018

The financial statements were approved by the Board of Directors on 27 June 2019 and were signed on its behalf by:

John Taylor - Director

Consolidated Statement of Changes in Equity

for the Year Ended 31 December 2018

Consolidated Statement of Cash Flows

For the Year Ended 31 December 2018

Notes

1. Publication of non-statutory accounts

The financial information set out in this report does not constitute the Company's statutory accounts for the years ended 31 December 2018 or 2017 but is derived from the 2018 accounts.

This information has been extracted from the Group's financial statements to that date upon which the auditors' opinion is unmodified.

2. Note on trade and other receivables

3. Note on trade and other payables

4. 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 today and will be available within the Investor Relations section of the Company's website www.pathfinderminerals.com.

5. Annual General Meeting

The annual general meeting of the Company will be held at 11.00 a.m. on 23 July 2019 at Becket House, 36 Old Jewry, London, EC2R 8DD.

Enquiries:

Pathfinder Minerals Plc

John Taylor, Chief Executive Officer

Tel. +44 (0)20 3440 7775

Strand Hanson Limited (Nominated & Financial Adviser and Broker)

James Spinney / Ritchie Balmer / Jack Botros

Tel. +44 (0)20 7409 3494

Vigo Communications (Public Relations)

Ben Simons / Simon Woods

Tel. +44 (0)20 7390 0234

Email. pathfinderminerals@vigocomms.com

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").