Last checked at 18 Jul 2011 07:00
Embargoed: 0700hrs 18 July 2011
Pathfinder Minerals Plc
("Pathfinder Minerals" or the "Company")
Subscription to Raise £11 million
Pathfinder Minerals Plc, the natural resources company with licences to mine heavy minerals sands in Mozambique, is pleased to announce that it has conditionally raised gross funds of £11 million via a Subscription (the "Subscription") for 220,000,000 new ordinary shares at 5 pence per share (the "Subscription Shares") by institutional investors.
Use of funds
The net proceeds of the Subscription will be used to undertake the Feasibility Study and detailed engineering study work over the next 18 months leading up to bankable feasibility and the construction phase of the mine development, for which the Company is exploring a number of non-equity related sources of funding.
The Company's licensed area was originally issued to former subsidiary companies of BHP Billiton, which invested approximately US$29 million in geological exploration, metallurgical testwork and related engineering studies; and in the construction of a site camp, roads, bridges and an airstrip. Between 1996 and 1998 BHP Billiton's subsidiaries drilled and analysed the results of over 3,000 boreholes. Pathfinder Minerals will undertake a confirmatory drilling programme to twin a selection of drill holes to establish the validity of the historic database and to enhance the Company's understanding of the deposit, parts of which had been classified as a Measured Mineral Resource by BHP Billiton.
The sonic drilling programme will include sample collection, preparation and detailed analysis, expected to be carried out in South Africa and Australia, followed by metallurgical test work to examine the mineral split, process recoveries and final product qualities.
The feasibility programme will include studies on the environmental and social impacts, project infrastructure; and a full marketing study, examining the ilmenite, rutile and zircon markets and supply routes.
John McKeon, Chairman of Pathfinder Minerals, commented:
"We are delighted to have received the financial backing of a number of high-calibre institutions which are as eager as we are to unlock the significant value of our assets.
As we approach the anticipated supply deficit for heavy minerals, with growing demand from emerging economies, Pathfinder Minerals will waste no time in progressing towards the construction of an efficient mining operation. Geographically we are well situated for export, geologically we have a world class asset with strong mineral grades and financially we now have the funds to undertake a full feasibility programme. We are excited to be entering this next phase with supportive investors and our well established local partners in Mozambique."
Admission and dealings
The Company has existing authorities in place to allow the issue of the Subscription Shares for cash on a non pre-emptive basis and the Subscription therefore does not require additional shareholder approvals. The Subscription is conditional on the Subscription Agreement not being terminated in accordance with its terms. The Subscription has not been underwritten.
The Subscription Shares will rank pari passu in all respects with the Company's existing issued ordinary shares and will be equivalent to 21.2% of the enlarged issued share capital. Application will be made for the admission of the Subscription Shares and a further 5,000,000 shares, issued in lieu of fees relating to the Subscription, to trading on AIM and it is expected that admission of the shares will occur and that dealings will commence at 8.00 a.m. on 22 July 2011 ("Admission"). Following admission, the Company will have 1,037,167,230 Ordinary Shares in issue.
Enquiries:
Pathfinder Minerals Plc
Nick Trew, Chief Executive
Tel. +44 (0)20 7399 4371
Daniel Stewart & Company Plc
Oliver Rigby or James Thomas
Tel: +44 (0)20 7776 6550
M: Communications
Ben Simons or Maria Souvorov
Tel: +44 (0)20 7920 2340 /2327
Notes to Editors
About Pathfinder Minerals
Pathfinder Minerals, through a wholly owned subsidiary, has mining concessions covering 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.
The licences, known as Naburi and Moebase and formerly held by BHP Billiton, are over land located near the Indian Ocean coast of Mozambique. Historical reported mineral resources on the assets are estimated at 2.02 billion tonnes with a 3.55% total heavy mineral content, which is equivalent to approximately 71.7 million tonnes of contained heavy minerals. Confirmatory drilling and metallurgical test work will be required to upgrade the classification of the mineral resources.
Exploration work conducted on the licences from the mid-1980s through to 2002 has identified significant mineralisation. Bulk sampling and metallurgical test work conducted in support of prefeasibility and feasibility studies in the mid-1990s indicates that valuable heavy minerals can be recovered using conventional dredge mining, wet concentration and dry mineral separation processes.
The Company is undertaking a detailed feasibility study with a view to developing a mine for commercial extraction.
Heavy Minerals Sands
The more valuable components of a heavy mineral sands deposit include the titanium oxide minerals ilmenite and rutile, and in addition, zircon. Ilmenite and rutile are used to produce titanium dioxide pigment used in the production of paint, paper, plastic, textiles, rubber and pharmaceutical products. Zircons are commercially mined for the metal zirconium and are used for abrasive and insulating purposes.