Corporate Update

24 October 2019

Pathfinder Minerals Plc

("Pathfinder" or the "Company")

Corporate Update

Pathfinder (AIM: PFP) is pleased to provide an update on further progress towards restoring an interest in Mining Concession 4623C (the "Licence") in Mozambique following a period of intense positive activity and further meetings in South Africa and Mozambique attended by executive and non-executive directors of the Company.

By way of background, over recent months, the Board has reviewed the Company's financial and legal position as well as its prospects. This has included a review of certain historical agreements and implementing significant improvements to the Company's operating structures.

The review has included a detailed analysis of the different routes available to Pathfinder to restore an interest in the Licence and to fund its further development within the context of the Company's access to capital. Wide-ranging meetings have been held in South Africa and Mozambique with representatives of Pathfinder Moçambique S.A. (the current Licence holder, in which Pathfinder has no interest), the Company's Mozambique legal advisers, representatives of the Mozambique Government, and prospective funding partners introduced by Africa Focus Group Limited ("AFG") under the agreement announced on 11 February 2019.

A resolution by way of the Mozambique courts remains a possible route. However, Pathfinder continues to await a ruling by the Supreme Court in Mozambique in relation to the Company's application for recognition of the 2012 English High Court ruling in respect of the Company's subsidiary's ownership of Companhia Mineira de Naburi S.A.R.L. ("CMdN") (the former Licence holder). The Board has no visibility over when a ruling will be forthcoming, and the Supreme Court is not bound to a timetable on which to deliver a ruling.

If favourable, the ruling should effectively lead to the Company's subsidiary regaining control of CMdN. However, an assessment by the Board and the Company's legal advisers anticipates that, even in the event of a favourable ruling, it could require further, and potentially substantial, financial and non-financial resources in order to enforce a positive ruling and seek the return of the Licence itself to CMdN.

For these reasons, a commercial settlement facilitated by a technically competent partner with the means to fund both the settlement itself and substantial future development costs associated with the Licence, remains the focus of the Board's attention.

Such a settlement would necessarily involve that partner making a payment to the shareholders of Pathfinder Moçambique S.A. and satisfying the Mozambique Ministry of Mineral Resources of the technical capability of the partner to develop the Licence.

Accordingly, having reached agreement in principle on a proposed transaction between Pathfinder and General Jacinto Veloso who, with his family interests, owns 50 per cent of Pathfinder Moçambique S.A., the Board is able to confirm that positive dialogue is now taking place with all the shareholders of Pathfinder Moçambique S.A.

The Board has a preferred funding partner with which it is now in detailed discussions over the financing and structure of a proposed transaction. The party is both well-funded and experienced in mining opportunities in southern Africa. Whilst discussions are advancing positively, shareholders should be aware that there is no guarantee that a transaction as currently envisaged will conclude successfully.

The discussions with both the prospective partner and the shareholders of Pathfinder Moçambique S.A. are being facilitated by AFG. Accordingly, the Board has extended the engagement of AFG, pursuant to the terms announced on 11 February 2019, until 31 December 2019. Under the terms of the extension, Pathfinder will at its sole discretion have the right to satisfy AFG's entirely contingent success fee either in cash or through the issue of new shares in the Company to AFG ("Fee Shares") which shall not exceed 9 per cent of the entire issued share capital of the Company at the time of such issue and as enlarged by the issue of the Fee Shares. 

John Taylor, Chief Executive Officer of Pathfinder, commented:

"Our recently appointed non-executive director, Dennis Edmonds, and I have held detailed and positive discussions in South Africa and Mozambique this month. It is clear that a commercial settlement, resulting in Pathfinder holding a significant minority interest in the Licence alongside a partner which has both the commercial and technical capability to fund a transaction and progress the future development of the Licence, represents the most realistic prospect of bringing to an end years of litigation and dispute and instead generating meaningful value for shareholders.

"The revised Scoping Study commissioned earlier this year showed us both the enormous value potential of the Licence and the considerable associated capital costs. While there remain challenges to overcome, I am encouraged by the significant progress being made together with AFG to engineer a prospective transaction that would allow Pathfinder's shareholders to benefit from the potential upside of a world-class mining opportunity."

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").