REG - Pathfinder Minerals - Final Results
08/05/2024 07:00
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RNS Number : 5140N Pathfinder Minerals Plc 08 May 2024
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the UK Market Abuse
Regulation
8 May 2024
Pathfinder Minerals Plc
("Pathfinder" the "Company")
Final Results for the Year Ended 31 December 2023
Pathfinder reports its audited financial results for the year ended 31
December 2023. The full annual report including, all notes to the accounts,
will be posted to shareholders on or around 9 May 2024, and is available on
the Company's website at www.pathfinderminerals.com
(http://www.pathfinderminerals.com) .
Paul Barrett, Executive Director, commented:
"Following completion of the disposal of IM Minerals Limited, the Company
immediately concentrated on re-building the business with a significant
acquisition. As of the date of this announcement, excellent progress is being
made on the technical and legal due diligence in relation to the proposed
acquisition of Rome Resources Ltd, which is anticipated to provide the
enlarged group with access to a tin play offsetting a world class producer in
sub-Saharan Africa, also discovered by the Rome Resources principals. The
proposed acquisition of Rome Resources has the ability to transform Pathfinder
into being a key player in a critical commodity in the energy transition."
Enquiries:
Pathfinder Minerals Plc
Paul Barrett, Executive Director
Tel. +44 (0)20 3143 6748
Allenby Capital Limited (Nominated Adviser and Broker)
John Depasquale / Vivek Bhardwaj / Lauren Wright (Corporate Finance)
Stefano Aquilino / Joscelin Pinnington (Sales & Corporate Broking)
Tel. +44 (0)20 3328 5656
Chairman's Statement
For the Year Ended 31(st) December 2023
Introduction
The Company focused on two key activities during the financial year ended 31st
December 2023 - the disposal of its formerly wholly-owned subsidiary IM
Minerals Limited ("IM Minerals") and engagement with a target company to
acquire it through a reverse takeover. Both of these activities, which are
considered to be vital steps in the relaunch of Pathfinder, are detailed
further below.
Successful disposal of IM Minerals Limited and transition to AIM Rule 15 Cash
Shell
Following completion of the disposal of IM Minerals on 18 August 2023
("Completion"), Pathfinder received an initial consideration of £1.0 million.
The purchaser of IM Minerals, Acumen Advisory Group LLC ("Acumen"), undertook
to commence legal proceedings against the Government of Mozambique in respect
of the expropriation of Mining Concession 4623C (the "Claim") within three
months of completion of the disposal of IM Minerals by Pathfinder, a deadline
subsequently extended by mutual agreement to January 2024. Acumen filed the
request for arbitration in January 2024. Acumen has assigned the Claim to
Luangwa Resources LLC ("Luangwa"). Pathfinder management have met with
Luangwa's principals and are satisfied of their intentions to finalise and/or
settle the claim within five years.
In the event of a successful outcome of the Claim, Pathfinder will receive a
contingent payment to be made by Acumen of a share 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 ("Contingent Payment"). The share of the net
proceeds due to Pathfinder varies on a sliding scale from 40% to 22.5%, with
Pathfinder entitled to 22.5% in the event that the amount awarded under the
Claim is above US$120 million. As reported in the Company's announcement on 10
December 2021, the valuation ranges prepared by Versant Partners LLC reflect a
minimum of US$110 million for an ex-ante damages award, through to US$1,500
million for an ex-post damages award.
To ensure that shareholders on Pathfinder's share register at around the time
of Completion ("Eligible Shareholders") may in due course be compensated for
the expropriation of Mining Concession 4623C, the Company intends to enter
into a deed of assignment with a Special Purpose wholly owned subsidiary of
the Company ("SPV") into which any Contingent Payment will be paid and then
distributed to shareholders of the SPV. Eligible shareholders of Pathfinder
are those who were on the Company's register as at 6:00pm on the record date
of 5 September 2023, further details of which were announced by Pathfinder on
1 September 2023.
Following Completion, the Company ceased to own, control, or conduct all or
substantially all its previous trading business, activities or assets and on
18 August 2023 became an AIM Rule 15 cash shell pursuant to the AIM Rules for
Companies ("AIM Rules"). As such, the Company is required to make an
acquisition or acquisitions which constitutes a reverse takeover under AIM
Rule 14 ("Reverse Takeover" (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 (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.
On 29 November 2023, Pathfinder announced¸ inter alia, into non-binding
heads of terms regarding a potential acquisition of the entire issued share
capital and to be issued share capital of Rome Resources Ltd ("Rome
Resources"), which would constitute a reverse takeover under the AIM Rules
(together the "Proposed Acquisition"). Rome Resources is a tin explorer active
in the Democratic Republic of Congo and is a company in which Mark Gasson is
also a director of. The Proposed Acquisition constitutes a reverse takeover
under rule 14 of the AIM Rules. Therefore, the Proposed Acquisition would be
subject, inter alia, to the approval of the Company's shareholders. In
accordance with rule 14 of the AIM Rules, the Company's ordinary shares was
suspended from trading on AIM with effect from 7:30 a.m. on 29 November 2023.
The Company's ordinary shares will remain suspended until such time as either
an admission document is published, or an announcement is released confirming
that the Proposed Acquisition is not proceeding. Details of Rome Resources and
its assets are set out below along with the outline terms of the proposed
Reverse Acquisition.
Rome Resources Tin Project
Rome Resources holds majority indirect beneficial interests in two permits
(totalling 38.4km(2)) in the eastern part of the Democratic Republic of Congo
('DRC'), collectively the Bisie Tin Project, where initial surface sampling
and limited drilling to date has identified encouraging grades of tin, copper,
silver and zinc in two prospects. The mineralisation is contained in early
PalaeoProterozoic metamorphics (amphibolite schists) with the mineralising
fluids believed to be associated with MesoProterozoic and later granite
emplacement.
The project lies only 8km along trend from the Alphamin's Mpama tin mine,
which currently produces currently 4% of global tin production (with plans to
increase to 7%) associated with the margins of the same large granitic mass.
Rome Resources has encountered grades of up to 12.8% tin, 7.8% copper, 4.2%
zinc and >100ppm silver in its core samples. Two large surface anomalies
have been identified on the permits, the size of which is comparable, if not
larger, than the Alphamin deposits.
Rome Resources' forward programme consists of further drilling on both
anomalies to delineate a tin resource by end 2024. The continuity of this
programme is important and it was therefore agreed to loan Rome the necessary
funds to continue drilling, as detailed below.
Outline Terms for the Proposed Acquisition
The Proposed Acquisition constitutes a reorganization under Part 8 of Policy
5.3 of the TSX Venture Exchange ("TSX-V"). Related to the Proposed
Acquisition, Pathfinder has agreed to lend the Company up to C$2,500,000 paid
in two drawdowns on an unsecured basis to support its ongoing exploration
activities in the DRC. The TSX Venture Exchange ("TSXV") has conditionally
accepted for filing the loan between the Company and Pathfinder. The first
drawdown of C$500k loan funds was drawn down at year end.
Under the non-binding heads of terms governing the Proposed Acquisition, a
loan has been provided to Rome Resources to support its early 2024 drilling
programme in a tin and related metals prospect in the Bisie North area of the
North Kivu district of the DRC. The terms of this loan facility are a
maximum facility of C$2,500,000 which, when fully drawn down post year end,
which trigged the issue of 10,000,000 warrants in Rome Resources to the
Company, exercisable at C$0.25 per share. A fixed payment of 10% is attached
to the loan, except in the case of termination, when it will be 15%. The loan
becomes repayable to the Company on the first anniversary of full drawdown,
i.e. 12(th) January 2025.
The Company is pleased with the progress made to date in relation to the
Proposed Acquisition and all advisers are continuing to work hard on the
proposed transaction to bring it to fruition.
Financial results and current financial position
As of 31 December 2023, cash and equivalents was £1,396,000 (2023: £46,000),
primarily a result of a combination of the proceeds of £1 million from the
disposal of IM Minerals and a placing undertaken in December 2023 to raise
£1,275,000 before expenses. There was an earlier equity raise in January
2023 of £0.5 million to provide working capital for the Company throughout
2023. There were no operating revenues during the reporting period.
It should be noted that immediately following the end of the reporting period,
£1,177,183 (CAD$ 2,000,000) was provided to Rome in January 2024 as the
second and final drawdown on the loan facility agreed as part of the Proposed
Acquisition.
Board changes
During the reporting period, there were several changes at board level,
reflecting the changes in the business going forward. Peter Taylor stepped
down from the board of Pathfinder on 22 June 2023 along with Dennis Edmonds on
16 August 2023. I was appointed at the same time and following the
commencement of discussions with Rome Resources and took over the role of
Chief Executive Officer of Pathfinder with Mark Gasson remaining a
non-executive director.
Additionally in November 2023, David Taylor stepped down from the role of
Company Secretary and the role was taken over by Silvertree Partners.
Outlook
The outlook for the Company is significantly better than that was the case a
year ago. The disposal of IM Minerals and the potential for future value for
shareholders has allowed the Company to move to the next stage of its
development and with a sub-Saharan metals focus, the Company has landed on
Rome Resources as a reverse takeover candidate, potentially giving
shareholders exposure to a high-quality tin project. Tin has recently
attracted attention as a somewhat overlooked critical metal with many
commentators predicting a supply squeeze in the coming years.
We believe this project offers shareholders an excellent opportunity to see
significant returns. The Rome Resources' management were responsible for the
world class Alphamin tin project just 8km from the Rome project and bring a
wealth of knowledge and experience which will be invaluable in the development
of the project.
Paul Barrett
Executive Director
7 May 2024
Consolidated Statement of Comprehensive Income
for the Year Ended 31 December 2023
Note Year ended Year ended
31 December 2023
31 December 2022
£'000 £'000
CONTINUING OPERATIONS
Revenue - -
Administrative expenses 3, 4 (1,043) (376)
OPERATING LOSS (1,043) (376)
LOSS BEFORE INCOME TAX (1,043) (376)
Income tax 5 - -
LOSS AFTER INCOME TAX (1,043) (376)
Gain on sale of investment 17 1,000 -
LOSS FOR THE YEAR (43) (376)
Total comprehensive loss for the year attributable to equity holders of the (43) (376)
parent
Loss per share from continuing operations in pence per share: 7
Basic and diluted (0.01) (0.07)
Consolidated Statement of Financial Position
for the Year Ended 31 December 2023
Note Year ended Year ended
31 December 2023
31 December 2022
£'000 £'000
NON-CURRENT ASSETS
Investments 8 - -
CURRENT ASSETS
Trade and other receivables 9 389 13
Cash and cash equivalents 10 1,396 46
TOTAL ASSETS 1,785 59
EQUITY AND LIABILITIES
Capital and reserves attributable to equity holders of the Company:
Share capital 11 18,817 18,717
Share premium 11 14,613 14,239
Share based payment reserve 42 162
Shares to issue reserve 11 1,215 -
Warrant reserve 11 104
Accumulated deficit (33,180) (33,357)
TOTAL EQUITY 1,518 (135)
CURRENT LIABILITIES
Trade and other payables 12 267 114
Borrowings 13 - 80
TOTAL LIABILITIES 267 194
TOTAL EQUITY AND LIABILITIES 1,785 59
The financial statements were approved for issue by the Board of Directors on
7 May 2024 and were signed on its behalf by:
Paul Barrett
Director
Consolidated Statement of Changes in Equity
for the Year Ended 31 December 2023
Called up share capital Share premium Share based payment reserve Warrant reserve Accumulated Total
deficit
equity
Shares to issue reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2022 as previously stated 18,716 14,234 199 255 (33,169) 235
-
Loss for the year - - - - - (376) (376)
Total comprehensive loss for the year - - - - (376) (376)
-
Issue of share capital 1 5 - - - - 6
Cost of share issue - - - - - - -
Share based payments - - (37) (151) - 188 -
Balance at 31 December 2022 18,717 14,239 162 104 - (33,357) (135)
Loss for the year - - - - - (43) (43)
Total comprehensive loss for the year - - - - (43) (43)
-
Issue of share capital 100 400 - - - - 500
Cost of share issue - (25) - - - - (25)
Shares to issue - - - - 1,215 - 1,215
Share based payments - (1) (120) (93) - 220 6
Balance at 31 December 2023 18,817 14,613 42 11 1,215 (33,180) 1,518
Consolidated Statement of Cash Flows
for the Year Ended 31 December 2023
Note Year ended Year ended
31 December 2023
31 December 2022
£'000 £'000
Cash flows from operating activities
Loss before tax (43) (376)
Adjustments for:
Finance income (7) -
Finance expense 9 -
Share-based payments 6 -
Funds received for disposal of assets 17 (1,000) -
Net cash flow from operating activities before changes in working capital (1,035) (376)
Changes in working capital:
Increase in trade and other payables 12 154 6
Increase in trade and other receivables 9 (376) (35)
Net cash flow used in operating activities (1,257) (405)
Cash flow from investing activities
Interest received 7 -
Gain on disposal of assets 17 1,000 -
Net cash flow from investing activities 1,007 -
Cash flow from financing activities
Proceeds arising as a result of the issue of ordinary shares 500 6
Costs related to issue of ordinary share capital (26) -
Shares to issue 11 1,215 -
Repayment of borrowings 13 (80) 80
Finance expense (9) -
Net cash flow from financing activities 1,600 86
Net increase in cash and cash equivalents in the year 1,350 (319)
Cash and cash equivalents at beginning of the year 46 365
Cash and cash equivalents at end of the year 10 1,396 46
Company Statement of Financial Position
for the Year Ended 31 December 2023
Note Year ended Year ended
31 December 2023
31 December 2022
£'000 £'000
NON-CURRENT ASSETS
Investments 8 - -
CURRENT ASSETS
Trade and other receivables 9 389 13
Cash and cash equivalents 10 1,396 46
TOTAL ASSETS 1,785 59
EQUITY AND LIABILITIES
Capital and reserves attributable to equity holders of the Company:
Share capital 11 18,817 18,717
Share premium 11 14,613 14,239
Share based payment reserve 42 162
Warrant reserve 11 104
Shares to issue reserve 11 1,215 -
Accumulated deficit (33,180) (33,357)
TOTAL EQUITY 1,518 (135)
CURRENT LIABILITIES
Trade and other payables 12 267 114
Borrowings 13 - 80
TOTAL LIABILITIES 267 194
TOTAL EQUITY AND LIABILITIES 1,785 59
The Company has taken exemptions allowed under section 408 of the Companies
Act 2006 and has not presented its own profit and loss account in these
financial statements. The loss after tax of the parent Company for the year
was £43k (2022: £376k).
The financial statements were approved and authorised for issue by the Board
of Directors on 7 May 2024 and were signed on its behalf by:
Paul Barrett
Director
Company Statement of Changes in Equity
for the Year Ended 31 December 2023
Called up share capital Share premium Share based payment reserve Warrant reserve Accumulated Total
deficit
equity
Shares to issue reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2022 18,716 14,234 199 255 (33,169) 235
-
Loss for the year - - - - - (376) (376)
Total comprehensive loss for the year - - - - (376) (376)
-
Issue of share capital 1 5 - - - - 6
Cost of share issue - - - - - - -
Share based payments - - (37) (151) - 188 -
Balance at 31 December 2022 18,717 14,239 162 104 - (33,357) (135)
Loss for the year - - - - - (43) (43)
Total comprehensive loss for the year - - - - (43) (43)
-
Issue of share capital 100 400 - - - - 500
Cost of share issue - (25) - - - - (25)
Shares to issue - - - - 1,215 - 1,215
Share based payments - (1) (120) (93) - 220 6
Balance at 31 December 2023 18,817 14,613 42 11 1,215 (33,180) 1,518
Company Statement of Cash Flows
for the Year Ended 31 December 2023
Note Year ended Year ended
31 December 2023
31 December 2022
£'000 £'000
Cash flows from operating activities
Loss before tax (43) (376)
Adjustments for:
Finance income (7) -
Finance expense 9 -
Share-based payments 6 -
Funds received for disposal of assets 17 (1,000) -
Net cash flow from operating activities before changes in working capital (1,035) (376)
Changes in working capital:
Increase in trade and other payables 12 154 6
Increase in trade and other receivables 9 (376) (35)
Net cash flow used in operating activities (1,257) (405)
Cash flow from investing activities
Interest received 7 -
Gain on disposal of assets 17 1,000 -
Net cash flow from investing activities 1,007 -
Cash flow from financing activities
Proceeds arising as a result of the issue of ordinary shares 500 6
Costs related to issue of ordinary share capital (26) -
Shares to issue 11 1,215
Repayment of borrowings 13 (80) 80
Finance expense (9) -
Net cash flow from financing activities 1,600 86
Net increase in cash and cash equivalents in the year 1,350 (319)
Cash and cash equivalents at beginning of the year 46 365
Cash and cash equivalents at end of the year 10 1,396 46
Notes to the Consolidated Financial Statements
for the year ended 31 December 2023
1. ACCOUNTING POLICIES
General information
Pathfinder Minerals Plc is a public limited company, quoted on AIM and is
incorporated, registered and domiciled in England.
The Company's registered office is 35 Berkeley Square, London, England, W1J
5BF.
Basis of preparation
These financial statements have been prepared in accordance with UK-adopted
International Accounting Standards as issued by the International Accounting
Standards Board (IASB) and Interpretations (collectively IASs) and with those
parts of the Companies Act 2006 applicable to companies reporting under IASs.
The financial statements have been prepared under the historical cost
convention. The functional and presentational currency of the Company is Pound
Sterling.
New standards, amendments and interpretations adopted by the Company
At the date of authorisation of these financial statements, the following
standards and interpretations relevant to the Company and which have not been
applied in these financial statements, were in issue but were not yet
effective.
Standard Effective date, annual period beginning on or after
IAS 1: Non-current liabilities with covenants 1 January 2024
IAS 1: Classifications of current or non-current liabilities 1 January 2024
IAS 7 and IFRS 7: Supplier finance arrangements 1 January 2024
IFRS 16 Leases: Lease liability in a Sale and Leaseback 1 January 2024
IAS 21: Lack of exchangeability 1 January 2025
The adoption of these standards is not expected to have any material impact on
the financial statements of the Company.
Going concern
In determining whether these financial statements should be prepared on the
going concern basis, the Directors must consider whether the business has
adequate financial resources to continue to operate and meet its obligations
for a period of at least 12 months from the date of this report.
The Directors have assessed the funding needs of the business as it continues
to progress the Proposed Acquisition with Rome Resources, together with the
various forms of funding that remain available to it, including but not
limited to the allotment of new ordinary shares for cash and the drawing of
other forms of finance such as convertible debt instruments. Following
consideration of the timing of costs associated with the continued efforts to
complete the transaction, coupled with the assessment of the funding options
that remain available as this process continues, the Directors have determined
that sufficient funding remains available for the Company to continue to meet
its obligations as they fall due over the course of this process. However, as
the company does not have an ability to generate revenue and the timings
around this are currently uncertain, a material uncertainty exists as to the
Company's ability to then raise additional equity or debt funding based on
conditions in existence at the appropriate time. The auditors have included a
material uncertainty in the their audit report due to circumstances noted
above.
The Directors believe that the Company has adequate financial resources
available to continue its operational existence for at least 12 months from
the date of the approval of these financial statements. Accordingly, the
Directors believe that it is appropriate to continue to adopt the going
concern basis in preparing these financial statements.
Basis of consolidation
Although the Company's direct subsidiary as at 31 December 2022, IM Minerals
Limited holds 99.9% of the issued share capital of Companhia Mineira de Naburi
SARL, which in turn holds 99.8% of the issued share capital of Sociedade Geral
de Mineracao de Moçambique SARL, events in 2011 indicated that the Company
does not control either of these Moçambique-domiciled companies group
companies; neither has it been possible to obtain the statutory registers or
audited accounts for them; accordingly, these financial statements consolidate
the financial statements of IM Minerals Limited only. IM Minerals Limited is a
dormant intermediate holding company registered in England & Wales. In
July 2023 the Company sold its holdings in IM Minerals Limited and its
subsidiaries to Acumen Advisory Group LLC along with the rights to bring a
claim against the government of Mozambique. As a consequence of this
divestment, the Company no longer consolidates the performance of IM Minerals
Limited.
Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at
the rates of exchange ruling at the statement of financial position date.
Transactions in foreign currencies are translated into sterling at the rate of
exchange ruling at the date of transaction. Exchange differences are
considered in arriving at the operating result.
Employee benefit costs
The Group makes available a defined contribution pension scheme to eligible
employees. Any contributions paid to the Group's pension scheme are charged to
the income statement in the period to which they relate.
Equity instruments and reserves description
An equity instrument is any contract that evidences a residual interest in the
assets of the Company after deducting all of its liabilities. Equity
instruments issued by the Company are recorded at the proceeds received net of
direct issue costs.
Ordinary shares are classified as equity.
Deferred shares are classified as equity but have restricted rights such that
they have no economic value.
Share capital account represents the nominal value of the ordinary and
deferred shares issued.
The share premium account represents premiums received on the initial issuing
of the share capital. Any transaction costs associated with the issuing of
shares are deducted from share premium, net of any related income tax
benefits.
Share based payment reserve represents equity-settled share-based employee
remuneration until such share options are exercised.
Warrant reserve represents equity-settled share-based payments until such
share warrants are exercised.
The shares to issue reserve represents the total value of funds received in
the year for issuance of share capital issued post reporting period end to
which the price and number of shares are fixed.
Share-based payments
Where equity settled share options or warrants are awarded, the fair value of
the options at the date of grant is charged to the statement of comprehensive
income over the vesting period. Non-market vesting conditions are considered
by adjusting the number of equity instruments expected to vest at each balance
sheet date so that, ultimately, the cumulative amount recognised over the
vesting period is based on the number of options that eventually vest.
Financial instruments
Trade and other receivables
Trade receivables are measured at initial recognition at fair value and are
subsequently measured at amortised cost using the effective interest rate
method. Trade and other receivables are accounted for at original invoice
amount less any provisions for doubtful debts. Provisions are made where
there is evidence of a risk of non-payment, considering the age of the debt,
historical experience and general economic conditions. If a trade debt is
determined to be uncollectable, it is written off, firstly against any
provisions already held and then to the statement of comprehensive income.
Subsequent recoveries of amounts previously provided for are credited to the
statement of comprehensive income.
Appropriate allowances for estimated irrecoverable amounts are recognised in
profit or loss in accordance with the expected credit loss model under IFRS 9.
For trade and other receivables which do not contain a significant financing
component, the Company applies the simplified approach. This approach requires
the allowance for expected credit losses to be recognised at an amount equal
to lifetime expected credit losses. For other debt financial assets, the
Company applies the general approach to providing for expected credit losses
as prescribed by IFRS 9, which permits for the recognition of an allowance for
the estimated expected loss resulting from default in the subsequent 12-month
period. Exposure to credit loss is monitored on a continual basis and, where
material, the allowance for expected credit losses is adjusted to reflect the
risk of default during the lifetime of the financial asset should a
significant change in credit risk be identified.
The majority of the Company's financial assets are expected to have a low risk
of default. A review of the historical occurrence of credit losses indicates
that credit losses are insignificant due to the size of the Company's clients
and the nature of its activities. The outlook for the natural resources
industry is not expected to result in a significant change in the Company's
exposure to credit losses. As lifetime expected credit losses are not expected
to be significant the Company has opted not to adopt the practical expedient
available under IFRS 9 to utilise a provision matrix for the recognition of
lifetime expected credit losses on trade receivables. Allowances are
calculated on a case-by-case basis based on the credit risk applicable to
individual counterparties.
Trade and other payables
Trade and other payables are held at amortised cost which equates to nominal
value.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, current balances with banks
and similar institutions and liquid investments generally with maturities of 3
months or less. They are readily convertible into known amounts of cash and
have an insignificant risk of changes in values.
Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax.
The tax currently payable is based on taxable profit for the period. Taxable
profit differs from the net profit as reported in the income statement because
it excludes items of income or expense that are taxable or deductible in other
periods and it further excludes items that are never taxable or deductible.
The Company's liability for current tax is calculated using tax rates that
have been enacted or substantively enacted by the balance sheet date.
Provisions
Provisions are recognised when the Company has a present obligation as a
result of a past event, it is probable that the Company will be required to
settle that obligation and a reliable estimate can be made of the amount of
the obligation. The amount recognised as a provision is the best estimate of
the consideration required to settle the present obligation at the balance
sheet date, taking into account the risks and uncertainties surrounding the
obligation.
Critical accounting estimates and judgements
The preparation of financial information in accordance with generally accepted
accounting practice, in the case of the Group using IFRSs, requires the
directors to make estimates and judgements that affect the reported amount of
assets, liabilities, income and expenditure and the disclosures made in the
financial statements. Such estimates and judgements must be continually
evaluated based on historical experience and other factors, including
expectations of future events.
Details of accounting estimates and judgements that have the most significant
effect on the amounts recognised in the financial statements have been
disclosed under the relevant note or accounting policy for each area where
disclosure is required.
Valuation of share-based payments to employees
The Company estimates the expected value of share-based payments to employees
and this is charged through the income statement over the vesting period.
The fair value is estimated using the Black Scholes valuation model which
requires a number of assumptions to be made such as level of share vesting,
time of exercise, expected length of service and employee turnover and share
price volatility. This method of estimating the value of share-based
payments is intended to ensure that the actual value transferred to employees
is provided for by the time such payments are made.
Recovery of loan to Rome Resources Ltd
As announced on 29 November 2023, the Company has entered into a proposed
acquisition agreement to acquire the entire share capital of Rome Resources
Ltd ("Rome"). The Company has entered into a loan agreement with Rome to
fund the acquisition process, providing a total of CAD2,500,000 to Rome over
the course of the transaction completion process. As at the reporting date,
the amount of CAD500,000 had been provided to Rome and which is carried in
these financial statements at £299,000 as a non-current asset receivable.
Recovery of this receivable remains contingent on the completion of the
proposed transaction. The directors are of the opinion that completion of
the proposed transaction is highly probable and as there is no indication that
the loan receivable from Rome may not be recovered, no impairment has been
recognised as regards this asset.
2. SEGMENTAL REPORTING
The Group has one activity only. The whole of the value of the Group's and the
Company's net assets in their respective financial statements at 31 December
2023 and 2022 was attributable to UK assets and liabilities.
3. OPERATING LOSS
Group and Company
2023 2022
£'000 £'000
Loss from operations has been arrived at after charging:
Directors' Remuneration 219 124
Share based payment charge 6 -
Legal Fees 270 4
Nomad Fees 45 50
Fees payable to the Company's auditor for the audit of the Group 26 22
and Company's financial statements
4. EMPLOYEES AND DIRECTORS
The average number of persons employed by the Company in the financial year
(including directors that receive remuneration) was 4 (2022: 5).
The highest paid director during the year received £130,000 (2022: 62,000).
The following tables set out and analyse the remuneration of directors for the
years ended 31 December 2023 and 2022.
For the year ended 31 December 2023:
Salary Fees Total emoluments Contribution to Pension schemes Share Based Payments Total remuneration
£'000 £'000 £'000 £'000 £'000 £'000
Dennis Edmonds 56 - 56 - - 56
Peter Taylor 125 - 125 1 4 130
Mark Gasson - 28 28 - 1 29
Paul Barrett 10 - 10 - - 10
191 28 219 1 5 225
For the year ended 31 December 2022:
Salary Fees Total emoluments Contribution to Pension schemes Share Based Payments Total remuneration
£'000 £'000 £'000 £'000 £'000 £'000
Dennis Edmonds 30 - 30 - - 30
Peter Taylor 60 - 60 2 - 62
Mark Gasson - 25 25 - - 25
Jonathan Summers 7 - 7 - - 7
97 25 122 2 - 124
No share options were exercised by the directors, and no shares were received
or receivable by any director in respect of qualifying services under a
long-term incentive scheme.
5. INCOME TAX
The charge for the year is made up as follows:
2023 2022
£'000 £'000
Current tax - -
Tax charge for the year - -
Analysis of tax expense
No liability to UK corporation tax arose for the year ended 31 December 2023
nor for the year ended 31 December 2022. No deferred tax asset has been
recorded on tax losses carried forward.
Factors affecting the tax expense
The tax assessed for the year is higher than (2022: higher than) the standard
rate of corporation tax in the UK. The difference is explained below:
2023 2022
£'000 £'000
Loss on ordinary activities before tax (43) (376)
Loss on ordinary activities multiplied by the standard rate of corporation tax (8) (71)
in the UK of 19% (2022: 19%)
Effects of:
Non-deductible expenses - -
Income not chargeable to tax - -
Unrelieved tax losses carried forward 8 71
Tax expense - -
6. LOSS OF PARENT COMPANY
As permitted by Section 408 of the Companies Act 2006, the income statement of
the parent company is not presented as part of these financial statements. The
parent company's loss for the financial year was £43k (2022: £376k).
7. LOSS PER SHARE
Basic loss per share is calculated, as set out in the tables below, by
dividing the loss attributable to ordinary shareholders by the weighted
average number of ordinary shares outstanding during the period.
In accordance with IAS 33, as the Group is reporting a loss for both this and
the preceding year the share options
and warrants are not considered dilutive because the exercise of these would
have the effect of reducing the loss per share.
As at 31 December 2022:
Loss Weighted average number of shares Per-share amount, pence
£'000
Basic loss attributable to the ordinary shareholders 376 532,094,193 0.07p
As at 31 December 2023:
Loss Weighted average number of shares Per-share amount, pence
£'000
Basic loss attributable to the ordinary shareholders 43 623,727,711 0.01p
8. INVESTMENTS
Parent company Shares in group undertakings
£'000
COST
At 1 January 2022 and 1 January 2023 34,806
Disposal of subsidiaries in the year (34,806)
PROVISION FOR IMPAIRMENT
At 1 January 2022 and 1 January 2023 (34,806)
Reversal of impairment on disposal in the year 34,806
NET BOOK VALUE
At 31 December 2022 and 31 December 2023 -
Subsidiaries
Pathfinder Battery Commodities Ltd
Registered office: 35 Berkeley Square, London, W1J 5BF, United
Kingdom
Nature of business: Holding company
Class of shares: Ordinary
Holding: 100.00%
Incorporated: 20 May 2022
IM Minerals Limited held the shares in Companhia Mineira de Naburi SARL
("CMdN") which held titanium dioxide mining concessions in the Republic of
Mozambique. In November 2011, the original vendors of IM Minerals' subsidiary,
CMdN, advised the Company that they had procured the cancellation of IM
Minerals Ltd's shares in CMdN and the transfer of its assets (the mining
licences) to another company controlled by them. Whilst the Company is taking
legal and other action in order to recover the shares and the licences, the
Company, in the interest of accounting prudence, made full provision in the
2011 financial statements against the cost of its investment in IM Minerals
Ltd. As a consequence of the situation regarding the Company's legal claims,
the Company has been unable to verify the current registered office addresses
for the Mozambique-domiciled companies, CMdN and Sociedade Geral de Mineracao
de Moçambique SARL. Furthermore, whilst the Company believes these companies
to be non-trading, the Company has been unable to verify their trading
statuses.
On 28 July 2023 Pathfinder Minerals Plc sold 100% of its position to Acumen
Advisory Group LLC along with its rights to bring a claim against the
Government of Mozambique for initial consideration of £1,000,000. The
remaining consideration consists of a contingent payment of the aggregate
amount payable on settlement or determination of the claim shown in the below
table.
Amount for which Rights Claim Finalised (US$M) Percentage of Net Recoveries to be paid to Pathfinder
0 - 10m 40.0%
10m - 20m 37.5%
20m - 30m 35.0%
30m - 40m 32.5%
40m - 50m 30.0%
50m - 70m 27.5%
70m - 120m 25.0%
>120m 22.5%
9. TRADE AND OTHER RECEIVABLES
Group Parent Company
Current
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Other debtors 8 8 8 8
VAT 21 5 21 5
Prepayments 61 - 61 -
Loan receivable 299 - 299 -
389 13 389 13
The loan receivable balance of £299k (C$500K) is owed by Rome Resources, a
related party entity as a result of having a common director.
10. CASH AND CASH EQUIVALENTS
Group Parent Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Bank accounts 1,396 46 1,396 46
11. SHARE CAPITAL
a) Called up, allotted, issued and fully paid share capital
No. Ordinary shares of 0.1p each Deferred shares of 9.9p each Allotment price Share Share Premium Shares to Issue Reserve
(£s) Capital £'000 £'000
£'000
Total as at 31 December 2021 531,328,168 183,688,116 18,716 14,234
-
6 May 2022 1,166,666 - 0.005 1 5 -
Total as at 31 December 2022 532,494,834 183,688,116 18,717 14,239
-
1 Feb 2023 100,000,000 - 0.005 100 374 -
Total as at 31 December 2023 632,494,834 183,688,116 18,817 14,613
1,215
On the 29(th) November 2023 the Company allotted 425,000,000 shares for total
consideration of £1,275,000 net of associated costs. As at year end £60,000
remained outstanding from investors with £1,215,000 having been received in
the year. This issuance was subject to shareholder approval which was obtained
January 2024 and as a result these shares were issued subsequent to the year
end and the cash received of £1,215,000 is shown within a shares to be issued
reserve as at 31 December 2023.
b) Share options & warrants in issue
Share options
Exercise Price Grant Date Expiry Date At 1 January 2023 Issued / (lapsed) At 31 December 2023
1.25p((1)) 11 May 2020 30 June 2025 10,000,000 - 10,000,000
1.25p((1)) 4 August 2020 30 June 2025 6,000,000 - 6,000,000
1.75p 21 September 2018 20 September 2023 18,750,000 (18,750,000) -
0.55p 17 March 2021 16 March 2023 6,000,000 (6,000,000) -
1.25p 1 April 2021 31 March 2023 6,000,000 (6,000,000) -
1.25p 9 June 2021 30 June 2025 6,000,000 - 6,000,000
1.25p 23 June 2021 30 June 2025 3,000,000 - 3,000,000
1.25p 4 October 2021 30 June 2025 5,000,000 - 5,000,000
60,750,000 (30,750,000) 30,000,000
((1)) On 27 April 2023, the following amendments were made to certain of
the above share options:
· 6,000,000 of the 6,000,000 1.25p options that were otherwise due
to expire on 8 August 2023 were extended so as to lapse on 30 June 2025
· 5,000,000 options with an exercise price of 1.25p and an expiry
date of 3 October 2023, were extended so as to expire on 30 June 2025.
· 6,000,000 options with an exercise price of 1.25p and an expiry
date of 8 June 2023, were extended so as to expire on 30 June 2025.
· 3,000,000 options with an exercise price of 1.25p and an expiry
date of 22 June 2023, were extended so as to expire on 30 June 2025.
· 10,000,000 options with an exercise price of 1.25p and an expiry
date of 11 May 2023, were extended so as to expire on 30 June 2025.
Share warrants
Exercise Price Expiry Date At 1 January 2023 Issued/(lapsed) At 31 December 2023
0.50p 31 May 2023 11,666,668 (11,666,668) -
1.50p 31 May 2023 3,076,923 (3,076,923) -
0.60p 29 April 2024 3,500,000 - 3,500,000
0.5p((1)) 31 January 2025 - 5,000,000 5,000,000
18,243,591 (9,743,591) 8,500,000
(1) On 31 January 2023, 5,000,000 warrants over Ordinary shares were
issued at a strike price of 0.45p per share, the exercise period is 2 years.
12. TRADE AND OTHER PAYABLES
Group Parent Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Trade creditors 224 4 224 4
Social security and other taxes 12 43 12 43
Other creditors - 42 - 42
Accruals and deferred income 31 25 31 25
267 114 267 113
13. BORROWINGS
On 29 September 2022 and 28 December 2022, the Company announced it has
entered into a loan agreement whereby an FCA authorised financial institution
has arranged for the provision to the Company by an individual, of an
unsecured loan facility of up to £120,000 (the "Loan") for working capital
purposes. The Loan carried a simple fixed interest of 5.0 percent on any
amounts drawn down and had issue costs of £5,000. The Loan was designed to
provide the Company with access to additional working capital, should it be
required. As at 31 December 2022 £80,000 had been drawn down.
The Loan was repaid in full together with accrued interest and the issue costs
on 1 February 2023.
14. CONTINGENT LIABILITIES
As at the reporting date, the Company had an obligation to disburse the second
tranche of the loan to Rome Resources Ltd pursuant to the loan agreement
announced on 29 November 2023, totalling C$2,000,000, contingent on receiving
a formally executed drawdown request. Such a drawdown request was received in
January 2024 and consequently disbursement of this second tranche of the loan
took place in January 2024, see note 19 for further details.
15. RELATED PARTY DISCLOSURES
· Related party receivables are disclosed in note 9 and 19.
· Details of directors' remuneration are given in note 4 above.
16. SHARE BASED PAYMENTS
The fair values of the share options and warrants at the date of grant have
been measured using the Black- Scholes pricing model, which takes into account
factors such as the option life, share price volatility and the risk-free
rate.
Each share option and warrant vested and was exercisable immediately upon
grant. The share-based expense relating to each share option and share warrant
was recognised in full on the date of grant.
Share options
Date of grant Share price Exercise Risk Free Expected life Expected yield Expected volatility((2)) Fair value per option
price Rate((1)) of options
11 May 2020 0.93p 1.25p((3)) 0.07% 2 years 0% 55% £0.00190
4 August 2020 0.43p 1.25p((3)) 0.06% 2 years 0% 55% £0.00022
9 June 2021 0.79p 1.25p((3)) 0.05% 2 years 0% 55% £0.00127
23 June 2021 0.75p 1.25p((3)) 0.05% 2 years 0% 55% £0.00111
4 October 2021 0.73p 1.25p((3)) 0.05% 2 years 0% 55% £0.00101
27 April 2023((4)) 0.5p 0.75p 4.18% 2.2 years 0% 55% £0.00107
( )
((1)) Daily sterling overnight index average (SONIA) rate at the date of grant
was adopted as the effective risk-free rate.
((2)) Expected volatility is based on management's estimate of the expected
volatility.
((3)) Repriced to 0.75p on 27 April 2023.
((4)) Values for repricing model of existing options for FV adjustment
determination.
Share warrants
Date of grant Share price Exercise Risk Free Expected life Expected yield Expected volatility Fair value per option
price Rate of warrants
21 May 2021 0.68p 0.6p 0.05% 2.9 years 0% 55% £0.00271
31 January 2023 0.41p 0.5p 3.45% 2 years 0& 19% £0.00023
On 27 April 2023, the Company extended the expiry date of certain directors'
share options and share warrants issued to a related party. The details are as
follows:
Director Date of Grant No. Options Exercise Price Original Expiry Date New Expiry Date
Dennis Edmonds 27/04/2023 10,000,000 £0.0125 11/05/2023 30 June 2025
Peter Taylor 27/04/2023 6,000,000 £0.0125 30/08/2023 30 June 2025
Peter Taylor 27/04/2023 5,000,000 £0.0125 03/10/2023 30 June 2025
Mark Gasson 27/04/2023 6,000,000 £0.0125 08/06/2023 30 June 2025
David Taylor 27/04/2023 3,000,000 £0.0125 22/06/2023 30 June 2025
The extension of share options and warrants did not result in a change to the
fair value that was determined on initial recognition.
The directors' interests in the share options and warrants of
the Company as at 31 December 2023 are as follows:
Director Number of options Number of warrants Exercise price per share Latest exercise date
M Gasson 6,000,000 - 1.25p 8 June 2023
The total share-based payment expense in the year for the Company was £6k in
relation to options (2022: £nil) and £nil in relation to warrants (2022:
£nil).
17. Disposal of IM Minerals Limited ('IMM')
On 28 July 2023 the Company, completed the disposal of 100% of the shares in
IMM, a wholly owned subsidiary of the Company with Acumen Advisory Group LLC
("AAG").
The gain on disposal in the consolidated financial statements are as follows:
Carrying value of total identifiable net assets disposed of -
Total Present Value of consideration 1,000
Gain on disposal 1,000
Consideration for the disposal of IMM is receivable in two tranches, being:
· Tranche 1 - £1,000,000 on completion of the
transaction;
· Tranche 2 - A contingent payment based on a
sliding recovery scale varying between 40% - 22.5% dependant on the amount
recovered from the claim less reasonable costs incurred as shown in note 8.
The Company had historically fully impaired all
the fair value of the assets and liabilities of AAG, see note 8 for further
details.
18. FINANCIAL INSTRUMENTS
The Group and Company's principal financial instruments comprise cash and cash
equivalents and other receivables/payables. The Company's accounting policies
and method adopted, including the criteria for recognition, the basis on which
income and expenses are recognised in respect of each class of financial
assets, financial liability and equity instrument are set out in note 1. The
Company does not use financial instruments for speculative purposes.
The principal financial instruments used by the Company, from which financial
instrument risk arises, are as follows:
Group Parent Company
2023 2022 2023 2022
Financial assets at amortised cost £'000 £'000 £'000 £'000
Cash and cash equivalents 1,396 46 1,396 46
Other debtors 29 13 29 13
Loans 299 - 299 -
Financial liabilities at amortised cost
Trade payables 236 114 236 114
a) Financial risk management objectives and policies
The Company's major financial instruments include bank balances and amounts
payable to suppliers. The risks associated with these financial instruments
and the policies on how to mitigate these risks are set out below. The
Directors manage and monitor these exposures to ensure appropriate measures
are implemented on a timely and effective manner.
b) Liquidity risk
Liquidity risk arises from the Company's management of working capital.
The Company regularly reviews its major funding positions to ensure that it
has adequate financial resources in meeting its financial obligations. The
Directors have considered the liquidity risk as part of their going concern
assessment (see note 1). Controls over expenditure are carefully managed in
order to maintain its cash reserves whilst it targets a suitable transaction.
Financial liabilities are all due within one year.
c) Credit risk
The Company's credit risk is attributable to its cash and loan balance. The
credit risk from its cash and cash equivalents is limited because the
counterparties are banks with high credit ratings and have not experienced any
losses in such accounts. The Company assesses the creditworthiness of loans
receivable from related parties and establishes appropriate terms and
conditions for loan agreements.
d) Interest risk
The Company's exposure to interest rate risk is the interest received on the
cash held, which is immaterial.
e) Capital risk management
The Company's objectives when managing capital are to safeguard the Company's
ability to continue as a going concern, in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal
capital structure. The Company has no borrowings. In order to maintain or
adjust the capital structure, the Company may adjust the amount of dividends
paid to shareholders, return capital to shareholders, or issue new shares.
f) Fair value of financial assets and liabilities
There are no material differences between the fair value of the Company's
financial assets and liabilities and their carrying values in the financial
information.
19. EVENTS AFTER THE REPORTING PERIOD
The Company and Rome Resources entered into a non-binding heads of terms
providing for the potential acquisition of the issued and outstanding
securities of Rome by the Company. Related to the Proposed Acquisition,
Pathfinder has agreed to lend the Company up to C$2,500,000 paid in two
drawdowns on an unsecured basis to support its ongoing exploration activities
in the DRC. The first drawdown of C$500k loan funds have been drawn down at
year end.
Under the terms of the Heads of Terms governing the acquisition of Rome
Resources, a loan has been provided to Rome to support its exploration
programme in a tin and related metals prospect in the Bisie North area of the
North Kivu district of the Democratic Republic of Congo ('DRC'). The terms
of this loan facility are a maximum facility of C$2,500,000 which, when fully
drawn down, triggers the issue of 10,000,000 warrants in Rome Resources to the
Company, exercisable at C$0.25 per share. A fixed payment of 10% is attached
to the loan, except in the case of termination, when it will be 15%. The
loan becomes repayable to the Company on the first anniversary of full
drawdown, ie 12(th) January 2025.
As at year end the second drawdown of C$2,000,000 remains unpaid, being paid
in full January 2024.
On the 29(th) November 2023 the Company allotted 425,000,000 shares for total
consideration of £1,275,000 net of associated costs and warrants of
212,500,000 with an exercise price of £0.0045. This issuance was subject to
shareholder approval which was obtained January 2024. As a result these shares
were issued subsequent to the year end.
20. ULTIMATE CONTROLLING PARTY
The directors believe there is no ultimate
controlling party.
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