Report of the Directors and
Audited Financial Statements for the Year Ended 31 December 2011
for
Pathfinder Minerals Plc
Contents of the Financial Statements
for the Year Ended 31 December 2011
Page
Company Information 3
Chairman’s Statement 4
Report of the Directors 9
Report of the Independent Auditors 12
Statement of Consolidated Comprehensive Income 14
Statement of Consolidated Financial Position 15
Statement of Financial Position – Company 16
Statement of Changes in Equity – Group 17
Statement of Changes in Equity – Company 18
Statement of Cash Flows – Group 19
Statement of Cash Flows – Company 20
Notes to the Financial Statements 21
2
Company Information
for the Year Ended 31 December 2011
DIRECTORS:
SECRETARY:
REGISTERED OFFICE:
Nicholas Trew
James Normand
John McKeon
James Normand
60 Lombard Street
London
EC3V 9EA
REGISTERED NUMBER:
02578942 (England and Wales)
AUDITORS:
SOLICITORS:
NOMINATED ADVISORS:
REGISTRARS:
BANKERS:
Chapman Davis LLP
2 Chapel Court
London
SE1 1HH
Travers Smith LLP
10 Snow Hill
London
EC1A 2AL
Daniel Stewart and Company
Becket House
36 Old Jewry
London
EC2R 8DD
Capita Registrars Limited
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Royal Bank of Scotland
1 Dale Street
Liverpool
L2 2PP
3
Chairman’s Statement
for the Year Ended 31 December 2011
Background
In February 2011, Pathfinder Minerals completed the acquisition of IM Minerals Limited (“IMM”) for £34.7
million and, with it, two adjacent licences over heavy mineral bearing sands on the Indian Ocean Coast of
Mozambique, known as Moebase and Naburi (the “Licences”). Pathfinder Minerals was founded around
these world-class deposits of ilmenite, rutile and zircon and is entirely focused on a strategy to build and
operate a mine to produce these minerals.
By mid-2011, Pathfinder Minerals had advanced significantly the development of the Licences and by
commissioning, and completing a scoping study report carried out by the engineering consultants URS/Scott
Wilson. The scoping study helped to develop the optimum mining method, process flow sheet and ancillary
infrastructure requirements as well as progressing to the next level of engineering and cost accuracy.
In July 2011, Pathfinder Minerals undertook a £11 million fundraising backed by institutional investors.
These proceeds enabled the Company to accelerate the development programme and, in September 2011,
Pathfinder Minerals appointed Jacobs Matasis (Pty) to carry out the Definitive Feasibility Study with the
benefit of a grant from the South African Department of Trade and Industry towards work on our licences.
A LIDAR survey was completed by the Southern Mapping Company of South Africa in October, and
drilling on the Moebase licence, originally acquired from BHP Billiton, was scheduled to begin in
November 2011.
Suspension of trading
Trading in Pathfinder Minerals’ shares was suspended at the Company’s request on 11 November 2011,
following the resignation of General Veloso from the Board and his assertion that Pathfinder Minerals no
longer held its mining licences in Mozambique. At the time, it was appropriate that trading in the Company’s
shares should be suspended to enable the position to be clarified. The Board believes that, in light of the
clearer position which is conveyed in this statement, both in terms of the status of the Company’s assets and
the routes by which control of those assets may or may not be restored, it is now appropriate to lift the
suspension of trading in the Company’s shares. Trading in the Company’s shares will therefore be restored
at 7.30 a.m. on 29 June 2012.
The Company’s actions since suspension
Since trading in the Company’s shares was suspended, the Board’s sole focus has been on clarifying the
status of the Company’s assets and seeking to restore control of them in order that project development can
be resumed.
The restoration of control entails:
• securing the ownership and control of the Company’s Mozambique subsidiary, Companhia Mineira
de Naburi S.A.R.L. (“CMDN”); and
• recovering the Licences previously held by CMDN.
There are, broadly, three processes by which the Company is seeking to regain ownership and control of its
assets, namely:
1. multiple legal proceedings which are underway in the English and Mozambican courts;
2. a political process, which has already involved dialogue at the highest level between the UK and
Mozambique governments; and
3. a line of communication, recently established through representatives of Pathfinder in Mozambique,
with General Veloso.
4
Chairman’s Statement – continued
for the Year Ended 31 December 2011
Ownership and control of CMDN
IMM, the Company’s wholly owned UK subsidiary, holds or held 399,998 of the 400,000 shares of CMDN.
However, General Veloso and his associates have asserted, first that the agreements by which the shares in
CMDN were acquired by IMM (the “Acquisition Agreements”) were null and void and, subsequently, that
IMM has never been the owner of any shares in CMDN.
These assertions have been made notwithstanding:
• the existence of the Acquisition Agreements, which are governed by English law, by which the shares
were acquired and which were signed by or on behalf of General Veloso (and/or J.V. Consultores,
Limitada (“JVC”), a company controlled by General Veloso) and Mr Cavaco;
• the issue by CMDN of a share certificate in the name of IMM (the “Share Certificate”) evidencing its
ownership of 399,998 of the 400,000 issued shares signed by General Veloso and Mr Cavaco;
• representations made by General Veloso and Mr Cavaco to the Mozambique Ministry of Mineral
Resources that IMM was a shareholder in CMDN;
• the attendance by General Veloso and Mr Cavaco at EGMs of CMDN in 2009 and 2010 approving
the transfer of 75 per cent. and then of all but two of the shares in CMDN to IMM;
• Mr Cavaco’s detailed involvement in the verification of IMM’s ownership of 399,998 shares in
CMDN for the purpose of the circular to shareholders at the time of the Company’s admission to
listing on AIM in February 2010; and
• the fact that General Veloso and Mr Cavaco’s current shareholding in the Company, totalling 19.12
per cent. of the Company’s issued shares, was acquired by exchanging shares in CMDN for shares in
IMM which were then exchanged for shares in the Company.
General Veloso and Mr Cavaco have denied the validity of the Share Certificate they signed, which replaced
previously held bearer share certificates, and have purported to cancel the original bearer share certificates
and to issue to themselves (and JVC) new share certificates representing the entire issued share capital of
CMDN.
Action in England
In the circumstances described above, Pathfinder Minerals obtained an injunction on 19 December 2011
from the English High Court ordering General Veloso, JVC and Mr Cavaco (the “Defendants”) not to take
any steps to interfere with the rights of ownership of IMM in the shares of CMDN pursuant to the
Acquisition Agreements. At a hearing on 19 March 2012, the Defendants gave an undertaking to the
English Court that, until trial or further order, they would not take any further steps to interfere
with IMM’s asserted rights of ownership of shares in CMDN, including by taking any further steps to have
those shares cancelled or annulled or otherwise; and would not take any steps in Mozambique or
elsewhere to alter the constitution or share capital of CMDN, or to have CMDN dissolved, wound up, sold
or otherwise.
Also on 19 December 2011, Pathfinder Minerals commenced substantive legal proceedings in the English
courts seeking, amongst other things, declarations from the English court as to the validity and effect of the
Acquisition Agreements (the “Contract Claims”). The Defendants accepted the jurisdiction of the English
High Court to determine the Contract Claims and a hearing date of 29 October 2012 was set.
The Company announces that it has now been informed by the Defendants’ English lawyers that they are no
longer instructed to act on the Defendants’ behalf and that the Defendants intend to take no further part in
the English proceedings.
Contrary to their express agreement to submit to the jurisdiction of the English court for the purpose of the
determination of the Contract Claims, the Defendants have, however, sought to prevent the continuation of
the English proceedings by obtaining an interdict from the Mozambique courts prohibiting IMM from taking
any action in the English courts under two of the disputed Acquisition Agreements (relating to the acquisition
5
Chairman’s Statement – continued
for the Year Ended 31 December 2011
by IMM of 75 per cent. of the shares in CMDN) – effectively an anti-suit injunction. That interdict was
granted without a hearing and without notice to IMM. A hearing subsequently took place in the Maputo court
on 3 May 2012 at which IMM was represented and contested the interdict. Judgment is still awaited, but at
the hearing the judge confirmed that she had not been made aware of the existence of the English
proceedings when she had first granted the interdict and that the interdict did not apply to those English
proceedings already underway.
In light of steps taken by the Defendants in the Mozambique courts described above, Pathfinder Minerals has
also obtained an interim injunction from the English High Court on 15 May 2012, ordering the Defendants
to withdraw and not to pursue any proceedings in Mozambique which seek to restrain the current litigation
in the English courts aimed at determining the parties’ contractual rights under the Acquisition Agreements.
That injunction was continued until trial or further order at a further hearing on 30 May 2012 which the
Defendants did not attend and at which they were ordered to pay the Company’s costs of the application on
an indemnity basis. So far as the Company is aware, the Defendants have not complied with the injunction.
Action in Mozambique
The Board of CMDN had a majority of local directors, being General Veloso, his daughter and Mr Cavaco.
Following General Veloso’s resignation, and the discovery of the apparent removal of the Licences from
CMDN to Pathfinder Moçambique (as to which see below), IMM convened and on 17 January 2012 held an
extraordinary general meeting of CMDN (“EGM”). The purpose of the EGM was to amend the constitution
of CMDN and to remove the local directors from the Board of CMDN. Notwithstanding a representative of
General Veloso and Mr Cavaco voting on their behalf at the EGM in respect of the two CMDN shares owned
by them, all the resolutions put forward by IMM (the “January Resolutions”), including to remove the local
directors and appoint an additional director on behalf of IMM, were successfully passed.
Immediately prior to the EGM, however, Pathfinder Minerals was advised that General Veloso, Mr Cavaco
and JVC had purported to hold a contradictory EGM of CMDN in December 2011, in order to pass
resolutions (the “December Resolutions”) to remove Pathfinder Minerals’ appointees from the Board of
CMDN and to authorise the cancellation of the original bearer share certificates and reissue of bearer share
certificates to themselves (as described above). The Defendants failed to recognise IMM as a shareholder of
CMDN and called the meeting without giving notice to IMM. These steps had been taken notwithstanding
IMM’s holding of the Share Certificate and the various acts and conduct on the part of General Veloso, Mr
Cavaco and JVC evidencing that ownership (as further described above).
On the basis of advice from a leading Mozambican law firm that the December Resolutions were not
lawfully passed, IMM has commenced legal proceedings in Mozambique to contest the validity of the
December Resolutions, including seeking an interdict preventing CMDN from implementing the December
Resolutions. So far as the Company is aware, at the time of this announcement no decision has been given
by the Mozambique court in those legal proceedings. Pathfinder Minerals also sought to register the January
Resolutions with the Legal Entities Registrar in Maputo. The Company has now been advised that those
resolutions have been so registered and been published in the Mozambique Government Gazette.
As the registration of the January Resolutions supersedes the rival December Resolutions, the principal
obstacle now in the way of the Company regaining control of CMDN and being able to pursue recovery of
the Licences is an interdict, apparently granted upon the application of General Veloso and his associates
(referred to in the RNS announcement of 20 March 2012), provisionally suspending the January
Resolutions. Substantive legal proceedings have also been commenced on behalf of General Veloso and his
associates seeking the permanent annulment of the January Resolutions from the Mozambique court. IMM
is not a party to either the interdict or the substantive proceedings, since these have been brought against
CMDN itself in accordance with applicable Mozambique law. Nevertheless, IMM has recently filed an
application in the Maputo Court seeking the appointment of an independent third party to defend the
proceedings on behalf of CMDN, given the clear conflict of interest inherent in General Veloso bringing a
claim for temporary suspension and ultimately permanent annulment of the resolutions against CMDN
which is under his de facto control. Again, so far as the Company is aware, IMM’s application has not yet
been ruled upon..
6
Chairman’s Statement – continued
for the Year Ended 31 December 2011
The Licences
In November 2011, Pathfinder Minerals learned of the existence of Pathfinder Moçambique S.A., a
Mozambique-incorporated company established on 23 September 2011, with which neither Pathfinder
Minerals nor its subsidiaries are affiliated. It was established that the shareholders of Pathfinder Moçambique
S.A. are General Veloso, JVC and Mr Cavaco.
The Mozambique Ministry of Mineral Resources has confirmed to the Company that, at present, mining
concession licences 4623C and 760C, which were issued to Pathfinder Minerals’ subsidiary CMDN, are no
longer registered to CMDN. The Company has also established that Pathfinder Moçambique S.A. has been
granted an exploration and research licence (with number 4623C) over an area amalgamating Pathfinder
Minerals’ Moebase and Naburi mining concession areas. The Company has yet to receive any explanation
from the Ministry on how this could have taken place. The Company’s standing to insist on this would
become clearer once control of CMDN is returned to IMM. In the meantime, political pressure is being
brought to bear (see below).
The Company and its lawyers have made numerous urgent requests of the Defendants and their London
lawyers, since General Veloso’s resignation, seeking an explanation of the basis upon which the Licences
had allegedly been transferred from CMDN. Despite those requests, it was only on 17 February 2012 that
the Defendants for the first time disclosed to the Company an agreement which purports to have been made
between the Defendants and CMDN and dated 27 February 2006 (the “2006 Agreement”). Curiously, it
appears to be a term of the 2006 Agreement that its existence had to be kept secret by the Defendants from
the Board of CMDN (on penalty of a payment of US$1 million) unless and until one of the Defendants
ceased to be a director of CMDN. The 2006 Agreement provides, broadly, that CMDN is obliged to transfer
the Naburi licence to JVC in the event that: (a) US$2 million is not paid by CMDN to JVC; or (b) the Project
is not progressed to export, both within 5 years of the agreement. The 2006 Agreement also provides that, in
that event, the sum of US$100 million will be paid by CMDN to JVC. Also on 15 February 2012, the
Defendants additionally disclosed the existence of a resolution of CMDN purportedly passed in a general
meeting on 11 May 2009 (the “May 2009 Resolution”) confirming that the 2006 Agreement (albeit without
the US$100 million penalty referred to above) shall also apply to the Moebase licence which was acquired
from BHP Billiton at that time (using funds provided by IMM).
The 2006 Agreement and the May 2009 Resolution have never previously been disclosed to the Company
nor to its Directors, despite representations having been received from the Defendants that there were no
undisclosed material contracts. The Company has disputed the authenticity of the 2006 Agreement and the
May 2009 Resolution in the Contract Claims referred to above. The Company has been advised by its
Mozambique lawyers that, even if authentic, under Mozambique law the 2006 Agreement is not binding on
CMDN and the May 2009 Resolution is annullable (although both are matters of Mozambique law which
would need a court determination). Legal proceedings have been commenced in the Mozambique courts to
seek annulment of the May 2009 Resolution and IMM is awaiting notification of a hearing date for
determination of the preliminary question of whether or not it was a shareholder of CMDN as at 11 May
2009 when the resolution was purportedly passed.
Political status and developments
Until the legal processes in Mozambique have re-confirmed IMM’s ownership of CMDN, the Company is
advised that it does not have the standing to take legal action for the recovery of its Licences. Accordingly,
concurrent with these legal proceedings, Pathfinder Minerals has been seeking the assistance of both the UK
and Mozambique Governments to obtain a resolution of the issues outside the judicial processes.
Due to sensitivities surrounding the political process, the Company has, to date, not been able to publish any
details in this regard. The Company is now able to confirm that the Prime Minister, David Cameron MP, and
the Foreign Secretary, William Hague MP, specifically raised the issue of Pathfinder Minerals at a meeting
at 10 Downing Street on 9 May 2012 with the President of Mozambique, Armando Guebuza, during his visit
to London. The Company has been further assured that the Minister of State at the Foreign and
Commonwealth Office with responsibility for relations with Mozambique, Henry Bellingham MP, will
continue to take a close personal interest in the issue.
7
Chairman’s Statement – continued
for the Year Ended 31 December 2011
At the same time, in Mozambique Pathfinder Minerals’ local representative has held meetings with a senior
Mozambique government minister who shares the serious concerns regarding the implications that the
transfer of Pathfinder Minerals’ assets may have under the Bilateral Investment Treaty between Mozambique
and the UK and on the relationship between Mozambique and the UK more generally.
Communication with General Veloso
Since trading in the Company’s shares was suspended in November 2011, the Company has not until very
recently been able to engage General Veloso in any dialogue on these issues, nor indeed to establish his
personal involvement in the actions set out above. A line of communication was recently established between
Pathfinder Minerals’ Mozambique representative and General Veloso himself with a view to achieving a
resolution without reliance on the courts. Meetings have now taken place between the Mozambique
representative of Pathfinder Minerals, and both the Defendants’ local legal representative and, subsequently,
with General Veloso himself. At present it is not possible to ascertain whether or not a positive outcome will
be achieved from this communication.
Financial results and current financial position
The financial statements of the Pathfinder Group for the year ended 31 December 2011 follow. The Income
Statement shows a loss of £37.6 million. Of this, £34.8 million results from the Board’s decision, in the light
of events in Mozambique, to adopt a prudent accounting approach and make full provision against the
Group’s investment in its Mozambique subsidiaries. The largest part of the remaining expenditure consists
of initial work on the Definitive Feasibility Study (referred to in the opening paragraphs of this
announcement).
The Group’s Statement of Financial Position shows net assets of £8.5 million, a level which reflects the net
£10.3 million raised in July 2011. The assets are held largely in the form of cash deposits (totalling £8.5
million at the year-end).
Since 31 December 2011, the Board has concentrated its energies on attempting to recover the Group’s assets
expropriated by General Veloso and Mr Cavaco. As a result of these efforts, at the date of this announcement
cash deposits have fallen to £6.1 million.
Outlook
During the last six months, the Board of Pathfinder has been undertaking an exercise of positioning the
Company for political and legal redress. This strategy is bearing fruit and there is evidence of a strong
political will to resolve the position of Pathfinder Minerals. To that end, our focus remains solely on
recovering shareholders’ assets and resuming the development of the Moebase and Naburi mineral sands
concessions in Zambezia Province. The Board believes that, while a solution is taking much longer than it
would have liked, the concessions granted to CMDN, if restored, would have a very material value to the
Company.
In the event that the Company becomes solely reliant on the courts for a resolution, the Board believes, and
is advised, that Pathfinder Minerals has a strong legal case. The Company continues to pursue these remedies
in the interest of securing shareholder value.
The Board recognises that the period of suspension has deprived shareholders of their ability to trade in the
shares of Pathfinder Minerals. However, we are grateful for the overwhelming and continuing support of our
shareholders.
John McKeon
Chairman
29 June 2012
8
Report of the Directors
for the Year Ended 31 December 2011
The directors present their report with the consolidated financial statements of the company for the year
ended 31 December 2011.
PRINCIPAL ACTIVITY
The Company began the year as an investing company. On 9 February 2011 the Company completed its
acquisition of IM Minerals Limited, a UK company with interests in companies in Mozambique holding
mining licences. The principal activity of the Group for the remainder of the year under review was mining.
REVIEW OF BUSINESS
The review of the business, its operations and finances is contained in the Chairman’s Statement.
DIVIDENDS
The Directors do not recommend the payment of a dividend.
EVENTS SINCE THE END OF THE YEAR
Information relating to events since the end of the year is contained in the Chairman’s statement.
DIRECTORS
The directors shown below have held office during the whole of the period from 1 January 2011 to the date
of this report.
Nicholas Trew
James Normand
Other changes in directors holding office are as follows:
Mark Edmonds – resigned 9 February 2011
John McKeon – appointed 9 February 2011
Gordon Dickie – appointed 9 February 2011; resigned 16 September 2011
Tim Baldwin – appointed 9 February 2011; resigned 16 June 2011
General Jacinto Veloso – appointed 16 June 2011; resigned 11 November 2011
COMPANY’S POLICY ON PAYMENT OF CREDITORS
It is the company’s policy to pay suppliers in accordance with the payment terms negotiated with them. The
company’s average creditor days during the year were 44 days (2010: 105 days).
FINANCIAL INSTRUMENTS
The company’s financial instruments comprise borrowings and cash that arise directly from its operations.
The main purpose of these financial instruments is to fund the company’s operations as well as to manage
working capital, liquidity and invest surplus funds. It is, and has been throughout the period under review,
the company’s policy not to enter into derivative transactions and no trading in financial instruments has been
undertaken.
POLITICAL AND CHARITABLE CONTRIBUTIONS
No charitable or political contributions were made during the current or previous year.
9
Report of the Directors – continued
for the Year Ended 31 December 2011
SUBSTANTIAL SHAREHOLDINGS
The Directors’ interests in the shares of the Company are set out in the notes to the financial statements. As
at 28 June 2012, the following other shareholders had notified the company of an interest of 3 per cent. or
more of the Company’s ordinary share capital:
Number of Shareholding
Shareholder name 1p ordinary shares percentage
Timothy Baldwin 115,128,316 11.1%
J V Consultores Internacionais Limitada
(a company controlled by Jacinto Veloso) 110,120,680 10.6%
JP Morgan Funds 100,020,000 9.6%
Gordon Dickie
(including 300,000 held in the name of Mr Dickie’s wife, Mrs Ans Dickie) 89,806,920 8.7%
Diogo Cavaco 88,129,280 8.5%
Genesis Emerging Market Opportunities Fund 86,000,000 8.3%
YF Finance Limited 45,610,000 4.4%
RISK EXPOSURE
The Companies Act 2006 requires the Directors to set out in this report how the Group manages its exposure
to risk.
The directors consider that the Company has sufficient cash and cash equivalents to meet its foreseeable
operational requirements.
CORPORATE GOVERNANCE
The Board is responsible for establishing the strategic direction of the Company, monitoring the Group’s
trading performance and appraising and executing development and acquisition opportunities. The Company
holds regular Board meetings, at which financial and other reports, including working capital reports and
acquisition opportunities, are considered and, where appropriate, voted on.
The Directors support high standards of corporate governance and the Board complies with the QCA
Guidelines so far as reasonably practicable and appropriate taking into account the Company’s size. The
Company’s current situation does not allow for separate audit and remuneration committees and is not
conducive to the appointment of non-executive directors, all of which the Board is keen to do as soon as
circumstances allow.
The Board supports the principle of clear reporting of financial performance to shareholders. Each year,
shareholders receive a full annual report and interim report. The Board regards the Annual General Meeting
as an opportunity to communicate directly with private investors. Directors attend the Annual General
Meeting and are available to answer questions from shareholders present. The Board actively encourages
feedback and shareholder dialogue, whether oral or written.
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The directors are responsible for preparing the Report of the Directors and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law
the directors have elected to prepare the financial statements in accordance with International Financial
Reporting Standards as adopted by the European Union. Under company law the directors must not approve
the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of
the company and of the profit or loss of the company for that period. In preparing these financial statements,
the directors are required to:
10
Report of the Directors – continued
for the Year Ended 31 December 2011
– select suitable accounting policies and then apply them consistently;
– make judgements and accounting estimates that are reasonable and prudent;
– state that the financial statements comply with IFRS;
– prepare the financial statements on the going concern basis unless it is inappropriate to presume that
the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the company’s transactions and disclose with reasonable accuracy at any time the financial position of the
company and enable them to ensure that the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the
Companies Act 2006) of which the company’s auditors are unaware, and each director has taken all the steps
that he ought to have taken as a director in order to make himself aware of any relevant audit information
and to establish that the company’s auditors are aware of that information.
AUDITORS
The auditors, Chapman Davis LLP, will be proposed for re-appointment at the forthcoming Annual General
Meeting.
ON BEHALF OF THE BOARD:
James Normand
Director and Company Secretary
29 June 2012
11
Report of the Independent Auditors to the Members of
Pathfinder Minerals PLC
We have audited the financial statements of Pathfinder Minerals PLC for the year ended 31 December 2011
which comprises the Statement of Consolidated Comprehensive Income, the consolidated and parent
company statements of financial position, the consolidated and parent company statements of changes in
equity, the consolidated and parent company statements of cash flow and the related notes. The financial
reporting framework that has been applied in their preparation is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s
members those matters we are required to state to them in a Report of the Auditors and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
company and the company’s members as a body, for our audit work, for this report, or for the opinions we
have formed.
Respective responsibilities of directors and auditors
As explained more fully in the Directors’ Report, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit
and express an opinion on the financial statements in accordance with applicable law and International
Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices
Board’s Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and only for the Company’s members as a body
in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in
giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom
this report is shown or into whose hands it may come save where expressly agreed by our prior consent in
writing.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient
to give reasonable assurance that the financial statements are free from material misstatement, whether
caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to
the company’s circumstances and have been consistently applied and adequately disclosed; the
reasonableness of significant accounting estimates made by the directors; and the overall presentation of the
financial statements. In addition, we read all the financial and non-financial information in the Report of the
Directors to identify material inconsistencies with the audited financial statements. If we become aware of
any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion the financial statements:
– give a true and fair view of the state of the Group’s and of the parent company’s affairs as at
31 December 2011 and of the Group’s loss for the year then ended;
– have been properly prepared in accordance with IFRSs as adopted by the European Union; and
– have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Report of the Directors for the financial year for which the
financial statements are prepared is consistent with the financial statements.
12
Report of the Independent Auditors to the Members of
Pathfinder Minerals PLC – continued
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to
report to you if, in our opinion:
– adequate accounting records have not been kept, or returns adequate for our audit have not been
received from branches not visited by us; or
– the financial statements are not in agreement with the accounting records and returns; or
– certain disclosures of directors’ remuneration specified by law are not made; or
– we have not received all the information and explanations we require for our audit.
Rowan J Palmer (Senior Statutory Auditor)
for and on behalf of Chapman Davis LLP
2 Chapel Court
London
SE1 1HH
29 June 2012
13
Statement of Consolidated Comprehensive Income
for the Year Ended 31 December 2011
Year ended 31 December
2011 2010
Notes £’000 £’000
CONTINUING OPERATIONS
Revenue – –
Administrative expenses (2,533) (1,057)
––––––––– –––––––––
OPERATING LOSS BEFORE EXCEPTIONAL ITEMS (2,533) (1,057)
Exceptional items 5 (34,830) –
––––––––– –––––––––
OPERATING LOSS (37,363) (1,057)
Finance costs 6 – (7)
Finance income 6 19 –
––––––––– –––––––––
LOSS BEFORE INCOME TAX 7 (37,344) (1,064)
Income tax 8 – –
––––––––– –––––––––
LOSS FOR THE YEAR (37,344) (1,064)
OTHER COMPREHENSIVE INCOME – –
––––––––– –––––––––
TOTAL COMPREHENSIVE LOSS FOR THE YEAR (37,344) (1,064)
––––––––– –––––––––
Loss per share (expressed in pence per share) 9
Basic (4.5) (2.7)
Diluted (4.5) (2.7)
––––––––– –––––––––
The notes form part of these financial statements
14
Statement of Consolidated Financial Position
31 December 2011
2011 2010
Notes £’000 £’000
ASSETS
NON-CURRENT ASSETS
Investments 10 – 200
––––––––– –––––––––
CURRENT ASSETS
Trade and other receivables 11 34 –
Cash and cash equivalents 12 8,471 21
––––––––– –––––––––
8,505 21
––––––––– –––––––––
TOTAL ASSETS 8,505 221
––––––––– –––––––––
EQUITY
SHAREHOLDERS’ EQUITY
Called up share capital 13 18,289 8,412
Share premium 14 11,022 2,171
Other reserves 14 – 17
Merger reserve 14 – –
Retained earnings 14 (21,343) (11,337)
––––––––– –––––––––
TOTAL EQUITY 7,968 (737)
––––––––– –––––––––
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 15 537 958
––––––––– –––––––––
TOTAL LIABILITIES 537 958
––––––––– –––––––––
TOTAL EQUITY AND LIABILITIES 8,505 221
––––––––– –––––––––
The financial statements were approved by the Board of Directors on 29 June 2012 and were signed on its
behalf by:
James Normand
Finance Director
The notes form part of these financial statements
15
Statement of the Company’s Financial Position
31 December 2011
2011 2010
Notes £’000 £’000
ASSETS
NON-CURRENT ASSETS
Investments 10 – 200
––––––––– –––––––––
– 200
––––––––– –––––––––
CURRENT ASSETS
Trade and other receivables 11 33 –
Cash and cash equivalents 12 8,471 21
––––––––– –––––––––
8,504 21
––––––––– –––––––––
TOTAL ASSETS 8,504 222
––––––––– –––––––––
EQUITY
SHAREHOLDERS’ EQUITY
Called up share capital 13 18,289 8,412
Share premium 14 11,022 2,171
Other reserves 14 – 17
Retained earnings (deficit) 14 (21,474) (11,337)
––––––––– –––––––––
TOTAL EQUITY 7,837 (737)
––––––––– –––––––––
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 15 667 959
––––––––– –––––––––
TOTAL LIABILITIES 667 959
––––––––– –––––––––
TOTAL EQUITY AND LIABILITIES 8,504 222
––––––––– –––––––––
The notes form part of these financial statements
16
Statement of Changes in Equity – Group
for the Year Ended 31 December 2011
Called up Profit
share and loss Share
capital account premium
£’000 £’000 £’000
Balance at 1 January 2010 7,997 (10,273) 1,970
Changes in equity
Issue of share capital 415 – 201
Total comprehensive loss – (1,064) –
––––––––– ––––––––– –––––––––
Balance at 31 December 2010 8,412 (11,337) 2,171
Changes in equity
Issue of share capital for cash (net of commission
paid to brokers) 2,591 – 9,597
Commissions payable on equity capital raised – – (746)
Issue of shares for assets (shares in subsidiary) 7,286 – –
Transfers between reserves – 27,338 –
Total comprehensive income – (37,344) –
––––––––– ––––––––– –––––––––
Balance at 31 December 2011 18,289 (21,343) 11,022
––––––––– ––––––––– –––––––––
Other Merger Total
reserves reserve equity
£’000 £’000 £’000
Balance at 1 January 2010 348 – 42
Changes in equity
Issue of share capital – – 616
Total comprehensive income (331) – (1,395)
––––––––– ––––––––– –––––––––
Balance at 31 December 2010 17 – (737)
Changes in equity
Issue of share capital for cash (net of commission
paid to brokers) – – 11,442
Commissions payable on equity capital raised – – (746)
Issue of shares for assets (shares in subsidiary) – 27,321 35,353
Transfers between reserves (17) (27,321) –
Total comprehensive income – (37,344)
––––––––– ––––––––– –––––––––
Balance at 31 December 2011 – – 7,968
––––––––– ––––––––– –––––––––
The notes form part of these financial statements
17
Statement of Changes in Equity – Company
for the Year Ended 31 December 2011
Called up Profit
share and loss Share
capital account premium
£’000 £’000 £’000
Balance at 1 January 2010 7,997 (10,273) 1,970
Changes in equity
Issue of share capital 415 – 201
Total comprehensive income – (1,064) –
––––––––– ––––––––– –––––––––
Balance at 31 December 2010 8,412 (11,337) 2,171
Changes in equity
Issue of share capital for cash (net of commission
paid to brokers) 2,591 – 9,597
Commissions payable on equity capital raised – – (746)
Issue of shares for assets (shares in subsidiary) 7,286 – –
Transfers between reserves – 27,338 –
Total comprehensive income – (37,475) –
––––––––– ––––––––– –––––––––
Balance at 31 December 2011 18,289 (21,473) 11,022
––––––––– ––––––––– –––––––––
Other Merger Total
reserves reserve equity
£’000 £’000 £’000
Balance at 1 January 2010 348 – 42
Changes in equity
Issue of share capital – – 616
Total comprehensive income (331) – (1,395)
––––––––– ––––––––– –––––––––
Balance at 31 December 2010 17 – (737)
Changes in equity
Issue of share capital for cash (net of commission
paid to brokers) – – 11,442
Commissions payable on equity capital raised – – (746)
Issue of shares for assets (shares in subsidiary) – 27,321 34,607
Transfers between reserves (17) (27,321) –
Total comprehensive income – – (37,475)
––––––––– ––––––––– –––––––––
Balance at 31 December 2011 – – 7,837
––––––––– ––––––––– –––––––––
The notes form part of these financial statements
18
Statement of Cash Flows – Group
for the Year Ended 31 December 2011
Notes 2011 2010
(see below) £’000 £’000
Cash flows from operating activities
Cash generated from operations 1 (3,011) (245)
Interest paid – (7)
––––––––– –––––––––
Net cash from operating activities (3,011) (252)
––––––––– –––––––––
Cash flows from investing activities
Interest received 19 –
––––––––– –––––––––
Net cash from investing activities 19 –
––––––––– –––––––––
Cash flows from financing activities
Shares issued for cash 11,442 117
––––––––– –––––––––
Net cash from financing activities 11,442 117
––––––––– –––––––––
Increase (decrease) in cash and cash equivalents 8,450 (135)
Cash and cash equivalents at beginning of year 21 156
––––––––– –––––––––
Cash and cash equivalents at end of year 8,471 21
––––––––– –––––––––
Notes
1. Reconciliation of loss before income tax to cash generated from operations
Loss before income tax
Provision against diminution in value
Finance costs
Finance income
(1,064)
–
7
–
––––––––– –––––––––
(1,057)
30
782
––––––––– –––––––––
(245)
––––––––– –––––––––
(Increase) decrease in trade and other receivables
(Decrease) increase in trade and other payables
(37,344)
34,830
–
(19)
Cash generated from operations
(2,533)
(34)
(444)
(3,011)
2. Major non-cash transactions
During the year the company issued 728,556,730 ordinary 1 penny shares at a premium of 3.75 pence per share in consideration
for the acquisition of the shares it did not already own in IM Minerals Limited.
The notes form part of these financial statements
19
Statement of Cash Flows – Company
for the Year Ended 31 December 2011
Notes 2011 2010
(see below) £’000 £’000
Cash flows from operating activities
Cash generated from operations 1 (3,011) (245)
Interest paid – (7)
––––––––– –––––––––
Net cash from operating activities (3,011) (252)
––––––––– –––––––––
Cash flows from investing activities
Interest received 19 –
––––––––– –––––––––
Net cash from investing activities 19 –
––––––––– –––––––––
Cash flows from financing activities
Shares issued for cash 11,442 117
––––––––– –––––––––
Net cash from financing activities 11,442 117
––––––––– –––––––––
Increase (decrease) in cash and cash equivalents 8,450 (135)
Cash and cash equivalents at beginning of year 21 156
––––––––– –––––––––
Cash and cash equivalents at end of year 8,471 21
––––––––– –––––––––
Notes
1. Reconciliation of loss before income tax to cash generated from operations
Loss before income tax
Provision against diminution in value
Finance costs
Finance income
(1,064)
–
7
–
––––––––– –––––––––
(1,057)
30
782
––––––––– –––––––––
(245)
––––––––– –––––––––
(Increase) decrease in trade and other receivables
(Decrease) increase in trade and other payables
(37,475)
34,852
–
(19)
Cash generated from operations
(2,686)
(33)
(292)
(3,011)
2. Major non-cash transactions
During the year the company issued 728,556,730 ordinary 1 penny shares at a premium of 3.75 pence per share in consideration
for the acquisition of the shares it did not already own in IM Minerals Limited.
The notes form part of these financial statements
20
Notes to the Financial Statements
for the Year Ended 31 December 2011
1. GENERAL INFORMATION
The company is a public limited company listed on the AIM market of the London Stock Exchange and is
incorporated and domiciled in the UK. The address of its registered office is 60 Lombard Street, London
EC3V 9EA.
The financial statements of Pathfinder Minerals PLC for the year ended 31 December 2011 were authorised
for issue by the Board on 29 June 2012 and the statement of consolidated financial position signed on the
Board’s behalf by James Normand.
2. ACCOUNTING POLICIES
Basis of preparation
These financial statements have been prepared in accordance with International Financial Reporting
Standards and IFRIC interpretations and with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS. The financial statements have been prepared under the historical cost
convention and are presented in the functional currency in £’000.
Although the Company’s direct subsidiary, IM Minerals Limited, itself holds the whole of the issued share
capital of Companhia Mineira de Naburi SARL, which in turn holds the whole of the issued share capital of
Sociedade Geral de Mineracao de Moçambique SARL, events during the year indicate that the Company
does not control either of these sub-subsidiaries. Neither has it been possible to obtain 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.
Taxation
The tax expense for the year represents the total of current taxation and deferred taxation. The charge in
respect of current taxation is based on the estimated taxable profit for the year. Taxable profit for the year is
based on the profit as shown in the income statement, as adjusted for items of income or expenditure which
are not deductible or chargeable for tax purposes. The current tax liability for the year is calculated using tax
rates which have either been enacted or substantially enacted at the balance sheet date.
Trade and other receivables
Trade receivables are amounts due from customers for merchandise sold or services performed in the
ordinary course of business. If collection is expected in one year or less, they are classified as current assets.
If not, they are presented as non-current assets
Trade and other receivables are recognised at fair value subsequently measured at amortised cost using
effective interest method, less any appropriate allowance for estimated irrecoverable amounts.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and other short term highly liquid deposits with
original maturities of three months or less.
Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.
Share capital
Ordinary shares of the company are classified as equity. Mandatorily redeemable preference shares and other
classes of share where an obligation exists to transfer economic benefits are classified as liabilities.
21
Notes to the Financial Statements – continued
for the Year Ended 31 December 2011
2. ACCOUNTING POLICIES – continued
Trade payables
Trade payables are recognised initially at fair value and are subsequently measured at amortised cost using
the effective interest method. As the payment period of trade payables is short future cash payments are not
discounted as the effect is not material.
New standards and interpretations not yet adopted
The adoption of new standards, where relevant, has had no impact on the reported results nor the financial
position of the company.
Critical accounting estimates and judgements
The preparation of financial information in accordance with generally accepted accounting practice, in the
case of the Group using International Financial Reporting Standards as adopted by the European Union,
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.
Judgements made by management in the application of IFRS that have a significant effect on the financial
statements and estimates with a significant risk of material adjustment in the year are discussed in the notes.
3. SEGMENTAL REPORTING
The Group has one activity only. Of the Group’s administrative expenses, £963,000 (2010 – nil) was spent
in Mozambique. The whole of the exceptional charge in 2011 relates to the Group’s investment in
Mozambique. The whole of the value of the Group’s and the Company’s net assets in their respective
financial statements at 31 December 2010 is attributable to UK assets and liabilities (2010 – £200,000).
4. EMPLOYEES AND DIRECTORS
There were no employees, other than the directors.
The following table sets out and analyses the remuneration of directors for the years ended 31 December
2010 and 2011 in £s.
Contributions
to pension Total emoluments
Fees Bonus Salary Gross pay schemes 2011 2010
£ £ £ £ £ £ £
John McKeon 44,000 27,500 – 71,500 – 71,500 –
Nicholas Trew 1,500 – 137,500 139,000 13,750 152,750 18,000
James Normand 500 100,000 100,500 10,000 110,500 6,000
Timothy Baldwin 7,500 – – 7,500 – 7,500 –
Gordon Dickie 16,000 – – 16,000 – 16,000 –
Mark Edmonds 10,000 – – 10,000 – 10,000 –
Jacinto Veloso 10,000 – – 10,000 – 10,000 –
Gerard Lee – – – – – – 6,000
––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
89,500 27,500 237,500 354,500 23,750 378,250 30,000
––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
No benefits in kind or bonuses were made in either year. During the year options were granted to directors.
These are set out in note 16.
22
Notes to the Financial Statements – continued
for the Year Ended 31 December 2011
5. EXCEPTIONAL ITEMS
In November 2011 the original vendors of IM Minerals’ subsidiary, Companhia Mineira de Naburi SARL
(“CMdN”), advised the Company that they had procured the cancellation of IM Minerals’ 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, has made full provision in these financial statements against the cost of its
investment in IM Minerals and against the value of advances made by the Company to CMdN and its
vendors; in aggregate £34,830,000.
6. NET FINANCE INCOME
2011 2010
£’000 £’000
Finance income:
Deposit account interest 19 –
Finance costs:
Interest bearing loans and borrowings – 7
––––––––– –––––––––
––––––––– –––––––––
––––––––– –––––––––
Net finance income 19 (7)
7. LOSS BEFORE INCOME TAX
The loss before income tax is stated after charging:
Auditors’ remuneration 12 12
Auditors’ remuneration for non-audit work – 25
Directors’ remuneration 378 24
––––––––– –––––––––
8. INCOME TAX
Analysis of tax expense
No liability to UK corporation tax arose on ordinary activities for the year ended 31 December 2011 nor for
the year ended 31 December 2010.
Factors affecting the tax expense
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is
explained below:
Loss on ordinary activities before income tax (37,344) (1,064)
––––––––– –––––––––
Loss on ordinary activities multiplied by the standard rate of corporation tax
in the UK of 26.5% (2010 – 28%) (9,896) (298)
Effects of:
Expenses not deductible for tax purposes – 28
Unrelieved tax losses carried forward 9,896 270
––––––––– –––––––––
Tax expense – –
––––––––– –––––––––
23
Notes to the Financial Statements – continued
for the Year Ended 31 December 2011
9. LOSS PER SHARE
Basic loss per share is calculated, as set out in the tables below, by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
A diluted loss per share has not been calculated as the effect of the exercise of outstanding warrants and
options would be anti-dilutive.
2011
Weighted
average Per-share
Earnings number amount
£’000 of shares pence
Basic earnings per share
Earnings attributable to ordinary shareholders (37,344) 828,274,942 (4.5)
–––––––––– –––––––––– ––––––––––
2010
Weighted
average Per-share
Earnings number amount
£’000 of shares pence
Basic EPS
Earnings attributable to ordinary shareholders (1,064) 38,620,000 (2.8)
–––––––––– –––––––––– ––––––––––
10. SUBSIDIARIES
Shares in
group
undertakings
£’000
COST
At 1 January 2011 200
Additions 34,606
–––––––––
At 31 December 2011 34,806
–––––––––
PROVISIONS
Provision made in the year (see note below) 34,806
–––––––––
At 31 December 2011 34,806
–––––––––
NET BOOK VALUE
At 31 December 2011 –
–––––––––
–––––––––
At 31 December 2010 200
The Company’s subsidiaries, each of which is wholly-owned, are: Incorporated in:
IM Minerals Limited England and Wales
Companhia Mineira de Naburi SARL Mozambique
Sociedade Geral de Mineracao de Moçambique SARL Mozambique
IM Minerals Limited owns two companies in Mozambique which hold titanium oxide mining concessions
in the Republic of Mozambique. In February 2011 the Company acquired the shares of IM Minerals Limited
that it did not already own. The consideration was wholly in the form of Pathfinder Minerals Plc ordinary
shares. Applying the price per share at which simultaneously new shares in the Company were issued values
the additional shares acquired at £34,606,445.
24
Notes to the Financial Statements – continued
for the Year Ended 31 December 2011
10. SUBSIDIARIES – continued
As noted in Note 5 above, in November 2011 the original vendors of IM Minerals’ subsidiary, Companhia
Mineira de Naburi SARL (“CMdN”), advised the Company that they had procured the cancellation of IM
Minerals’ 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, has made full provision in these financial statements
against the cost of its investment in IM Minerals.
11. TRADE AND OTHER RECEIVABLES
Group Company Company
and Group
2011 2011 2010
£’000 £’000 £’000
Other debtors 34 33 –
––––––––– ––––––––– –––––––––
12. CASH AND CASH EQUIVALENTS
Bank accounts 8,471 8,471 21
––––––––– ––––––––– –––––––––
13. CALLED UP SHARE CAPITAL
Allotted, issued and fully paid: 2011 2010
Number Class £’000 £’000
1,037,167,230 (2010 – 49,530,472) Ordinary shares of 1 penny each 10,372 495
79,971,393 (2010 – 79,971,393) Deferred shares of 9.9 pence each 7,917 7,917
––––––––– –––––––––
18,289 8,412
––––––––– –––––––––
During the year the company issued the following new ordinary shares of 1 penny each:
on 9 February:
20,266,665 at a premium of 0.5 pence per share for cash on the exercise of warrants;
11,052,632 at a premium of 3.75 pence per share for cash;
728,556,730 at a premium of 3.75 pence per share in consideration for the acquisition of shares in IM
Minerals Limited;
on 1 March:
2,094,065 at a premium of 3.75 pence per share for cash on the exercise of warrants;
on 17 March:
666,667 at a premium of 0.5 pence per share for cash on the exercise of warrants; and
on 22 July:
225,000,000 at a premium of 4 pence per share for cash.
14. RESERVES
The premium of £27,320,877 realised on the issue of shares in consideration for the acquisition of shares in
IM Minerals Limited was credited to a merger reserve. The provision of £34,606,445 made against the
diminution in the value of the Company’s investment in IM Minerals has been debited to this reserve to the
full extent available, with the remainder of the provision being added to the deficit on revenue reserves.
25
Notes to the Financial Statements – continued
for the Year Ended 31 December 2011
15. TRADE AND OTHER PAYABLES
Group Company Company
and Group
2011 2011 2010
£’000 £’000 £’000
Trade creditors 417 417 310
Amount owing to subsidiary – 134 –
Other creditors 73 73 103
Accruals and deferred income 47 43 546
––––––––– ––––––––– –––––––––
537 667 959
––––––––– ––––––––– –––––––––
16. SHARE OPTIONS AND WARRANTS
This table explains the movement during the year of the number of warrants and options granted over the
Company’s ordinary one penny shares.
Unexercised Unexercised
Held by: 1 January Sold Awarded Exercised Expired 31 December
Directors:
John McKeon – – 36,000,000 – – 36,000,000
Nicholas Trew 3,333,333 (3,333,333) 36,000,000 – – 36,000,000
James Normand – – 19,600,000 – – 19,600,000
Timothy Baldwin – – 10,800,000 – – 10,800,000
Gordon Dickie – – 10,800,000 – – 10,800,000
Jacinto Veloso – – 1,000,000 – – 1,000,000
Mark Edmonds – – – – – –
Non-directors:
Various 24,266,665 3,333,333 9,894,065 (23,027,396) (6,666,667) 7,800,000
–––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Total 27,599,998 – 124,094,065 (23,027,396) (6,666,667) 122,000,000
–––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
This table notes the exercise price and the earliest and latest exercise dates of the warrants and options still
unexercised as at 31 December 2011.
Exercise
Unexercised price per Earliest Latest
Held by: 31 December share exercise date exercise date
Directors:
John McKeon 36,000,000 10p 27 July 2012 26 July 2016
Nicholas Trew 36,000,000 10p 27 July 2012 26 July 2016
James Normand 16,000,000 4.75p 10 February 2012 9 February 2021
James Normand 3,600,000 10p 27 July 2012 26 July 2016
Timothy Baldwin 10,800,000 10p 27 July 2012 26 July 2016
Gordon Dickie 10,800,000 10p 27 July 2012 26 July 2016
Jacinto Veloso 1,000,000 10p 27 July 2012 26 July 2016
Non-directors:
Various 6,000,000 4.75p 9 February 2011 8 February 2016
Various 1,800,000 10p 27 July 2012 26 July 2016
26
Notes to the Financial Statements – continued
for the Year Ended 31 December 2011
16. SHARE OPTIONS AND WARRANTS – continued
At the point when trading in the Company’s shares on AIM was suspended, the mid-market price of the
Company’s shares was 3 pence. The value of the options granted to directors and others, in connection with
the reverse takeover and the ongoing development of the company, has been considered in the context of the
requirements of IFRS 2; and in the opinion of the directors there is no material charge to be made to the
income statement.
There have been no changes to the numbers of unexercised warrants and share options since 31 December
2011.
17. RELATED PARTY DISCLOSURES
During the year the Company paid £2,400 to International Mercantile Group Limited, a company in which
Nicholas Trew and Gordon Dickie each have a material interest, and £30,000 to Tomilly Limited, a company
in which John McKeon has a material interest, each for the provision of office services.
Directors were reimbursed sums totalling £18,725 for personal expenditure incurred on Company business.
18. CONTINGENT LIABILITIES
As part of the agreement for the purchase of the shares in its subsidiary, Companhia Mineira de Naburi
SARL (“CMdN”), the Company’s subsidiary, IM Minerals Limited, agreed to pay the vendors a further sum
of $9,900,000 if, following further exploration and appraisal, an agreement is reached for the construction
of a facility for the processing of ore extracted from the Naburi mineral sands deposit. This sum has since
been reduced by advances of £90,083, made by IM Minerals Limited, and £75,933, made by the Company,
to one of the vendors, Mr Diogo Cavaco.
Similarly, as part of its agreement for the purchase of the whole of the issued share capital of Sociedade
Geral de Mineracao de Moçambique SARL, CMdN has agreed to pay the vendors, BHP Billiton, a further
sum of $9,500,000 if, following further exploration and appraisal, an agreement is reached for the
construction of a facility for the processing of ore extracted from the Moebase mineral sands deposit. This
obligation is guaranteed by IM Minerals Limited.
19. EVENTS AFTER THE REPORTING DATE
Since the year-end, and as noted in the Chairman’s Statement, the Board has concentrated its energies on
attempting to recover the Group’s assets expropriated by General Veloso and Mr Cavaco. As a direct result
of these efforts, considerable legal and related costs have been incurred which have contributed materially to
the reduction in the Group’s cash reserves to approximately £6.1 million (at the date of this report).
27
sterling 159084