Group Directors and Strategic Report and
Consolidated Financial Statements for the Year Ended 31 December 2017
for
PATHFINDER MINERALS PLC
PATHFINDER MINERALS PLC
Contents of the Consolidated Financial Statements
for the Year Ended 31 December 2017
Company Information
Chairman’s Statement
Directors and Strategic Report
Report of the Independent Auditors
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
Company Statement of Cash Flows
Notes to the Statements of Cash Flows
Notes to the Consolidated Financial Statements
Page
1
2
4
7
10
11
12
13
14
15
16
17
18
19
PATHFINDER MINERALS PLC
Company Information
for the Year Ended 31 December 2017
DIRECTORS:
Sir H C Bellingham
R P Easby
N S Trew
SECRETARY:
R P Easby
REGISTERED OFFICE:
Becket House
36 Old Jewry
London
EC2R 8DD
REGISTERED NUMBER:
02578942 (England and Wales)
INDEPENDENT AUDITORS:
SOLICITORS:
NOMINATED ADVISOR:
REGISTRARS:
BANKERS:
Chapman Davis LLP
2 Chapel Court
London
SE1 1HH
Travers Smith LLP
10 Snow Hill
London
EC1A 2AL
WH Ireland Limited
24 Martin Lane
London
EC4R 0DR
Link Assets Services
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Royal Bank of Scotland
1 Dale Street
Liverpool
L2 2PP
Page 1
PATHFINDER MINERALS PLC
Chairman’s Statement
for the Year Ended 31 December 2017
INTRODUCTION
Throughout 2017, the Board continued to pursue the reinstatement to the Company of the areas previously licensed to
Pathfinder in Mozambique under Mining Concession nos. 760C and 4623C. These licences were consolidated under
Mining Concession no. 4623C (the “Licence”) in November 2011 and transferred without the Company’s knowledge or
consent to Pathfinder Moçambique, S.A. (“Pathfinder Moçambique”) – an entity with which neither Pathfinder nor its
subsidiaries are affiliated. Pathfinder Moçambique is owned by the Company’s former local partners.
STEPS TO RECOVER THE COMPANY’S ASSETS
In addition to pursuing recognition in Mozambique of the October 2012 English High Court judgment, which confirms,
contrary to the former local partners’ assertions, that Pathfinder legally acquired 99.99% of the shares of the entity
from which the Licence was appropriated (the “English Judgment”), significant attempts were made in 2017 to settle
the dispute through discussions with General Veloso, the principal former local partner (and his daughter Miriam Veloso
on his behalf) and, separately, with the Government of Mozambique.
Following a number of discussions during which the terms upon which the parties would be prepared to settle the
dispute were discussed, the Company sent a letter to General Veloso in March 2017 confirming its agreement in
principle to a resolution and providing an outline proposal with respect to the same.
In September 2017, the Company sent a proposed framework for an agreement to resolve the dispute to Miriam Veloso.
During October 2017, the Company’s regional representative and Miriam Veloso exchanged communications regarding
the framework agreement. Following further exchanges in October 2017 in which General Veloso and Miriam Veloso
requested that an acceptable proposal should be tabled, a meeting took place in November 2017 in Maputo between
the Company’s regional representative, General Veloso and Miriam Veloso.
A further meeting with General Veloso took place after the year-end, in January 2018, at which the Company was
represented by Professor Waty (an eminent expert on Mozambican law). Following that meeting, a request was made
that the framework agreement should be broken down into a “road map” to enable General Veloso and Miriam Veloso
to identify the stages required towards closure and this was provided later the same month.
These discussions ended in February 2018 upon receipt of a communication from Diogo Cavaco, one of the former local
partners, informing the Company that there was no ongoing settlement negotiation. While the Board remains open to
resuming a dialogue with the former local partners on a reasonable basis, it is focused on enforcing the Company’s
rights through the judicial process.
Paramount to the legal process is the Company’s application, lodged with the Supreme Court in Mozambique in August
2013, for recognition of the English Judgment. While the timing of the ruling is unknown, and there can be no certainty
of a favourable decision, the Board believes a favourable decision – effectively recognising Pathfinder’s ownership of
the entity from which the Licence was appropriated - would ultimately cause the Ministry of Mineral Resources of
Mozambique to put the Licence back to that entity, under Pathfinder’s control, and enable the Company to resume
development of the project.
I should like to remind you that the Company’s first application for recognition in Mozambique of an English judgment
– in that instance, orders by the English court for costs aggregating £106,000 to be paid by the former local partners -
was unsuccessful (as announced in September 2015). Following its ruling, the Supreme Court admitted a 'harmonisation
of laws' appeal from the Company against this unfavourable decision (an appeal based on the existence of a previous
conflicting decision), but subsequently dismissed the appeal (as announced in October 2017) on procedural grounds.
The Company is advised in respect of its application for recognition of the English Judgment that the Supreme Court is
not bound to follow its previous decisions.
Page 2
PATHFINDER MINERALS PLC
Chairman’s Statement
for the Year Ended 31 December 2017
FINANCIAL RESULTS AND CURRENT FINANCIAL POSITION
The Company was required to conduct three share issues for cash during the year under review to enable us to continue
our strategy to recover the Licence and meet our ongoing obligations as an AIM-listed company. Accordingly, Pathfinder
raised approximately an aggregate £620,000 in net proceeds from three fundraisings in March, September and
December 2017. We are grateful for the support of investors and continue to believe that the Licence, if recovered, will
deliver considerable value to shareholders as a world-class mineral sands asset.
We continue to manage costs conservatively. Payments of an aggregate 30% of directors' fees incurred in the period
under review, in addition to other benefits such as pension contributions, have been deferred until the Company is in
materially better financial health. With effect from 1 April 2018, the fixed salaries of Nicholas Trew and myself were
reduced by 50% until such time as the Licence has been recovered.
The financial statements of the Pathfinder Group for the year ended 31 December 2017 follow later in this report. The
Income Statement shows a loss of £615,000 (2016 - £582,000) of which £94,000 relates to directors' fees and pension
contributions that are recorded as a liability in 'Trade and other payables' but actual payment of which have been
deferred as described above and in 'Note 20' to these accounts.
The Group's Statement of Financial Position shows net assets (excluding £277,000 of deferred fees and pension
contributions described in 'Note 20') at 31 December 2017 of £224,000 (31 December 2016 - £122,000). The assets are
held largely in the form of cash deposits (totalling £248,000 at the end of the period). A further £250,000 was raised
after the year end, in May 2018, through a placing of new shares with investors.
OUTLOOK
Earlier this month, Pathfinder announced that the Supreme Court in Mozambique had notified the Company of its
request for final written submissions in relation to Pathfinder's application for recognition of the English Judgment. The
Company has duly complied and has lodged final written submissions with the Supreme Court. Pathfinder is confident
in its application and is encouraged by the request for final written submissions, which shows that the court is advancing
– albeit slowly - through its process.
The length of time it is taking for the Supreme Court to opine on the application for recognition is frustrating for us all.
However, the Board believes that, absent a speedier resolution via Mozambique’s Ministry of Mineral Resources,
pursuing the judicial process is the main avenue available to Pathfinder to recover meaningful value for Pathfinder’s
shareholders.
The Board’s primary focus remains to pursue the reinstatement of the appropriated Licence. However, the Board also
receives other approaches from time to time for broader opportunities in mineral sands projects. Any meaningful
acquisition of a new project would likely be considered a reverse takeover under the AIM rules for companies and the
Board would of course come back to shareholders for approval on any significant investment, consistent with our AIM
rule obligations.
We announced last month the Company’s intention, subject to customary directorate appointment regulatory due
diligence, to appoint Blair Sergeant and Simon Farrell to the Board as Chief Executive Officer and Non-executive Co-
chairman respectively. A further announcement concerning the proposed appointments of Mr Sergeant and Mr Farrell
will be made in due course.
On behalf of the Board, I should like to thank all shareholders for their continuing support while the Board is doing
everything in its power to recover the Licence on terms which represent meaningful value for Pathfinder’s shareholders.
ON BEHALF OF THE BOARD:
Sir H C Bellingham - Director
28 June 2018
Page 3
PATHFINDER MINERALS PLC
Directors and Strategic Report
for the Year Ended 31 December 2017
The directors present their report with the financial statements of the company and the group for the year ended
31 December 2017.
DIVIDENDS
No dividends will be distributed for the year ended 31 December 2017.
An overview of the group results is presented in the Chairman's Statement.
EVENTS SINCE THE END OF THE YEAR
Information relating to events since the end of the year is given in the notes to the financial statements.
DIRECTORS
The directors shown below have held office during the whole of the period from 1 January 2017 to the date of this
report.
Sir H C Bellingham
N S Trew
R P Easby
FINANCIAL INSTRUMENTS
The company's financial instruments consist entirely of cash that arises 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 DONATIONS AND EXPENDITURE
No charitable or political contributions were made during the current or previous year.
MAJOR SHAREHOLDERS
As at 1 June 2018 the following shareholders were beneficially interested in 3% or more of the Company's ordinary
share capital insofar as the Company is aware and based on the Company’s latest available ‘Detailed Share Register
Analysis: Beneficial Owner’ report.
Shareholder name
Number of 0.1p
ordinary shares
Shareholding
percentage
Mr Nicholas Trew (Director)
Align Research and related party - R S & C A Jennings
Mr E P Walsh
Mr Kane Morgan
21,449,735
9,500,000
9,212,295
8,475,000
8.38%
3.71%
3.60%
3.31%
Page 4
PATHFINDER MINERALS PLC
Directors and Strategic Report
for the Year Ended 31 December 2017
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 20 days (2016: 20 days).
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.
DISCLOSURE IN THE STRATEGIC REPORT
Strategic matters relating to the company throughout the reporting period are outlined in the Chairman's Statement.
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 the group and of the
profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
- 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the
company and the group 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 the group and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
Page 5
PATHFINDER MINERALS PLC
Directors and Strategic Report
for the Year Ended 31 December 2017
GOING CONCERN
The directors have considered the appropriateness of the going concern concept in the preparation of the financial
statements, especially considering the negative equity position the company is in. After a review of the cash
requirements of the company, the directors believe that the company will have sufficient cash reserves available for at
least the next 12 months from the date of this report. As disclosed in note 21, the company has raised £250,000 via a
subscription for new shares after the balance sheet date in order to remedy the negative equity position.
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 group'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 group'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:
N S Trew - Director
28 June 2018
Page 6
Report of the Independent Auditors to the Members of
Pathfinder Minerals Plc
OPINION
We have audited the financial statements of Pathfinder Minerals Plc (the ‘Parent Company’) and its subsidiaries (the
‘Group’) for the year ended 31 December 2017 which comprise the Consolidated Income Statement, the Consolidated
Statement of 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 Flows, and the related notes 1 to 22, including the significant accounting policies in note 3.
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.
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 2017 and of the Group’s and the Parent Company’s loss for the year then ended;
the financial statements have been properly prepared in accordance with IFRSs as adopted by the European
Union; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006
and, as regards the Group financial statements, Article 4 of the IAS Regulation.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
financial statements section of our report. We are independent of the group and the parent company in accordance
with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s
Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
CONCLUSIONS REGARDING GOING CONCERN
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to
you where:
the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not
appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that may cast
significant doubt about the Company’s ability to continue to adopt the going concern basis of accounting for a period
of at least twelve months from the date when the financial statements are authorised for issue.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgement, are of most significance in our audit of the
financial statements of the current period. Such matters would be addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and a separate opinion on such matters would not be provided.
We have determined that there are no key audit matters to be communicated in our report.
The materiality for the group financial statements as a whole was set at £30,000, being 5% of the loss for the year and
less than 10% of both total assets and total liabilities.
Page 7
Report of the Independent Auditors to the Members of
Pathfinder Minerals Plc
OTHER INFORMATION
The directors are responsible for the other information. The other information comprises the information included in
the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or
apparent material misstatements, we are required to determine whether there is a material misstatement in the
financial statements or a material misstatement of the other information. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the Directors` and Strategic Report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
the Directors` and Strategic Report has been prepared in accordance with applicable legal requirements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
In the light of the knowledge and understanding of the Group and its environment obtained in the course of the audit
we have not identified material misstatements in the Directors` and Strategic Report. We have nothing to report in
respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our
opinion:
•
•
•
adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit
have not been received from branches not visited by us; or
the Parent Company 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.
RESPONSIBILITIES OF THE DIRECTORS
As explained more fully in the Statement of Directors’ Responsibilities, the directors are responsible for the preparation
of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as
the directors determine is necessary to enable the preparation of financial statements that are free from material
misstatement whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or the Parent Company or to cease operations, or
have no realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists.
Page 8
Report of the Independent Auditors to the Members of
Pathfinder Minerals Plc
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
USE OF OUR REPORT
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 an auditor’s report 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.
Keith Fulton (Senior Statutory Auditor)
for and on behalf of Chapman Davis LLP
Chartered Accountants and Statutory Auditors
2 Chapel Court
London
SE1 1HH
28 June 2018
Page 9
PATHFINDER MINERALS PLC
Consolidated Income Statement
for the Year Ended 31 December 2017
Notes
2017
£'000
2016
£'000
CONTINUING OPERATIONS
Revenue
Other operating income
Administrative expenses
OPERATING LOSS
Finance income
LOSS BEFORE INCOME TAX
Income tax
LOSS FOR THE YEAR
Loss attributable to:
Owners of the parent
Earnings per share expressed
in pence per share:
Basic
Diluted
5
7
8
9
11
-
-
(615)
(615)
-
(615)
-
(615)
(615)
-0.33
-0.33
-
161
(743)
(582)
-
(582)
-
(582)
(582)
-0.44
-0.44
The notes form part of these financial statements
Page 10
PATHFINDER MINERALS PLC
Consolidated Statement of Comprehensive Income
for the Year Ended 31 December 2017
LOSS FOR THE YEAR
OTHER COMPREHENSIVE INCOME
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR
Total comprehensive income attributable to:
Owners of the parent
2017
£'000
(615)
-
(615)
(615)
2016
£'000
(582)
-
(582)
(582)
The notes form part of these financial statements
Page 11
PATHFINDER MINERALS PLC (REGISTERED NUMBER: 02578942)
Consolidated Statement of Financial Position
31 December 2017
Notes
2017
£'000
2016
£'000
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Investments
CURRENT ASSETS
Trade and other receivables
Cash and cash equivalents
TOTAL ASSETS
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital
Share premium
Retained earnings
TOTAL EQUITY
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
12
13
14
15
16
17
17
18
-
-
-
56
248
304
304
18,416
11,997
(30,466)
(53)
357
357
304
1
-
1
65
134
199
200
18,345
11,445
(29,851)
(61)
261
261
200
The financial statements were approved by the Board of Directors on 28 June 2018 and were signed on its behalf by:
R P Easby - Director
The notes form part of these financial statements
Page 12
PATHFINDER MINERALS PLC (REGISTERED NUMBER: 02578942)
Company Statement of Financial Position
31 December 2017
Notes
2017
£'000
2016
£'000
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Investments
CURRENT ASSETS
Trade and other receivables
Cash and cash equivalents
TOTAL ASSETS
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital
Share premium
Retained earnings
TOTAL EQUITY
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
12
13
14
15
16
17
17
18
-
-
-
56
248
304
304
18,416
11,997
(30,465)
(52)
356
356
304
1
-
1
65
134
199
200
18,345
11,445
(29,850)
(60)
260
260
200
The financial statements were approved by the Board of Directors on 28 June 2018 and were signed on its behalf by:
R P Easby - Director
The notes form part of these financial statements
Page 13
PATHFINDER MINERALS PLC
Consolidated Statement of Changes in Equity
for the Year Ended 31 December 2017
Called up
share
capital
£'000
Retained
earnings
£'000
Share
premium
£'000
Total
equity
£'000
Balance at 1 January 2016
18,289
(29,269)
11,022
42
Changes in equity
Issue of share capital
Total comprehensive income
56
-
-
(582)
423
-
Balance at 31 December 2016
18,345
(29,851)
11,445
Changes in equity
Issue of share capital
Total comprehensive income
71
-
-
(615)
552
-
Balance at 31 December 2017
18,416
(30,466)
11,997
479
(582)
(61)
623
(615)
(53)
The notes form part of these financial statements
Page 14
PATHFINDER MINERALS PLC
Company Statement of Changes in Equity
for the Year Ended 31 December 2017
Called up
share
capital
£'000
Retained
earnings
£'000
Share
premium
£'000
Total
equity
£'000
Balance at 1 January 2016
18,289
(29,269)
11,022
42
Changes in equity
Issue of share capital
Total comprehensive income
56
-
-
(581)
423
-
Balance at 31 December 2016
18,345
(29,850)
11,445
Changes in equity
Issue of share capital
Total comprehensive income
71
-
-
(615)
552
-
Balance at 31 December 2017
18,416
(30,465)
11,997
479
(581)
(60)
623
(615)
(52)
The notes form part of these financial statements
Page 15
PATHFINDER MINERALS PLC
Consolidated Statement of Cash Flows
for the Year Ended 31 December 2017
Cash flows from operating activities
Cash absorbed by operations
Net cash from operating activities
Notes
1
Cash flows from investing activities
Purchase of tangible fixed assets
Interest received
Net cash from investing activities-
Cash flows from financing activities
Share issue
Share issue expenses
Net cash from financing activities
Increase in cash and cash equivalents
Cash and cash equivalents at beginning of
year
2
Cash and cash equivalents at end of year
2
2017
£'000
(509)
(509)
-
-
-
2016
£'000
(423)
(423)
(2)
-
(2)
664 495
(41) (16)
623
114
134
248
479
54
80
134
The notes form part of these financial statements
Page 16
PATHFINDER MINERALS PLC
Company Statement of Cash Flows
for the Year Ended 31 December 2017
Cash flows from operating activities
Cash absorbed by operations
Net cash from operating activities
Notes
1
Cash flows from investing activities
Purchase of tangible fixed assets
Interest received
Net cash from investing activities
Cash flows from financing activities
Share issue
Share issue expenses
Net cash from financing activities
Increase in cash and cash equivalents
Cash and cash equivalents at beginning of
year
2
Cash and cash equivalents at end of year
2
2017
£'000
(509)
(509)
-
-
-
2016
£'000
(423)
(423)
(2)
-
(2)
664 495
(16)
(41)
623
114
134
248
479
54
80
134
The notes form part of these financial statements
Page 17
PATHFINDER MINERALS PLC
Notes to the Statements of Cash Flows
for the Year Ended 31 December 2017
1.
RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH ABSORBED BY OPERATIONS
Group
Loss before income tax
Depreciation charges
Finance income
Decrease in trade and other receivables
Increase in trade and other payables
Cash absorbed by operations
Company
Loss before income tax
Depreciation charges
Finance income
Decrease in trade and other receivables
Increase in trade and other payables
Cash absorbed by operations
2.
CASH AND CASH EQUIVALENTS
2017
2016
£'000
(615)
1
-
(614)
9
96
(509)
£'000
(582)
1
-
(581)
29
129
(423)
2017
2016
£'000
(615)
1
-
(614)
9
96
(509)
£'000
(581)
1
-
(580)
29
128
(423)
The amounts disclosed on the Statements of Cash Flows in respect of cash and cash equivalents are in respect
of these Statement of Financial Position amounts:
Year ended 31 December 2017
Cash and cash equivalents
Year ended 31 December 2016
Cash and cash equivalents
Group
Company
31.12.17
£'000
248
31.12.16
£'000
134
1.1.17
£'000
134
1.1.16
£'000
80
31.12.17
£'000
248
31.12.16
£'000
134
1.1.17
£'000
134
1.1.16
£'000
80
The notes form part of these financial statements
Page 18
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2017
1.
GENERAL INFORMATION
Pathfinder Minerals Plc is a public limited company whose ordinary shares are listed on the Alternative
Investment Market of the London Stock Exchange; and is incorporated and domiciled in the UK. The address of
its registered office is Becket House, 36 Old Jewry, London EC2R 8DD.
The financial statements of Pathfinder Minerals PLC for the year ended 31 December 2017 were authorised for
issue by the Board on 28 June 2018 and the statement of consolidated financial position signed on the Board's
behalf by Robert Easby.
2.
STATUTORY INFORMATION
Pathfinder Minerals Plc is a private company, limited by shares, registered in England and Wales. The company's
registered number and registered office address can be found on the General Information page.
3.
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.
As a result of the funding activities undertaken since the year end, the Company has improved its short-term
liquidity position. The Board have reviewed the Company's cash requirements for the next 12 months and,
after taking account of reasonably possible changes in both expenditure and equity investment, have concluded
that the Company should be able to operate within its current level of financing.
After making enquiries, the directors have a reasonable expectation that the Company has adequate resources
to continue in operational existence for the foreseeable future. The Company therefore continues to adopt the
going concern basis in preparing its financial statements.
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 in 2011 indicated 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.
Property, plant and equipment
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful
life.
Plant and machinery
- 33% on cost
Taxation
Current taxes are based on the results shown in the financial statements and are calculated according to local
tax rules, using tax rates enacted or substantially enacted by the statement of financial position date.
Page 19
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2017
3.
ACCOUNTING POLICIES - continued
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 taken into account in arriving at the
operating result.
Employee benefit costs
The group operates a defined contribution pension scheme. Contributions payable to the group's pension
scheme are charged to the income statement in the period to which they relate.
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.
New standards and interpretations not yet adopted
The adoption of new standards, where relevant, has had no impact on the reported results nor on 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.
4.
SEGMENTAL REPORTING
The Group has one activity only. Of the Group's administrative expenses, £21,000 (2016: £53,000) was spent 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 2017 and 2016 was attributable to UK assets and liabilities.
5.
OTHER OPERATING INCOME
Sundry receipts
2017
£'000
-
2016
£'000
161
On 23 August 2016, the English High Court made orders for the sale of the aggregate 19,824,000 shares held by
JV Consultores Internacionais Limitada and Diogo Cavaco in the Company. Other operating income represents
receipts from the sale of these shares.
Page 20
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2017
6.
EMPLOYEES AND DIRECTORS
There were no employees, other than the directors.
The following tables set out and analyse the remuneration of directors for the years ended 31 December 2017
and 2016.
Year ended 31 December 2017:
Henry
Bellingham
Nicholas Trew
Robert Easby
Benefits
in kind
£000
-
Total
emoluments
£000
48
Contributions to
pension
schemes
£000
-
Total
remuneration
2017
£000
48
5
-
5
155
60
263
15
-
15
170
60
278
Salary
£000
48
150
60
258
Year ended 31 December 2016:
Henry
Bellingham
Nicholas Trew
James Normand
Robert Easby
Benefits
in kind
£000
-
Total
emoluments
£000
48
Contributions to
pension
schemes
£000
-
Total
remuneration
2017
£000
48
5
4
-
9
155
54
45
302
15
5
-
20
170
59
45
322
Salary
£000
48
150
50
45
293
In addition to the above amounts, James Normand received £14,665 as part of a settlement agreement following
his resignation as director.
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.
7.
NET FINANCE INCOME
Finance income:
Deposit account interest
2017
£'000
2016
£'000
-
-
Page 21
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2017
8.
LOSS BEFORE INCOME TAX
The loss before income tax is stated after charging:
Depreciation - owned assets
Auditors' remuneration
Foreign exchange differences
9.
INCOME TAX
2017
£'000
1
8
2
2016
£'000
1
11
8
Analysis of tax expense
No liability to UK corporation tax arose for the year ended 31 December 2017 nor for the year ended
31 December 2016.
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 before income tax
2017
£'000
(615)
2016
£'000
(582)
Loss multiplied by the standard rate of corporation tax in the UK of 19%
(2016 - 20%)
(117)
(116)
Effects of:
Unrelieved tax losses carried forward
Income not chargeable to tax
Tax expense
10.
LOSS OF PARENT COMPANY
117
-
-
148
(32)
-
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 £615,224
(2016 - £581,282).
Page 22
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2017
11.
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.
A diluted loss per share has not been calculated as the effect of the exercise of outstanding warrants and options
would be anti-dilutive.
Basic
Earnings attributable to ordinary shareholders
Effect of dilutive securities
Diluted
Adjusted earnings
Basic
Earnings attributable to ordinary shareholders
Effect of dilutive securities
Diluted
Adjusted earnings
2017
Weighted
average
number
of
shares
Per-share
amount
pence
Loss
£'000
(615)
-
185,404,008
-
-0.33
-
(615)
185,404,008
-0.33
2016
Weighted
average
number
of
shares
Per-share
amount
pence
Loss
£'000
(582)
-
131,985,901
-
-0.44
-
(582)
131,985,901
-0.44
Page 23
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2017
12.
PROPERTY, PLANT AND EQUIPMENT
Group
COST
At 1 January 2017
At 31 December 2017
DEPRECIATION
At 1 January 2017
Charge for year
At 31 December 2017
NET BOOK VALUE
At 31 December 2017
At 31 December 2016
Company
COST
At 1 January 2017
At 31 December 2017
DEPRECIATION
At 1 January 2017
Charge for year
At 31 December 2017
NET BOOK VALUE
At 31 December 2017
At 31 December 2016
Plant and
machinery
£'000
2
2
1
1
2
-
1
Plant and
machinery
£'000
2
2
1
1
2
-
1
Page 24
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2017
13.
INVESTMENTS
Company
COST
At 1 January 2017
and 31 December 2017
PROVISIONS
At 1 January 2017
and 31 December 2017
NET BOOK VALUE
At 31 December 2017
At 31 December 2016
Shares in
group
undertakings
£'000
34,806
34,806
-
-
The group or the company's investments at the Statement of Financial Position date in the share capital of
companies include the following:
Subsidiaries
I M Minerals Limited
Registered office: United Kingdom
Nature of business: Holding company
Class of shares:
Ordinary
Companhia Mineira de Naburi SARL
Registered office: Mozambique
Nature of business: Mining
Class of shares:
Ordinary
%
holding
100.00
%
holding
100.00
Page 25
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2017
13.
INVESTMENTS - continued
Company
Sociedade Geral de Mineracao de Moçambique SARL
Registered office: Mozambique
Nature of business: Dormant
Class of shares:
Ordinary
%
holding
100.00
IM Minerals Limited held the shares in Companhia Mineira de Naburi SARL which held titanium dioxide mining
concessions in the Republic of Mozambique. 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, made full provision in the 2011 financial statements
against the cost of its investment in IM Minerals.
14.
TRADE AND OTHER RECEIVABLES
Current:
Other debtors
VAT
Prepayments and accrued income
15.
CASH AND CASH EQUIVALENTS
Bank accounts
16.
CALLED UP SHARE CAPITAL
Allotted, issued and fully paid:
Number:
Class:
230,819,182
183,688,116
Ordinary
Deferred
Group
2017
£'000
2016
£'000
Company
2017
£'000
2016
£'000
35
7
14
56
37
17
11
65
35
7
14
56
37
17
11
65
Group
Company
2017
£'000
248
2016
£'000
134
2017
£'000
248
2016
£'000
134
Nominal
value:
0.1p
9.9p
2017
£'000
231
18,185
2016
£'000
160
18,185
18,416
18,345
Page 26
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2017
16.
CALLED UP SHARE CAPITAL - continued
During the year the company made the following issues of Ordinary shares of 0.1p each for cash consideration:
20,000,000 Ordinary shares of 0.1p each at a premium of 0.9p per share;
28,333,333 Ordinary shares of 0.1p each at a premium of 0.65p per share; and
19,230,770 Ordinary shares of 0.1p each at a premium of 1.2p per share.
In addition, 3,000,000 Ordinary shares of 0.1p each were issued in return for corporate services provided by a
third party.
17.
RESERVES
Group
At 1 January 2017
Deficit for the year
Cash share issue
Share issue expenses
At 31 December 2017
At 1 January 2016
Deficit for the year
Cash share issue
Share issue expenses
At 31 December 2016
Retained
earnings
£'000
(29,851)
(615)
-
-
Share
premium
£'000
11,445
594
(42)
Totals
£'000
(18,406)
(615)
594
(42)
(30,466)
11,997
(18,469)
Retained
earnings
£'000
(29,270)
(581)
-
-
Share
premium
£'000
11,022
439
(16)
Totals
£'000
(18,248)
(581)
439
(16)
(29,851)
11,445
(18,406)
Page 27
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2017
17.
RESERVES - continued
Company
At 1 January 2017
Deficit for the year
Cash share issue
Share issue expenses
At 31 December 2017
At 1 January 2016
Deficit for the year
Cash share issue
Share issue expenses
At 31 December 2016
18.
TRADE AND OTHER PAYABLES
Current:
Trade creditors
Social security and other taxes
Other creditors
Accruals and deferred income
Retained
earnings
£'000
(29,850)
(615)
-
-
Share
premium
£'000
11,445
594
(42)
Totals
£'000
(18,405)
(615)
594
(42)
(30,465)
11,997
(18,468)
Retained
earnings
£'000
(29,268)
(582)
-
-
Share
premium
£'000
11,022
439
(16)
Totals
£'000
(18,246)
(582)
439
(16)
(29,850)
11,445
(18,405)
Group
2017
£'000
2016
£'000
Company
2017
£'000
2016
£'000
12
11
324
10
357
18
11
220
12
261
12
11
323
10
356
17
11
220
12
260
Page 28
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2017
19.
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.
In the event that Pathfinder is successful in regaining control of the disputed Licences, the Company has agreed
to issue ordinary shares to its' regional representative, Eduardo C. Mondlane Jr, equivalent to up to 25 per cent
of the enlarged issued share capital of Pathfinder. In such circumstances, it is envisaged that the Mr Mondlane
Jr will assist with the ongoing administration of Pathfinder's local operating subsidiaries and with the Company's
relationships with regional and national authorities and with local communities.
20.
RELATED PARTY DISCLOSURES
At the balance sheet date J P McKeon, a former director, owed the company £8,924.
In order to ease the pressure on the company's cash resources, the following directors deferred payment of
their contracted salaries or fees and, where applicable, pension contributions. The amounts deferred, and
included in other creditors, were as follows:
Salary/ fees
deferred at 1
January
2017
N S Trew
J P
Normand
H C
Bellingham
R P Easby
J P McKeon
£000
87
27
28
17
1
Total
160
Pension
contributions
deferred at 1
January 2017
£000
Salary/fees
deferred
during the
year
£000
19
4
-
-
-
23
43
-
16
20
-
79
Pension
contributions
deferred during
the year
Salary/fees
deferred at 31
December
2017
Pension
contributions
deferred at 31
December 2017
£000
£000
15
130
-
-
-
-
27
44
37
1
15
239
£000
34
4
-
-
-
38
These amounts will be made good when it is safe and reasonable for the company to do so, but no fixed date
for repayment has been set.
Details of directors' remuneration are given in note 6 above.
Page 29
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2017
21.
EVENTS AFTER THE REPORTING PERIOD
Following the end of the year the company has raised £250,000 via a subscription for new shares and issued
25m warrants to subscribe for new shares at a price of 1.5p per share, which lapse on 14 May 2021.
22.
SHARE OPTIONS AND WARRANTS
The company granted the following share options to directors on 15 November 2016:
Director
H C Bellingham
N S Trew
R P Easby
Number of
shares the
subject of
options or
warrants
2,750,000
2,750,000
1,375,000
6,875,000
Exercise price
per share
Latest exercise date
3p
3p
3p
15 November 2021
15 November 2021
15 November 2021
In addition to those listed above, J P Normand holds options over 1,600,000 shares with an exercise price of
47.5p.
The fair value of the options granted on 15 November 2016 was determined using the Black-Scholes pricing
model. The resulting value was deemed immaterial by the directors and no charge has been made to the income
statement.
As detailed in note 19, the company is contractually obliged to issue Eduardo Mondlane Jr ordinary shares
equivalent to 25 per cent of the enlarged issued share capital of the company if certain conditions are met.
Page 30