Status of Moebase and Naburi Heavy Mineral Sands Project
Following various confusing Press Releases issued to the public market in London by the Board of Pathfinder Minerals plc, the Directors of Pathfinder Mocambique SA (“the Company”) wish to clarify the current situation.
1. General Veloso resigned in writing from the Board of Pathfinder Minerals on 21 October 2011 following an attempt to remove the other directors of the Board of Pathfinder Minerals at an AGM held on 16 September 2011. John McKeon, the Chairman, survived with a vote of 50.2%.
2. The Directors of Pathfinder Mocambique had, after taking legal advice from their London lawyers, approached Pathfinder Minerals shareholders JP Morgan Asset Management, Genesis Investments and Tim Baldwin (a former Director), to obtain their assistance in removing the Board of Pathfinder Minerals on the following grounds:
i) breach of contract in respect of the option to acquire shares of Companhia Mineira de Naburi (“CMdN”) (the then owner of the licence) which had been granted to International Mercantile Group Limited (“IMG”), the private investment vehicle of Nick Trew and Gordon Dickie;
ii) persistent questions raised about corporate governance issues;
iii) lack of operational experience in heavy minerals sands mining;
iv) the loss of confidence of their local (Mozambican) partner.
3. In the event only Gordon Dickie was voted off the Pathfinder Minerals Board after various parties, including Tim Baldwin, altered their voting intentions at the last minute.
4. On 21 October 2011, Nick Trew, the CEO of Pathfinder Minerals, was informed of the resignation of General Veloso. Diogo Cavaco subsequently informed Nick Trew that the licence would be removed due to the failure of Pathfinder Minerals to honour its obligations to CMdN.
5. The Directors of Pathfinder Mocambique remain extremely surprised that the market was not immediately informed of General Veloso’s resignation. Instead, on 23 October 2011, Nick Trew flew to Maputo and offered General Veloso verbally and subsequently in writing financial inducements to reconsider his decision to resign, including offers of a cash payment and a transfer of Pathfinder Minerals shares then owned by John McKeon, Nick Trew, Gordon Dickie and Tim Baldwin. A condition was that General Veloso should keep this offer secret. He immediately refused this proposal.
6. Despite further communications from General Veloso and Diogo Cavaco to the AIM market regulation team and Daniel Stewart & Co, the NOMAD to Pathfinder Minerals, that they felt that investors were being misled about Pathfinder Minerals’ commercial status, a false market was allowed to persist in the shares of Pathfinder Minerals until they were finally suspended on 11 November 2011 – precisely three weeks after Nick Trew was informed of General Veloso’s decision.
7. The Board of Pathfinder Minerals claimed on 25 November 2011 to have “uncovered” the existence of Pathfinder Mocambique. In fact and to the contrary, the Directors of Pathfinder Mocambique made it clear to Arlington Securities when asked by them on behalf of JP Morgan, that the new licence was being issued to Pathfinder Mocambique, a company controlled by General Veloso and Diogo Cavaco.
8. The Directors of Pathfinder Mocambique have taken extensive advice from their London lawyers – including a leading Queen’s Counsel specializing in breaches of company law.
9. As a direct result of this legal advice, on 22 November 2011 the London lawyers of Pathfinder Mocambique wrote to Marcus Studdart, the head of the AIM Regulation team, asking for a full investigation into the activities of the Board of Pathfinder Minerals and IM Minerals Limited and former Directors Gordon Dickie and Tim Baldwin.
10. Based on specific advice from counsel, Pathfinder Mocambique’s lawyers have also asked the City of London Police to examine the activities of all Pathfinder Minerals Directors, past and present, to ensure that there have been no breaches of criminal law.
11. Pathfinder Mocambique would expect any investigations to include the activities of Pathfinder Minerals’ subsidiary IM Minerals Limited and its affiliated company International Mercantile Group (a private investment company controlled by Nick Trew and Gordon Dickie).
12. Pathfinder Mocambique and its lawyers have volunteered their full cooperation with any investigations which follow.
13. The Directors of Pathfinder Mocambique note that an article in the British newspaper The Daily Telegraph on 2 December 2011, stated “The British High Commissioner is now understood to have been involved” in the dispute. The Directors of Pathfinder Mocambique would like to make clear that the British High Commissioner in Mozambique, Shaun Cleary, has made no apparent attempt to obtain Pathfinder Mocambique’s version of events before engaging in commercial lobbying on behalf of the board of Pathfinder Minerals. The London lawyers for Pathfinder Mocambique have written in the strongest terms to the Foreign Secretary, William Hague, to complain about the partisan interference of the British High Commissioner in a corporate dispute in a sovereign country.
14. Pathfinder Minerals raised £11m in a placing of shares on 2 August 2011 of which £9m was subscribed by JP Morgan Asset Management and Genesis Investments. The Directors of Pathfinder Mocambique have offered their full cooperation to JP Morgan and Genesis through Arlington Securities, the brokers to the placing.
15. As major shareholders of Pathfinder Minerals representing over 19% of the issued share capital, General Veloso and Diogo Cavaco intend to requisition an Extraordinary General Meeting of Pathfinder Minerals to appoint an independent law firm and forensic corporate investigator to carry out a full examination of the activities, contracts and share dealings entered into by the Directors of Pathfinder Minerals, IM Minerals Limited and International Mercantile Group Limited.
16. Such an investigation would specifically examine how and on what basis the option (and associated financial obligations) to acquire shares in CMdN was transferred from IMG to IM Minerals Limited, prior to the reverse takeover of Pathfinder Minerals (formerly Pathfinder Properties plc).
17. General Veloso and Diogo Cavaco hope that the Board of Pathfinder Minerals would share results of any such investigation with AIM regulators, the City of London Police and the shareholders of Pathfinder Minerals.
Jacinto Veloso and Diogo Cavaco
Maputo, 6 December 2011
Av. Armando Tivane, 890, Maputo, Moçambique.
Tel: +258 21 493160/2 – Fax: +258 21 493163
Enquiries:
Pathfindermozambique@gmail.com
Notes to Editors:
The Board of Pathfinder Minerals currently comprises John McKeon, Chairman, Nick Trew, CEO and James Normand, CFO. Gordon Dickie had been a director until he was voted off the Board on 16 September 2011.
Tim Baldwin was a Director of Pathfinder Minerals following the Admission to AIM but subsequently resigned.
Pathfinder Properties plc, a quoted “shell” company, changed its name to Pathfinders Minerals Plc on 22 December 2009. Pathfinder Minerals acquired IM Minerals Limited as part of the Admission to AIM on 30 December 2010. IM Minerals is purported to have acquired an interest in CMdN ahead of the Admission to AIM although the legal basis for the acquisition of this interest remains unclear.
General Veloso is a former head of national security for Mozambique and Minister of Foreign Affairs. He and Diogo Cavaco owned the entire issued share capital of CMdN, the owner of the Naburi licence. In 2006 International Mercantile Group Limited, a private company controlled by Nick Trew and Gordon Dickie, entered into an Option Agreement to acquire shares of CMdN. The purchase consideration under this Option Agreement has never been paid.
