Misinformation in the market

The confused nonsense below was published on April 3^rd 2013 by Proactive Investors – “one of the leading free sources of breaking news, in-depth comment and analysis”, according to its own website. The content, though, was supplied by HB Markets, the little stockbroker until recently known as Hoodless Brennan.

When contacted and offered General Veloso’s and Diogo Cavaco’s version of the latest court developments, HB Markets’ research desk said: “We have absolutely no interest in your version of events. Goodbye.”
In fairness, nowhere on the HB website does the firm claim to produce independent or unbiased research. 

“Pathfinder Minerals (LON:PFP)

On 27th March 2013, Pathfinder received a notification that General Veloso, his company JV Consultores Internacionais Limitada and Mr. Diogo Cavaco (“defendants”) had appealed against the Maputo Judgment, revoking an interdict previously secured by the defendants against Pathfinder’s wholly owned subsidiary IM Minerals Ltd (IMM). The Notification indicated that the purpose of the defendants’ appeal was to suspend the effect of the Maputo Judgment pending the outcome of the appeal or further order. The decision to suspend the effect of the Maputo Judgment was made following an application by the defendants without notice to or hearing from IMM. IMM will challenge the validity on an urgent basis and will also contest the defendants’ appeal. The appeal is due to be heard before the judges of the Court of Appeal in England on 22nd or 23rd April 2013. Earlier, the defendants had alleged that IMM never acquired any shares in its Mozambique subsidiary, Companhia Mineira de Naburi (CMDN), and sought to argue that the agreements by which IMM acquired the shares in CMDN were validly terminated and/or invalid. Damages amounting to US$1m were also sought. The stock advanced 3% yesterday.

Our view: As previously announced on 1st February 2013, General Veloso, his company JV Consultores Internacionais Limitada and Diogo Cavaco sought permission to appeal against the English High Court judgment passed on 19th October 2012, which stated that Pathfinder’s wholly-owned subsidiary IMM had validly acquired 99.99% of the Mozambique subsidiary, CMDN, pursuant to the English law agreements entered into between IMM and General Veloso and his associates. The Court had subsequently ordered that Pathfinder receive 90% of the total costs incurred during the High Court proceedings, and ordered the defendants to make an interim payment of £850,000. Pathfinder will now contest the appeal vigorously, as it considers the basis for appeal to be without justification – both as to the defendants’ legal arguments and also in light of the defendants’ persistent breaches of orders made by the English High Court and their decision prior to trial to take no further part in the proceedings. We are optimistic that Pathfinder will regain ownership and control over the Moebase and Naburi assets of CMDN and subsequently commence the project development of the heavy mineral sand deposits housed in the prospect. In light of the high demand for heavy minerals of ilmenite, rutile and zircon in the manufacture of products in the industrial sectors, the Company’s Moebase and Naburi licences, if and when restored, would have a significant material value to Pathfinder. We assign a Speculative Buy rating on the stock.”

By HB Markets, published by Proactive Investors

For a clearer account of what happened in court, see the post after this one.