Pathfinder Minerals Plc (LON: PFP), a zircon and titanium-centric mining company, announced on Monday, calling for it to resort to the Bilateral Investment Treaty (BIT) between the UK and Mozambique, signed in 2004.
The news follows a move by local actors in 2011, and removes the license from Pathfinder Resources covering approximately 32,000 hectares of land on the Indian Ocean coast of Zambezia, Mozambi. In its view, the Mozambique government acted inappropriately by causing this without its knowledge or consent. And in that case, the lawsuit to remove the license “has “had no legal validity.”
In 2014, the group said there was a valid claim under the conditions of the 2004 bit, and that the most likely outcome of successful legal proceedings is to receive its control and its endorsement award.
In 2015, Pathfinder Minerals provided a notification of disputes based on the Bit of the Mozambique government. It demonstrated that all legal paths in Britain and Mozambique are exhausted. This includes the refusal of the Mozambique Supreme Court to reject the UK’s High Court decision – the company will continue to attempt diplomatic resolutions before it begins proceedings.
Council members met with the British government to seek support in their diplomatic efforts. If these failed, the company conducted an analysis of the likelihood of success in preparation for a formal litigation, and its board began discussions with future litigation funders.
Taking into account the potential billing benchmarks, a 2019 range survey conducted by an independent technology consultant found that “10% discount rate is US$1.05 billion, net current value before tax. Annual revenue of US$323 million is projected over a 30-year mine lifetime. Approximately 25% project internal return.”
Speaking about the strategic update, Pathfinder CEO Peter Taylor commented:
“A exhausting attempt to meet all conditions before the start of the bit proceedings and negotiate a friendly resolution with previous local partners has no choice but to properly transfer the licenses that are deemed illegal to the Mozambique government.”
“It remains our preference to avoid treaty litigation and quickly conclude such resolutions by resolving disputes through constructive dialogue with the Mozambique government. Such a timely resolution is expected to allow us to resume the development of licenses and bring significant relevant social and economic benefits to the region through employment, infrastructure, loyalty and taxation.”
In anticipation of licensing expectations for the management of the company, the group is engaged with future partners whose financial and technical capabilities may help develop future licenses.
Following the news, Pathfinder Minerals stock has fallen by more than 22%, at about 0.52p on Monday, November 20th. This is far from the start of the year’s high of 0.98p, but it surpasses the lowest level of 0.43pa share.
MarketBeat reports that the company “purchased more shares in the company than insiders are selling. Specifically, they bought £276,800 in the company’s shares and sold GBX 0 in the company’s shares.” The MarketBeat community has a “underperformance” rating of 54.12% on the shares.
