Pathfinder shares surge as it moves closer to arbitration

Pathfinder Minerals updated the market on its dispute over mining concession 4623C on Friday, reporting that it had “significantly advanced” its preparation to refer the dispute to the International Centre for Settlement of Investment Disputes (ICSID) under the Mozambique-UK Bilateral Investment Treaty.

The AIM-traded firm said the preparatory work included the development of a detailed budget and timeline for claimant costs, the identification of the company's litigation team, and an independent professional analysis of valuations for differing successful outcomes at tribunal.

It said those elements had now been compiled into a briefing pack for review by institutional litigation funders, who would fund the claim, with fees payable only in the event of a successful outcome.

The pack was developed by the company’s solicitors Travers Smith LLP, and drew on detailed valuation mechanisms from Versant Partners LLC.

Pathfinder said that, while the detail behind the valuation remained legally privileged, the Versant analysis assessed a range of successful scenarios with valuation ranges from $110m for an ex-ante damages award, through to $1.5bn for an ex-post damages award.

The Versant valuation supported the $621.3m of estimated losses, detailed by the company on 12 April, that was notified to the government of Mozambique.

While the firm said it was confident in its position, it cautioned shareholders that there was no guarantee that, or any, amount would be recovered should the matter be referred to the ICSID.

“A huge amount of work over recent months has gone into advancing our position with respect to a potential claim under the treaty,” said chief executive officer Peter Taylor.

“With independent professional analysis supporting a range of high value award scenarios, and legal counsel attributing a favourable prospect of establishing liability on the part of the government of Mozambique, a claim under the treaty is now a very likely course of action.

“While this was never our preferred path, and we remain open to alternative solutions with the current licence-holder, we believe we have strong prospects of recovering very significant monetary damages through this process.”

In the meantime, Taylor said the company believed Pathfinder could pursue other opportunities at the same time to further its multi-project strategy.

“To this end we are looking at a range of mineral projects including graphite and lithium where we believe we can create value while advancing the litigation strategy.”

At 1029 GMT, shares in Pathfinder Minerals were up 32.73% at 0.73p.