Miner explores claim monetisation options

Pathfinder Minerals Plc (AIM:PFP), a London-based natural resources company, is continuing to explore potential routes to monetise the company’s claim against the Government of Mozambique over a disputed mining concession.

The company reports that it has been discussing strategic options with institutional litigation funders and other parties. Options being explored include conventional litigation funding arrangements, whereby the legal costs of the claim would be borne by the funder on a contingency basis, as well as a full acquisition of the claim via a sale of the company’s wholly owned subsidiary that is bringing the claim. Parties that could potentially be interested in acquiring the subsidiary include litigation funders who would pursue the claim, through to the current licence-holder, TZM Resources SA, to protect its ownership of the licence which could be lost in the event of a successful claim.

As previously reported, the company has, together with Travers Smith LLP, prepared a briefing package for funders which includes a detailed budget and timeline for claimant costs, the identification of a litigation team, and independent professional analysis of valuations for differing successful outcomes at an ICSID tribunal, ranging from a minimum of US$110m for an ex-ante damages award through to US$1,500m for an ex-post damages award.

The claim is being further developed to include asset tracing reports and enforcement strategies. This includes the Republic of Mozambique’s foreign and domestic assets, which may include, inter alia, exported hydrocarbons such as those produced from the Rovuma LNG project.

Peter Taylor, Chief Executive Officer of Pathfinder, commented:

Having done the considerable groundwork to prepare to launch a claim against Mozambique, we are now able to consider options to pursue or monetise the claim.

Given the areas now referred to as the licence were independently assessed in 2010 to have a market value of between US$107.6m and US$179.3m – prior to the Moebase portion of the licence being upgraded to Mining Concession status – we believe the current Licence-holder, TZM, has a significant vested interest in protecting its investment in the licence. The window of opportunity for TZM to act is closing as the Company may dispose of IMM to a third party whose sole objective is to pursue the valuable claim under the treaty.” 

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Miner seeks funding for $600 million claim

Pathfinder Minerals, a London-based natural resources company,  is shopping for a litigation funder to support a $600 million plus claim against the Government of Mozambique over a disputed mining concession. A briefing pack for funders has been developed by Travers Smith LLP and draws on detailed valuation mechanisms from Versant Partners LLC which pegs damages at US$621.3 million.

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