Pathfinder Minerals - Update
With a deal on the key mineral sands licence now seemingly on the cards, Pathfinder is in the enviable position of being on the cusp of a journey which could create material shareholder value
Pathfinder Minerals originally acquired a large African mineral sands project in Mozambique back in 2011 for £34 million via a paper reverse takeover transaction. These licences have been subject to dispute for 9 years trying to regain control of them through the courts. Recent news indicates that Pathfinder, finally, looks to be making serious progress at long last. A deal seems to be fast evolving on the licences with the key difference that there appears to be the buy in of all parties. Such developments would seem to herald a basis change for long suffering shareholders.
Potentially world class minerals sands ex-BHP Billiton project
BHP invested US$29m on drilling/infrastructure to prove up an impressive resource in the mid-1990s. Back then, commercial circumstances did not merit future development. But now, Pathfinder is set to benefit from improved demand for ilmenite, the pigment for brilliant white paint.
Team set to rapidly increase shareholder value via spreadsheet mining
The 2019 updated Scoping Study determined an NPV(10) of US$1.05bn. Pathfinder could benefit from the big uplift in value seen in mining projects in the early stages to smartly push the project up the valuation curve.
Based just 50km from Kenmare’s Moma Mine suggests a natural buyer
We believe Pathfinder has all the hallmarks of being Kenmare mark II. Pathfinder’s neighbour has more than a decade of operating experience in Mozambique and its close proximity creates unparalleled upside potential.
Risked conservative NPV suggests considerable upside potential
Our conservative valuation shows the potential. We update coverage of Pathfinder with an initial target price of 7.23p and Conviction Buy stance.
RISK WARNING & DISCLAIMER
Pathfinder is a research client of Align Research. Align Research and a director of Align Research own shares in Pathfinder. Full details of our Company & Personal Account Dealing Policy can be found on our website http://www.alignresearch.co.uk/legal/
For full disclaimer information please refer to the last page of the full document. This investment may not be suitable for your personal circumstances. If you are in any doubt as to its suitability you should seek professional advice. This note does not constitute advice and your capital is at risk. This is a marketing communication and cannot be considered independent research.
| Year to Dec | 2017A | 2018A | 2019E | 2020E |
|---|---|---|---|---|
| Revenue (£'000) | - | - | - | - |
| PTP (£'000) | (615) | (645) | (600) | (750) |
| EPS (p) | (0.33) | (0.26) | (0.20) | (0.18) |