is a natural resources company with
licences to mine heavy minerals sands
in Mozambique containing titanium
dioxide ore.
Disclaimer
Important Notice
Reliance on this document for the purposes of engaging in any investment activity, including entering into a Proposed Transaction, may expose
the Recipient to a significant risk of losing all the sums invested. If the recipient is in any doubt about the investment to which this document
relates, he should consult an authorised person specialising in advising on purchases of, or investments in, shares of unlisted and listed
companies.
In particular, the document contains certain statements, estimates and projections with respect to Pathfinder Minerals Plc (and it’s associated
companies) and as to the market for its producers and services. Such statements, estimates and projections reflect various assumptions made
by the management of Pathfinder Minerals Plc concerning anticipated results, which assumptions may or may not be correct.
The information in this document will not form any part of a contract. Furthermore, it does not offer capable acceptance and no binding
commitment may be entered into on the basis of the document. Nor does anything in this document constitute any representation, warranty
or indemnity, express or implied, by Pathfinder Minerals Plc, its directors, employees or agents, in relation to any proposed transaction and no
such director, employee or agent has authority to make or give such representation, warranty or indemnity, whether orally or in writing.
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Pathfinder Minerals: The Opportunity
Pathfinder Minerals plc (AIM: PFP) is a natural resources company listed on the AIM market of the London
Stock Exchange with licences to mine heavy minerals sands in Mozambique, southern Africa
Pathfinder Minerals’ two licences cover approximately 32,000 hectares of land. They are located
approximately 50km south of Kenmare Resources plc’s producing Moma mine, and are known to contain
titanium dioxide bearing minerals of ilmenite and rutile, as well as the mineral zircon
The minerals of ilmenite, rutile and zircon are used in the manufacture of a wide range of products across
a number of industrial sectors
The Company believes that global supply of titanium dioxide (TiO2) and zircon will be in a significant
structural deficit by 2013 with only a limited number of known new sources of significant supply
A detailed feasibility study is currently being undertaken, with a view to developing the deposit for
commercial extraction
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Benefiting from BHP Billiton
Pathfinder Minerals’ licences formerly belonged to subsidiary companies of BHP Billiton
Our licences have long been known to contain heavy mineral sands
Exploration work conducted on the deposits from the mid-1980s through to 2002 identified significant
mineralisation
BHP invested US$29M to:
• build infrastructure including a site camp, roads, bridges and airstrip
• drill over 3,000 boreholes for geological interpretation, data analysis and preliminary processing
test work
Bulk sampling and metallurgical test work conducted in support of prefeasibility and feasibility studies
in the mid-1990s indicates that valuable heavy minerals can be recovered using conventional dredge
mining, wet concentration and dry mineral separation processes
Commercial circumstances at that time did not merit further development of the deposit and the
project was placed on a care and maintenance basis
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Recent History
2004
Companhia Mineira de Naburi (CMdN) acquired the Naburi Licence from BHP Billiton and
obtained a 25 year Mining Concession
2009
IM Minerals Ltd acquired 75% of CMdN and funded it to acquire the Moebase Licence from
BHP Billiton with Exploration rights for an aggregate $20m
2010
Consulting engineers, URS Scott Wilson, completed a Mineral Experts Report based on the
historic information developed by BHP Billiton
2011
Pathfinder Minerals Plc acquired IM Minerals via a reverse takeover and, with it, a 100%
interest in CMdN (whose minority shareholders became shareholders in Pathfinder Minerals Plc)
URS Scott Wilson undertook a Scoping Study which indicated that the development of the
Moebase and Naburi mineral sands deposits appears to be economically viable under present
market conditions
The National Directorate of Mines at the Ministry of Mineral Resources of Mozambique issued a
new 25 year mining concession licence for Moebase enabling Pathfinder Minerals to move
forward with mining concession status on both of its licences
Pathfinder Minerals appointed Jacobs Matasis to execute a Definitive Feasibility Study over 12
months. Wardell Armstrong was appointed as Feasibility Study Manager.
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Titanium and Zircon Feedstocks
Ilmenite is widely used in the production of paint, paper, plastic, textiles, rubber, and pharmaceutical
products, while 60% of global production occurs in South Africa, Australia and Canada
Rutile and beneficiated ilmenite are the main minerals used to make titanium metal
Titanium metal’s unique properties, including its high strength-to-weight ratio, high melting point and
its resistance to corrosion, make it the preferred metal for applications such as the manufacture of jet
engines for the aerospace industry
Titanium feedstocks are used to produce titanium dioxide pigment which is favoured for its brilliant
whiteness, excellent opacity, non-toxicity and inertness
Zircon is used in ceramics applications and chemical manufacture
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Moebase and Naburi Mineral Resource Base
7
Historic Mineral Resource
The historic mineral resource of Pathfinder Minerals’ licences was reported by URS Scott Wilson to be
2.02 billion tonnes, with a total heavy mineral content of approximately 3.55% - which is equivalent to
approximately 71.7 million tonnes of contained heavy minerals
Indicated (mt)
1,353
Grade(% hm)
3.33
Contained (mt)
45.01
Inferred (mt)
668
Grade (% hm)
4.00
Contained (mt)
26.71
Total Mineral Resource (mt)
2,021 @ 3.55% = Contained Heavy Minerals: 71.68mt
URS Scott Wilson downgraded BHP Billiton’s previously Measured resource category to Indicated in the
absence of physical core samples. It is anticipated that the corroborative drilling programme will enable
this to be re-categorised as a Measured resource.
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Historic Mineral Resource cont.
Initial mining development will concentrate on the higher grade areas
Deposit
Tonnage
(Million)
Grade
(% HM)
HM
Tonnage
(million)
TiO2
Tonnage
(million)
Mine Life
Moebase
205.4
4.6
9.45
4.03
8 Years
Lipobase
193.6
4.7
9.10
3.88
7 Years
Molocue
67.4
5.3
3.57
1.52
3 Years
Moebase
intertidal
3.3
9.1
0.3
0.1
Total Coastal
469.7
4.77
22.42
9.53
Decksand
1147.1
3.1
35.56
16.29
30 Years
404
3.4
13.74
5
13 Years
2020.8
3.55
71.72
30.82
Naburi
Total Project
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URS Scott Wilson: Asset Valuation
URS Scott Wilson analysis demonstrated rising project valuations over the period from 2001 to mid
2009 for heavy mineral properties in terms of $/t HM
Quantity of contained economic heavy minerals:
= 71.7 million tonnes
On a NPV (10 % discount rate basis):
= $529m
Valuations below based on a production schedule of 1.245m tpa of ilmenite (93.4% of total final
product), 24,000 tpa of rutile (1.74%) and 65,000 tpa of zircon (4.78%)
Using Scoping Study conservative pricing assumptions:
Ilmenite
$125/t
$155,625,000
Rutile
$677/t
$16,248,000
Zircon
$1148/t
$74,620,000
TOTAL ANNUAL PRODUCTION REVENUE
$246,493,000
Using Canaccord Genuity Limited Long Term Price forecast (20 April 2011):
Ilmenite (Avg price for IL 1,2,3)
$175/t
$217,875,000
Rutile
$875/t
$21,000,000
Zircon
$1454/t
$94,510,000
TOTAL ANNUAL PRODUCTION REVENUE
$333,385,000
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Summary of Scoping Study
Notes
Estimated Run of Mine Production
47,000,000 t/pa
Estimated Life of Mine
30 years
Estimated Mineral Content Split of Final Product
ilmenite: 93.4%
rutile: 1.74%
zircon: 4.78%
Estimated Annual Production
ilmenite: 1,245,000 t/pa
rutile: 24,000 t/pa
zircon: 65,000 t/pa
Projected Annual revenues
$246,493,000
Direct Capital Cost
$533 million
Estimated IRR
18.8%
Estimated Net Present Value
$529 million
Total Run of Mine cost estimated at
$79 million per annum
Similar to Kenmare’s Moma mine
$333,385,000 using Canaccord
Genuity Long Term Price Forecast
pricing
Increases to >30% using Canaccord
Genuity Long Term Price Forecast
pricing
11
Pathfinder Minerals: Kenmare 2?
Kenmare Resources, a UK-listed ilmenite, rutile and zircon producer on the nearby Moma licence, has more
than a decade’s operating experience in Mozambique
In 2010 Moma exported 718,788 tonnes of ilmenite, rutile and zircon
It is the Directors’ belief that the Moma site’s close proximity to the Naburi and Moebase sites suggests
notable parallels in terms of mineral grade, operational costs and infrastructure-related challenges
The market value of Kenmare Resources (FTSE250) has grown to in excess of US $1.3 billion
Pathfinder Mineral’s Strengths
World Class Mineral
Sands Deposit
Second Mover
Advantage
$29m Spent by BHP
Billiton
Scoping Study Complete
Feasibility Study
complete in c.12 months
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Mozambique
Mozambique is a democracy which actively
encourages foreign investment
It is an attractive location for foreign investment
with low corporation taxes and mineral royalties
Kenmare’s Moma
Mine
The country’s infrastructure is constantly
improving. Roads and bridges to our licensed
area are being upgraded and maintained by the
Mozambique government
A substantial new power line is expected to be
completed prior to the commissioning of the
mine. This power line will run close to the mine
site and be capable of powering Pathfinder
Minerals’ mine and associated facilities
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Distinguished Local Partners
Our Mozambique operating team and substantial shareholders include:
Major-General Jacinto Veloso (Non-Executive Director of Pathfinder Minerals Plc)
After a highly decorated career in the Mozambique armed forces following the country’s independence, General
Veloso held many prominent government positions, including Minister of International Co-operation and Minister of
State Security and National Intelligence. He has extensive top level international business, strategic and mediation
experience
Diogo Cavaco
Mr Cavaco is a lawyer by profession but has broad experience as a manager of civil engineering, construction and
public works projects. With dual Portuguese-Angolan nationality, Mr Cavaco’s fluency in Portuguese, English, French
and Spanish has proved invaluable. He is currently Chairman of Companhia Mineira de Naburi (CMdN), Pathfinder
Minerals’ wholly-owned local subsidiary
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Mining Process
TiO2 Supply
Global supply is expected to be in a significant
structural deficit by 2013 (Telegraph, September
2010)
TiO2 Demand
There is no viable substitute for TiO2 at present
It cannot be recycled and requires re-application
There are a limited number of known new
sources of significant supply
Several major titanium feedstock producers are
expected to decrease future production as
known resources reach the end of their mine
lives, and efficiencies decrease
South African feedstock producers face
significant cost pressures from electricity tariff
increases
Prospective buyers of TiO2 span many industries
and refine it accordingly for its specific end-use
Zircon demand is likely to grow with increased
demand for tiles and ceramic produce for
continued urbanisation and construction in
rapidly developing regions, notably in Asian Pacific regions
Industry inventories are at historically low levels
Even with a 50% price increase annual supply
growth may not meet historical demand growth
(~3.5% p.a.)
Ilmenite and rutile demand will similarly benefit
from the construction industry growth as the
demand for white pigment in paints and coatings
(including architectural paints) increases
It is anticipated that despite current expansion
plans such as those at Moma, there will be a
shortfall of over 1 million tonnes of TiO2 units by
2015
Higher intensity of use and wealth effect in
developing countries may create “turbo” charged
demand (Iluka, August 2010)
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Appendix
17
Board of Directors
John McKeon, Non-Executive Chairman
John McKeon was a founding shareholder of IM Minerals, which was acquired by Pathfinder Minerals in February
2011. Mr McKeon has considerable experience in the natural resources sector and is well connected, at government
and ministerial level, with many of the natural resource ministries in Asia, Africa and the Middle East. He was a
founding shareholder and former executive director of Circle Oil plc and is currently a consultant to a number of UK
listed companies operating in the mining and oil and gas sectors.
Nick Trew, Chief Executive Officer
Nick Trew was a founding shareholder of IM Minerals, which was acquired by Pathfinder Minerals in February 2011.
He co-founded International Mercantile Group Limited, a project management business which he has owned and run
jointly with Gordon Dickie (non executive director) for the past 13 years. This followed a twenty year career in the
energy insurance industry, latterly as a co-founder and director of Heath Oil & Gas, where Mr Trew specialised in the
oil and gas sector with a particular expertise in construction and operational risk.
James Normand, Finance Director
James Normand is a Chartered Accountant. He trained at Spicer and Pegler (now part of Deloitte) where, after a twoyear secondment to 3i plc, he specialised in acting as the project manager of acquisitions by management buy-out
and buy-in teams that he advised. For the past ten years Mr Normand has held management and finance officer roles
for developing companies and charities.
Major-General Jacinto Veloso, Non-Executive Director
After a highly decorated career in the Mozambique armed forces following the country’s independence, General
Veloso held many prominent government positions, including Minister of International Co-operation and Minister of
State Security and National Intelligence. He has extensive top level international business, strategic and mediation
experience.
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Corporate Information
Date of Admission (reverse takeover):
10/2/2011
Shares in issue:
1,037,167,230
Warrants/Options :
128,666,667
Fully diluted:
1,165,833,897
Cash raised 22/7/2011
£11m
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Significant Shareholders
Shareholder
% Holding
John McKeon (Director)*
11.69
Tim Baldwin*
11.10
JV Consultores (Jacinto Veloso – Director)*
10.62
JP Morgan Asset Management
9.64
Nick Trew (Director)*
8.71
Gordon Dickie (Director)*
8.66
Diogo Cavaco*
8.50
Genesis Investment Management
8.29
*subject to 2 year lock-in (1 year hard / 1 year soft) from 9 February 2011
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The Major Titanium Feedstock Producers Are Expected to Decrease Their Future Production
Rio Tinto
• Subject to energy cost increases in SA through RBM
• Facing challenges to further increase QMM capacity
Iluka
• Waroona and Wagerup mines closed in 2009
• Together, these mines in the SW of Western Australia produced 534kt of
ilmenite and 20kt of zircon in 2008
• Idled 2 of 4 synthetic rutile kilns in Western Australia
• Gingin mine closed in 2009 and Eneabba mine scheduled for closure in
mid-2010
• Partially offset by new mine development in Eucla Basin and Murray
Basin producing predominantly zircon and rutile
Key drivers of the supply constraint
• SA power provider Eskom expected to increase power prices by c.25%
each year over the next 3 years impacting 20% of total TiO2 production
(slag producers)
• Existing operations are reaching full capacity and have limited expansion
potential
• Limited number of known new sources of significant supply
Global market share TiO2 feedstock producers
Other, 14%
Exxaro
• Fairbreeze project discontinued and exited Toliara Sands Project in
Madagascar
• Planned closure of KZN Sands subsidiary
• Subject to energy cost increases in SA
Rio Tinto 1, 27%
Vietnam, 4%
India, 7%
51%
China, 9%
Others
• Corridor Sands project in Mozambique discontinued by BHP
• Base Resources has the ilmenite Kwale project
• China is import dependent for ilmenite - over 1.3mt imported in 2009
• Tata Steel’s titanium project in India and Mineral Commodities’
Xolobeni deposit in South Africa have both been delayed
1 Including 100%
Kenmare3, 5%
Cristal, 3%
Titania, 7%
of RBM
2 Including 100% of Tiwest
3 Moma to grow to 7% in 2010
Iluka, 13%
Exxaro2, 11%
Source: Kenmare Resources, 2010
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Global Supply/Demand Illustration
kt of TiO2
8,000
World
World
Supply
Demand
Demand
7,500
* Structural deficit of
all titanium
feedstocks by 2012
7,000
6,500
* Shortfall of over 1
million tonnes of
TiO2 units by 2015
6,000
5,500
5,000
4,500
4,000
3,500
3,000
2009
2010
2011
2012
2013
2014
2015
Source: TZMI Ilmenite Study and Price Forecast
22
Demand in Pigment is Expected to Grow in Relation to GDP Growth
Consumption intensity of TiO2
Source: TZMI
23
China Has Been the Key Source of Growth in Pigment Demand Over the Last 20 Years
Pigment demand (mt)
6
World
China
World excl. China
5
1990-2008 CAGR
=3.1%
Mt of pigments
4
1990-2008 CAGR
=2.1%
3
2
1990-2008 CAGR
=15.6%
1
0
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Source: TZMI
Note: Dotted line represents respective average pigment demand growth rate over the period
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Ilmenite, Rutile & Zircon Annual Pricing Forecasts
1,400
250
US$/t
US$/t
1,200
200
1,000
150
800
600
100
400
50
200
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Ilmenite (blended)
3,500
Rutile
US$/t
3,500
3,000
US$/t
3,000
2,500
2,500
2,000
2,000
1,500
U
1,000
U
1,500
1,000
500
500
0
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Zircon
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Ilmenite (blended)
Rutile
Zircon
Source: Mirabaud Securities price forecasts, Jan 2011
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Contact Details
Head office:
4 Old Park Lane, Mayfair
London
W1K 1QW
Telephone:
020 7399 4371
Website:
www.pathfinderminerals.com
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