Investors in Pathfinder Minerals (LON:PFP) had a cracking start to the week as its shares rallied by more than 700% on a favourable court ruling in Mozambique.
The dispute dates back to 2010, when Pathfinder subsidiary IM Minerals bought virtually all (99.99% to be exact) of Companhia de Naburi (CMDN), which holds licences for a mineral sands project in the country.
At a meeting in 2011, held without Pathfinder’s knowledge, resolutions were apparently passed that dismissed Pathfinder chief Nicholas Trew and founding shareholder Gordon Dickie as directors of CMDN.
A decision was then made to cancel the shares in CMDN held by IM Minerals and reissue them to General Veloso, ex-minister of state security in Mozambique and a former director at the company and Diogo Cavaco.
Veloso claimed that Pathfinder Minerals never legitimately acquired CMDN.
Pathfinder won a London court case in 2012, which said it did validly acquire CMDN and granted a permanent injunction restraining General Veloso from taking any steps to interfere its rights of ownership of CMDN.
However, Veloso said Pathfinder broke Mozambique law by going to a London court.
Today, a court in Maputo, Mozambique ruled in favour of IM Minerals.
The judge said IM Minerals did not lose its status as a shareholder so CMDN had a right to be notified of and to take part in the December 2011 EGM.
Speaking after the judgment, Nick Trew, said: "Once again the Maputo courts have confirmed IMM's status as shareholder in CMDN.
“I would urge General Veloso and Diogo Cavaco to respect the rule of law and to accept the Court's findings so that the parties can resume development of the project for the benefit of the company, its shareholders and the people of Mozambique."