Pathfinder’s licences (just south of Kenmare) could increase considerably in value

Deutsche Bank has a "buy" on Iluka Resources with a price target at $8.90 a share. "Kenmare's Moma mine operated at around 75 per cent of nameplate in 2Q despite the loss of nine days due to industrial action and also further repairs to on-site power lines. Excluding the downtime, the dredges operated at 84 per cent of nameplate. HM recovery improved but product recoveries declined. Major upgrades to the main Northern power lines should be complete by the wet season therefore Moma should have a stronger 2H. Iluka is continuing on its counter cyclical investment path with its pursuit of Kenmare Resources. We believe there are significant synergies between Moma and Iluka with the deal potentially worth $1.30 a share to ILU shareholders."

Iluka Resources limited ASX:ILU may be stalking Kenmare to put in a synthetic rutile plant and utilise their cheap source of Ilmenite. If that were to take place then Pathfinder’s licences (just south of Kenmare) could increase considerably in value due to pathfinder minerals Ilmenite being of a higher grade which can be extracted cheaper. The licences, covering approximately 32,000 hectares, are 50 km south of Kenmare’s Moma mine and would have targeted production of ilmenite, rutile and zircon. The total mineral resource reported by Pathfinder Minerals LONFP amounts to 2bn tonnes at approximately 3.55% content which translates into almost 72mt of contained heavy minerals. Independent consultants, URS Scott Wilson, attributed a net present value of US$529m at a 10% discount rate said Pathfinder.


Iluka Resources managing director David Robb insists that mineral sands miner Kenmare is still on its radar, despite a failed $800 million takeover bid for the Dublin-based rival last year.

Four years ago, Pathfinder’s subsidiary IM Minerals bought 99.99% of CMDN’s share capital. But, at an extraordinary general meeting held a year later without Pathfinder’s knowledge, resolutions were apparently passed that dismissed Pathfinder chief Nicholas Trew and founding shareholder Gordon Dickie as directors of CMDN. It also cancelled the shares in CMDN previously held by IMM and reissued them to General Jacinto Veloso, ex-minister of state security in Mozambique, and Diogo Cavaco.

But after a long wait that saw its share price plummet from nearly 7p to just 0.16p, the Maputo Court in Mozambique has ruled in Pathfinder’s favour, recognising IM’s stake in CMDN. The ruling stated that the shares can be held in either registered or bearer form and as the company was not informed of the December 2011 EGM, all the resolutions passed have been voided. It also annulled the 2013 court judgement that did not recognise IM as a CMDN shareholder as the company was not a party to the proceedings.

Pathfinder’s LONFP chief executive 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.”