REG - Mila Resources Plc - Final Results
31/10/2023 14:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20231031:nRSe9036Ra&default-theme=true
RNS Number : 9036R Mila Resources PLC 31 October 2023
Mila Resources Plc / Index: LSE / Epic: MILA / Sector: Natural Resources
31 October 2023
Mila Resources Plc
('Mila' or the 'Company')
Final Results
Mila Resources Plc (LSE:MILA), the post-discovery gold exploration
accelerator, is pleased to announce its final results for the year ended 30
June 2023.
Highlights
· Significant progress towards achieving strategy of becoming a post
discovery exploration accelerator
· Advanced the geological model for gold at the Company's first asset,
the Kathleen Valley Project
· Entered into JV arrangement with leading ASX lithium company,
Liontown Resources, to begin exploration of lithium at Kathleen Valley Project
· Raised gross proceeds of £2m post year end to support work at
Kathleen Valley and assess additional development opportunities
· Bolstered technical team post year end with appointment of Alastair
Goodship, an exploration geologist with significant experience in leading
discovery-focussed exploration teams in a diverse range of environments and
jurisdictions globally
· Cash position of £448,063 as at 30 June 2023
· Loss for the financial year ended 30 June 2023 of £549,487 (2022:
£1,011,445).
Statement from the Board
Dear Shareholder
We have made solid progress this year both on a corporate and asset level.
Since the financial year end, we have entered into an exciting partnership
with Australia's leading lithium company, Liontown Resources, who will explore
for lithium targets on our acreage and (subject to shareholder approval on the
8th of November), we will then complete the £2m fund raise (before expenses)
which will provide the Company with a robust balance sheet. Our strategy is to
build value from both the gold and lithium at our Kathleen Valley Project in
Western Australia (the "Project") and move ahead with a number of new business
opportunities that have presented themselves this year.
We want Mila to become the "best in class" post-discovery exploration
accelerator through the careful identification and development of proven
projects that cannot access the traditional routes of funding in the capital
markets due to market conditions for IPOs and equities generally. We recently
added Alastair Goodship, an exploration geologist with significant experience
in leading discovery-focussed exploration teams in a diverse range of
environments and jurisdictions globally, to bolster the team.
We have been approached by several business development opportunities and
continue to review these as we firmly believe that we can mitigate risk by
broadening the portfolio of projects. The biggest single risk facing most
junior mining companies is that they are reliant on the success of a sole
project, and we want to differentiate Mila by providing companies and
management with proven projects with the support structure of a public company
and access to capital. By definition, exploration is high risk and high
reward, therefore, we want to mitigate and diversify risk by building Mila
particularly at the time where high quality exploration and development
projects are attractively valued with limited scope to access the closed IPO
market.
Gold
During this financial year, we have been highly active at the Project. In the
year ending 30 June 2022 we acquired 30% of the Project with the ability to
move up to 80% and we continue to retain that flexibility.
We have now completed several drilling phases designed to test the known
mineralisation and test the "unknown" by drilling at depth and stepping out
from the previously tested mineralisation. With each drilling phase, we are
building a better and more complete picture of the geological system which we
believe is highly structured, featuring concentrated zones of high-grade
mineralisation.
With the benefit of a clearer picture, our next objective will be to conduct
more low-cost exploration prior to conducting costly drill programmes. We now
believe we know the system sufficiently well to be far more focused and
efficient with the exploration budget. Also, I believe we will be able to
obtain technical and operational efficiencies by working with the Liontown
team. Whilst they are focused on finding lithium they will be able to share
geological insights to assist our team on gold exploration.
We have a number of development routes given the Project is surrounded by gold
mining infrastructure and some of Australia's leading gold companies.
Lithium
Earlier this year we were approached by Liontown, our neighbours to the north,
to explore for lithium on our Project. Liontown was recently subject to a
A$6.6bn takeover bid by American lithium giant, Albemarle Corp. (NYSE: ALB)
and is developing Australia's leading lithium project, the Kathleen Valley
Lithium Project ahead of targeted production in 2024. Liontown has offtake
agreements to supply lithium to companies including LG, Ford and Tesla.
Liontown has mapped pegmatite swarms extending south from its own project and
the hypothesis is that this mineralisation corridor covers our own licence
area. With the identification of these pegmatite swarms extending on to our
own property, we reasoned that it makes commercial sense to work with Liontown
to explore for lithium on our project. In addition, they bring a lot of
intangible value to our project by sharing geological and technical
information and their expertise in the region generally. On the 16th of
October 2023 we announced that work is now underway with Liontown on the
acreage with the preliminary social and environmental programmes before they
can commence their exploration which will initially entail mapping, trenching
and sampling in areas of the Project known to host lithium pegmatites.
Finance Review
In October 2022, the Company announced that it had raised £908,000 (before
expenses) through a placing of 30,266,651 New Ordinary Shares of GBP0.01 each
at a price of 3 pence per placing share. Investors in the Placing will also
receive one three-year warrant per Placing Share to subscribe for one new
ordinary share at a cost of 4.8p per share. The Company will also issue
524,000 broker warrants that are exercisable at 3p for a period of 3 years.
The issue of the Investor Warrants and Broker Warrants is conditional on
shareholder approval to increase the Company's share authorities.
Post year- end, in October 2023, the Company announced the placing of
200,000,000 new ordinary shares at a price of 1 pence per ordinary share to
raise £2m. The placing shares have one warrant attached with an exercise
price of 2 pence for a period of two years from the date of admission. The
Placing is conditional on approval by Shareholders of resolutions at a General
Meeting ("GM").
Cash Position
At 30 June 2023, cash and cash equivalents amounted to £448,063 (2022:
£1,096,084).
Outlook
Mila is now in the most solid position of its brief life since we listed in
November 2021. This of course assumes that the shareholders vote in favour of
the £2m fund raise on the 8th of November.
We have a clear strategy and are well capitalised to deliver the strategy to
fruition. We expect the next 12 months to be highly active on both a corporate
and asset level as we continue to assess business development opportunities
and how to deliver value from both the gold and lithium at our project.
Whilst the financial period has proven to be difficult for junior mining
companies given the challenges in the capital markets, we now look forward to
building Mila from the opportunities that present themselves from such
circumstances. Ultimately, Mila will continue to be highly entrepreneurial,
and I would like to take this opportunity to thank our existing shareholders,
and those new to our register, as we look forward with excitement and
confidence, to a period of increased activity in the forthcoming financial
year.
Mark Stephenson
Executive Chairman
31 October 2023
Statements of Comprehensive Income
For the year Ended 30 June 2023
Year ended Year ended
30 June 2023 30 June 2022
£
£
Notes
Administrative expenses (549,487) (518,213)
Share warrant and options expense 3 - (493,232)
Loss on ordinary activities before taxation (549,487) (1,011,445)
Income tax expense 6 - -
Loss and total comprehensive income for the year attributable to the owners of (549,487) (1,011,445)
the company
Earnings per share (basic and diluted) attributable to the equity holders 7 (0.17) (0.52)
(pence)
Statements of Financial Position
For the year Ended 30 June 2023
Year ended Year ended
30 June 2023 30 June 2022
£
£
Notes
NON-CURRENT ASSETS
Exploration and evaluation assets 8 5,605,870 4,698,625
5,605,870 4,698,625
CURRENT ASSETS
Trade and other receivables 9 135,459 22,568
Cash and cash equivalents 10 448,063 1,096,084
583,522 1,118,652
TOTAL ASSETS 6,189,392 5,817,277
CURRENT LIABILITIES
Trade and other payables 11 312,938 210,760
TOTAL LIABILITIES 312,938 210,760
NET ASSETS 5,876,454 5,606,517
EQUITY
Share capital 12 3,368,177 3,065,511
Share premium 12 4,784,603 4,267,846
Share based payment reserve 13 539,093 543,813
Retained loss (2,815,420) (2,270,653)
TOTAL EQUITY 5,876,454 5,606,517
Statements of Cash Flow
For the year Ended 30 June 2023
12 months to 30 June 12 months to 30 June
2023 2022
£ £
Cash flows from operating activities
Loss for the year (549,487) (1,011,445)
Adjustments for:
Warrants / Options expense (non-cash) - 493,232
Operating cashflow before working capital movements (549,487) (518,213)
(Increase)/Decrease in trade and other receivables (112,891) 1,616
Increase in trade and other payables 102,178 4,427
Shares issued for services - 30,000
Interest expense - 3,801
Net cash outflow from operating activities (560,200) (478,369)
Cash flow from investing activities
Acquisition of Kathleen Valley - cash component - (300,000)
Acquisition costs - (336,732)
Funds used for drilling and exploration (net of GST recovered) (907,245) (1,408,108)
Net cash outflow from investing activities (907,245) (2,044,840)
Cash flow from financing activities
Proceeds from share issues 908,000 3,358,740
Issue costs paid in cash (88,576) (69,075)
Net cash inflow from financing activities 819,424 3,289,665
Net (Decrease)/Increase in cash and cash equivalents (648,021) 766,456
Cash and cash equivalents at beginning of the year 1,096,084 329,628
Cash and cash equivalents at end of the year 448,063 1,096,084
Statements of Changes in Equity
For the year Ended 30 June 2023
Share Capital Share Premium Share Based Payment Reserve Retained Loss Total
£ £ £ £ £
Balance at 30 June 2021 232,000 849,300 4,720 (1,259,208) (173,188)
Total comprehensive income for the year - - - (1,011,445) (1,011,445)
Capital Raising - Issue of shares 1,458,333 2,041,667 - - 3,500,000
Capital Raising - Issue of shares in lieu of fees 59,792 83,708 - - 143,500
Capital Raising - Issue Costs - (221,135) - - (221,135)
Acquisition of Kathleen Valley 835,432 1,169,605 - - 2,005,037
Conversion of convertible loan notes 477,754 382,203 - - 859,957
Conversion of warrants 2,200 8,360 - - 10,560
Share warrants and options expense - (45,861) 539,093 - 493,232
Balance at 30 June 2022 3,065,511 4,267,846 543,813 (2,270,653) 5,606,517
Total comprehensive income for the year - - - (549,487) (549,487)
Transactions with Shareholders
Expired Warrants - - (4,720) 4,720 -
Capital Raising - Issue of shares 302,667 605,333 - - 908,000
Capital Raising - Issue costs - (88,576) - - (88,576)
Balance at 30 June 2023 3,368,178 4,784,603 539,093 (2,815,420) 5,876,454
Notes to the Financial Statements
For the year Ended 30 June 2023
1 GENERAL INFORMATION
Mila Resources Plc (the "Company'') was listed on the London Stock Exchange in
2016 with a view to acquiring projects in the natural resources sector that
have a significant innate value that could be unlocked without excessive
capital. In November 2021, the Company acquired an interest in a gold
exploration project in Western Australia.
The Company is domiciled in the United Kingdom and incorporated and registered
in England and Wales, with registration number 09620350.
2 ACCOUNTING POLICIES
2.1 Basis of preparation
The financial statements have been prepared on a going concern basis using the
historical cost convention and in accordance with the UK-Adopted International
Accounting Standards, and in accordance with the provisions of the Companies
Act 2006.
The Company's financial statements for the year ended 30 June 2023 were
authorised for issue by the Board of Directors on 31 October 2023 and were
signed on the Board's behalf by Mr L Daniels.
The Company's financial statements are presented in pounds Sterling and
presented to the nearest pound.
2.2 Business Combinations
Acquisitions of business are accounted for using the acquisition method. At
the acquisition date, the identifiable assets acquired, and the liabilities
assumed are recognised at their fair value.
Consideration is also measured at fair value at the acquisition date. This is
calculated as the sum of the fair values of assets transferred less the fair
value of the liabilities incurred by the Company.
Goodwill is measured as the excess of the sum of the consideration
transferred, the amount of any non‑controlling interests in the acquiree,
and the fair value of the acquirers previously held equity interest in the
acquiree (if any) over the net of the acquisition‑date amounts of the
identifiable assets acquired, and the liabilities assumed. If, after
reassessment, the net of the acquisition‑date amounts of the identifiable
assets acquired and liabilities assumed exceeds the sum of the consideration
transferred, the amount of any non‑controlling interests in the acquiree and
the fair value of the acquirers previously held interest in the acquiree (if
any), the excess is recognised immediately in profit or loss as a bargain
purchase gain.
Acquisition‑related costs are recognised in profit or loss as incurred.
2.3 Going concern
The Financial Statements have been prepared under the going concern
assumption, which presumes that the Company will be able to meet its
obligations as they fall due for at least the next twelve months from the date
of the signing of the Financial Statements.
The Company had a net cash outflow for the year of £648,021 (2022: inflow of
£766,456) and at 30 June 2023 had cash and cash equivalents balance of
£448,063 (2022: £1,096,084).
An operating loss of £549,487 has been made and although the Company was in a
net current asset position at 30 June 2023 and has raised £908,000 (before
expenses).
Post year end, the Company announced (2 October 2023) that it raised £2m
(before expenses) through a Placing of 200m New Ordinary Shares of GBP0.01
each. This placing is subject to the approval by shareholders at a general
meeting to be held on 8 November 2023.
The Company's current cash reserves are less than the forecasted expenditure
over the 12 months from the date of this report and therefore further funding
needs to be received in this period to enable the Company to continue to meet
its obligations as they fall due. Due to the aforementioned £2m raise, which
is subject to approval by shareholders at a general meeting being obtained,
management are confident that the required funding will be obtained. For this
reason, the Directors continue to adopt the going concern basis in preparing
the financial statements. However, the Directors acknowledge that the receipt
of the funding is contingent on the approval by shareholders at a general
meeting and therefore a material uncertainty exists which may cause
significant doubt about the ability to continue to trade as a going concern.
The auditors have made reference to going concern by way of a material
uncertainty within the financial statements.
2.4 Standards, amendments and interpretations to existing standards
that are not yet effective and have not been early adopted by the Company
New standards, amendments to standards and interpretations:
No new standards, amendments or interpretations, effective for the first time
for the financial year beginning on or after 1 January 2022 have had a
material impact on the Company.
Standards issued but not yet effective:
At the date of authorisation of these financial statements, the following
standards and interpretations relevant to the Company and which have not been
applied in these financial statements, were in issue but were not yet
effective.
Standard Impact on initial application Effective date
IAS 1 Amendments - presentation and classification of liabilities as current or non TBC
current
IAS 8 Amendments - Definition of accounting policies 01 January 2023
IAS 1 Amendments - Disclosure of accounting policies 01 January 2023
IFRS 17 Insurance Contracts 01 January 2023
IFRS 17 (amendments) Insurance contracts 01 January 2023
The directors do not consider that these standards will impact the financial
statements of the Company.
2.5 Asset acquisition
Where an acquisition transaction constitutes the acquisition of an asset and
not a business, the consideration paid is allocated to assets and liabilities
acquired based on their relative fair values, with transaction costs
capitalised. No gain or loss is recognised.
Consideration paid in the form of equity instruments is measured by reference
to the fair value of the asset acquired. The fair value of the assets acquired
would be measured at the point control is obtained.
The Company recognises the fair value of contingent consideration in respect
to an asset acquisition, where it is probable that a liability has been
incurred, and the amount of that liability can be reasonably estimated. Such
contingent consideration is recognized at the time control of the underlying
asset is obtained, and such an amount is included in the initial measurement
of the cost of the acquired assets.
The Company recognises contingent consideration in the form of cash, and
contingent consideration in the form of equity instruments. Contingent
consideration in the form of cash is recognised as a liability, and contingent
consideration in the form of equity instruments is recognised in the
contingent share reserve.
For contingent cash consideration milestones, the Company estimates a
probability for the likelihood of completion to estimate the total liability
for the expected variable payments. The probability estimated for the
likelihood of completion is considered at each reporting period. Movements in
the fair value of contingent cash consideration payable is capitalised as part
of the asset.
For contingent share consideration milestones, the Company estimates a
probability for the likelihood of completion to estimate the total contingent
share consideration payable. The probability estimated for the likelihood of
completion is not reassessed in subsequent reporting periods.
Deferred tax is not recognised upon an asset acquisition.
2.6 Foreign currency translation
The financial information is presented in Sterling which is the Company's
functional and presentational currency.
Transactions in currencies other than the functional currency are recognised
at the rates of exchange on the dates of the transactions. At each balance
sheet date, monetary assets and liabilities are retranslated at the rates
prevailing at the balance sheet date with differences recognised in the
Statement of comprehensive income in the period in which they arise.
2.7 Financial instruments
Initial recognition
A financial asset or financial liability is recognised in the statement of
financial position of the Company when it arises or when the Company becomes
part of the contractual terms of the financial instrument.
Classification
Financial assets at amortised cost
The Company measures financial assets at amortised cost if both of the
following conditions are met:
(1) the asset is held within a business model whose objective is to collect
contractual cash flows; and
(2) the contractual terms of the financial asset generating cash flows at
specified dates only pertain to capital and interest payments on the balance
of the initial capital.
Financial assets which are measured at amortised cost, are measured using the
Effective Interest Rate Method (EIR) and are subject to impairment. Gains and
losses are recognised in profit or loss when the asset is de-recognised,
modified or impaired.
Financial liabilities at amortised cost
Financial liabilities measured at amortised cost using the effective interest
rate method include current borrowings and trade and other payables that are
short term in nature. Financial liabilities are derecognised if the Company's
obligations specified in the contract expire or are discharged or cancelled.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the effective
interest rate ("EIR"). The EIR amortisation is included as finance costs in
profit or loss. Trade payables other payables are non-interest bearing and are
stated at amortised cost using the effective interest method.
Derecognition
A financial asset is de-recognised when:
(1) the rights to receive cash flows from the asset have expired, or
(2) the Company has transferred its rights to receive cash flows from the
asset or has undertaken the commitment to fully pay the cash flows received
without significant delay to a third party under an arrangement and has either
(a) transferred substantially all the risks and the assets of the asset or (b
has neither transferred nor held substantially all the risks and estimates of
the asset but has transferred the control of the asset.
Impairment
The Company recognises a provision for impairment for expected credit losses
regarding all financial assets. Expected credit losses are based on the
balance between all the payable contractual cash flows and all discounted cash
flows that the Company expects to receive. Regarding trade receivables, the
Company applies the IFRS 9 simplified approach in order to calculate expected
credit losses. Therefore, at every reporting date, provision for losses
regarding a financial instrument is measured at an amount equal to the
expected credit losses over its lifetime without monitoring changes in credit
risk. To measure expected credit losses, trade receivables and contract assets
have been grouped based on shared risk characteristics.
Trade and other receivables
Trade and other receivables are initially recognised at fair value when
related amounts are invoiced then carried at this amount less any allowances
for doubtful debts or provision made for impairment of these receivables.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and are subject to
an insignificant risk of changes in value.
Trade payables
These financial liabilities are all non-interest bearing and are initially
recognised at the fair value of the consideration payable.
2.8 Equity
Share capital is determined using the nominal value of shares that have been
issued.
The Share premium account includes any premiums received on the initial
issuing of the share capital. Any transaction costs associated with the
issuing of shares are deducted from the Share premium account, net of any
related income tax benefits.
Equity-settled share-based payments are credited to a share-based payment
reserve as a component of equity until related options or warrants are
exercised or lapse.
Retained losses includes all current and prior period results as disclosed in
the statement of comprehensive income.
2.9 Share-based payments
The Company records charges for share-based payments.
For warrant-based or option-based share-based payments, to determine the value
of the warrants or options, management estimate certain factors used in the
Black Scholes Pricing Model, including volatility, vesting date exercise date
of the warrants or option and the number likely to vest. At each reporting
date during the vesting period management estimate the number of shares that
will vest after considering the vesting criteria. If these estimates vary from
actual occurrence, this will impact on the value of the equity carried in
reserves.
2.10 Taxation
Tax currently payable is based on taxable profit for the period. Taxable
profit differs from profit as reported in the income statement because it
excludes items of income and expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
Company's liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised on differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax
bases used in the computation of taxable profit, and is accounted for using
the balance sheet liability method. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilised. Such
assets and liabilities are not recognised if the temporary difference arises
from initial recognition of goodwill or from the initial recognition (other
than in a business combination) of other assets and liabilities in a
transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Company is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled, or the asset realised. Deferred tax is
charged or credited to profit or loss, except when it relates to items charged
or credited directly to equity, in which case the deferred tax is also dealt
with in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Company intends to settle its current tax assets and
liabilities on a net basis.
2.11 Intangible assets - Exploration and evaluation expenditures
(E&E) Development expenditure
The Company applies the successful efforts method of accounting, having regard
to the requirements of IFRS 6 'Exploration for and Evaluation of Mineral
Resources'. Costs incurred prior to obtaining the legal rights to explore an
area are expensed immediately to the Statement of Comprehensive Income.
Expenditure incurred on the acquisition of a licence interest is initially
capitalised within intangible assets on a licence by licence basis. Costs are
held, unamortised, until such time as the exploration phase of the field area
is complete or commercial reserves have been discovered. The cost of the
licence is subsequently transferred into property, plant and equipment and
depreciated over its estimated useful economic life.
Exploration expenditure incurred in the process of determining exploration
targets is capitalised initially within intangible assets as drilling costs.
Drilling costs are initially capitalised on a licence by licence basis until
the success or otherwise has been established. Drilling costs are written off
unless the results indicate that reserves exist and there is a reasonable
prospect that these reserves are commercially viable. Drilling costs are
subsequently transferred into 'Drilling expenditure' within property, plant
and equipment and depreciated over their estimated useful economic life.
2.12 Impairment of Exploration and Evaluation assets
The Company assesses at each reporting date whether there is an indication
that an asset may be impaired. This includes consideration of the IFRS 6
impairment indicators for any intangible exploration and evaluation
expenditure capitalised as intangible assets. Examples of indicators of
impairment include whether:
a) the period for which the entity has the right to explore in the
specific area has expired during the period or will expire in the near future
and is not expected to be renewed.
b) substantive expenditure on further exploration for and evaluation of
mineral resources in the specific area is neither budgeted nor planned.
c) exploration for and evaluation of mineral resources in the specific
area have not led to the discovery of commercially viable quantities of
mineral resources and the entity has decided to discontinue such activities in
the specific area.
d) sufficient data exist to indicate that, although a development in the
specific area is likely to proceed, the carrying amount of the exploration and
evaluation asset is unlikely to be recovered in full from successful
development or by sale.
If any such indication exists, or when annual impairment testing for an asset
is required, the Company makes an estimate of the asset's recoverable amount,
which is the higher of its fair value less costs to sell and its value in use.
Any impairment identified is recorded in the statement of comprehensive
income.
2.13 Critical accounting judgements and key sources of uncertainty
In the process of applying the entity's accounting policies, management makes
estimates and assumptions that have an effect on the amounts recognised in the
financial information. Although these estimates are based on management's best
knowledge of current events and actions, actual results may ultimately differ
from those estimates.
The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements are as
follows:
Impairment of intangible assets
For details on the accounting policy for the impairment of exploration and
evaluation assets, see note 2.12 "Impairment of Exploration and Evaluation
Assets" in the "Notes to the Financial Statements" on page 40.
The first stage of the impairment process is the identification of an
indication of impairment. Such indications can include significant geological
or geophysical information which may negatively impact the existing assessment
of a project's potential for recoverability, significant reductions in
estimates of resources, significant falls in commodity prices, a significant
revision of the Company Strategy, operational issues which may require
significant capital expenditure, political or regulatory impacts and others.
This list is not exhaustive and management judgement is required to decide if
an indicator of impairment exists.
The Company regularly assesses the intangible assets for indicators of
impairment. For more information on impairment indicators see note 2.12
"Impairment of Exploration and Evaluation Assets" in the "Notes to the
Financial Statements" on page 40. Also see IFRS 6 'Exploration for and
Evaluation of Mineral Resources'
When an impairment indicator exists an impairment test is performed; the
recoverable amount of the asset, being the higher of the asset's fair value
less costs to sell and value in use, is compared to the asset's carrying
value. Any excess of the asset's carrying value over its recoverable amount is
expensed to the income statement.
2.14 Earnings per share
Basic earnings per share is calculated as profit or loss attributable to
equity holders of the Company for the period, adjusted to exclude any costs of
servicing equity (other than dividends), divided by the weighted average
number of ordinary shares, adjusted for any bonus element. The diluted profit
per share is the same as the basic profit per share for 2023 because, although
certain warrants and options in issue were in the money as at the year end,
the Company reported a loss, hence including the additional dilution would
have resulted in a reduction of the loss per share.
2.15 Segmental reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for allocating
resources and assessing performance of the operating segments, has been
identified as the Board as a whole.
All operations and information are reviewed together therefore at present
there is only one reportable operating segment.
The Company's strategy is to act as a post discovery accelerator, where the
Company identifies target(s) that have already had an early-stage geological
discovery. To date the Company has identified and invested on one target,
namely the Kathleen Valley Project. Hence at the moment there is only one
reportable operating segment.
3. OPERATING LOSS
This is stated after charging:
2023 2022
£
£
Auditor's remuneration
Audit of the Company 40,000 30,000
Other services - 2,000
Directors' remuneration 250,000 266,585
Stock exchange and regulatory expenses 10,536 47,486
Share warrant and options expense ((1)) - 493,232
Other expenses 248,951 172,142
Operating expenses 549,487 1,011,445
(1) This is a non-cash accounting expense for the issue of share warrants
and options.
4. AUDITOR'S REMUNERATION
2023 2022
£
£
Fees payable to the Company's current auditor:
- audit of the Company's financial statements 40,000 30,000
- other services - 2,000
40,000
32,000
5. DIRECTORS AND STAFF COSTS
During the year the only staff of the Company were the Directors and as such
key management personnel. Management remuneration, other benefits supplied and
social security costs to the Directors during the year was as follows below.
For Directors costs see the Directors remuneration report from page 21.
2023 2022
£
£
Salaries 250,000 266,585
Social security costs 25,369 29,016
Share based payments - 59,658
275,369 355,259
6. TAXATION
2023 2022
£
£
The charge / credit for the year is made up as follows:
Current tax - -
Deferred tax - -
Taxation charge / credit for the year - -
A reconciliation of the tax charge / credit appearing in the income statement
to the tax that would result from applying the standard rate of tax to the
results for the year is:
Loss per accounts (549,487) (1,011,445)
Tax credit at the standard rate of corporation tax in the UK of 19% (2022: (104,403) (192,175)
19%)
Impact of costs disallowed for tax purposes 2,809 17,919
Deferred tax in respect of temporary differences - -
Impact of unrelieved tax losses carried forward 101,594 174,256
- -
Estimated tax losses of £2,651,344 (2022: £2,116,641) are available for
relief against future profits and a deferred tax asset of £503,756 (2022:
£402,162) has not been provided for in the accounts due to the uncertainty of
future profits.
Factors affecting the future tax charge
The standard rate of corporation tax in the UK for Companies making less than
£250,000 annual profit is 19%. Accordingly, the Company's effective tax rate
for the period was 19% (2022: 19%).
Deferred taxation
No deferred tax asset has been recognised by the Company due to the
uncertainty of generating sufficient future profits and tax liability against
which to offset the tax losses. Note 6 above sets out the estimated tax losses
carried forward
7. EARNINGS PER SHARE
The calculation of the earnings per share is based on the loss for the
financial period after taxation of £549,487 (2022: £1,011,445) and on the
weighted average of 327,554,881 (2022: 193,873,021 ordinary shares in issue
during the period.
The diluted profit per share is the same as the basic profit per share because
the Company reported a loss, hence including the additional dilution would
have resulted in a reduction of the loss per share.
Earnings Weighted average number of shares Per-share amount
£ unit pence
30 June 2023: Loss per share attributed to ordinary shareholders (549,487) 327,554,881 (0.17)
30 June 2022: Loss per share attributed to ordinary shareholders (1,011,445) 193,873,021 (0.52)
8. EXPLORATION AND EVALUATION ASSETS
At 30 At 30
June 2023 June 2022
£ £
Opening balance 4,698,625 -
Cost of acquisition including transaction costs - 3,290,517
Exploration costs capitalised in the year 1,092,201 1,408,108
Other movements (184,956) -
Net book value 5,605,870 4,698,625
In November 2021, the Company acquired a 30% interest in the Kathleen Valley
(Gold) Project for £2,812,500. The consideration was £300,000 in cash and
the balance in new Mila shares. Transaction costs of £478,017 have also been
capitalised. The principal assets are leases with rights to exploration of
those leases in Western Australia. At the year end the capitalised
exploration and evaluation assets totalled £5.6m (2022: £4.7m). All
Exploration costs capitalised in the year relate to the Kathleen Valley
Project.
During the year the Company was able to register for Australian "GST" (Goods
and Services Tax). Unfortunately, registration was a long drawn out process,
however, as this has now been completed the Company can recover the GST paid.
This has been show in "Other movement" in the table above.
Exploration and evaluation assets are regularly reviewed for indicators of
impairment. If an indicator of impairment is found an impairment test is
required, where the carrying value of the asset is compared with its
recoverable amount. The recoverable amount is the higher of the assets fair
value less costs to sell and value in use. The Directors are satisfied that no
impairments are required for the current year.
9. TRADE AND OTHER RECEIVABLES
2023 2022
£
£
Prepayments and other receivables 135,459 22,568
135,459 22,568
The Directors consider that the carrying value amount of trade and other
receivables approximates to their fair value.
10. CASH AND CASH EQUIVALENTS
2023 2022
£
£
Cash at bank 448,063 1,096,084
448,063 1,096,084
Cash at bank comprises balances held by the Company in current bank accounts.
The carrying value of these approximates to their fair value.
11. TRADE AND OTHER PAYABLES
2023 2022
£
£
Trade payables 55,457 36,722
Accruals and other payables 257,481 174,038
312,938 210,760
12. SHARE CAPITAL / SHARE PREMIUM
Number of shares on issue Share capital £ Share premium £ Total £
Balance as at 30 June 2021 23,200,000 232,000 849,300 1,081,300
Capital Raising 151,812,495 1,518,125 1,904,240 3,422,365
Acquisition of Kathleen Valley 83,543,197 835,432 1,169,605 2,005,037
Conversion of convertible loan notes 47,775,365 477,754 382,203 859,957
Conversion of warrants 220,000 2,200 8,360 10,560
Warrants issued in lieu of share issue costs - - (45,861) (45,861)
Balance as at 30 June 2022 306,551,057 3,065,511 4,267,846 7,333,357
Capital Raising 30,266,651 302,667 516,757 819,424
Balance as at 30 June 2023 336,817,708 3,368,178 4,784,603 8,152,781
The Company issued a total of 30,266,651 new fully paid ordinary shares during
the year.
In October and November 2022, the Company completed a placing of 30,266,651
new fully paid ordinary shares with a nominal value of £0.01, raising gross
proceeds of £908,000 before expenses.
The Directors held the following warrants at the beginning and end of the
year:
Director At 30 June 2022((1)) Granted during the year At 30 June 2023 Exercise price Earliest date of exercise Last date of exercise
M. Stephenson 7,500,000 - 7,500,000 £0.024 22 Nov 2021 31 Dec 2026
L. Daniels 7,500,000 - 7,500,000 £0.024 22 Nov 2021 31 Dec 2026
N. Hutchison 5,000,000 - 5,000,000 £0.024 22 Nov 2021 31 Dec 2026
L. Mair 2,000,000 - 2,000,000 £0.024 22 Nov 2021 31 Dec 2026
- 22,000,000
(1) as outlined in the prospectus dated 29 October 2021.
The Directors held the following EMI Options at the beginning and end of the
year:
Director At 30 June 2022 Granted during the year At 30 June 2023 Exercise price Earliest date of exercise Last date of exercise
M. Stephenson 3,500,000 - 3,500,000 £0.024 10 Dec 2021 10 Dec 2026
L. Daniels 2,500,000 - 2,500,000 £0.024 10 Dec 2021 10 Dec 2026
6,000,000 - 6,000,000
13. SHARE BASED PAYMENT RESERVE AND SHARE BASED PAYMENTS
SHARE BASED PAYMENT RESERVE
2023 2022
£
£
At 1 July 543,813 4,720
Issue of Warrants per prospectus - 479,435
Issue of EMI Options per prospectus - 59,658
Expired Warrants (4,720) 543,813
At 30 June 539,093 543,813
Warrants and Options in Issue Number of Options in Issue Number of Warrants in Issue Weighted average exercise price Expiry date
Balance at 30 June 2021 - 11,425,000 £0.048 31 Dec 2022
Warrants issued during the year - per the prospectus - 242,264,111 £0.0432 31 Dec 2026
EMI options scheme issued during the year - per the prospectus 6,000,000 - £0.024 10 Dec 2026
Warrants exercised during the year - (220,000)
At 30 June 2022 6,000,000 253,469,111 £0.0429
Expired during the year - (11,425,000) £0.048 31 Dec 2022
At 30 June 2023 6,000,000 242,044,111 £0.0432
During the year the Company raised £908,000 (before expenses) through a
Placing of 30,266,651 New Ordinary Shares of GBP0.01 each ("Placing Shares")
at a price of 3 pence per Placing Share (the "Placing"). Investors in the
Placing will also receive one three-year warrant per Placing Share to
subscribe for one new ordinary share at a cost of 4.8p per share. In
addition the Company has also issued 524,000 broker warrants that are
exercisable at 3p for a period of 3 years. Both the investor warrants and
broker warrants are conditional on shareholder approval to increase the
Company's share authorities. At the time of writing, the Prospectus has been
issued and the shareholder approval is being sought at a general meeting to be
held on 8 November 2023.
The market price of the shares at year end was 1.2 pence per share.
During the year, the minimum and maximum prices were 0.825 pence and 4.25
pence per share respectively.
SHARE BASED PAYMENTS - WARRANTS AND OPTIONS
No Warrants or Options were issued during the period.
14. CAPITAL COMMITMENTS
There were no capital commitments at 30 June 2022 and 30 June 2023.
15. CONTINGENT LIABILITIES
There were no contingent liabilities at 30 June 2022 and 30 June 2023.
16. COMMITMENTS UNDER LEASES
There were no commitments under operating leases at 30 June 2023 and 30 June
2022.
17. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Company's financial instruments comprise primarily cash and various items
such as trade debtors and trade payables which arise directly from operations.
The main purpose of these financial instruments is to provide working capital
for the Company's operations. The Company does not utilise complex financial
instruments or hedging mechanisms.
Financial assets by category
2023 2022
£
£
Current Assets:
Cash and cash equivalents 448,063 1,096,084
Trade and other receivables 135,459 11,520
Categorised as financial assets at amortised cost 583,522 1,107,604
Financial liabilities by category
2023 2022
£
£
Current Liabilities:
Trade and other payables 312,938 210,760
Categorised as financial liabilities measured at amortised cost 312,938 210,760
All amounts are short term and payable in 0 to 6 months.
Credit risk
The maximum exposure to credit risk at the reporting date by class of
financial asset was:
2023 2022
£
£
Trade and other receivables 123,297 11,520
Cash and cash equivalents 448,063 1,096,084
571,360 1,107,604
Capital management
The Company considers its capital to be equal to the sum of its total equity.
The Company monitors its capital using a number of key performance indicators
including cash flow projections, working capital ratios, the cost to achieve
development milestones and potential revenue from partnerships and ongoing
licensing activities.
The Company's objective when managing its capital is to ensure it obtains
sufficient funding for continuing as a going concern. The Company funds its
capital requirements through the issue of new shares to investors.
Interest rate risk
The maximum exposure to interest rate risk at the reporting date by class of
financial asset was:
2023 2022
£
£
Bank balances 448,063 1,096,084
The Company is not financially dependent on the income earned on these
resources and therefore the risk of interest rate fluctuations is not
significant to the business and the Directors have not performed a detailed
sensitivity analysis.
All deposits are placed with main clearing banks, with 'A' ratings, to
restrict both credit risk and liquidity risk. The deposits are placed for the
short term, between one and three months, to provide flexibility and access to
the funds.
Credit and liquidity risk
Credit risk is managed on a Company basis. Funds are deposited with financial
institutions with a credit rating equivalent to, or above, the main UK
clearing banks. The Company's liquid resources are invested having regard to
the timing of payment to be made in the ordinary course of the Company's
activities. All financial liabilities are payable in the short term (between 0
to 3 months) and the Company maintains adequate bank balances to meet those
liabilities. A liquidity analysis is not therefore considered material to
disclose.
Currency risk
The Company operates in a global market with income and costs possibly arising
in a number of currencies. The Company's strategic aim of acquiring asset(s)
or business(es) acting as a post discovery accelerator, is not limited to any
specific geo-political area or jurisdiction. Currently the majority of the
Company's overhead costs are incurred in £GBP. The Kathleen Valley Project is
located in Western Australia, and hence the majority of the exploration and
evaluation costs relating to this project are incurred in $AUD. The Company
has not hedged against any currency depreciation but continues to keep the
matter under review.
18. RELATED PARTY TRANSACTIONS
Key management personnel compensation
The Directors are considered to be key management personnel. Detailed
remuneration disclosures are provided in the remuneration report on pages 21 -
23.
There were no other related party transactions.
19. EVENTS SUBESQUENT TO YEAR END
Fund Raise - post year end
Post year end, the Company announced on the 2(nd) of October 2023 that it
raised £2m (before expenses) through a Placing of 200m New Ordinary Shares of
GBP0.01 each ("Placing Shares") at a price of 1 pence per Placing Share (the
"Placing"). Investors in the Placing will also receive one two year warrant
per Placing Share to subscribe for one new ordinary share at a cost of 2p per
share ("Investor Warrants").
The Placing has not been underwritten and is conditional on approval by
Shareholders of resolutions, inter alia, granting authority for the Directors
to issue ordinary shares at a General Meeting ("GM") to be held on 8 November
2023 at 11.00 a.m. at 13th Floor, 88 Wood Street, London EC2V 7DA.
Appointment of Exploration Geologist
The Company appointed Alastair Goodship, an exploration geologist with over 14
years of industry experience of leading discovery-focussed exploration teams
in a diverse range of environments and jurisdictions globally. Alastair
has worked across the exploration spectrum from greenfield and brownfield
exploration to resource definition and feasibility studies. Alistair most
recently worked as a Senior Exploration Consultant with RSCMME Ltd and
technical advisor to Trinity Metals Group.
Appointment of Joint Broker
Shard Capital Partners LLP was appointed as joint broker, alongside SI
Capital.
Option Agreement with Liontown Resources to Explore for Lithium
Post year end the Company announced that, together with the other owners of
the Kathleen Valley licence ("Licence"), it had entered into an option
agreement with LBM (Aust) Pty Limited, a subsidiary of Liontown Resources
Limited (ASX: LTR) ('Liontown'), granting Liontown the option to explore for
lithium on the Kathleen Valley Licence Area in Western Australia ('KV
Project').
Liontown to invest AUD$100,000 in Mila through a convertible loan
This is based on the following principal terms:
1. the Notes are repayable by conversion into Mila Shares at a price to be
determined on Mila's next fundraise;
2. Mila may repay the Notes without penalty after 31 December 2023;
3. Liontown may redeem the Notes following the occurrence of usual events of
default or if the Notes have not been converted into Mila Shares by 30
November 2023; and
4. the Notes carry no interest except on the occurrence an event of default,
when interest at 10% per annum will become payable.
Amendments to Kathleen Valley Earn-In Agreement
Post year end the Company announced that it has entered into a deed of
amendment with Trans Pacific Energy Group Pty Ltd ("TPE") and New Generation
Minerals Limited ("NGM"), the other owners of the Licence, making certain
amendments to the Earn-In Agreement between them dated 29 October 2021
("Earn-In Agreement") as part of the re-listing of the Company on the LSE in
November 2021.
Summary of key amendments
• increase its Participating Interest in the Licence from its current
30% to 80% on the issue of the Stage Two Consideration Shares;
• increase its ownership of the current Lithium rights from 50% to 80%
on the issue of the Stage Three Consideration Shares, representing 16% of the
Lithium Rights following full exercise by Liontown of its option; and
• at any time when the Parties are not conducting a physical drilling
campaign, reduce Mila's liability for expenditure to maintain the Licence to
its Participating Interest (currently 30%).
20. CONTROL
In the opinion of the Directors there is no single ultimate controlling party.
**ENDS**
For more information visit www.milaresources.com or contact:
Mark Stephenson info@milaresources.com
Mila Resources Plc
Jonathan Evans +44 (0) 20 7100 5100
Tavira Financial Limited
Nick Emerson +44 (0) 20 3143 0600
SI Capital
Susie Geliher +44 (0) 20 7236 1177
St Brides Partners Limited
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR UASOROWUROAARecent news on Mila Resources
See all newsREG - Mila Resources Plc - Drilling Campaign Update at Yarrol Gold Project
AnnouncementREG - Mila Resources Plc - Yarrol Project Update & Investor Presentation
AnnouncementREG - Mila Resources Plc - Interim Results
AnnouncementRCS - Mila Resources Plc - New Website and Corporate Presentation
AnnouncementREG - Mila Resources Plc - Yarrol Project Update
Announcement