REG - Mila Resources Plc - Interim Results
31/03/2023 07:00
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RNS Number : 8394U Mila Resources PLC 31 March 2023
Mila Resources Plc / Index: LSE / Epic: MILA / Sector: Natural Resources
31 March 2023
Mila Resources Plc
("Mila" or "the Company")
Interim Results
Mila Resources Plc, a London listed natural resources company, is pleased to
present its interim results for the six-month period ended 31 December 2022.
Chairman Statement
I am pleased to present Mila Resources' unaudited interim results for the
six-month period ended 31 December 2022.
During this period we continued with our exploration efforts at the Kathleen
Valley Gold Project ("Kathleen Valley" or "the Project"). Mila Resources
re-listed on the London Stock Exchange in November 2021 following the
acquisition of 30% of Kathleen Valley with the option to acquire an additional
50% interest in two further tranches.
Our primary objective on acquiring the Project was to drill in order to
increase the resource inventory of 21,000oz to reach a resource that was
sufficiently economic. The location benefits from an abundance of gold
plants and infrastructure, thereby potentially giving Mila a route to early
cash flow without the associated capital expenditure of building plants and
infrastructure.
Our initial phase 1 exploration and drilling programme comprised up to 11,000m
drilling to test the Coffey deposit and follow up on the work of the vendor of
the Project. This phase delivered encouraging results, including 6.6m at
almost 15 grams gold and 22 grams silver and 10m at 8.38 grams gold and almost
14 grams silver.
In September 2022, we commenced the phase 2 drilling at the Project which was
designed to further test the resource. Unfortunately, the results of the
drilling did not meet our expectations. However, we did gain important data
from phase 2 and the first drill hole intersected a ~10m wide zone of
sulphide-bearing alteration, which is visually consistent with the previously
reported mineralised gold-silver-zinc-bearing zone at Coffey.
During the period our exploration plans continued to be supported by our
shareholders, and we raised £696,000 in October 2022, followed by an
additional £212,000 in November 2022. These raises provide funding to improve
our understanding of the exploration model for Coffey and the licence area
more generally.
However, given the risks associated with exploration and the high costs of
drilling in Western Australia, we are spending the funds prudently and do not
believe it appropriate to continue drilling without mitigating as much
exploration risk as possible. Consequently we are now working methodically
through the geological data and moving more slowly than previously
anticipated.
In line with this revised strategy, post period our team has been
collaborating closely with the on-site personnel at Kathleen Valley and expert
consultants to analyse and interpret the data gathered from our drilling
operations. We are currently evaluating the risk and reward of drilling
further at depth and reviewing additional targets on the licence area.
Outlook
Kathleen Valley is surrounded by a number of mining success stories, including
Liontown Resources, which is developing a lithium project scheduled for
production in 2024 (2km to the north), gold producing Wiluna Mining (~60km to
the north), BHP's Mount Keith nickel mine (~20km to the north), and Kathleen
Valley Gold (to the north), which extracted 65,900 oz gold over an 18-month
period.
As mentioned above we are now evaluating the geological data and refining our
exploration model. Once we have worked through the options and the budget
available to us, Mila will update the market with its next programme at the
Project. Whilst we are moving slower than anticipated, we are also mindful
that equity markets are currently difficult for junior explorers and accessing
capital for expensive drilling programmes cannot be taken for granted.
Finally, on behalf of the whole Mila team, I would like to thank our
shareholders for their continued support, and I look forward to sharing more
news in the coming weeks as our exploration plans are finalised.
Finance and Corporate
Results
The interim results for the six months to 31 December 2022 show a loss of
£205,404 (2021: £760,806).
Fund Raise
In October / November 2022, the Company announced that it had raised £907,999
(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 warrant per
Placing Share to subscribe for one new ordinary share at a cost of 4.8p per
share ("Investor Warrants"). The Company has also issued 717,331 broker
warrants that are exercisable at 3p for a period of 3 years ("Broker
Warrants"). The Investor Warrants and Broker Warrants are conditional on the
publication of the Prospectus by the Company.
Cash Position
At 31 December 2022, cash and cash equivalents amounted to £832,275 (2021:
£2,516,043).
Directors
The following Directors have held office during the period:
Mark Stephenson
Lee Daniels
Neil Hutchison
Lindsay Mair
Corporate Governance
The UK Corporate Governance Code (September 2014) ("the Code"), as appended to
the Listing Rules, sets out the Principles of Good Corporate Governance and
Code Provisions which are applicable to listed companies incorporated in the
United Kingdom. As a standard listed company, the Company is not subject to
the Code, but the Board recognises the value of applying the principles of the
Code where appropriate and proportionate and has endeavoured to do so where
practicable.
On behalf of the board
Mark Stephenson
Director
31 March 2023
MILA RESOURCES PLC
Interim Statement of Comprehensive Income (Unaudited)
For the six months ended 31 December 2022
Notes Six months ended 31 December 2022 Unaudited Six months ended 31 December 2021 Year ended 30 June
Unaudited 2022 Audited
£ £ £
Administrative expenses (205,404) (267,574) (518,213)
Share warrant and options expense 3 - (493,232) (493,232)
Operating loss (205,404) (760,806) (1,011,445)
Other revenue - - -
Interest receivable - - --
Loss on ordinary activities before taxation (205,404) (760,806) (1,011,445)
Income tax expense 4 - - -
Loss for the period (205,404) (760,806) (1,011,445)
Other comprehensive income / (loss) - - -
Total comprehensive income for the period attributable to equity holders (205,404) (760,806) (1,011,445)
Earnings per share (basic and diluted) attributable to equity holders (p) 5 (0.07) (1.42) (0.52)
The income statement has been prepared on the basis that all operations are
continuing operations.
MILA RESOURCES PLC
Interim Statement of Financial Position (Unaudited)
As at 31 December 2022
At 31 At 31 December 2021 At 30
December 2022 Unaudited Unaudited June 2022
Audited
Notes £ £ £
ASSETS
Non-current assets
Exploration and evaluation assets 6 5,535,102 3,459,356 4,698,625
5,535,102 3,459,356 4,698,625
Current assets
Trade and other receivables 33,925 5,293 22,568
Cash at bank and in hand 832,275 2,516,043 1,096,084
866,200 2,521,336 1,118,652
Total assets 6,401,302 5,980,692 5,817,277
LIABILITIES
Current liabilities
Trade and other payables 180,766 134,096 210,760
Convertible loan notes - - -
180,766 134,096 210,760
Total liabilities 180,766 134,096 210,760
Net assets 6,220,536 5,846,596 (5,606,517)
EQUITY
Share capital 7 3,368,177 3,063,311 3,065,511
Share premium 7 4,784,603 4,259,486 4,267,846
Share based payment reserve 543,813 543,813 543,813
Retained losses (2,476,057) (2,020,014) (2,270,653)
Shareholders' equity 6,220,536 5,846,596 (5,606,517)
MILA RESOURCES PLC
Statements of changes in equity (Unaudited)
For the six months ended 31 December 2022
Share Capital Share Premium Account Share Based Payment Reserve Retained TOTAL
Loss
£ £ £ £ £
Balance at 30 June 2021 232,000 849,300 4,720 (1,259,208) (173,188)
Total comprehensive income for the period - - - (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 period - - - (205,404) (205,404)
Capital Raising - Issue of shares 302,666 605,333 - - 907,999
Capital Raising - Issue Costs - (88,576) - - (88,576)
Balance at 31 Dec 2022 3,368,177 4,784,603 543,813 (2,476,057) 6,220,536
MILA RESOURCES PLC
Statement of cash flow (Unaudited)
For the six months ended 31 December 2022
Six months to 31 December Six months to 31 December 12 months to 30 June
2022 2021 2022
£ £ £
Cash flows from operating activities
Loss for the period (205,404) (760,806) (1,011,445)
Adjustments for:
Warrants / Options expense (non-cash) - 493,232 493,232
Costs settled by the payment of shares - 143,500 -
Operating cashflow before working capital movements (205,404) (124,074) (518,213)
Decrease / (Increase) in trade and other receivables (11,357) 18,892 1,616
(Decrease) / Increase in trade and other payables (29,994) (44,213) 4,427
Shares issued for services - - 30,000
Interest income - - -
Interest expense - 3,801 3,801
Net cash flow from operating activities (246,755) (145,594) (478,369)
Cash flow from investing activities
Acquisition of Kathleen Valley - (300,000) (300,000)
Acquisition costs - (336,732) (336,732)
Funds used for drilling and exploration (836,477) (310,124) (1,408,108)
Net cash (outflow) / inflow from investing activities (836,477) (946,856) (2,044,840)
Cash flow from financing activities
Proceeds from share issues 863,839 3,500,000 3,358,740
Issue costs paid in cash (44,416) (221,135) (69,075)
Net cash inflow from financing activities 819,423 3,278,865 3,289,665
Net Increase in cash and cash equivalents (263,809) 2,186,415 766,456
Cash and cash equivalents at beginning of the period 1,096,084 329,628 329,628
Cash and cash equivalents at end of the period 832,275 2,516,043 1,096,084
MILA RESOURCES PLC
Notes to the financial statements
For the six months ended 31 December 2022
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
had 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.
The Company's registered office is 65 Gresham Street London, EC2V 7NQ.
2 Accounting policies
The principal accounting policies applied in preparation of these consolidated
financial statements are set out below. These policies have been consistently
applied unless otherwise stated.
Basis of preparation
The interim unaudited financial statements for the period ended 31 December
2022 have been prepared in accordance with IAS 34 Interim Financial Reporting.
This interim financial information is not the Company's statutory financial
statements and should be read in conjunction with the annual financial
statements for the period ended 30 June 2022, which have been prepared in
accordance with International Financial Reporting Standards (IFRS) and have
been delivered to the Registrars of Companies. The auditors have reported on
those accounts; their report was unqualified and did not contain statements
under section 498 (2) or (3) of the Companies Act 2006.
The interim financial information for the six months ended 31 December 2022 is
unaudited. In the opinion of the Directors, the interim consolidated financial
information presents fairly the financial position, and results from
operations and cash flows for the period.
The Directors have made an assessment of the Company's ability to continue as
a going concern and the interim report has been prepared on the going concern
basis, which contemplates the continuity of normal business activity and the
realisation of assets and the settlement of liabilities in the normal course
of business. The Company, therefore, continues to adopt the going concern
basis in preparing its consolidated financial statements.
The financial information of the Company is presented in British Pounds
Sterling (£).
Critical accounting estimates and judgements
The preparation of interim financial information requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities and the
reported amounts of income and expenses during the reporting period. Although
these estimates are based on management's best knowledge of current events and
actions, the resulting accounting estimates will, by definition, seldom equal
related actual results.
In preparing the interim financial information, the significant judgements
made by management in applying the Company's accounting policies and the key
sources of estimation uncertainty. New accounting policies adopted in the
period are listed below.
MILA RESOURCES PLC
Notes to the financial statements
For the six months ended 31 December 2022
Intangible assets - Exploration and evaluation expenditures (E&E)
Development expenditure
Expenditure on the construction, installation and completion of infrastructure
facilities including service, is capitalized initially within intangible fixed
assets and when the asset has formally commenced commercial production, then
it is transferred to property, plant and equipment and is depreciated from the
commencement of production as described in the accounting policy for property,
plant and equipment.
Drilling costs and intangible licenses
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.
Impairment
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 Group 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
MILA RESOURCES PLC
Notes to the financial statements
For the six months ended 31 December 2022
3 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.
4 Income tax expense
No tax is applicable to the Company for the six months ended 31 December 2022.
No deferred income tax asset has been recognised in respect of the losses
carried forward, due to the uncertainty as to whether the Company will
generate sufficient future profits in the foreseeable future to prudently
justify this.
5 Earnings per share
Basic earnings per ordinary share is calculated by dividing the loss
attributable to equity holders of the Company by the weighted average number
of ordinary shares in issue during the period. Diluted earnings per share is
calculated by adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all dilutive potential ordinary shares.
The diluted profit per share is the same as the basic profit per share
because; all warrants and options in issue were out of the money at 31
December 2022, 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
Loss per share attributed to ordinary shareholders (205,404) 312,545,939 (0.07)p
6 Exploration and evaluation assets
At 31 At 31 December 2021 At 30
December 2022 Unaudited Unaudited June 2022
Audited
£ £ £
Cost
Opening balance 4,698,625 - -
Cost of acquisition including transaction costs - 3,149,232 3,290,517
Exploration costs capitalised in the period 836,477 310,124 1,408,108
Net book value 5,535,102 3,459,356 4,698,625
MILA RESOURCES PLC
Notes to the financial statements
For the six months ended 31 December 2022
In November 2021, the Company acquired a 30% interest in the Kathleen Valley
(Gold) Project. The principal assets are leases with rights to exploration in
Western Australia. At the period end the capitalised exploration and
evaluation assets totalled £5.5m (31 December 2020: £3.5m) and all such
costs capitalised related to exploration and evaluation activities conducted
in relation to the Kathleen Valley Project.
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 period.
7 Share capital
Number Share Share
of shares capital premium Total
In issue £ £ £
Balance at 30 June 2022 306,551,057 3,065,511 4,267,846 7,333,357
Capital Raise 30,266,651 302,666 605,333 907,999
Issue Costs - - (88,576) (88,576)
Balance at 31 December 2022 3,368,177 4,784,603 8,152,780
336,817,708
On 6 October, the Company raised £696,000 (before expenses) through a Placing
of 23,199,984 New Ordinary Shares of GBP0.01 each at a price of 3 pence per
Placing Share. Investors in the Placing will also receive one warrant per
Placing Share to subscribe for one new ordinary share at a cost of 4.8p per
share ("Investor Warrants"). The Company has also committed to issue 524,000
broker warrants that are exercisable at 3p for a period of 3 years ("Broker
Warrants"). The Investor Warrants and Broker Warrants are conditional on the
publication of the Prospectus by the Company and will be issued at that time.
On 8 November, the Company raised and additional £212,000 (before expenses) a
through a top-up placing to that announced on the 6 October. The additional
placing was for 7,066,667 New Ordinary Shares of 1 pence each at a placing
price of 3 pence per Placing Share. As per the 6 October placing the
Investors will also receive one warrant per Placing Share to subscribe for one
new ordinary share at an exercise price of 4.8 per share for 3 years from the
date of admission. The Company has also issued 253,321 broker warrants that
are exercisable at the Placing Price for a period of 3 years from admission
("Broker Warrants"). Again, the Investor Warrants and Broker Warrants are
conditional on the publication of the Prospectus by the Company and will be
issued at that time.
MILA RESOURCES PLC
Notes to the financial statements
For the six months ended 31 December 2022
As at 31 December, 2022 the Company also has the following options and
warrants:
Issued Exercisable from Expiry Date Number outstanding Exercise price
Warrants - 22 November 2021((1)) 22 November 2021 31 December 2026 193,388,694 4.8 pence
Warrants - 22 November 2021((1)) 22 November 2021 31 December 2026 48,655,417 2.4 pence
253,469,111
1. On 22 November 2021, the Company granted 242,264,111 warrants, on the
above terms and set out in the Prospectus dated 29 October 2021 to
shareholders, directors, brokers and certain advisors.
Issued Exercisable from Expiry Date Number outstanding Exercise price
Options - 10 December 2021((2)) 10 December 2021 10 December 2026 6,000,000 2.4 pence
6,000,000
2. Issued under the Company's EMI Scheme established on 10 December
2021, as set out in the Prospectus dated 29 October 2021.
8. Subsequent events
There are no subsequent events.
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