REG - Mila Resources Plc - Interim Results
28/03/2024 07:00
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RNS Number : 5974I Mila Resources PLC 28 March 2024
Mila Resources Plc / Index: LSE / Epic: MILA / Sector: Natural Resources
28 March 2024
Mila Resources Plc
("Mila" or "the Company")
Interim Results
Mila Resources Plc, the post-discovery gold exploration accelerator, is
pleased to present its interim results for the six-month period ended 31
December 2023.
Highlights:
· Advanced post-discovery exploration accelerator business model
through targeted exploration work and value accretive partnerships.
· Exploration progress made at initial asset, the Kathleen Valley Gold
Project in Western Australia, a premier mining destination.
· Mutually beneficial partnership agreed with Australia's leading
lithium company, Liontown Resources, to explore for lithium extensions at
Kathleen Valley Gold Project.
· Project generator team expanded through appointment of Alastair
Goodship - a highly experienced exploration geologist with a proven track
record of exploration success.
· Successfully raised gross proceeds of £2m to support work at
Kathleen Valley Gold Project and advance additional valuable development
opportunities.
· Cash position of £1,684,073 as at 31 December 2023.
· Loss for the six-month period ended 31 December of £321,436 (2022:
£205,404).
Chairman Statement
The period under review has been seen Mila's strategy advance and mature, most
excitingly through Mila's partnership with Australia's leading lithium
company, Liontown Resources ("Liontown"). As shareholders will be aware, our
first asset within our post-discovery exploration accelerator model, the
Kathleen Valley Gold Project, has yielded highly encouraging gold results
since our work programme began in 2021, however it was lithium, not gold, that
attracted Liontown to us in 2023, as they are confident about the lithium
mineralisation on their licence which extends south into Kathleen Valley.
This resulted in a mutually beneficial partnership between Mila and Liontown,
through which exploration for both gold and lithium will be carried out on our
tenement throughout 2024. This partnership also serves to underscore the
value of our accelerator model as we look to broaden our horizons to potential
new projects.
Kathleen Valley
Mila has now completed several drilling phases at Kathleen Valley, 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, the Company is generating a clearer picture of this highly structured
geological system, featuring concentrated zones of high-grade gold
mineralisation, potentially mirroring Bellevue's system to the west of us.
Our focus over the coming months will be to capitalise on the operational and
technical efficiencies of working with Liontown. Post period end, Liontown
commissioned an aerial image survey for its baseline studies and to comply
with heritage and environmental regulations, ahead of commencing sampling and
drilling works on the project. Liontown has now completed the aerial image
survey and a soil sampling programme is underway. The assay results will then
be used by Liontown to determine drilling targets for lithium, and also by
Mila for precious and base metals to provide a more complete picture of the
geological model for Kathleen Valley and determine any new targets outside of
the recent focus on the Coffey deposit.
As previously reported, Mila benefits from a number of development routes
given Kathleen Valley is surrounded by gold mining infrastructure and some of
Australia's leading gold companies. We are committed to moving Kathleen
Valley forward, leveraging the geological information and technical/Heritage
Survey expertise of Liontown.
Project Generator Opportunities
Our over-arching strategy remains to become a "best in class" post-discovery
exploration accelerator through the careful identification and development of
proven projects, which we believe is imperative now given the continued
pressure on the IPO market and traditional routes of finance. To this end,
we have looked to build our technical team during the period and were
delighted to announce the appointment of Alastair Goodship to the Mila team in
Q4 2023. Alastair is an exploration geologist with significant experience in
leading discovery-focussed exploration teams in a diverse range of
environments and jurisdictions globally, and he has proved an impressive and
valuable member of our group.
Alastair has been working on various potential new opportunities, assessing
their relative merits in order to generate a shortlist of potential assets
through which to broaden our portfolio. The biggest single risk facing most
junior mining companies is that they are reliant on the success of a sole
project, something that the Board of Mila are keen to avoid. With this in
mind, the team are making solid progress on a number of potential
opportunities, however there can be no guarantee that these will come to
fruition. The Board are hopeful that through the continued focus on quality
and whilst retaining the internal expertise to rapidly add value to a project,
we will be able to make further updates on the advancement of Mila's project
generator strategy during the current period.
Finance and Corporate
Results
The interim results for the six months to 31 December 2023 show a loss of
£321,436 (2022: £205,404).
Fund Raise
In October 2023, the Company published a prospectus and 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, which
was 9 November 2023. The Placing was approved by Shareholders at a General
Meeting on 8 November 2023.
Cash Position
At 31 December 2023, cash and cash equivalents amounted to £1,684,073 (2022:
£832,275).
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
27 March 2024
MILA RESOURCES PLC
Interim Statement of Comprehensive Income (Unaudited)
For the six months ended 31 December 2023
Notes Six months ended Six months ended Year
31 December 2023 Unaudited 31 December 2022 Unaudited ended
30 June 2023 Audited
£ £ £
Administrative expenses (321,436) (205,404) (549,487)
Operating loss (321,436) (205,404) (549,487)
Loss on ordinary activities before taxation (321,436) (205,404) (549,487)
Income tax expense 4 - - -
Loss for the period (321,436) (205,404) (549,487)
Other comprehensive income / (loss) - - -
Total comprehensive income for the period attributable to equity holders (321,436) (205,404) (549,487)
Earnings per share (basic and diluted) attributable to equity holders (p) 5 (0.09) (0.07) (0.17)
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 2023
At 31 At 31 At 30
December 2023 Unaudited December 2022 June 2023
Unaudited Audited
Notes £ £ £
ASSETS
Non-current assets
Exploration and evaluation assets 6 5,682,925 5,535,102 5,605,870
5,682,925 5,535,102 5,605,870
Current assets
Trade and other receivables 129,176 33,925 135,459
Cash at bank and in hand 1,684,073 832,275 448,063
1,813,249 866,200 583,522
Total assets 7,496,174 6,401,302 6,189,392
LIABILITIES
Current liabilities
Trade and other payables 179,526 180,766 312,938
Convertible loan notes 51,475 - -
231,001 180,766 312,938
Total liabilities 231,001 180,766 312,938
Net assets 7,265,173 6,220,536 (5,876,454)
EQUITY
Share capital 7 5,368,178 3,368,178 3,368,178
Share premium 7 4,494,758 4,784,603 4,784,603
Share based payment reserve 539,093 543,813 539,093
Retained losses (3,136,856) (2,476,057) (2,815,420)
Shareholders' equity 7,265,173 6,220,536 (5,876,454)
MILA RESOURCES PLC
Statements of changes in equity (Unaudited)
For the six months ended 31 December 2023
Share Capital Share Premium Account Share Based Payment Reserve Retained TOTAL
Loss
£ £ £ £ £
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)
Capital Raising - Issue of shares 302,667 605,333 - - 908,000
Capital Raising - Issue Costs - (88,576) - - (88,576)
Expired Warrants - - (4,720) 4,720 -
Balance at 30 June 2023 3,368,178 4,784,603 539,093 (2,815,420) 5,876,454
Total comprehensive income for the period - - - (321,436) (321,436)
Capital Raising - Issue of shares 2,000,000 - - - 2,000,000
Capital Raising - Issue Costs - (289,845) - - (289,845)
Balance at 31 Dec 2023 5,368,178 4,494,758 539,093 (3,136,856) 7,265,173
MILA RESOURCES PLC
Statement of cash flow (Unaudited)
For the six months ended 31 December 2023
Six months Six months 12 months
to 31 December to 31 December to 30
June
2023 2022 2023
£ £ £
Cash flows from operating activities
Loss for the period (321,436) (205,404) (549,487)
Operating cashflow before working capital movements (321,436) (205,404) (549,487)
Decrease / (Increase) in trade and other receivables 6,283 (11,357) (112,891)
Decrease in trade and other payables (133,412) (29,994) 102,178
Net cash flow from operating activities (448,565) (246,755) (560,200)
Cash flow from investing activities
Funds used for drilling and exploration (77,055) (836,477) (907,245)
Net cash outflow from investing activities (77,055) (836,477) (907,245)
Cash flow from financing activities
Proceeds from share issues 2,000,000 863,839 908,000
Issue costs paid in cash (289,845) (44,416) (88,576)
Convertible Loan Note 51,475 - -
Net cash inflow from financing activities 1,761,630 819,423 819,424
Net Increase / ( Decrease) in cash and cash equivalents 1,236,010 (263,809) (648,021)
Cash and cash equivalents at beginning of the period 448,063 1,096,084 1,096,084
Cash and cash equivalents at end of the period 1,684,073 832,275 448,063
MILA RESOURCES PLC
Notes to the financial statements
For the six months ended 31 December 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
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 6(th) Floor, 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
2023 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 2023, which have been prepared in
accordance with International Financial Reporting Standards (IFRS) and have
been delivered to the Registrar 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 2023 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.
MILA RESOURCES PLC
Notes to the financial statements
For the six months ended 31 December 2023
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 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.
MILA RESOURCES PLC
Notes to the financial statements
For the six months ended 31 December 2023
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 Taxation
No tax is applicable to the Company for the six months ended 31 December 2023.
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 2023
and 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 (321,436) 365,310,859 (0.09)p
6 Exploration and evaluation assets
At 31 At 31 December 2022 At 30
December 2023 Unaudited Unaudited June 2023
Audited
£ £ £
Cost
Opening balance 5,535,102 4,698,625 4,698,625
Exploration costs capitalised in the period 147.823 836,477 1,092,201
Other movements - - (184,956)
Net book value 5,682,925 5,535,102 5,605,870
MILA RESOURCES PLC
Notes to the financial statements
For the six months ended 31 December 2023
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 £5.7m (31 December 2022: £5.5m) 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 2023 336,817,708 3,368,178 4,784,603 8,152,781
Capital Raise 200,000,000 2,000,000 - 2,000,000
Issue Costs - - (289,845) (289,845)
Balance at 31 December 2023 5,368,178 4,494,758 9,862,936
536,817,708
The Company issued a total of 200,000,000 new fully paid ordinary shares
during the period.
In November 2023, the Company completed a placing of 200,000,000 fully paid
ordinary shares with a nominal value of £0.01, raising gross proceeds of £2m
before expenses.
MILA RESOURCES PLC
Notes to the financial statements
For the six months ended 31 December 2023
As at 31 December, 2023 the Company also has the following options and
warrants:
Warrants and Options in Issue Number of Options in Issue Number of Warrants in Issue Weighted average exercise price Expiry date
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
Warrants issued to investors as part of £2m Capital Raise in Nov 2023 - per - 200,000,000 £0.02 7 Nov 2025
the prospectus
Warrants issued as part of previous Capital Raise in Oct / Nov 2022 ((1)) - 30,983,982 £0.048 4 Oct 2025
At 31 December 2023 6,000,000 473,028,093 £0.035
During the period the Company 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. Investors in the Placing also received one two-year
warrant per Placing Share to subscribe for one new ordinary share at a cost of
2p per share.
(1) In October & November 2022 the Company 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 this Placing also
received 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 also
issued 717,331 broker warrants that are exercisable at 3p for a period of 3
years. Both the investor warrants and broker warrants were conditional on
shareholder approval to increase the Company's share authorities. This
approval was granted on the 8th of November 2023.
8. Subsequent events
Conversion of AUD$100,000 convertible loan note into Mila ordinary shares
In July 2023 the Company announced that, together with the other owners of the
Kathleen Valley licence, it had entered into an option agreement with a
subsidiary of Liontown Resources Limited (ASX: LTR), granting Liontown the
option to explore for lithium on the Kathleen Valley Licence Area in Western
Australia.
As part of that that arrangement Liontown invested A$100,000 in Mila through a
convertible loan.
Following an amendment of the terms of the Convertible Loan
Note in January 2024, Liontown agreed that Mila would convert the AS$100,000
into 5,147,475 fully paid Mila Ordinary Shares at a conversion price of 1
pence per share. In addition, Mila has also agreed to issue Liontown warrants
to subscribe for up to a further 5,147,475 Ordinary Shares exercisable at a
price of 2 pence per share at any time until 29 January 2027.
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