REG - Mila Resources Plc - Mila to Acquire Highly Prospective Gold Projects

Mila ResourcesAnnouncement

31/10/2024 07:15

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RNS Number : 3176K  Mila Resources PLC  31 October 2024

Mila Resources Plc / Index: LSE / Epic: MILA / Sector: Natural Resources

 

This announcement contains Inside Information as stipulated under the UK
version of the Market Abuse Regulation No 596/2014 which is part of English
law by virtue of the European (Withdrawal) Act 2018, as amended.  On
publication of this announcement via a regulatory information service, this
information is considered to be in the public domain.

 

31 October 2024

Mila Resources Plc

('Mila' or the 'Company')

 

Mila to Acquire Three Highly Prospective Gold Exploration Projects in
Queensland, Australia

& Kathleen Valley Gold Project Update & Investor Presentation

 

Mila Resources Plc (LSE:MILA), the post-discovery gold exploration
accelerator, is pleased to announce that it has signed an exploration and
option agreement (the 'Option Agreement') relating to three highly prospective
gold projects in Queensland, Australia (the 'Exploration Portfolio') with EMX
Broken Hill Pty Ltd and EMX - NSW 1 Pty Ltd (both wholly owned subsidiaries of
EMX Royalty Corp (TSX-V:EMX and NYSE AMERICAN: EMX)) ('EMX').  The
Exploration Portfolio is intended to complement Mila's primary asset, the
Kathleen Valley Gold Project ('Kathleen Valley'), located in Western
Australia.

 

Highlights

 

·    Option to purchase three highly prospective projects with proven gold
mineralisation, each with the potential to materially expand Mila's mineral
resource inventory.

·    The Company is fully funded to undertake the exploration work, with
A$450,000 (approx. £230,000) to be committed within one year of executing the
Option Agreement.

·    The Company will initially pay A$25,000 in cash and issue 16 million
warrants exercisable at 1p per Ordinary Share for the Option Agreement. The
Option must be exercised within 12 months. However, any further payments are
subject to exploration and development success. (Further details of the Option
Agreement are set out below.)

·    The Option Agreement underlines the Company's post-discovery gold
exploration accelerator model with the aim of building value from applying
systematic exploration work, metallurgical studies and initial ESG work to
best determine the optimum path to production.

·    The Company's priority remains the advancement of Kathleen Valley,
together with its partner, ASX listed Liontown Resources Ltd ("Liontown"), to
unlock value from both the lithium and gold mineralisation identified at the
project.

·    Following the commencement of spodumene production at Liontown's
Kathleen Valley Project in July 2024, engagement with local stakeholders with
regard to ongoing exploration activities is continuing with further news
expected in Q4 2024.

 

Mark Stephenson, Executive Chairman of Mila Commented: "We are looking forward
to advancing these projects alongside Kathleen Valley, as we continue to build
critical mass within our exploration accelerator portfolio.  Importantly, we
have structured a transaction to ensure that new funds are "going in the
ground" and milestone payments are linked to geological success and
development.  Mila will now employ a targeted and strategic work programme
across all of the properties to further prioritise the Company's resources.

 

"We expect ground exploration work to commence at Yarrol, the most advanced of
the three projects within the Exploration Portfolio, within the coming weeks
whilst the team plan for geophysical surveys across Mt Steadman and Mt Weary
in early 2025.  Our technical team, led by Neil Hutchison and Alistair
Goodship, have been on site earlier this month and are extremely enthusiastic
about the potential across the Exploration Portfolio.

 

"Alongside this new work, our attention remains very much focussed on our
Kathleen Valley project, and, following Liontown's announcement confirming
that it commenced production of spodumene concentrate in July, engagement with
local Tjiwarl people has continued to progress and we look forward to our
advancing dialogue. It remains our primary objective to advance and unlock
value from this project, in respect to both lithium and gold development, and
we will update shareholders in due course with expected timetables."

 

Overview of the Exploration Portfolio

 

The Yarrol Project

 

Gold mineralisation at Yarrol has several geological expressions, including
IRGS-type vein swarms developed in and around Permian-aged dioritic
intrusions, as well as sediment-hosted gold mineralisation. Elsewhere on the
property, mineralisation appears to be developed along cross structures that
intersect the regional structural trends.

 

There is significant upside potential that exists along the 10-15-kilometre
trend of gold mineralisation that has been historically under-explored. EMX
re-processed the historical geophysical data from the project area, which
highlighted additional targets along strike of, and below, the historically
defined zones of mineralisation.

 

Exploration programmes conducted by EMX in 2021 included the collection of 544
soil samples, which identified two new gold-in-soil anomalies. The northern
anomaly, known as the Limestone Creek area, lies approximately five kilometres
northwest of the historical Yarrol gold resources. This new anomaly has
dimensions of 200 by 600 metres, with the strongest results along the
southernmost line. The area was identified as a target by EMX on the basis of
magnetic inversion geophysical models, previous geochemical results and the
presence of numerous historical prospecting pits. The Limestone Creek anomaly
also coincides with a zone of albite-silica-goethite alteration developed
adjacent to a monzonite porphyry and remains open to the south. The anomaly
has a scale and tenor that resembles those over the historical gold resources
on the Yarrol Project.

 

Other gold-in-soil anomalies have been delineated immediately northwest of the
historical Yarrol resources, along a contact zone between geological
formations within folded and faulted sediments, which also merit follow-up
exploration.

 

In the process of carrying out the sampling programmes at the Yarrol Project,
EMX geologists also noted boulders of dark manganiferous material in several
drainages in the northern part of the exploration licence. The boulders were
traced back to an outcropping stratigraphic horizon of dark, manganiferous
material that has the appearance of a conglomeratic unit.

 

Nine rock chip samples collected from various boulders, float materials and
outcrop exposures averaged 1.1% cobalt, 0.15 % nickel and 10.0% manganese,
with a high of 1.6% cobalt with 0.25% nickel. This has the potential to be a
significant discovery of additional mineral potential on the Yarrol Project,
as previous efforts had strictly focused on Yarrol's intrusion-related gold
mineralisation.

 

A drill campaign was conducted in Q4 2023 by Many Peaks Minerals Limited,
which was at that time had secured the right to acquire a 100% interest in the
Yarrol Project.  The drilling included initial drill tests on two targets
generated from reprocessing and inversion modelling of aerial magnetic data
and historical IP ground geophysics. Drilling successfully identified new
zones of mineralisation and alteration at both targets located approximately
1.6km apart along the eastern margin of the 4km long intrusion related gold
system.

 

Despite very encouraging results from this drill programme and the additional
work conducted in 2023 and 2024 by Many Peaks, the company was required to
reallocate its resources to its West African portfolio at that time, and Many
Peaks concluded that they would not exercise its right to acquire the Yarrol
Project.

 

Mt Steadman Project

The 57km(2) Mt Steadman project is an intrusion-related gold system ("IRGS")
in the New England Orogenic Belt in Queensland, Australia, a province that
hosts IRGS-type gold, porphyry and epithermal deposits. Mt Steadman is located
along the Perry Fault system, a major structural feature in the area. The Mt
Steadman project was the focus of exploration in the 1990s when shallow
reconnaissance drilling programmes led to the recognition and definition of
historical gold resources at the Fitzroy prospect, however there has been
limited exploration since then.

 

Examples of historical reverse circulation drill intercepts at Mt Steadman's
Fitzroy prospect include 23 metres averaging 1.04 g/t gold in RC95MS7, 24
metres averaging 1.13 g/t gold in RC85MS10, and 21 metres averaging 1.15 g/t
gold in RC95MS11 5 (true widths unknown). The zones of drill defined
mineralisation at Fitzroy are shallow (generally less than 60 metres from
surface) and remain open in multiple directions.

 

Gold mineralization at the Fitzroy prospect is developed in the near surface
environment as sheeted quartz veins hosted within a granitic intrusion and is
associated with broad zones of sericitic alteration. Similar styles of gold
mineralisation, alteration and geologic occurrences are developed in numerous
locations elsewhere along the trace of the Perry Fault on the property.
Several of these peripheral target areas have never been drill tested.

 

In 2021, EMX conducted a broad soil geochemical survey to the north of the
Fitzroy historical resource. A total of 351 samples were collected on 200
metre and 400 metre spaced traverses with samples collected every 50 metres
along each line. This programme resulted in the delineation of multiple
anomalous gold-in-soil trends. The most prominent anomaly extends for 400
metres along trend and reaches a maximum width of 200 metres at its northern
extent. The anomaly remains open to the north and includes a sample of 2.17
ppm gold. This soil anomaly is similar in scale and tenor to those around the
historic Fitzroy prospect located 1km to the southeast. This anomaly also
exhibits coincident anomalous molybdenum and tellurium geochemistry, similar
to geochemical signatures seen at Fitzroy, and closely correlates with the
mapped extent of a zone of hydrothermal breccias, quartz veining and
alteration.

 

A drill campaign was conducted in Q4 2023 by Many Peaks Minerals Limited,
which was at that time had secured the right to acquire a 100% interest in the
Mt Steadman Project.  The RC drilling results included an intercept of 8m @
2.63g/t gold from 8m drill depth, and demonstrated a significant extension to
the footprint of gold mineralisation, intersecting the targeted gold corridor
at the Fitzroy prospect more than 120m south from a 300m zone of outcropping
mineralisation confirmed in historical drilling with intercepts including 22m
@ 1.21g/t gold from surface, 25m @ 1.02g/t gold from surface, and 19m @
1.25g/t gold. The results highlighted the higher tenor gold grades at the
Fitzroy prospect within a corridor of gold mineralisation that remains open in
all directions within a more than 3km long surface gold anomaly.

 

Despite very encouraging results from this drill programme and the additional
work conducted in 2023 and 2024 by Many Peaks, the company was required to
reallocate its resources to its West African portfolio at that time, and Many
Peaks concluded that they would not exercise its right to acquire the Mt
Steadman Project.

 

Mt Weary Project

The 476km(2) Mt Weary Project is located in southern Queensland and covers
multiple exploration targets with styles of mineralisation including IRGS,
skarn, reef-type veins, and sediment hosted copper-silver mineralisation. Many
of the exploration targets are associated with suites of Permian-Triassic aged
volcanic and intrusive rocks.

 

The Mt Weary Project has been the site of historical mining and exploration
activities for over a century. The project last saw intensive exploration in
the mid-1990s, when CRA Exploration and North Ltd (both precursor companies to
what is now Rio Tinto Exploration Pty Limited) drilled the Boggy Creek
prospect, intersecting long intervals (i.e., >25 metres) of near surface
gold mineralisation associated with quartz vein stockworks in
rhyolitic-dacitic intrusions, which is typical of IRGS systems. Multiple
historical gold mines are located elsewhere on the project, including the
Monal Goldfields, which saw production from 1892 through the 1930s.

 

Rock chip samples from the Rawlins prospect at the "Apple Tree" target area
include a grab sample assaying 31.1 g/t gold (n=5, min 0.015 g/t Au, max 31.1
g/t Au, avg 12.74 g/t Au). Two grab samples from the Eastern Star workings
returned with multi-gram gold (1.12 g/t Au and 9.55 g/t Au) and multi-percent
copper (2.84% Cu and 10.07% Cu, respectively). At the Malakoff sediment-hosted
copper prospect, rock chip samples from outcrop returned multi-gram gold (n=7,
min <0.005g/t Au, max 2.49g/t Au, avg 0.71g/t Au) and multi-percent copper
(min 0.001% Cu, max 12.15% Cu, avg 2.61% Cu) (see comments on sampling
protocols below

 

Option Agreement Terms

 

Mila has signed an exploration and option agreement to purchase a 100%
interest over three project areas: Yarrol (EPM8402, EPM27561, EPM28230 and
EPM28658), Mt Steadman (EPM12834 and EPM27750) and Mt Weary (EPM26317 and
EPM27252) (collectively the 'Exploration Portfolio').

 

The consideration for the Option Agreement is as follows:

a)     A cash payment of A$25,000;

b)     The issue of 16,000,000 warrants at an exercise price of £0.01 to
EMX exercisable within 12 months; and

c)      The issue of £50,000 of new Mila ordinary shares to EMX if the
Mila share price exceeds 1.0p for more than 12 continuous trading days.

d)     a payment of A$125,000 on the second anniversary of the Optioh
Agreement payable in cash or by the issue of new Mila ordinary shares valued
by reference to the volume weighted average price of the shares during thirty
consecutive trading days prior to the day of issue.

 

Work Commitments

 

a)    Under the terms of the Option Agreement, Mila has committed to
undertake a minimum work programmes spendingA$450,000 collectively across all
three project areas by the first anniversary of the Option Agreement with a
commitment to meet the minimum work programmes required to keep each licence
in good standing.

Exercise of the Option

 

In the event that Mila wishes to exercise the Option (on or before 31 October
2025) Mila will issue £110,000 of new ordinary shares valued by reference to
the volume weighted average price of the shares during thirty consecutive
trading days prior to the day of issue.

 

Mila is fully funded to deliver this work programme and earn into the
Exploration Portfolio.

 

Milestone/Performance related payments

 

In the event the Option is exercised there is a commitment:

a)     to complete an upgraded resource by the second anniversary of
signature of the Option Agreement;

b)    to complete 30,000 metres of drilling across the project areas and/or
establish resources of >400k oz with at least 40% being indicated resources
with the remainder as inferred resources by the fifth anniversary of signature
of the Option Agreement;

c)      to pay an annual advance royalty of 20oz gold, increasing to 35oz
from the fifth anniversary of signature of the Option Agreement and to 50 oz
on the delivery of a scoping study (payable in cash, gold, or ordinary shares
of the Company); and

d)     on completion of a scoping study, to pay A$250,000 in cash or new
ordinary shares;

e)     on completion of a feasibility study, to pay A$500,000 in cash or
new ordinary shares of the Company.

 

Each of the Tenements is subject to a 2.5% Net Smelter Royalty, payment of
which will be secured. Annual advance royalties will be set off against any
Net Smelter Royalty due. On completion of a feasibility study on a project,
Mila will have the right to reduce the Net Smelter Royalty to 1.25% on payment
of 65% of the post-tax royalty net present value (NPV) of the project.

 

Corporate Presentation:

 

An updated corporate presentation which provides further details on the
Queensland Gold properties can be found using the following link:
http://www.rns-pdf.londonstockexchange.com/rns/3176K_1-2024-10-30.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/3176K_1-2024-10-30.pdf) .

 

Investor Presentation via Investor Meet Company:

 

Mila Resources is pleased to announce that Mark Stephenson and Alastair
Goodship will provide a live presentation via Investor Meet Company on Tuesday
5 November 2024 at 12:00 GMT. 

 

The presentation is open to all existing and potential shareholders. Questions
can be submitted pre-event via the Investor Meet Company dashboard up until 4
November 2024 at 09:00 GMT, or at any time during the live presentation. 

 

Investors can sign up to Investor Meet Company for free and add to meet Mila
Resources Plc via:
https://www.investormeetcompany.com/mila-resources-plc/register-investor
(https://eur03.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.investormeetcompany.com%2Fmila-resources-plc%2Fregister-investor&data=05%7C02%7Cwill%40stbridespartners.co.uk%7Cba779921e5d24e97f38f08dcf8ceb570%7C48b7268319d344289c4b73cf144d89ed%7C1%7C0%7C638658813926402645%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=P9xIuCJ2U4YDqYonqBmC8Cd4RAObHAPXO60fjaFMnKI%3D&reserved=0)
 

 

Investors who already follow Mila Resources Plc on the Investor Meet Company
platform will automatically be invited. 

 

**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

 Damon Heath                     +44 (0) 20 3971 7000

 Shard Capital Partners LLP

 Susie Geliher / Charlotte Page  +44 (0) 20 7236 1177

 St Brides Partners Limited

 

 

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