REG - Mila Resources Plc - Placing to Raise £2m & Appointment of Joint Broker

Mila ResourcesAnnouncement

02/10/2023 07:00

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RNS Number : 2668O  Mila Resources PLC  02 October 2023

Certain information contained within this Announcement is deemed by the
Company to constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014 ("MAR") as applied in the United Kingdom. Upon
publication of this Announcement, this information is now considered to be in
the public domain.

 

2 October 2023

Mila Resources Plc

("Mila" or the "Company")

 

Placing to Raise £2m & Appointment of Joint Broker

 

Mila Resources Plc (LSE:MILA),  is delighted to announce that it has raised
£2,000,000 before expenses, through a conditional placing by its existing
broker SI Capital, and Shard Capital, which has been appointed as joint broker
with immediate effect, (the "Placing"), of 200,000,000 new ordinary shares
("Placing Shares") at the closing offer price  of 1 pence per ordinary share
("Placing Price"). The Placing Shares shall have one warrant attached with an
exercise price of 2 pence for a period of two years from the date of admission
("Placing Warrants").

 

The Placing has not been underwritten and is conditional on, amongst other
things:

 

i)             the publication of a Prospectus by the Company to
be approved by the Financial Conduct Authority of the United Kingdom ("FCA").
The Company and its advisers have been working on obtaining such approvals
from the FCA in recent weeks and anticipate being able to publish the
Prospectus in the next 10 days; and

ii)            approval by Shareholders of resolutions, inter alia,
granting authority for the Directors to issue ordinary shares at a General
Meeting ("GM") expected to be held before the end of October 2023.

 

The Placing Shares, when issued, will be credited as fully paid and will be
issued subject to the Articles of Association of the Company and rank pari
passu in all respects with the Ordinary Shares currently in issue, including
the right to receive all dividends and other distributions declared, made or
paid on or in respect of the Ordinary Shares after the date of issue of the
Placing Shares and will, on issue, be free of all claims, liens, charges and
encumbrances.

 

Use of Proceeds

Further to the announcement of 27 July 2023 relating to the option agreement
with Liontown Resources Limited (ASX: LTR) ('Liontown'), the Liontown team are
on the ground on the Mila's Kathleen Valley licence area, and management
expects that a lithium work programme will commence shortly to identify drill
targets, to validate the theory that spodumene-bearing pegmatites occur within
the substantial pegmatite swarms already identified at surface. As previously
announced, Liontown will fund all lithium exploration activities on Mila's
Kathleen Valley licence area.

 

The Company intends to utilise the placing funds to conduct further gold
exploration work alongside Liontown's lithium exploration in the northern part
of the Kathleen Valley licence area. By capitalising on work permits and
heritage surveys that the Company expects to be granted in the near future,
drilling costs will be significantly reduced, maximising drill metres and
funds into the ground at this exciting gold project.

 

Finally, the Company has received several proposals to partner on other
projects and funds will be applied to reviewing business development
opportunities. Alastair Goodship, an exploration geologist, has joined the
team as noted below to assist the board and provide technical oversight on the
current portfolio and new opportunities.

 

Appointment of Exploration Geologist

The Company has 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.

 

Background to the Placing

Mila's principal activity is to develop mining projects following initial
exploration through to development with the aim of creating value as the
assets are de-risked and capable of economic development.

 

The Company's portfolio currently consists of one project, being a 30%
interest in the Kathleen Valley gold project ("Kathleen Valley Project" or the
"Project") and the exploration licence E36/876 in the Kathleen Valley
("Kathleen Valley Licence") located in the +40Moz Wiluna Jundee gold belt
which hosts some of Australia's largest gold mines.

 

In December 2021, the Company commenced drilling at the Coffey deposit
("Coffey") which already hosts an existing JORC Inferred Resource of 21koz
gold. Mila subsequently committed to a more extensive drilling programme
between February and April 2022 ("First Stage").  With a total of 31 holes
that encountered gold mineralisation, the First Stage drilling results were
considered a success, reporting wide intersections of mineralisation and some
very high gold grades including 6.6m at 14.86g/t Au and 21.79g/t Ag from
209.4m (reported 25/4/2022).

 

In October 2022, the Company followed up with the second stage ("Second
Stage") of drilling at Coffey designed to test the mineral deposit at further
depths than those conducted in the First Stage. Despite intersecting promising
alteration and limited low grade gold mineralisation, the drilling did not
intersect the anticipated high-grade gold mineralisation at this target depth.
However, with reference to the style of mineralisation at other major Western
Australian gold deposits such as Bellevue Gold's 3.1Moz Bellevue project
(contiguous to Mila's licence area), the Company believes that these results
could provide evidence of a 'ladder system', commonly found in Western
Australia, which is strongly encouraging for further discovery potential at
the project.

 

Since the beginning of 2023, the Company has been reviewing a range of
geological tools and data to build a more precise geological model of the
Coffey Deposit and enhance targeting in order to mitigate risk ahead of its
next exploration phase. Whilst the Company awaits the results of six drill
holes, designed to test the thinner section of mineralisation, where it
expects to find narrower widths of mineralisation, progress has been made to
explore the target zones in the North, exploring the favoured part of the
acreage based on magnetic survey results.

 

Alongside this, on 27 July 2023 the Company announced that, together with the
other owners of the Kathleen Valley Licence, it had entered into an option
agreement with LBM (Aust) Pty Limited, a subsidiary of Liontown, a A$6bn
business currently subject to a takeover bid by Albemarle. Liontown is
developing the significant Kathleen Valley lithium project nearby that is due
to commence production in 2024 and currently has offtake agreements signed
with Ford, Tesla and LG. The agreement grants Liontown the option to explore
for lithium on Mila's Kathleen Valley Licence area where, despite being
proximal to Liontown's project and having numerous pegmatite swarms
identified, the licence has not been systematically explored for lithium.

 

Importantly this gives Mila a A$2.2m free carry over initial exploration. If
successful and all option agreements are taken up, Mila will retain a 16%
stake in the lithium rights, which could prove significantly more valuable
than the Company's current market capitalisation.

 

Following the decision to grant the option to Liontown, the Company has
determined to continue exploration for gold by completing a drill programme to
the north of the Coffey deposit. By capitalising on work permits and heritage
surveys that it expects to be granted in the near future, drilling costs will
be significantly reduced, maximising drill metres. The initial drill programme
will consist of up to eight holes to determine the geological continuity of
mineralisation. To date, the drilling has focused on the Coffey deposit, and
so it will be the first time that a drilling programme has been conducted in
the preferred target zone which remains highly prospective based on
geophysical results.

 

Appointment of Joint Broker

The Company is pleased to announce the appointment of Shard Capital Partners
LLP as joint broker, alongside SI Capital, with immediate effect.  Tavira
Financial Limited remains the Company's financial adviser.

 

Admission

An application will be made for the Placing Shares to be admitted to trading
on the Official List and the London Stock Exchange ("Admission") within two
business days of the GM.

 

In accordance with the FCA's Disclosure Guidance and Transparency Rules, the
Company confirms that following Admission, the Company's enlarged issued
ordinary share capital will comprise 526,817,108 Ordinary Shares. The Company
does not hold any Ordinary Shares in Treasury. Therefore, following Admission,
the above figure may be used by shareholders in the Company as the denominator
for the calculations to determine if they are required to notify their
interest in, or a change to their interest in the Company, under the FCA's
Disclosure Guidance and Transparency Rules.

 

Mark Stephenson, Chairman of Mila, commented:

 

"I am delighted with the strong level of support we've received in this
fundraising from both existing and new investors, particularly given the
difficult market conditions, and we are grateful for the enthusiastic support
from the market to continue advancing our post-discovery exploration
accelerator model.

 

"Our gold exploration activities at Kathleen Valley have been encouraging,
and, in tandem with the option agreement with Liontown to explore and fund the
lithium exploration at the project, our initial asset has the potential to
deliver significant value for Mila.

 

"Our immediate objective now is to push forward with our gold exploration
work, specifically to fully understand the mineralisation dynamics,
particularly along the unexplored north-western stretch.  In addition, we
will prioritise the assessment of deeper mineralisation layers, which,
investors will remember, have already illuminated the presence of high-grade
mineralisation, and the continuation of a mineralising system at significant
depths, exemplified by instances like 1 metre @ 27.60 g/t Au and 47.50 g/t Ag
down to a depth of 211 metres.

 

"Furthermore, this fundraising provides the Mila team with the ability to
evaluate and capitalise on new opportunities during what remains a difficult
market for junior exploration businesses.  We now have a strong balance sheet
behind us, and a team of industry experts to review and benefit from new value
accretive business development opportunities.

 

"I would like to thank our shareholders, both new and existing, as we look to
a highly active phase of our journey at Mila and I look forward to reporting
further news in the coming weeks."

 

A further announcement will be made on the publication of the Company's
prospectus.

 

**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                +44 (0) 20 7236 1177

 St Brides Partners Limited

 

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