TIDMMILA
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 GBP696,000 in October
2022, followed by an additional GBP212,000 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 GBP205,404 (2021: GBP760,806).
Fund Raise
In October / November 2022, the Company announced that it had
raised GBP907,999 (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
GBP832,275 (2021: GBP2,516,043).
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 Six months Year ended
ended 31 ended 31 30 June 2022
December December Audited
2022 Unaudited 2021 Unaudited
GBP GBP GBP
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 At 30
December 2021 June 2022
2022 Unaudited Unaudited Audited
Notes GBP GBP GBP
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 Share Premium Share Based Retained TOTAL
Capital Account Payment Loss
Reserve
GBP GBP GBP GBP GBP
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 Six months 12 months
to 31 December to 31 December to 30 June
2022 2021 2022
GBP GBP GBP
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 - 143,500 -
shares
---------------- ----------------
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 (GBP).
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 Per-share
GBP number of shares 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 At 30
December 2022 2021 June 2022
Unaudited Unaudited Audited
GBP GBP GBP
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 GBP5.5m
(31 December 2020: GBP3.5m) 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 GBP GBP GBP
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 336,817,708 3,368,177 4,784,603 8,152,780
============== ========== ========== ==========
On 6 October, the Company raised GBP696,000 (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 GBP212,000
(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 Expiry Number Exercise
from Date outstanding price
Warrants -
22 November 22 November 31 December
2021(1) 2021 2026 193,388,694 4.8 pence
Warrants -
22 November 22 November 31 December
2021(1) 2021 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 Expiry Number Exercise
from Date outstanding price
Options -
10 December 10 December 10 December
2021(2) 2021 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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END
IR SDFFMSEDSEFD
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