Mila Resources Plc
Financial Statements
For the year ended
30 June 2023
Registered number 09620350 (England and Wales)
MILA RESOURCES PLC
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
CONTENTS
Page | |
Directors and Advisors | 3 |
Statement from the Board | 4-5 |
Strategic Report | 6-11 |
Key Personnel | 12 |
Directors' Report | 13-25 |
Independent Auditor's Report to the Members | 26-31 |
Statement of Comprehensive Income | 32 |
Statement of Financial Position | 33 |
Statement of Cashflows | 34 |
Statement of Changes in Equity | 35 |
Notes to the Financial Statements | 36-53 |
MILA RESOURCES PLC
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
DIRECTORS AND ADVISORS
Directors | Mark Stephenson |
Lee Daniels | |
Neil Hutchison | |
Lindsay Mair | |
Company Secretary | Nick Foster |
Registered Office | 65 Gresham Street |
London | |
EC2V 7NQ | |
Independent Auditor | PKF Littlejohn LLP |
Statutory Auditor | |
15 Westferry Circus | |
London | |
E14 4HD | |
Solicitors | Kepstorn |
7 St James Terrace | |
Lochwinnoch Road | |
Kilmacolm PA13 4HB | |
Bankers | HSBC |
50 Church Road | |
Burgess Hill | |
RH15 9AE | |
Registrars and Transfer Office | Link Market Services (trading as Link Group) |
6th Floor | |
65 Gresham Street London | |
EC2V 7NQ | |
Financial Public Relations | St Brides Partners Limited |
22 Bishopsgate | |
London | |
EC2N 4BQ | |
Registered Number | 09620350 |
Website | www.milaresources.com |
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MILA RESOURCES PLC
STATEMENT FROM THE BOARD
FOR THE YEAR ENDED 30 JUNE 2023
Dear Shareholder
We have made solid progress this year both on a corporate and asset level. Since the financial year end, we have entered into an exciting partnership with Australia's leading lithium company, Liontown Resources, who will explore for lithium targets on our acreage and (subject to shareholder approval on the 8th of November), we will then complete the £2m fund raise (before expenses) which will provide the Company with a robust balance sheet. Our strategy is to build value from both the gold and lithium at our Kathleen Valley Project in Western Australia (the "Project") and move ahead with a number of new business opportunities that have presented themselves this year.
We want Mila to become the "best in class" post-discovery exploration accelerator through the careful identification and development of proven projects that cannot access the traditional routes of funding in the capital markets due to market conditions for IPOs and equities generally. We recently added Alastair Goodship, an exploration geologist with significant experience in leading discovery-focussed exploration teams in a diverse range of environments and jurisdictions globally, to bolster the team.
We have been approached by several business development opportunities and continue to review these as we firmly believe that we can mitigate risk by broadening the portfolio of projects. The biggest single risk facing most junior mining companies is that they are reliant on the success of a sole project, and we want to differentiate Mila by providing companies and management with proven projects with the support structure of a public company and access to capital. By definition, exploration is high risk and high reward, therefore, we want to mitigate and diversify risk by building Mila particularly at the time where high quality exploration and development projects are attractively valued with limited scope to access the closed IPO market.
Gold
During this financial year, we have been highly active at the Project. In the year ending 30 June 2022 we acquired 30% of the Project with the ability to move up to 80% and we continue to retain that flexibility.
We have now completed several drilling phases 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, we are building a better and more complete picture of the geological system which we believe is highly structured, featuring concentrated zones of high-grade mineralisation.
With the benefit of a clearer picture, our next objective will be to conduct more low-cost exploration prior to conducting costly drill programmes. We now believe we know the system sufficiently well to be far more focused and efficient with the exploration budget. Also, I believe we will be able to obtain technical and operational efficiencies by working with the Liontown team. Whilst they are focused on finding lithium they will i be able to share geological insights to assist our team on gold exploration.
We have a number of development routes given the Project is surrounded by gold mining infrastructure and some of Australia's leading gold companies.
Lithium
Earlier this year we were approached by Liontown, our neighbours to the north, to explore for lithium on our Project. Liontown was recently subject to a A$6.6bn takeover bid by American lithium giant, Albemarle Corp. (NYSE: ALB) and is developing Australia's leading lithium project, the Kathleen Valley Lithium Project ahead of targeted production in 2024. Liontown has offtake agreements to supply lithium to companies including LG, Ford and Tesla.
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MILA RESOURCES PLC
STATEMENT FROM THE BOARD
FOR THE YEAR ENDED 30 JUNE 2023
Liontown has mapped pegmatite swarms extending south from its own project and the hypothesis is that this mineralisation corridor covers our own licence area. With the identification of these pegmatite swarms extending on to our own property, we reasoned that it makes commercial sense to work with Liontown to explore for lithium on our project. In addition, they bring a lot of intangible value to our project by sharing geological and technical information and their expertise in the region generally. On the 16th of October 2023 we announced that work is now underway with Liontown on the acreage with the preliminary social and environmental programmes before they can commence their exploration which will initially entail mapping, trenching and sampling in areas of the Project known to host lithium pegmatites.
Finance Review
In October 2022, the Company announced that it had 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 the Placing will also receive one three-year warrant per Placing Share to subscribe for one new ordinary share at a cost of 4.8p per share. The Company will also issue 524,000 broker warrants that are exercisable at 3p for a period of 3 years. The issue of the Investor Warrants and Broker Warrants is conditional on shareholder approval to increase the Company's share authorities.
Post year- end, in October 2023, the Company 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. The Placing is conditional on approval by Shareholders of resolutions at a General Meeting ("GM").
Cash Position
At 30 June 2023, cash and cash equivalents amounted to £448,063 (2022: £1,096,084).
Outlook
Mila is now in the most solid position of its brief life since we listed in November 2021. This of course assumes that the shareholders vote in favour of the £2m fund raise on the 8th of November.
We have a clear strategy and are well capitalised to deliver the strategy to fruition. We expect the next 12 months to be highly active on both a corporate and asset level as we continue to assess business development opportunities and how to deliver value from both the gold and lithium at our project.
Whilst the financial period has proven to be difficult for junior mining companies given the challenges in the capital markets, we now look forward to building Mila from the opportunities that present themselves from such circumstances. Ultimately, Mila will continue to be highly entrepreneurial, and I would like to take this opportunity to thank our existing shareholders, and those new to our register, as we look forward with excitement and confidence, to a period of increased activity in the forthcoming financial year.
Mark Stephenson
Executive Chairman
31 October 2023
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MILA RESOURCES PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
The directors present the strategic report for the year ended 30 June 2023.
Understanding our business
The Company was incorporated on 3 June 2015, with the view of pursuing an initial public offering of its securities onto the London Stock Exchange through a Standard Listing to raise the necessary funds required for the execution of the business strategy, which is to buy asset(s) or business(es) acting as a post discovery accelerator. The Company identifies target(s) that have already had an early-stage geological discovery. To date one successful acquisition has been made, an initial 30% interest in the Kathleen Valley Gold Project in Western Australia. Whilst additional targets will be sought, the current priority is to develop and unlock the potential in the initial gold exploration project.
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MILA RESOURCES PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
Review of the business and Key Performance Indicators (KPIs)
FY2023 KPIs | Measurement | 2023 Performance |
Identify business(s) / asset(s) | Successful | Added Alastair Goodship, an exploration |
that meet the Company's | identification and | geologist with significant experience in |
strategic objectives and | development of | leading discovery-focussed exploration |
investment criteria. | proven projects | teams in a diverse range of environments |
and jurisdictions globally, to the team. | ||
Targets continue to be identified as to | ||
potential suitability. | ||
Ensure business adequately | The Company's cash | The Company successfully raised |
funded. | reserves | £908,000 (before costs) in Oct/Nov 2022, |
and an additional £2m (before expenses) | ||
in October 2023 (this is contingent on | ||
shareholder approval at the General | ||
Meeting on 8 Nov 2023) hence, until the | ||
fund raise is approved a material | ||
uncertainty exists which may cause | ||
significant doubt about the ability to | ||
continue to trade as a going concern. The | ||
company continues to explore all funding | ||
options to ensure the Company is | ||
adequately funded. | ||
Continued Operational activity | Delivering results from | The Company continued the drilling |
in the gold exploration project | Drilling / Assays. | campaign building a better and more |
in Western Australia. | complete picture of the geological system | |
Business review
For a review of developments in the year, please see page 4, the "Statement from the Board".
Principal risks and uncertainties
Exploration and development of a project can be adversely affected by environmental legislation and the unforeseen results of environmental studies carried out during that evaluation.
As the Company undertakes mineral exploration, any disturbance to the environment during this phase is required to be rehabilitated, with the prevailing regulations of the country in which we operate as well as to international best-practice.
Given the Company's size and scale it is not considered practical or cost effective to collect and report data on carbon emissions.
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MILA RESOURCES PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
The principal risks currently faced by the Company relate to:
Loss of Key Personnel
The Company has three Executive Directors and one Non-Executive Directors. It does not have any other employees. The executive function of the Company is conducted by the three Executive Directors; hence due to the small number people performing the executive function there is a risk that the execution of this function is considerably effected should one or more directors resign from the board. The Company has established a Remuneration Committee that monitors the Directors remuneration packages and seeks to ensure that said packages are competitive in contrast to market peers.
Acquiring Less than Controlling Interests
Regarding future potential acquisition targets, the Company may acquire less than whole voting control of, or less than a controlling equity interest, which may limit the Company's operational strategies and reduce is ability to enhance Shareholder value.
The Company has acquired less than a controlling equity interest in the Kathleen Valley Project. The Company acquired an initial 30% interest, which was the first stage of a three-part earn in agreement. This does not limit the Company's operational strategies as the Company has full control over the operations and maintains the ability to earn a controlling stake.
Inability to Fund Operations Post-Acquisition
The Company may be unable to fund the operations at the Kathleen Valley Project or other projects it invests in if it does not obtain additional funding, however, the Company will ensure that appropriate funding measures are taken to ensure minimum commitments are met. See the going concern assessment on page 24.
The Company's Relationship with the Directors and Conflicts of Interest
Regarding future potential acquisitions, the Company is dependent on the Directors to identify potential acquisition opportunities and to execute an acquisition.
The Directors are not obliged to commit their whole time to the Company's business; they will allocate a portion of their time to other businesses which may lead to the potential for conflicts of interest in their determination as to how much time to assign to the Company's affairs.
Risks Inherent in an Acquisition
Although the Company and the Directors will evaluate the risks inherent in a particular target, they cannot offer any further assurance that all of the significant risk factors can be identified or properly assessed. Furthermore, no assurance can be made that an investment in Ordinary Shares in the Company will ultimately prove to be more favourable to investors then a direct investment, if such an opportunity were available, in a target business.
Reliance on External Advisors
The Directors expect to rely on external advisors to help identify and assess potential and future acquisitions and there is a risk that suitable advisors cannot be placed under contract or that such advisors that are contracted to fail to perform as required.
Reliance on Income from the Acquired Activities
Following an acquisition of an initial 30% interest in the Kathleen Valley Project, the Company may be dependent on the income generated by the acquired project or from the subsequent divestment of the acquired business to meet the Company's expenses. If the acquired business is unable to provide the
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MILA RESOURCES PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
sufficient amounts to the Company, the Company may be unable to pay its expenses or make distributions and dividends on the Ordinary Shares. This risk can be mitigated by sourcing money through other means, eg. capital raisings.
Political conditions and government regulations could change and have a material effect on the Company's results of operations
Political conditions in jurisdictions in which the Company currently operates its exploration and evaluation activities, namely Western Australia, are generally stable. However, changes may occur in their political, fiscal and/or legal systems, which might adversely affect the Company's operations.
Although the Company believes that its activities are currently carried out in accordance with all applicable rules and regulations, no assurance can be given that new rules, laws and regulations will not be enacted, or that existing or future rules and regulations will not be applied in a manner which could serve to limit or curtail exploration or development of the Company's business or have an otherwise negative impact on its activities.
Gender analysis
A split of our employees and directors by gender and average number during the year is shown below:
MaleFemale
Directors | 4 | nil |
Corporate social responsibility
We aim to conduct our business with honesty, integrity and openness, respecting human rights and the interests of our shareholders and employees. We aim to provide timely, regular and reliable information on the business to all our shareholders and conduct our operations to the highest standards.
We strive to create a safe and healthy working environment for the wellbeing of our staff and create a trusting and respectful environment, where all members of staff are encouraged to feel responsible for the reputation and performance of the Company.
We aim to establish a diverse and dynamic workforce with team players who have the experience and knowledge of the business operations and markets in which we operate. Through maintaining good communications, members of staff are encouraged to realise the objectives of the Company and their own potential.
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MILA RESOURCES PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
Section 172 Statement
Section 172 of the Companies Act 2006 requires Directors to take into consideration the interests of stakeholders and other matters in their decision making. The Directors continue to have regard to the interests of the Company's stakeholders, however it should be noted that Mila is a relatively small company; with the full complement of staff consisting of only three executive directors and one non- executive director; no employees and the impacts of its activities is currently limited to a single gold exploration project in Western Australia. This statement forms part of the strategic report.
When making decisions the Company takes into account the impact of its activities on the community, the environment and the Company's reputation for good business conduct. In this context, acting in good faith and fairly, the Directors consider what is most likely to promote the success of the Company for its members in the long term.
The Directors are fully aware of their responsibilities to promote the success of the Company in accordance with section 172 of the Companies Act 2006. The Board continuously reflects on how the Company engages with its stakeholders and opportunities for enhancement in the future. As required, the Company's external lawyers and the Company Secretary will provide support to the Board to help ensure that enough consideration is given to issues relating to the matters set out in s172(1)(a)-(f).
The Board regularly reviews the Company's principal stakeholders and how it engages with them. This is achieved through information provided by management via Regulatory News Service announcements, Corporate Presentations, and Shareholder Meetings and teleconferences and also by direct engagement with stakeholders themselves.
We aim to work responsibly with our stakeholders, including suppliers. The key Board decisions made in the year and post year end are set out below:
Significant events/decisions | Key s172 matter(s) affected | Actions and Consequences |
Fund Raise of £0.9m (excluding | Business Relationships and | This has enabled the exploration |
costs). After year end an additional | Shareholders. | and development of the Kathleen |
Fund Raise of £2.0m (excluding | Valley Project asset in the year. | |
costs), subject to ratification by | The post year end raise, once | |
shareholders at a General Meeting | approved, will allow the Company | |
to advance the project | ||
Advancement of geological | Shareholders, staff and Business | The Company continued the drilling |
understanding of the region of the | Relationships. | campaign; building a better and |
Company's current acreage | more complete picture of the | |
geological system |
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Mila Resources plc published this content on 31 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 October 2023 14:37:57 UTC.