REG - Mila Resources Plc - Final Results
31/10/2024 07:00
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RNS Number : 3167K Mila Resources PLC 31 October 2024
Mila Resources Plc / Index: LSE / Epic: MILA / Sector: Natural Resources
31 October 2024
Mila Resources Plc ('Mila' or the 'Company')
Final Results:
Audited Accounts for the Year Ended 30 June 2024
Mila Resources Plc (LSE:MILA), the post-discovery gold exploration
accelerator, is pleased to announce its final results for the year ended 30
June 2024.
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.
· 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 (before costs) to
support work at Kathleen Valley Gold Project and advance additional valuable
development opportunities.
· Cash position of £1,417,710 as at 30 June 2024.
· Loss for the financial year ended 30 June 2024 of £686,277 (2023:
loss £549,487)
To view the audited report and accounts document, click here:
http://www.rns-pdf.londonstockexchange.com/rns/3167K_1-2024-10-30.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/3167K_1-2024-10-30.pdf)
Statement from the Board
Dear Shareholder,
I am pleased to share that we have made significant progress in advancing our
strategy of identifying and developing post-discovery exploration projects,
laying a solid foundation for future growth.
In 2023 the Company raised £2m which has given us a strong platform to
advance our portfolio whilst being mindful that preserving capital during
these volatile periods is sensible. Given our capital position this leaves us
in an enviable position as this has given us access to plenty of new
opportunities to review post discovery projects. Clearly, there is no shortage
of such projects, but we remain highly disciplined on what we progress and
hope to have some exciting news in the near future.
We are fundamentally looking to unlock value across the gold and lithium
commodities at our Kathleen Valley project.
In relation to gold, we are targeting new exploration in the northern section
of the licence area subject to Environmental and Heritage surveys.
In relation to lithium, during the financial year we entered a Joint Venture
("JV") with Australia's largest lithium producer being ASX Listed Liontown
Resources ("Liontown"). This JV has given us access to a team that has plenty
of experience of operating in the region. We are now awaiting the conclusion
of Environmental and Heritage surveys before Liontown proceeds with site
exploration works. We are in this partnership for the long term and the JV has
only just started. I look forward to updating you on progress.
We end the financial year with a well-capitalised balance sheet, an exciting
JV with one of Australia's leading lithium companies in Liontown and plenty of
new opportunities on the horizon. While we would like to see the capital
markets cycle turn back in our favour, we believe, there are green shoots
emerging from the London market.
I would like to thank you, our shareholders, for your ongoing support despite
the well documented difficulties in the commodities and capital markets in the
recent year. We look forward to unlocking value and building the Company one
step at a time.
Corporate
We have ended the current financial year in a strong position with a robust
balance sheet following a capital raise in November 2023 where we raised £2m
from new investors. At the same time Alistair Goodship joined the team as our
lead exploration geologist to assist with the current project and review of
new opportunities. We regularly receive enquiries to invest in new projects
and, where we see outstanding opportunities, we will progress only where we
feel that our budget and the relative risk and rewards are in our favour.
Following on from the financial year end of 30 June 2024 the company has
remained in a strong financial position.
Results
The results for the year ending 30 June 2024 is a loss of £686,277 (2023:
£549,487).
Fund Raises
In November 2023, the Company announced the placing of 200,000,000 new
ordinary shares at a price of 1 pence per ordinary share raising £2m (before
costs). The placing shares each have one warrant attached with an exercise
price of 2 pence for a period of two years from the date of admission.
As part of the exploration agreement with Liontown, Liontown invested
A$100,000 in Mila through a convertible loan, technically named a convertible
loan. Following an amendment of the terms of the convertible loan 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.
Cash Position
At 30 June 2024, cash and cash equivalents amounted to £1,417,710 (2023:
£448,063).
Outlook
The Company has identified what we believe to be an exciting potential
transaction, that we believe would be an excellent fit for Mila. A
non-disclosure agreement is currently in force; however, we can disclose that
we are at the very final stages of negotiation having already completed all
the due diligence.
The transaction is subject to completion risk, hence, there is no certainty
that the transaction will ultimately succeed.
Further announcement to follow in due course.
Mark Stephenson
Executive Chairman
30 October 2024
Strategic Report
The directors present the strategic report for the year ended 30 June 2024.
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.
Review of the business and Key Performance Indicators (KPIs)
FY2024KPIs Measurement 2024 Performance
Identify early-stage post discovery Projects, or similar, that meet the Successful initial identification of suitable early-stage Projects. A Many dozens of "seemingly" suitable projects have been reviewed this year; a
Company's selection criteria and are aligned with the Company's strategic well-defined process for quick and efficient first pass project review; before good number have gone on to successfully pass the second stage review process
objectives. more in-depth second stage review and analysis. with a few ultimately being identified as suitable for initial negotiations.
However, for a variety of reasons until recently each potential prospect fell
away. In recent months a suitable transaction has been identified and the
Company has very recently (at the time of writing) completed the due diligence
process. The Company is now in the very final stages of negotiations. The
transaction is subject to completion risk (at the time of writing).
Ensure business adequately funded and in a suitable position to raise The Company's cash reserves. The Company raised £2m (before costs) in November 2023. The capital markets
additional capital if required. for small cap companies were restricted during this time. However, despite the
conditions of the capital markets the Company believes Its success
demonstrates investor confidence in the Project and model.
Continued progress in the Kathleen Valley gold exploration project in Western Advancing the ultimate understanding of the geology. Current progress on the Northern Section is in the hands of Liontown. Per the
Australia. Company's agreement with Liontown all exploration and evaluation costs will be
borne by them. As a result Liontown has the lead and both Companies are eager
to progress this as fast as permissions etc will allow. As part of the
agreement all intercepts and assays will be shared with the Company, which
should significantly improve our understanding of the geology as it relates to
Gold.
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.
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,
together with two retained part time consultants and a part time bookkeeper.
It does not have any 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 could be affected should one or more of the directors resign
from the board. The Company promotes a positive working environment and aims
to pay market competitive remuneration.
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 in which it may invest, 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 25.
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 and consultants are not obliged to commit their whole time to
the Company's business; they may 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 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 do not 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 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, e.g. 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, currently 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:
Male Female
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.
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 a couple
of consultants, 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
During the year successfully concluded an additional Fund Raise of £2.0m Business Relationships and Shareholders. This has enabled the Company to consider other projects whilst Liontown
(before costs) in Nov 2023. prepare to drill the Northern Section of our acreage at their expense, whilst
still providing the Company with the intercepts and Assay results.
Advancement of geological understanding of the region of the Company's current Shareholders, staff and Business Relationships. The future planned Liontown drilling campaign will produce Assay results which
acreage will further advance will advance our understanding of geological area.
Enhanced interaction with the Traditional Land Owners. Local Community and Environment. The Company has invested time and effort to engage with the Tjiwarl group to
assist with ground clearance, operational standards and improvement drill
contractor induction procedures.
During the year the company entered into a farm-in agreement with one of Shareholders, staff and Business Relationships. Liontown are to explore for lithium on our project. In addition, they bring a
Australia's leading lithium company's, Liontown Resources lot of intangible value to project by sharing geological and technical
information and their expertise in the region generally. Liontown will
undertake preliminary social and environmental programmes before commencement
of the exploration.
The Company will have access to all assay information developed.
Enhanced environmental monitoring Local Community and Environment. The Company continued to engage the services of a local ecology company to
assist with field audits, flora and fauna studies and monitoring and general
advice to meet regulatory requirements.
Successfully identified a potential transaction that fits within the Company's Business Relationships and Shareholders A suitable transaction has been identified and the Company is in the final
selection criteria. stages of negotiation having completed the due diligence. The transaction is
subject to completion risk.
Finally, to you, our shareholders, thank you for your trust and support. I
hope you stay safe and well and I look forward to meeting you face to face at
the next Company event.
This report was approved by the board on 30 October 2024 and signed on its
behalf.
Mark Stephenson
Executive Director
INDEPENDENT AUDITORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2024
Opinion
We have audited the financial statements of Mila Resources Plc (the 'company')
for the year ended 30 June 2024 which comprise the Statement of Comprehensive
Income, the Statement of Financial Position, the Statement of Cash Flows, the
Statement of Changes in Equity and notes to the financial statements,
including significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and UK-adopted
international accounting standards.
In our opinion, the financial statements:
• give a true and fair view of the state of the company's affairs as at
30 June 2024 and of its loss for the year then ended;
• have been properly prepared in accordance with UK-adopted
international accounting standards; and
• have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the company in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC's Ethical
Standard as applied to listed public interest entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the company's ability to continue to adopt the going concern
basis of accounting included reviewing and challenging cashflow forecasts
prepared by management covering the 12 months from the approval of these
financial statements and the related key inputs and assumptions, ascertaining
the company's current financial position and cash reserves, and discussing
their strategies regarding potential asset acquisitions which may be completed
in the period.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the company's ability to continue
as a going concern for a period of at least twelve months from when the
financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our application of materiality
The scope of our audit was influenced by our application of materiality. The
quantitative and qualitative thresholds for materiality determine the scope of
our audit and the nature, timing and extent of our audit procedures.
Materiality for the financial statements was set at £147,000 (2023:
£122,000) based upon 2% (2023: 2%) of gross assets . Materiality has been
based upon gross assets due to the significant asset balances in the Statement
of Financial Position.
Performance materiality and the triviality threshold for the financial
statements was set at £110,250 (2023: £91,500) and £7,350 (2023: £6,100)
respectively due our accumulated knowledge of the company.
We also agreed to report to the audit committee any other differences below
that threshold that we believe warranted reporting on qualitative grounds.
Our approach to the audit
In designing our audit, we determined materiality and assessed the risks of
material misstatement in the financial statements. In particular we looked at
areas involving significant accounting estimates and judgements by the
directors and considered future events that are inherently uncertain, such as
the potential impairment of exploration and evaluation assets. We also
addressed the risk of management override of internal controls, including
among other matters consideration of whether there was evidence of bias that
represented a risk of material misstatement due to fraud.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key Audit Matter How our scope addressed this matter
Valuation of intangible assets (note 8)
Our work in this area included but was not limited to:
As at 30 June 2024, the company's capitalised exploration and evaluation costs · Testing a sample of additions; vouching to supporting
which had a carrying value of £5,761,853 (Note 8). The associated costs documentation to ensure exploration and evaluation costs have been accurately
capitalised in the year ended 30 June 2024 totalled £155,983. capitalised in accordance with IFRS 6 and the company's accounting policies;
Given the carrying value of intangible assets as at 30 June 2024 and the · Confirming that the company has good title to the applicable
significant judgement required by the directors when assessing for impairment, exploration licences; and,
there is a risk that intangible assets may be impaired and thus materially
misstated. · Reviewing and challenging the directors' assessment of impairment
indicators, considering whether any of the impairment indicators as per IFRS 6
Additionally, due to the value of costs capitalised in the year and the have been met and whether any impairment adjustments are necessary.
judgement required in assessing whether those capitalised meet the recognition
criteria per IFRS 6 - Exploration for and Evaluation of Mineral Resources,
there is a risk that some costs capitalised in the year do not meet the
recognition criteria per IFRS 6 and therefore intangible assets are materially Key observations
misstated.
The exploration and evaluation costs in the year has been appropriately
capitalised in accordance with IFRS 6 and management's assessment of the lack
of indicators of impairment of the intangible assets was deemed to be
reasonable.
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors' remuneration report to be audited
has been properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
• the strategic report and the directors' report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its
environment obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept, or returns adequate
for our audit have not been received from branches not visited by us; or
• the financial statements and the part of the directors' remuneration
report to be audited are not in agreement with the accounting records and
returns; or
• certain disclosures of directors' remuneration specified by law are
not made; or
• we have not received all the information and explanations we require
for our audit.
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities, the
directors are responsible for the preparation of the financial statements and
for being satisfied that they give a true and fair view, and for such internal
control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the company or
to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
• We obtained an understanding of the company and the
sector in which it operates to identify laws and regulations that could
reasonably be expected to have a direct effect on the financial statements. We
obtained our understanding in this regard through discussions with management,
industry research and our cumulative audit knowledge and experience of the
sector.
• We determined the principal laws and regulations
relevant to the company in this regard to be those arising from UK Company
Law, rules applicable to issuers on the London Stock Exchange's Main Market,
including the Financial Conduct Authority Listing Rules and the Disclosure
Guidance and Transparency Rules.
• We designed our audit procedures to ensure the
audit team considered whether there were any indications of non-compliance by
the company with those laws and regulations. These procedures included, but
were not limited to:
o Discussing with management the company's compliance with laws and
regulations;
o Reviewing board minutes;
o Reviewing legal expenditure; and,
o Reviewing regulatory news announcements made throughout the reporting
period and post year-end.
• We also identified the risks of material
misstatement of the financial statements due to fraud. We considered, in
addition to the non-rebuttable presumption of a risk of fraud arising from
management override of controls, that there was potential for management bias
in relation to the carrying value of the exploration and evaluation asset and
whether any impairment indicators were present. We addressed these risks by
challenging the assumptions and judgements made by management when auditing
these significant accounting estimates (see the Key Audit Matters section of
our report).
• As in all of our audits, we addressed the risk of
fraud arising from management override of controls by performing audit
procedures which included, but were not limited to the testing of journals;
reviewing accounting estimates for evidence of bias; and evaluating the
business rationale of any significant transactions that are unusual or outside
the normal course of business
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor's report.
Other matters which we are required to address
We were appointed by the Board of Directors on 22 November 2018 to audit the
financial statements for the period ending 30 June 2019 and subsequent
financial periods. Our total uninterrupted period of engagement is 6 years,
covering the periods ending 30 June 2019 to 30 June 2024.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the company and we remain independent of the company in conducting
our audit.
Our audit opinion is consistent with the additional report to the audit
committee.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone, other than the company and the company's members as
a body, for our audit work, for this report, or for the opinions we have
formed.
Daniel Hutson (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
30 October 2024
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
Year ended Year ended
30 June 2024 30 June 2023
£
£
Notes
Administrative expenses (686,298) (549,487)
Operating Loss 3 (686,298) (549,487)
Interest receivable 21 -
Loss before taxation (686,277) (549,487)
Income tax expense 6 - -
Loss and total comprehensive income for the year attributable to the owners of (686,277) (549,487)
the company
Earnings per share (basic and diluted) attributable to the equity holders 7 (0.15) (0.17)
(pence)
The above results relate entirely to continuing activities.
The accompanying notes on pages 37 to 52 of the annual report form part of
these financial statements.
STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 30 JUNE 2024
Year ended Year ended
30 June 2024 30 June 2023
£
£
Notes
NON-CURRENT ASSETS
Exploration and evaluation assets 8 5,761,853 5,605,870
5,761,853 5,605,870
CURRENT ASSETS
Trade and other receivables 9 31,521 135,459
Cash and cash equivalents 10 1,417,710 448,063
1,449,231 583,522
TOTAL ASSETS 7,211,084 6,189,392
CURRENT LIABILITIES
Trade and other payables 11 259,277 312,938
TOTAL LIABILITIES 259,277 312,938
NET ASSETS 6,951,807 5,876,454
EQUITY
Share capital 12 5,419,653 3,368,177
Share premium 12 4,494,522 4,784,603
Share based payment reserve 13 539,329 539,093
Retained loss (3,501,697) (2,815,420)
TOTAL EQUITY 6,951,807 5,876,454
The accompanying notes on pages 37 to 52 of the annual report form part of
these financial statements.
These financial statements were approved by the Board of Directors on 30
October 2024 and were signed on its behalf by:
______________________________
Lee Daniels
Executive Director
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
12 months to 30 June 12 months to 30 June
2024 2023
£ £
Cash flows from operating activities
Loss for the year (686,277) (549,487)
Adjustments for:
Less: Interest Received (21) -
Foreign exchange Gains/(Losses) 1,823 -
Operating cashflow before working capital movements (684,475) (549,487)
Decrease/(Increase) in trade and other receivables 17,183 (112,891)
(Decrease)/Increase in trade and other payables (108,155) 102,178
Net cash outflow from operating activities (775,447) (560,200)
Cash flow from investing activities
Funds used for drilling and exploration (16,558) (907,245)
Interest received 21 -
Net cash outflow from investing activities (16,537) (907,245)
Cash flow from financing activities
Gross Proceeds from share issues 2,000,000 908,000
Proceeds from issue of Convertible Loan 51,475 -
Issue costs paid in cash / netted against proceeds (289,844) (88,576)
Net cash inflow from financing activities 1,761,631 819,424
Net Increase/(Decrease) in cash and cash equivalents 969,647 (648,021)
Cash and cash equivalents at beginning of the year 448,063 1,096,084
Cash and cash equivalents at end of the year 1,417,710 448,063
Major non-cash transactions
During the year the Company issued a convertible loan to Liontown on the as
part of the agreement for Liontown to explore for Lithium on the Company's
acreage. The par value of the Convertible Loan was $AUD 100,000 (£51,475).
Following the completion of the Company's £2m fundraise in November 2023, it
was agreed with Liontown Resources to amend the terms of the Convertible Loan
Note.
Following the amendment Liontown agreed that Mila will 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 exerciseable at a
price of 2 pence per share at any time until 29 January 2027.
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
Share Capital Share Premium Share Based Payment Reserve Retained Loss Total
£ £ £ £ £
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)
Transactions with Shareholders
Expired Warrants - - (4,720) 4,720 -
Capital Raising - Issue of shares 302,667 605,333 - - 908,000
Capital Raising - Issue costs - (88,576) - - (88,576)
Balance at 30 June 2023 3,368,178 4,784,603 539,093 (2,815,420) 5,876,454
Total comprehensive income for the year - - - (686,277) (686,277)
Transactions with Shareholders
Capital Raising - Issue of shares 2,000,000 - - - 2,000,000
Capital Raising - Issue costs - (289,845) - - (289,845)
Conversion of Convertible Loan 51,475 - - - 51,475
Share warrants expense - (236) 236 - -
Balance at 30 June 2024 5,419,653 4,494,522 539,329 (3,501,697) 6,951,807
The accompanying notes on pages 37 to 52 of the annual report form part of
these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
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
have 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.
2 ACCOUNTING POLICIES
2.1 Basis of preparation
The financial statements have been prepared on a going concern basis using the
historical cost convention and in accordance with the UK-Adopted International
Accounting Standards, and in accordance with the provisions of the Companies
Act 2006.
The Company's financial statements for the year ended 30 June 2024 were
authorised for issue by the Board of Directors on 30 October 2024 and were
signed on the Board's behalf by Mr L Daniels.
The Company's financial statements are presented in pounds Sterling and
presented to the nearest pound.
2.2 Business Combinations
Acquisitions of business are accounted for using the acquisition method. At
the acquisition date, the identifiable assets acquired, and the liabilities
assumed are recognised at their fair value.
Consideration is also measured at fair value at the acquisition date. This is
calculated as the sum of the fair values of assets transferred less the fair
value of the liabilities incurred by the Company.
Goodwill is measured as the excess of the sum of the consideration
transferred, the amount of any non‑controlling interests in the acquiree,
and the fair value of the acquirers previously held equity interest in the
acquiree (if any) over the net of the acquisition‑date amounts of the
identifiable assets acquired, and the liabilities assumed. If, after
reassessment, the net of the acquisition‑date amounts of the identifiable
assets acquired and liabilities assumed exceeds the sum of the consideration
transferred, the amount of any non‑controlling interests in the acquiree and
the fair value of the acquirers previously held interest in the acquiree (if
any), the excess is recognised immediately in profit or loss as a bargain
purchase gain.
Acquisition‑related costs are recognised in profit or loss as incurred.
2.3 Going concern
The Financial Statements have been prepared under the going concern
assumption, which presumes that the Company will be able to meet its
obligations as they fall due for at least the next twelve months from the date
of the signing of the Financial Statements.
The Company had a net cash inflow for the year of £969,647 (2023: outflow of
(£648,021) and at 30 June 2024 had cash and cash equivalents balance of
£1,417,710 (2022: £448,063).
An operating loss of £686,298 has been made and although the Company was in a
net current asset position at 30 June 2024 and on November 2023 the Company
raised £2m in new capital (before expenses) through a Placing of 200m New
Ordinary Shares of GBP0.01 each.
Notwithstanding the loss incurred during the year under review, the Directors
consider that it is appropriate to prepare the accounts on a going basis due
to the current cash balance, following the fund raise in the year and that the
Company has low levels of minimum spend to maintain the licences in good
standing. In effect, material exploration expenditure is discretionary.
This potential transaction outlined in the Chairman's Statement (Page 4) has
been considered as part of the going concern assessment and the Directors are
satisfied that should the proposed transaction complete in the next 12 months
the Company will be able to meet its obligations for the next 12 months. Hence
the accounts have been prepared on a going concern basis.
2.4 Standards, amendments and interpretations to existing standards
that are not yet effective and have not been early adopted by the Company
New standards, amendments to standards and interpretations:
No new standards, amendments or interpretations, effective for the first time
for the financial year beginning on or after 1 July 2023 have had a material
impact on the Company.
Standards issued but not yet effective:
At the date of authorisation of these financial statements, the following
standards and interpretations relevant to the Company and which have not been
applied in these financial statements, were in issue but were not yet
effective.
Standard Impact on initial application Effective date
IFRS 16 Lease liability in a sale and leaseback (amendment to IFRS 16) 1 January 2024
IAS 1 Amendments to IAS 1: Classification of Liabilities as Current or Non-current 1 January 2024
and Classification of Non-current Liabilities with covenants
IFRS 7 Statement of Cash Flows (Supplier Finance Arrangements) Financial Instruments 1 January 2024
(Supplier Finance Arrangements)
IAS21 The Effects of Changes in Foreign Exchange Rate (Lack of Exchangeability) 1 January 2024
The directors do not consider that these standards will impact the financial
statements of the Company.
2.5 Asset acquisition
Where an acquisition transaction constitutes the acquisition of an asset and
not a business, the consideration paid is allocated to assets and liabilities
acquired based on their relative fair values, with transaction costs
capitalised. No gain or loss is recognised.
Consideration paid in the form of equity instruments is measured by reference
to the fair value of the asset acquired. The fair value of the assets acquired
would be measured at the point control is obtained.
The Company recognises the fair value of contingent consideration in respect
to an asset acquisition, where it is probable that a liability has been
incurred, and the amount of that liability can be reasonably estimated. Such
contingent consideration is recognized at the time control of the underlying
asset is obtained, and such an amount is included in the initial measurement
of the cost of the acquired assets.
2.6 Foreign currency translation
The financial information is presented in Sterling which is the Company's
functional and presentational currency.
Transactions in currencies other than the functional currency are recognised
at the rates of exchange on the dates of the transactions. At each balance
sheet date, monetary assets and liabilities are retranslated at the rates
prevailing at the balance sheet date with differences recognised in the
Statement of comprehensive income in the period in which they arise.
2.7 Financial instruments
Initial recognition
A financial asset or financial liability is recognised in the statement of
financial position of the Company when it arises or when the Company becomes
part of the contractual terms of the financial instrument.
Classification
Financial assets at amortised cost
The Company measures financial assets at amortised cost if both of the
following conditions are met:
1. the asset is held within a business model whose objective is to
collect contractual cash flows; and
2. the contractual terms of the financial asset generating cash flows
at specified dates only pertain to capital and interest payments on the
balance of the initial capital.
Financial assets which are measured at amortised cost, are measured using the
Effective Interest Rate Method (EIR) and are subject to impairment. Gains and
losses are recognised in profit or loss when the asset is de-recognised,
modified or impaired.
Financial liabilities at amortised cost
Financial liabilities measured at amortised cost using the effective interest
rate method include current borrowings and trade and other payables that are
short term in nature. Financial liabilities are derecognised if the Company's
obligations specified in the contract expire or are discharged or cancelled.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the effective
interest rate ("EIR"). The EIR amortisation is included as finance costs in
profit or loss. Trade payables other payables are non-interest bearing and are
stated at amortised cost using the effective interest method.
The proceeds, received on issue of the Group's convertible debt, are allocated
into their liability and equity components. The amount initially attributed to
the debt component equals the discounted cash flows, using a market rate of
interest that would be payable on a similar debt instrument that does not
include an option to convert. Subsequently, the debt component is accounted
for as a financial liability, measured at amortised cost until extinguished on
conversion or maturity of the bond. The remainder of the proceeds is allocated
to the conversion option and is recognised within shareholders' equity, net of
income tax effects.
Derecognition
A financial asset is de-recognised when:
1. the rights to receive cash flows from the asset have expired, or
2. the Company has transferred its rights to receive cash flows from
the asset or has undertaken the commitment to fully pay the cash flows
received without significant delay to a third party under an arrangement and
has either (a) transferred substantially all the risks and the assets of the
asset or (b has neither transferred nor held substantially all the risks and
estimates of the asset but has transferred the control of the asset.
Impairment
The Company recognises a provision for impairment for expected credit losses
regarding all financial assets. Expected credit losses are based on the
balance between all the payable contractual cash flows and all discounted cash
flows that the Company expects to receive. Regarding trade receivables, the
Company applies the IFRS 9 simplified approach in order to calculate expected
credit losses. Therefore, at every reporting date, provision for losses
regarding a financial instrument is measured at an amount equal to the
expected credit losses over its lifetime without monitoring changes in credit
risk. To measure expected credit losses, trade receivables and contract assets
have been grouped based on shared risk characteristics.
Trade and other receivables
Trade and other receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest method
(except for short-term receivables where interest is immaterial) less
provisions for impairment.
Provisions for impairment of trade receivables are recognised for expected
lifetime credit losses using the simplified approach. Impairment reviews of
other receivables, including those due from related parties, use the general
approach whereby 12-month expected losses are provided for and lifetime credit
losses are only recognised where there has been a significant increase in
credit risk, by monitoring the creditworthiness of the other party.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and are subject to
an insignificant risk of changes in value.
Trade payables
Trade and other payables are initially measured at their fair value and are
subsequently measured at their amortised cost using the effective interest
rate method. This method allocates interest expense over the relevant period
by applying the effective interest rate to the carrying amount of the
liability.
2.8 Equity
Share capital is determined using the nominal value of shares that have been
issued.
The Share premium account includes any premiums received on the initial
issuing of the share capital. Any transaction costs associated with the
issuing of shares are deducted from the Share premium account, net of any
related income tax benefits.
Equity-settled share-based payments are credited to a share-based payment
reserve as a component of equity until related options or warrants are
exercised, lapsed or cancelled.
Retained losses includes all current and prior period results as disclosed in
the statement of comprehensive income.
2.9 Share-based payments
The Company records charges for share-based payments where options, warrants
or other similar instruments are issued in lieu of services provided to the
Company.
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.
2.10 Taxation
Tax currently payable is based on taxable profit for the period. Taxable
profit differs from profit as reported in the income statement because it
excludes items of income and expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
Company's liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised on differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax
bases used in the computation of taxable profit, and is accounted for using
the balance sheet liability method. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilised. Such
assets and liabilities are not recognised if the temporary difference arises
from initial recognition of goodwill or from the initial recognition (other
than in a business combination) of other assets and liabilities in a
transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Company is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled, or the asset realised. Deferred tax is
charged or credited to profit or loss, except when it relates to items charged
or credited directly to equity, in which case the deferred tax is also dealt
with in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Company intends to settle its current tax assets and
liabilities on a net basis.
2.11 Intangible assets - Exploration and evaluation expenditures
(E&E)
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 exploration
assets. Drilling costs are initially capitalised on a licence-by-licence basis
until the success or otherwise has been established. Should the prospect prove
to be commercially viable, the intangible assets are re-classified to
Property, Plant and Equipment and depreciated over the estimated useful
economic life. Where it is ultimately determined that the prospect is not
commercially viable the Intangible asset balance is taken as a charge to the
Statement of Comprehensive Income.
2.12 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.
2.13 Critical accounting judgements and key sources of uncertainty
In the process of applying the entity's accounting policies, management makes
estimates and assumptions that have an effect on the amounts recognised in the
financial information. Although these estimates are based on management's best
knowledge of current events and actions, actual results may ultimately differ
from those estimates.
The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements are as
follows:
Impairment of intangible assets
For details on the accounting policy for the impairment of exploration and
evaluation assets, see note 2.12 "Impairment of Exploration and Evaluation
Assets" in the "Notes to the Financial Statements" on page 42.
The first stage of the impairment process is the identification of an
indication of impairment. Such indications can include significant geological
or geophysical information which may negatively impact the existing assessment
of a project's potential for recoverability, significant reductions in
estimates of resources, significant falls in commodity prices, a significant
revision of the Company Strategy, operational issues which may require
significant capital expenditure, political or regulatory impacts and others.
This list is not exhaustive and management judgement is required to decide if
an indicator of impairment exists.
The Company regularly assesses the intangible assets for indicators of
impairment. For more information on impairment indicators see note 2.12
"Impairment of Exploration and Evaluation Assets" in the "Notes to the
Financial Statements" on page 42. Also see IFRS 6 'Exploration for and
Evaluation of Mineral Resources'
When an impairment indicator exists an impairment test is performed; the
recoverable amount of the asset, being the higher of the asset's fair value
less costs to sell and value in use, is compared to the asset's carrying
value. Any excess of the asset's carrying value over its recoverable amount is
expensed to the income statement.
2.14 Earnings per share
Basic earnings per share is calculated as profit or loss attributable to
equity holders of the Company for the period, adjusted to exclude any costs of
servicing equity (other than dividends), divided by the weighted average
number of ordinary shares, adjusted for any bonus element. The diluted
earnings per share is the same as the basic earnings per share for 2024
because; all warrants and options in issue were out of the money at the year
end and the Company reported a loss, hence including the additional dilution
would have resulted in a reduction of the loss per share.
2.15 Segmental reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for allocating
resources and assessing performance of the operating segments, has been
identified as the Board as a whole.
All operations and information are reviewed together therefore at present
there is only one reportable operating segment.
The Company's strategy is to act as a post discovery accelerator, where the
Company identifies target(s) that have already had an early-stage geological
discovery. To date the Company has identified and invested on one target,
namely the Kathleen Valley Project. Hence at the moment there is only one
reportable operating segment.
3. OPERATING LOSS
This is stated after charging:
2024 2023
£
£
Auditor's remuneration
Audit of the Company 42,500 40,000
Directors' remuneration 348,332 250,000
Stock exchange and regulatory expenses 34,069 10,536
Other expenses 261,397 248,951
Operating expenses 686,298 549,487
4. AUDITOR'S REMUNERATION
2024 2023
£
£
Fees payable to the Company's current auditor:
- audit of the Company's financial statements 42,500 40,000
42,500 40,000
5. DIRECTORS AND STAFF COSTS
During the year the only employees of the Company were the Directors and as
such key management personnel. Management remuneration, other benefits
supplied and social security costs to the Directors during the year was as
follows below. For Directors costs see the Directors remuneration report from
page 23.
2024 2023
£
£
Salaries 348,332 250,000
Social security costs 38,348 25,369
Share based payments - -
386,680 275,369
6. TAXATION
2024 2023
£
£
The charge/credit for the year is made up as follows:
Current tax - -
Deferred tax - -
Taxation charge / credit for the year - -
A reconciliation of the tax charge / credit appearing in the income statement
to the tax that would result from applying the standard rate of tax to the
results for the year is:
Loss per accounts (686,277) (549,487)
Tax credit at the standard rate of corporation tax in the UK of 19% (2023: (130,393) (104,403)
19%)
Impact of costs disallowed for tax purposes 579 2,809
Deferred tax in respect of temporary differences - -
Impact of unrelieved tax losses carried forward 129,814 101,594
- -
Estimated tax losses of £(3,334,575) (2023: £2,651,344) are available for
relief against future profits and a deferred tax asset of £633,615 (2023:
£503,756) has not been provided for in the accounts due to the uncertainty of
future profits.
Factors affecting the future tax charge
The standard rate of corporation tax in the UK for Companies is 19%.
Accordingly, the Company's effective tax rate for the period was 19% (2023:
19%).
Deferred taxation
No deferred tax asset has been recognised by the Company due to the
uncertainty of generating sufficient future profits and tax liability against
which to offset the tax losses. The estimated tax losses carried forward are
as shown above.
7. EARNINGS PER SHARE
The calculation of the earnings per share is based on the loss for the
financial period after taxation of £686,277 (2023: £549,487) and on the
weighted average of 467,643,821 (2023: 327,554,881) ordinary shares in issue
during the period.
The diluted profit per share is the same as the basic profit per share because
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
30 June 2024: Loss per share attributed to ordinary shareholders (686,277) 467,643,821 (0.15)
30 June 2023: Loss per share attributed to ordinary shareholders (549,487) 327,554,881 (0.17)
8. EXPLORATION AND EVALUATION ASSETS
At 30 At 30
June 2024 June 2023
£ £
Opening balance 5,605,870 4,698,625
Exploration costs capitalised in the year 155,983 1,092,201
Other movements - (184,956)
Net book value 5,761,853 5,605,870
In November 2021, the Company acquired a 30% interest in the Kathleen Valley
(Gold) Project for £2,812,500. The consideration was £300,000 in cash and
the balance in new Mila shares. Transaction costs of £478,017 have also been
capitalised. The principal assets are leases with rights to exploration of
those leases in Western Australia. At the year end the capitalised
exploration and evaluation assets totalled £5.8m (2023: £5.6m). All
Exploration costs capitalised in the year relate 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 year.
9. TRADE AND OTHER RECEIVABLES
2024 2023
£
£
Other receivables 11,332 123,297
Prepayments 20,189 12,162
31,521 135,459
The Directors consider that the carrying value amount of trade and other
receivables approximates to their fair value.
10. CASH AND CASH EQUIVALENTS
2024 2023
£
£
Cash at bank 1,417,710 448,063
1,417,710 448,063
Cash at bank comprises balances held by the Company in current bank accounts.
The carrying value of these approximates to their fair value.
11. TRADE AND OTHER PAYABLES
2024 2023
£
£
Trade payables 12,106 55,457
Accruals and other payables 247,171 257,481
259,277 312,938
12. SHARE CAPITAL / SHARE PREMIUM
Number of shares on issue Share capital £ Share premium £ Total £
Balance as at 30 June 2022 306,551,057 3,065,511 4,267,846 7,333,357
Capital Raising 30,266,651 302,667 516,757 819,424
Balance as at 30 June 2023 336,817,708 3,368,178 4,784,603 8,152,781
Capital Raising 200,000,000 2,000,000 - 2,000,000
Issue Costs - - (289,845) (289,845)
Conversion of Convertible Loan 5,147,475 51,475 - 51,475
Share warrants expense - - (236) (236)
Balance as at 30 June 2024 541,965,183 5,419,653 4,494,522 9,914,175
In November 2023, the Company completed a placing of 200m new fully paid
ordinary shares with a nominal value of £0.01, raising gross proceeds of £2m
before expenses.
The Directors held the following warrants at the beginning and end of the
year:
Director At 30 June 2023((1)) Granted during the year At 30 June Exercise price Earliest date of exercise Last date of exercise
2024
M. Stephenson 7,500,000 - 7,500,000 £0.024 22 Nov 2021 31 Dec 2026
L. Daniels 7,500,000 - 7,500,000 £0.024 22 Nov 2021 31 Dec 2026
N. Hutchison 5,000,000 - 5,000,000 £0.024 22 Nov 2021 31 Dec 2026
L. Mair 2,000,000 - 2,000,000 £0.024 22 Nov 2021 31 Dec 2026
22,000,000 - 22,000,000
(1) as outlined in the prospectus dated 29 October 2021.
The Directors held the following EMI Options at the beginning and end of the
year:
Director At 30 June 2023 Granted during the year At 30 June Exercise price Earliest date of exercise Last date of exercise
2024
M. Stephenson 3,500,000 - 3,500,000 £0.024 10 Dec 2021 10 Dec 2026
L. Daniels 2,500,000 - 2,500,000 £0.024 10 Dec 2021 10 Dec 2026
6,000,000 - 6,000,000
13. SHARE BASED PAYMENT RESERVE AND SHARE BASED PAYMENTS
SHARE BASED PAYMENT RESERVE
2024 2023
£
£
At 1 July 539,093 543,813
Warrants expense 236 -
At 30 June 539,239 539,093
Warrants and Options in Issue Number of Options in Issue Number of Warrants in Issue Weighted average exercise price Expiry date
Balance 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
Investor Warrants - Delayed until Nov 2023 prospectus, relating to Oct/Nov - 30,266,650 £0.048 14 Nov 2025
2022 capital raise.
Broker Warrants - Delayed until Nov 2023 prospectus, relating to Oct/Nov 2022 - 717,332 £0.03 14 Nov 2025
capital raise ((1))
Investor Warrants - relating to £2m capital raise in Nov 2023. - 200,000,000 £0.02 9 Nov 2025
Investor Warrants - relating to conversion of the Liontown Convertible Loan - 5,147,475 £0.02 29 Jan 2027
At 30 June 2024 6,000,000 478,175,568 £0.034
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 717,332 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 8 November 2023.
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 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.
The market price of the shares at year end was 0.575 pence per share.
During the year, the minimum and maximum prices were 0.525 pence and 1.65
pence per share respectively.
SHARE BASED PAYMENTS - WARRANTS
There were no share based payments at 30 June 2024 and 30 June 2023.
14. CAPITAL COMMITMENTS
There were no capital commitments at 30 June 2024 and 30 June 2023.
15. CONTINGENT LIABILITIES
There were no contingent liabilities at 30 June 2024 and 30 June 2023.
16. COMMITMENTS UNDER LEASES
There were no commitments under operating leases at 30 June 2024 and 30 June
2023.
17. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Company's financial instruments comprise primarily cash and various items
such as trade debtors and trade payables which arise directly from operations.
The main purpose of these financial instruments is to provide working capital
for the Company's operations. The Company does not utilise complex financial
instruments or hedging mechanisms.
Financial assets by category
2024 2023
£
£
Current Assets:
Cash and cash equivalents 1,417,710 448,063
Trade and other receivables 11,332 123,297
Categorised as financial assets at amortised cost 1,429,042 571,360
Financial liabilities by category
2024 2023
£
£
Current Liabilities:
Trade and other payables 259,277 312,938
Categorised as financial liabilities measured at amortised cost 259,277 312,938
All amounts are short term and payable in 0 to 6 months.
Credit risk
The maximum exposure to credit risk at the reporting date by class of
financial asset was:
2024 2023
£
£
Trade and other receivables 11,332 123,297
Cash and cash equivalents 1,417,710 448,063
1,429,042 571,360
Capital management
The Company considers its capital to be equal to the sum of its total equity.
The Company monitors its capital using a number of key performance indicators
including cash flow projections, working capital ratios, the cost to achieve
development milestones and potential revenue from partnerships and ongoing
licensing activities.
The Company's objective when managing its capital is to ensure it obtains
sufficient funding for continuing as a going concern. The Company funds its
capital requirements through the issue of new shares to investors.
Interest rate risk
The maximum exposure to interest rate risk at the reporting date by class of
financial asset was:
2024 2023
£
£
Bank balances 1,417,710 448,063
The Company is not financially dependent on the income earned on these
resources and therefore the risk of interest rate fluctuations is not
significant to the business and the Directors have not performed a detailed
sensitivity analysis.
All deposits are placed with main clearing banks, with 'A' ratings, to
restrict both credit risk and liquidity risk. The deposits are placed for the
short term, between one and three months, to provide flexibility and access to
the funds.
Credit and liquidity risk
Credit risk is managed on a Company basis. Funds are deposited with financial
institutions with a credit rating equivalent to, or above, the main UK
clearing banks. The Company's liquid resources are invested having regard to
the timing of payment to be made in the ordinary course of the Company's
activities. All financial liabilities are payable in the short term (between 0
to 3 months) and the Company maintains adequate bank balances to meet those
liabilities. A liquidity analysis is not therefore considered material to
disclose.
Currency risk
The Company operates in a global market with income and costs possibly arising
in a number of currencies. The Company's strategic aim of acquiring asset(s)
or business(es) acting as a post discovery accelerator, is not limited to any
specific geo-political area or jurisdiction. Currently the majority of the
Company's overhead costs are incurred in £GBP. The Kathleen Valley Project is
located in Western Australia, and hence the majority of the exploration and
evaluation costs relating to this project are incurred in $AUD. The Company
has not hedged against any currency depreciation but continues to keep the
matter under review.
18. RELATED PARTY TRANSACTIONS
Key management personnel compensation
The Directors are considered to be key management personnel. Detailed
remuneration disclosures are provided in the remuneration report on pages 23 -
24.
There were no other related party transactions.
19. EVENTS SUBESQUENT TO YEAR END
No subsequent events have occurred since the year end.
20. CONTROL
In the opinion of the Directors there is no single ultimate controlling party.
**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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