Last checked at 31 Oct 2023 17:06
The following amendment has been made to the Final Results announcement released on 31 October 2023 at 2:00 p.m. under RNS No 9036R.
The Independent Auditors' Report has been included.
All other details remain unchanged.
The full amended text is shown below.
Mila Resources Plc / Index: LSE / Epic: MILA / Sector: Natural Resources
31 October 2023
Mila Resources Plc
('Mila' or the 'Company')
Final Results:
Audited Accounts for the Year Ended 30 June 2023
Mila Resources Plc (LSE:MILA), the post-discovery gold exploration accelerator, is pleased to announce its final results for the year ended 30 June 2023.
Highlights
· Significant progress towards achieving strategy of becoming a post discovery exploration accelerator
· Advanced the geological model for gold at the Company's first asset, the Kathleen Valley Project
· Entered into JV arrangement with leading ASX lithium company, Liontown Resources, to begin exploration of lithium at Kathleen Valley Project
· Raised gross proceeds of £2m post year end to support work at Kathleen Valley and assess additional development opportunities
· Bolstered technical team post year end with appointment of Alastair Goodship, an exploration geologist with significant experience in leading discovery-focussed exploration teams in a diverse range of environments and jurisdictions globally
· Cash position of £448,063 as at 30 June 2023
· Loss for the financial year ended 30 June 2023 of £549,487 (2022: £1,011,445).
To view the audited report and accounts document, click here: https://rb.gy/sshum.Statement from the Board
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 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.
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
Independent Auditors' Report to the Members of Mila Resources PLC
For the year Ended 30 June 2023
Opinion
We have audited the financial statements of Mila Resources Plc (the 'company') for the year ended 30 June 2023 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 2023 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.
Material uncertainty related to going concern
We draw attention to note 2.3 in the financial statements, which indicates that the company incurred a loss for the year of £549,487 during the year ended 30 June 2023 and that the company is dependent on raising further finance in order to fund its forecasted expenditures 12 months from the anticipate date of sign off. As stated in note 2.3, these events or conditions, along with the other matters as set forth in note 2.3, indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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 assumptions and inputs, ascertaining the company's current financial position and cash reserves, checking the mathematical accuracy of the forecasts and discussing their strategies regarding future fund raises.
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 £122,000 (2022: £116,000) based upon 2% of gross assets (2022: 2% of gross assets). Materiality has been based upon gross assets due to the significant asset balances in the Statement of Financial Position, including the exploration and evaluation asset.
Performance materiality and the triviality threshold for the financial statements was set at £91,500 (2022: £87,000) and £6,100 (2022: £5,800) respectively due our accumulated knowledge of the company.
We also agreed to report to the Audit Committee any other audit misstatements, below the triviality threshold established above, which 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 recoverability of intangible 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. In addition to the matter described in the Material uncertainty related to going concern section we have determined the matters described below to be the key audit matters to be communicated in our report.
Key Audit Matter | How our scope addressed this matter |
Valuation of intangible assets (note 11) |
|
As at 30 June 2023, the company's capitalised exploration and evaluation costs had a carrying value of £5,606 (2022: £4,699k). The associated costs capitalised in the year ended 30 June 2023 totalled £1,092k (2022: £1,408k). Given the carrying value of intangible assets as at 30 June 2023 and the significant judgement required by the directors when assessing for impairment, there is a risk that intangible assets may be impaired and thus materially misstated. Additionally, due to the value of costs capitalised in the year and the judgement required in assessing whether those capitalised meet the recognition criteria per IFRS 6, there is a risk that some costs capitalised in the year do not meet the recognition criteria per IFRS 6 Exploration for and Evaluation of Mineral Resources and therefore intangible assets are materially misstated.
| Our work in this area included but was not limited to: · Testing a sample of additions and vouching them to supporting documentation to ensure costs have been accurately capitalised in accordance with IFRS 6 and the company's accounting policies; · Obtaining confirmation that the company has good title to the applicable exploration licences, including new licences obtained during the year; and · Obtaining the directors' review of indicators of impairment and considering whether any of the impairment indicators as per IFRS 6 have been met and if so whether any impairment was deemed necessary. · Reviewing and challenging management's assessment that no impairment indicators have been met. Key observations The exploration expenditure in the year has been appropriately capitalised in accordance with IFRS 6 and management's assessment of the recoverability 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 Standard List 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 Discussions with management regarding compliance with laws and regulations by the company;
o Review of board minutes; and
o Review of Regulatory News Service 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 valuation of the intangible assets 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 5 years, covering the periods ending 30 June 2019 to 30 June 2023.
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) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
31 October 2023
Statements of Comprehensive Income
For the year Ended 30 June 2023
Notes | Year ended 30 June 2023£ |
| Year ended 30 June 2022£ | |
|
|
|
| |
|
| |||
Administrative expenses | (549,487) | (518,213) | ||
Share warrant and options expense | 3 | - | (493,232) | |
Loss on ordinary activities before taxation | (549,487) |
| (1,011,445) | |
Income tax expense | 6 | - | - | |
Loss and total comprehensive income for the year attributable to the owners of the company | (549,487) | (1,011,445) | ||
|
| |||
Earnings per share (basic and diluted) attributable to the equity holders (pence) | 7 | (0.17) | (0.52) |
Statements of Financial Position
For the year Ended 30 June 2023
Notes | Year ended 30 June 2023£ |
| Year ended 30 June 2022£ | |
|
|
|
| |
NON-CURRENT ASSETS |
| |||
Exploration and evaluation assets | 8 | 5,605,870 | 4,698,625 | |
| 5,605,870 |
| 4,698,625 | |
CURRENT ASSETS |
| |||
Trade and other receivables | 9 | 135,459 | 22,568 | |
Cash and cash equivalents | 10 | 448,063 | 1,096,084 | |
| 583,522 | 1,118,652 | ||
| ||||
TOTAL ASSETS | 6,189,392 |
| 5,817,277 | |
CURRENT LIABILITIES | ||||
Trade and other payables | 11 | 312,938 | 210,760 | |
TOTAL LIABILITIES | 312,938 | 210,760 | ||
NET ASSETS | 5,876,454 |
| 5,606,517 | |
EQUITY | ||||
Share capital | 12 | 3,368,177 | 3,065,511 | |
Share premium | 12 | 4,784,603 | 4,267,846 | |
Share based payment reserve | 13 | 539,093 | 543,813 | |
Retained loss | (2,815,420) | (2,270,653) | ||
| ||||
TOTAL EQUITY | 5,876,454 |
| 5,606,517 |
Statements of Cash Flow
For the year Ended 30 June 2023
12 months to 30 June | 12 months to 30 June | |||
2023 | 2022 | |||
£ | £ | |||
Cash flows from operating activities | ||||
Loss for the year | (549,487) | (1,011,445) | ||
Adjustments for: | ||||
Warrants / Options expense (non-cash) | - | 493,232 | ||
Operating cashflow before working capital movements | (549,487) | (518,213) | ||
(Increase)/Decrease in trade and other receivables | (112,891) | 1,616 | ||
Increase in trade and other payables | 102,178 | 4,427 | ||
Shares issued for services | - | 30,000 | ||
Interest expense | - | 3,801 | ||
Net cash outflow from operating activities | (560,200) | (478,369) | ||
Cash flow from investing activities | ||||
Acquisition of Kathleen Valley - cash component | - | (300,000) | ||
Acquisition costs | - | (336,732) | ||
Funds used for drilling and exploration (net of GST recovered) | (907,245) | (1,408,108) | ||
Net cash outflow from investing activities | (907,245) | (2,044,840) | ||
Cash flow from financing activities | ||||
Proceeds from share issues | 908,000 | 3,358,740 | ||
Issue costs paid in cash | (88,576) | (69,075) | ||
Net cash inflow from financing activities | 819,424 | 3,289,665 | ||
Net (Decrease)/Increase in cash and cash equivalents | (648,021) | 766,456 | ||
Cash and cash equivalents at beginning of the year | 1,096,084 | 329,628 | ||
Cash and cash equivalents at end of the year | 448,063 | 1,096,084 |
Statements of Changes in Equity
For the year Ended 30 June 2023
Share Capital | Share Premium | Share Based Payment Reserve | Retained Loss |
| Total | ||
| £ | £ | £ | £ |
| £ | |
| |||||||
Balance at 30 June 2021 |
| 232,000 | 849,300 | 4,720 | (1,259,208) |
| (173,188) |
Total comprehensive income for the year |
| - | - | - | (1,011,445) | (1,011,445) | |
Capital Raising - Issue of shares |
| 1,458,333 | 2,041,667 | - | - | 3,500,000 | |
Capital Raising - Issue of shares in lieu of fees |
| 59,792 | 83,708 | - | - | 143,500 | |
Capital Raising - Issue Costs |
| - | (221,135) | - | - | (221,135) | |
Acquisition of Kathleen Valley |
| 835,432 | 1,169,605 | - | - | 2,005,037 | |
Conversion of convertible loan notes |
| 477,754 | 382,203 | - | - | 859,957 | |
Conversion of warrants |
| 2,200 | 8,360 | - | - | 10,560 | |
Share warrants and options expense |
| - | (45,861) | 539,093 | - | 493,232 | |
Balance at 30 June 2022 |
| 3,065,511 | 4,267,846 | 543,813 | (2,270,653) |
| 5,606,517 |
Total comprehensive income for the 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 |
Notes to the Financial Statements
For the year Ended 30 June 2023
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 2023 were authorised for issue by the Board of Directors on 31 October 2023 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 outflow for the year of £648,021 (2022: inflow of £766,456) and at 30 June 2023 had cash and cash equivalents balance of £448,063 (2022: £1,096,084).
An operating loss of £549,487 has been made and although the Company was in a net current asset position at 30 June 2023 and has raised £908,000 (before expenses).
Post year end, the Company announced (2 October 2023) that it raised £2m (before expenses) through a Placing of 200m New Ordinary Shares of GBP0.01 each. This placing is subject to the approval by shareholders at a general meeting to be held on 8 November 2023.
The Company's current cash reserves are less than the forecasted expenditure over the 12 months from the date of this report and therefore further funding needs to be received in this period to enable the Company to continue to meet its obligations as they fall due. Due to the aforementioned £2m raise, which is subject to approval by shareholders at a general meeting being obtained, management are confident that the required funding will be obtained. For this reason, the Directors continue to adopt the going concern basis in preparing the financial statements. However, the Directors acknowledge that the receipt of the funding is contingent on the approval by shareholders at a general meeting and therefore a material uncertainty exists which may cause significant doubt about the ability to continue to trade as a going concern.
The auditors have made reference to going concern by way of a material uncertainty within the financial statements.
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 January 2022 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 |
IAS 1 | Amendments - presentation and classification of liabilities as current or non current | TBC |
IAS 8 | Amendments - Definition of accounting policies | 01 January 2023 |
IAS 1 | Amendments - Disclosure of accounting policies | 01 January 2023 |
IFRS 17 | Insurance Contracts | 01 January 2023 |
IFRS 17 (amendments) | Insurance contracts | 01 January 2023 |
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.
The Company recognises contingent consideration in the form of cash, and contingent consideration in the form of equity instruments. Contingent consideration in the form of cash is recognised as a liability, and contingent consideration in the form of equity instruments is recognised in the contingent share reserve.
For contingent cash consideration milestones, the Company estimates a probability for the likelihood of completion to estimate the total liability for the expected variable payments. The probability estimated for the likelihood of completion is considered at each reporting period. Movements in the fair value of contingent cash consideration payable is capitalised as part of the asset.
For contingent share consideration milestones, the Company estimates a probability for the likelihood of completion to estimate the total contingent share consideration payable. The probability estimated for the likelihood of completion is not reassessed in subsequent reporting periods.
Deferred tax is not recognised upon an asset acquisition.
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.
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 initially recognised at fair value when related amounts are invoiced then carried at this amount less any allowances for doubtful debts or provision made for impairment of these receivables.
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
These financial liabilities are all non-interest bearing and are initially recognised at the fair value of the consideration payable.
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 or lapse.
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.
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) Development expenditure
The Company applies the successful efforts method of accounting, having regard to the requirements of IFRS 6 'Exploration for and Evaluation of Mineral Resources'. Costs incurred prior to obtaining the legal rights to explore an area are expensed immediately to the Statement of Comprehensive Income.
Expenditure incurred on the acquisition of a licence interest is initially capitalised within intangible assets on a licence by licence basis. Costs are held, unamortised, until such time as the exploration phase of the field area is complete or commercial reserves have been discovered. The cost of the licence is subsequently transferred into property, plant and equipment and depreciated over its estimated useful economic life.
Exploration expenditure incurred in the process of determining exploration targets is capitalised initially within intangible assets as drilling costs. Drilling costs are initially capitalised on a licence by licence basis until the success or otherwise has been established. Drilling costs are written off unless the results indicate that reserves exist and there is a reasonable prospect that these reserves are commercially viable. Drilling costs are subsequently transferred into 'Drilling expenditure' within property, plant and equipment and depreciated over their estimated useful economic life.
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 40.
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 40. 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 profit per share is the same as the basic profit per share for 2023 because, although certain warrants and options in issue were in the money as at the year end, 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:
| 2023£ |
| 2022£ | |
|
|
|
| |
Auditor's remuneration | ||||
Audit of the Company | 40,000 | 30,000 | ||
Other services | - | 2,000 | ||
Directors' remuneration | 250,000 | 266,585 | ||
Stock exchange and regulatory expenses | 10,536 | 47,486 | ||
Share warrant and options expense (1) | - | 493,232 | ||
Other expenses | 248,951 | 172,142 | ||
Operating expenses | 549,487 | 1,011,445 | ||
|
|
(1) This is a non-cash accounting expense for the issue of share warrants and options.
4. AUDITOR'S REMUNERATION
| 2023£ |
| 2022£ | |
|
|
|
| |
Fees payable to the Company's current auditor: - audit of the Company's financial statements - other services |
40,000 - 40,000
|
30,000 2,000 32,000
|
5. DIRECTORS AND STAFF COSTS
During the year the only staff 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 21.
| 2023£ |
| 2022£ | |
|
|
|
| |
Salaries Social security costs Share based payments | 250,000 25,369 - | 266,585 29,016 59,658 | ||
| 275,369 | 355,259 |
6. TAXATION
| 2023£ |
| 2022£ | |
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 | (549,487) | (1,011,445) | ||
Tax credit at the standard rate of corporation tax in the UK of 19% (2022: 19%) | (104,403) | (192,175) | ||
Impact of costs disallowed for tax purposes | 2,809 | 17,919 | ||
Deferred tax in respect of temporary differences | - | - | ||
Impact of unrelieved tax losses carried forward | 101,594 | 174,256 | ||
- | - | |||
Estimated tax losses of £2,651,344 (2022: £2,116,641) are available for relief against future profits and a deferred tax asset of £503,756 (2022: £402,162) 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 making less than £250,000 annual profit is 19%. Accordingly, the Company's effective tax rate for the period was 19% (2022: 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. Note 6 above sets out the estimated tax losses carried forward.
7. EARNINGS PER SHARE
The calculation of the earnings per share is based on the loss for the financial period after taxation of £549,487 (2022: £1,011,445) and on the weighted average of 327,554,881 (2022: 193,873,021 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 unit | Per-share amount pence | |
30 June 2023: Loss per share attributed to ordinary shareholders | (549,487) | 327,554,881 | (0.17) |
30 June 2022: Loss per share attributed to ordinary shareholders | (1,011,445) | 193,873,021 | (0.52) |
8. EXPLORATION AND EVALUATION ASSETS
At 30 June 2023 | At 30 June 2022 | |
£ | £ | |
Opening balance | 4,698,625 | - |
Cost of acquisition including transaction costs | - | 3,290,517 |
Exploration costs capitalised in the year | 1,092,201 | 1,408,108 |
Other movements | (184,956) | - |
Net book value | 5,605,870 | 4,698,625 |
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 £5.6m (2022: £4.7m). All Exploration costs capitalised in the year relate to the Kathleen Valley Project.
During the year the Company was able to register for Australian "GST" (Goods and Services Tax). Unfortunately, registration was a long drawn out process, however, as this has now been completed the Company can recover the GST paid. This has been show in "Other movement" in the table above.
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
| 2023£ |
| 2022£ | |
|
|
|
| |
Prepayments and other receivables | 135,459 | 22,568 | ||
135,459 | 22,568 |
The Directors consider that the carrying value amount of trade and other receivables approximates to their fair value.
10. CASH AND CASH EQUIVALENTS
| 2023£ |
| 2022£ | |
|
|
|
| |
Cash at bank | 448,063 | 1,096,084 | ||
448,063 | 1,096,084 |
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
| 2023£ |
| 2022£ | |
|
|
|
| |
Trade payables | 55,457 | 36,722 | ||
Accruals and other payables | 257,481 | 174,038 | ||
312,938 | 210,760 |
12. SHARE CAPITAL / SHARE PREMIUM
|
| Number of shares on issue | Share capital £ | Share premium £ | Total £ |
|
|
|
| ||
|
|
|
| ||
Balance as at 30 June 2021 | 23,200,000 | 232,000 | 849,300 | 1,081,300 | |
Capital Raising |
| 151,812,495 | 1,518,125 | 1,904,240 | 3,422,365 |
Acquisition of Kathleen Valley |
| 83,543,197 | 835,432 | 1,169,605 | 2,005,037 |
Conversion of convertible loan notes |
| 47,775,365 | 477,754 | 382,203 | 859,957 |
Conversion of warrants |
| 220,000 | 2,200 | 8,360 | 10,560 |
Warrants issued in lieu of share issue costs |
| - | - | (45,861) | (45,861) |
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 |
|
The Company issued a total of 30,266,651 new fully paid ordinary shares during the year.
In October and November 2022, the Company completed a placing of 30,266,651 new fully paid ordinary shares with a nominal value of £0.01, raising gross proceeds of £908,000 before expenses.
The Directors held the following warrants at the beginning and end of the year:
Director | At 30 June 2022(1) | Granted during the year | At 30 June 2023 | Exercise price | Earliest date of exercise | Last date of exercise |
| ||||
| |||||||||||
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 |
| |||||||||
(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 2022 | Granted during the year | At 30 June 2023 | Exercise price | Earliest date of exercise | Last date of exercise |
| ||||
| |||||||||||
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
| 2023£ |
| 2022£ | |
At 1 July | 543,813 | 4,720 | ||
Issue of Warrants per prospectus | - | 479,435 | ||
Issue of EMI Options per prospectus | - |
| 59,658 | |
Expired Warrants | (4,720) | 543,813 | ||
At 30 June | 539,093 | 543,813 |
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 2021 | - | 11,425,000 | £0.048 | 31 Dec 2022 |
Warrants issued during the year - per the prospectus | - | 242,264,111 | £0.0432 | 31 Dec 2026 |
EMI options scheme issued during the year - per the prospectus | 6,000,000 | - | £0.024 | 10 Dec 2026 |
Warrants exercised during the year | - | (220,000) | ||
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 | |
During the year the Company raised £908,000 (before expenses) through a Placing of 30,266,651 New Ordinary Shares of GBP0.01 each ("Placing Shares") at a price of 3 pence per Placing Share (the "Placing"). Investors in the Placing will also receive one 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 has also issued 524,000 broker warrants that are exercisable at 3p for a period of 3 years. Both the investor warrants and broker warrants are conditional on shareholder approval to increase the Company's share authorities. At the time of writing, the Prospectus has been issued and the shareholder approval is being sought at a general meeting to be held on 8 November 2023.
The market price of the shares at year end was 1.2 pence per share.
During the year, the minimum and maximum prices were 0.825 pence and 4.25 pence per share respectively.
SHARE BASED PAYMENTS - WARRANTS AND OPTIONS
No Warrants or Options were issued during the period.
14. CAPITAL COMMITMENTS
There were no capital commitments at 30 June 2022 and 30 June 2023.
15. CONTINGENT LIABILITIES
There were no contingent liabilities at 30 June 2022 and 30 June 2023.
16. COMMITMENTS UNDER LEASES
There were no commitments under operating leases at 30 June 2023 and 30 June 2022.
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
| 2023£ |
| 2022£ | |
Current Assets: |
| |||
Cash and cash equivalents | 448,063 | 1,096,084 | ||
Trade and other receivables |
| 135,459 |
| 11,520 |
Categorised as financial assets at amortised cost | 583,522 | 1,107,604 |
Financial liabilities by category
| 2023£ |
| 2022£ | |
Current Liabilities: |
| |||
Trade and other payables | 312,938 | 210,760 | ||
|
|
|
| |
Categorised as financial liabilities measured at amortised cost | 312,938 | 210,760 |
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:
| 2023£ |
| 2022£ | |
Trade and other receivables | 123,297 | 11,520 | ||
Cash and cash equivalents | 448,063 | 1,096,084 | ||
571,360 | 1,107,604 |
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:
| 2023£ |
| 2022£ | |
Bank balances | 448,063 | 1,096,084 |
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 21 - 23.
There were no other related party transactions.
19. EVENTS SUBESQUENT TO YEAR END
Fund Raise - post year end
Post year end, the Company announced on the 2nd of October 2023 that it 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 (the "Placing"). Investors in the Placing will also receive one two year warrant per Placing Share to subscribe for one new ordinary share at a cost of 2p per share ("Investor Warrants").
The Placing has not been underwritten and is conditional on approval by Shareholders of resolutions, inter alia, granting authority for the Directors to issue ordinary shares at a General Meeting ("GM") to be held on 8 November 2023 at 11.00 a.m. at 13th Floor, 88 Wood Street, London EC2V 7DA.
Appointment of Exploration Geologist
The Company appointed Alastair Goodship, an exploration geologist with over 14 years of industry experience of leading discovery-focussed exploration teams in a diverse range of environments and jurisdictions globally. Alastair has worked across the exploration spectrum from greenfield and brownfield exploration to resource definition and feasibility studies. Alistair most recently worked as a Senior Exploration Consultant with RSCMME Ltd and technical advisor to Trinity Metals Group.
Appointment of Joint Broker
Shard Capital Partners LLP was appointed as joint broker, alongside SI Capital.
Option Agreement with Liontown Resources to Explore for Lithium
Post year end the Company announced that, together with the other owners of the Kathleen Valley licence ("Licence"), it had entered into an option agreement with LBM (Aust) Pty Limited, a subsidiary of Liontown Resources Limited (ASX: LTR) ('Liontown'), granting Liontown the option to explore for lithium on the Kathleen Valley Licence Area in Western Australia ('KV Project').
Liontown to invest AUD$100,000 in Mila through a convertible loan
This is based on the following principal terms:
1. the Notes are repayable by conversion into Mila Shares at a price to be determined on Mila's next fundraise;
2. Mila may repay the Notes without penalty after 31 December 2023;
3. Liontown may redeem the Notes following the occurrence of usual events of default or if the Notes have not been converted into Mila Shares by 30 November 2023; and
4. the Notes carry no interest except on the occurrence an event of default, when interest at 10% per annum will become payable.
Amendments to Kathleen Valley Earn-In Agreement
Post year end the Company announced that it has entered into a deed of amendment with Trans Pacific Energy Group Pty Ltd ("TPE") and New Generation Minerals Limited ("NGM"), the other owners of the Licence, making certain amendments to the Earn-In Agreement between them dated 29 October 2021 ("Earn-In Agreement") as part of the re-listing of the Company on the LSE in November 2021.
Summary of key amendments
? increase its Participating Interest in the Licence from its current 30% to 80% on the issue of the Stage Two Consideration Shares;
? increase its ownership of the current Lithium rights from 50% to 80% on the issue of the Stage Three Consideration Shares, representing 16% of the Lithium Rights following full exercise by Liontown of its option; and
? at any time when the Parties are not conducting a physical drilling campaign, reduce Mila's liability for expenditure to maintain the Licence to its Participating Interest (currently 30%).
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 Mila Resources Plc
| info@milaresources.com |
Jonathan Evans Tavira Financial Limited
| +44 (0) 20 7100 5100 |
Nick Emerson SI Capital
| +44 (0) 20 3143 0600 |
Susie Geliher St Brides Partners Limited | +44 (0) 20 7236 1177 |