Final Results

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).

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

Statements of Comprehensive Income

For the year Ended 30 June 2023

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.

2 ACCOUNTING POLICIES

2.1 Basis of preparation

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.

2.2 Business Combinations

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 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.

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:

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

2.7 Financial instruments

Initial recognition

Classification

Financial assets at amortised cost

Financial liabilities at amortised cost

Derecognition

A financial asset is de-recognised when:

• the rights to receive cash flows from the asset have expired, or

Impairment

Trade and other receivables

Cash and cash equivalents

Trade payables

2.8 Equity

Share capital is determined using the nominal value of shares that have been issued.

2.9 Share-based payments

The Company records charges for share-based payments.

2.10 Taxation

2.11 Intangible assets - Exploration and evaluation expenditures (E&E) Development expenditure

2.12 Impairment of Exploration and Evaluation assets

2.13 Critical accounting judgements and key sources of uncertainty

Impairment of intangible assets

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

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.

OPERATING LOSS

This is stated after charging:

• This is a non-cash accounting expense for the issue of share warrants and options.
• AUDITOR'S REMUNERATION

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.

The charge / credit for the year is made up as follows:

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

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.

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.

TRADE AND OTHER RECEIVABLES

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:

• as outlined in the prospectus dated 29 October 2021.

The Directors held the following EMI Options at the beginning and end of the year:

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.

CAPITAL COMMITMENTS

There were no capital commitments at 30 June 2022 and 30 June 2023.

CONTINGENT LIABILITIES

There were no contingent liabilities at 30 June 2022 and 30 June 2023.

COMMITMENTS UNDER LEASES

There were no commitments under operating leases at 30 June 2023 and 30 June 2022.

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Financial assets by category

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:

Capital management

Interest rate risk

The maximum exposure to interest rate risk at the reporting date by class of financial asset was:

​

Credit and liquidity risk

Currency risk

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.

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:

• the Notes are repayable by conversion into Mila Shares at a price to be determined on Mila's next fundraise;
• Mila may repay the Notes without penalty after 31 December 2023;
• 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
• 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%).
• CONTROL

In the opinion of the Directors there is no single ultimate controlling party.