TIDMMILA
RNS Number : 3265J
Mila Resources PLC
29 March 2018
Mila Resources Plc / Index: LSE / Epic: MILA / Sector: Natural
Resources
29 March 2018
Mila Resources Plc
("Mila" or "the Company")
Interim Results
Mila Resources Plc, a London listed natural resources company,
is pleased to present its interim results for the six-month period
ended 31 December 2017.
Highlights:
-- Development of a number of high growth potential target
opportunities in Africa, focusing on producing assets in the
attractive markets of tin, tungsten and tantalum ("3Ts")
-- Engagement of two world-class technical managers to assist
the Company in identifying and evaluating 3Ts acquisition and
investment targets
-- Ongoing secondary appraisal of investment targets in other
regions and commodities with strong valuation or cash-flow growth
potential
-- Strong balance sheet position with cash balance at the end of
the period in excess of GBP810,000 due to continuous prudent
financial management
Operating Review
As we move into our second year since listing on the London
Stock Exchange, Mila has progressed from a wide-ranging appraisal
of potential investment and acquisition targets to a more focused
strategy centering on certain specific commodities and projects
within a particular stage of the development cycle.
During 2017, the Company reviewed a very large number of mining
projects for potential investment, ranging from large
asset-redevelopment opportunities to small, early-stage exploration
prospects with promising growth potential. During this same period,
the public markets have shown an increased appetite for mining,
especially speciality metals but also caution; continued commodity
price growth has not been taken for granted nor has demand for
high-impact exploration opportunities returned. As a result, the
Board has refined its strategy to projects which offer access to
early cash flow and long-term market stability.
Through the resultant iterative process of target evaluation,
Mila has developed a focus on the "3T" metals of tin, tungsten and
tantalum. To strengthen our technical capabilities within this
particular strategy, the Company has engaged world-class advisors
with extensive track records in the exploitation of 3T projects.
Ian Gordon Hall Dun is a senior metallurgist, who has spent the
majority of his 40 year mining career specialising in the
extraction of tin, tantalum and niobium in South America. For 15
years, he was Metallurgical Manager and Director of Process
Development for Minsur SA, one of the largest tin mining companies
in the world, at its giant San Rafael and TABOCA operations and was
recently a special technical advisor to Alphamin Resources in the
development of their world-class Bisie project in the Democratic
Republic of Congo ("DRC"). Luke Rogers is a minerals and mining
engineer, who began his career at Glencore's Mutanda copper
operation in the DRC before specialising in heavy mineral
processing and extraction. He has worked for a number of the
world's leading mineral processing companies and recently led a
tantalum/gold exploration project in West Africa.
The addition of these leading professionals is a key part of our
envisioned 3T development strategy whereby Mila has both the
opportunity to take a unique place in the global 3T markets and to
cement a strong foundation for building a well-established mining
business, despite testing investment conditions. These commodities
are known for their high density and so are extracted predominantly
through gravity and magnetic processes. The relative simplicity,
therefore, of basic mineral recovery means that small-scale
production can be undertaken with minimal resources, but full
commercialisation remains a critical challenge. The opportunity
this presents is to introduce modern mining and processing
practices to existing operations in order to maximise mine life and
enhance recoveries. This focus on operation rather than
exploration, should allow Mila to generate early cash flow with
minimal capital outlay.
The Company's efforts to date have been focused on the Central
and Eastern region of Africa, significant producers of 3T metals,
but still with few world-class operations. Since many of the
orebodies in this region are hosted in soft-rock deposits, mining
is relatively simple and so production is already widespread
through artisanal methods. Exploration in these areas can be
challenging, with orebodies either narrow-veined or loosely
disseminated, but applying technical and financial efficiencies to
these projects can make them highly profitable. The number of these
easily-accessible projects which proliferate throughout countries
like Rwanda make this opportunity genuinely exciting.
This approach of modernising and commercialising existing
operations has the additional benefit of introducing not just good
mining practices, but also world-recognised standards of safety and
governance. The high utility of 3T metals in advance electronics
has brought an obligation for all industry stakeholders to ensure
production is obtained through conflict and child-labour free
sources. As well as introducing world-class operational expertise,
Mila would have the chance to establish an international standard
of health, safety and traceability.
Currently, the Directors are in discussion with certain project
owners about the potential for investment in their assets and
progress is being made. However, we realise that no negotiation or
assessment is assured a positive outcome and so we have taken the
decision to continue to assess projects in other commodities. We
are very excited about some of the opportunities that we have seen
so far in Rwanda and neighbouring countries, however reaching
acceptable valuations and structures for our shareholders remains
challenging as commodity prices rise, but one which your Board will
not compromise on. Therefore, the process of a wider project
evaluation will continue, based on the principle of significant
shareholder value accretion.
As our discussions progress in Africa, the Directors remain
confident that we will be in a position to recommend Mila's first
transaction in the near future. While we continue to be thorough in
adherence to our evaluation process, the Board remains committed to
the strict financial discipline and protocols which have been
adopted thus far and which have ensured that 80% of our cash
resources have been preserved for future targeted project
identification and evaluation.
Financial Review
For the half year to 31 December 2017, the Company reports a net
loss of GBP124,732 (2016: GBP63,049). During the six-month period
to 31 December 2017, the Company continued its strict financial
discipline, incurring a net operating cash outflow of GBP120,645.
The Company held cash at 31 December 2017 of GBP811,389.
Directors
The following Directors have held office during the period:
George Donne
Anthony Eastman
Mark Stephenson
Corporate Governance
The UK Corporate Governance Code (September 2014) ("the Code"),
as appended to the Listing Rules, sets out the Principles of Good
Corporate Governance and Code Provisions which are applicable to
listed companies incorporated in the United Kingdom. As a standard
listed company, the Company is not subject to the Code, but the
Board recognises the value of applying the principles of the Code
where appropriate and proportionate and has endeavoured to do so
where practicable.
Responsibility Statement
The Directors are responsible for preparing the Unaudited
Interim Condensed Consolidated Financial Statements in accordance
with the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority ("DTR") and with International
Accounting Standard 34 on Interim Reporting ("IAS 34"). The
Directors confirm that, to the best of their knowledge, this
condensed consolidated interim report has been prepared in
accordance with IAS 34 as adopted by the European Union. The
interim management report includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8, namely:
-- an indication of important events that have occurred during
the six months ended 31 December 2017 and their impact on the
condensed consolidated financial statements for the period, and a
description of the principal risks and uncertainties for the
remaining six months of the financial year; and
-- related party transactions that have taken place in the six
months ended 31 December 2017 and that have materially affected the
financial position of the performance of the business during that
period.
Outlook
The outlook for the mining industry for 2018 remains broadly
positive with improving appetite for most commodities augmented by
potential supply-side constrictions due to lower investment over
recent years. However, positive sentiment has proved itself
vulnerable to uncertainties in both global and domestic financial
market and increasing political risk. With this in mind, Mila has
sought to focus in particular on commodities whose demand-side
dynamics should not be materially impacted by macroeconomic events
and on projects which can prove financially self-sustaining in the
shortest possible timescale.
The majority of metals have shown upward pricing trends over the
last 12 months, buoyed by expected renewed demand. Precious and
base metal prices are higher year-on-year, as world markets
continue to build from the lows of the Global Financial Crisis.
This has provided a positive backdrop for the mining sector as a
whole. The standout performers remain the energy or battery metals,
particularly lithium, vanadium and cobalt, which have seen dramatic
price rises as exuberance over potential demand from the electric
vehicle ("EV") and energy storage markets drives a scramble for
resources. Much of this demand, however, is still based on
technologies which are yet to be fully commercialised and
increasing government regulation may also be a significant factor
in future resources development.
The current market conditions for 3T metals have increased our
interest in these commodities. Their primary use is in the
well-established and high-growth electronics industries,
principally in forms such as solder for circuit boards, included in
EV and renewable energy applications, and capacitors in mobile
phones and tablets. While the outlook for these industries is
robust, good supply chain management is critical to ensure premium
offtake pricing, especially in markets such as tantalum where
limited buyers exist. As a result, Mila has already been in contact
with a number of key trading and off-take partners to discuss its
potential investment activities in Africa.
Furthermore, Mila's current strategy of focusing on operational
optimisation opportunities, rather than exploration upside, has the
added benefit of providing some insulation from the volatile
financial market sentiment to small-scale mining companies. While
2017 was expected by many to see a positive inflection point for
public natural resource companies, the anticipated recovery was
muted with few of Mila's peers demonstrating strong value growth.
In such an environment, your Board feels it prudent to pursue
targets which can be commercialised swiftly.
With our strong balance sheet and the addition of world-class
technical management to augment the experience of our Board and
Advisory Committee, Mila is in excellent shape as we enter 2018 and
we hope that this will be a very good year for the Company and our
shareholders.
On behalf of the board
George Donne
Director
29 March 2018
MILA RESOURCES PLC
Interim Statement of Comprehensive Income (Unaudited)
For the six months ended 31 December 2017
Notes Six months Six months Year ended
ended ended 30 June
31 December 31 December 2017 Audited
2017 Unaudited 2016 Unaudited
GBP GBP GBP
Revenue - - -
Administrative expenses (124,732) (63,049) (136,639)
Loss before taxation (124,732) (63,049) (136,639)
Income tax expense 3 - - -
Loss for the year (124,732) (63,049) (136,639)
---------------- ---------------- --------------
Other comprehensive -
income / (loss) - -
---------------- ---------------- --------------
Total comprehensive
loss for the year
attributable to
equity holders (124,732) (63,049) (136,639)
---------------- ---------------- --------------
Loss per share (basic
and diluted) attributable
to equity holders
(p) 4 (0.54)p (0.53)p (0.78)p
---------------- ---------------- --------------
The income statement has been prepared on the basis that all
operations are continuing operations.
MILA RESOURCES PLC
Interim Statement of Financial Position (Unaudited)
As at 31 December 2017
At 31 At 31 December At 30
December 2016 Unaudited June 2017
2017 Unaudited Audited
Notes GBP GBP GBP
Current assets
Trade and other receivables 4,664 - 1,241
Cash at bank and
in hand 811,389 1,018,806 932,034
---------------- ---------------- -----------
816,053 1,018,806 933,275
Current liabilities
Trade and other payables 17,557 21,988 10,047
---------------- ---------------- -----------
17,557 21,988 10,047
Net current assets 798,496 996,818 923,228
Net assets 798,496 996,818 923,228
---------------- ---------------- -----------
Equity
Share capital 5 232,000 232,000 232,000
Share premium 5 849,300 849,300 849,300
Share based payment
reserve 4,720 4,720 4,720
Retained losses (287,524) (89,202) (162,792)
Equity attributable
to the owners of
the parent 798,496 996,818 923,228
---------------- ---------------- -----------
MILA RESOURCES PLC
Statements of changes in equity (Unaudited)
For the six months ended 31 December 2017
Share Share Share Retained TOTAL
Capital Premium Based Loss
Account Payment
Reserve
GBP GBP GBP GBP GBP
Balance at 30 June
2016 2,200 78,400 - (26,153) 54,447
Total comprehensive
loss for the period - - - (136,639) (136,639)
Shares issued during
the period 21,000 1,029,000 - - 1,050,000
Effect of change
to share nominal
value - as approved
2016 AGM 208,800 (208,800) - - -
Issue of warrants - - 4,720 - 4,720
Costs related to
share issues - (49,300) - - (49,300)
Balance at 30 June
2017 232,000 849,300 4,720 (162,792) 923,228
Total comprehensive
loss for the period - - - (124,732) (124,732)
Balance at 31 December
2017 232,000 849,300 4,720 (287,524) 798,496
========= ========== ========= ========== ==========
MILA RESOURCES PLC
Statement of cash flow (Unaudited)
For the six months ended 31 December 2017
Six months Six months 12 months
to 31 to 31 to 30
December December June
2017 2016 2017
GBP GBP GBP
Cash flows from operating
activities
Loss for the period (124,732) (63,049) (136,639)
Adjustments for:
Costs settled by the payment
of shares / warrants - 4,720 4,720
-----------
Operating cashflow before
working capital movements (124,732) (58,329) (131,919)
(Increase) / decrease in
trade and other receivables (3,423) - (1,241)
Increase / (decrease) in
trade and other payables 7,510 14,067 2,126
----------- ----------- ----------
Net cash flow from operating
activities (120,645) (44,262) (131,034)
----------- ----------- ----------
Cash flows from financing
activities
Net proceeds on issue of
shares - 1,050,000 1,050,000
Costs related to the issue
of shares - (49,300) (49,300)
----------- ----------- ----------
Net cash flow from financing
activities - 1,000,700 1,000,700
----------- ----------- ----------
Net increase in cash and
cash equivalents (120,645) 956,438 869,666
Cash and cash equivalents
at beginning of the period 932,034 62,368 62,368
Cash and cash equivalents
at end of the period 811,389 1,018,806 932,034
----------- ----------- ----------
MILA RESOURCES PLC
Notes to the financial statements
For the six months ended 31 December 2017
1 General information
Mila Resources Plc (the "Company") looks to identify potential
companies, businesses or asset(s) that have operations in the
natural resources exploration, development and production
sector.
The Company is domiciled in the United Kingdom and incorporated
and registered in England and Wales, with registration number
09620350.
The Company's registered office is Lockstrood Farm, Ditchling
Common, Burgess Hill, West Sussex RH15 0SJ.
2 Accounting policies
The principal accounting policies applied in preparation of
these consolidated financial statements are set out below. These
policies have been consistently applied unless otherwise
stated.
Basis of preparation
The interim unaudited financial statements for the period ended
31 December 2017 have been prepared in accordance with IAS 34
Interim Financial Reporting. This interim financial information is
not the Company's statutory financial statements and should be read
in conjunction with the annual financial statements for the period
ended 30 June 2017, which have been prepared in accordance with
International Financial Reporting Standards (IFRS) and have been
delivered to the Registrars of Companies. The auditors have
reported on those accounts; their report was unqualified, did not
include references to any matters which the auditors drew attention
by way of emphasis of matter without qualifying their report and
did not contain statements under section 498 (2) or (3) of the
Companies Act 2006.
The interim financial information for the six months ended 31
December 2017 is unaudited. In the opinion of the Directors, the
interim consolidated financial information presents fairly the
financial position, and results from operations and cash flows for
the period.
The Directors have made an assessment of the Company's ability
to continue as a going concern and are satisfied that the Company
has adequate resources to continue in operational existence for the
foreseeable future. The Company, therefore, continues to adopt the
going concern basis in preparing its consolidated financial
statements.
The financial information of the Company is presented in British
Pounds Sterling (GBP).
Critical accounting estimates and judgements
The preparation of interim financial information requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities and the reported amounts of
income and expenses during the reporting period. Although these
estimates are based on management's best knowledge of current
events and actions, the resulting accounting estimates will, by
definition, seldom equal related actual results.
In preparing the interim financial information, the significant
judgements made by management in applying the Company's accounting
policies and the key sources of estimation uncertainty were the
same as those that applied to the financial statements for the year
ended 30 June 2017.
3 Income tax expense
No tax is applicable to the Company for the six months ended 31
December 2017. No deferred income tax asset has been recognised in
respect of the losses carried forward, due to the uncertainty as to
whether the Company will generate sufficient future profits in the
foreseeable future to prudently justify this.
MILA RESOURCES PLC
Notes to the financial statements
For the six months ended 31 December 2017 (cont.)
4 Loss per share
Basic loss per ordinary share is calculated by dividing the loss
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the period.
Diluted earnings per share is calculated by adjusting the weighted
average number of ordinary shares outstanding to assume conversion
of all dilutive potential ordinary shares.
There are currently no dilutive potential ordinary shares.
Earnings Weighted Per-share
GBP average amount
number of pence
shares
unit
Loss per share attributed
to ordinary shareholders (124,732) 23,200,000 (0.54)p
5 Share capital
Number
of shares Share Share
in issue capital premium Total
GBP GBP GBP
Balance at 30 June
2017 23,200,000 232,000 849,300 1,081,300
Movements during the - - - -
period
Balance at 31 December
2017 23,200,000 232,000 849,300 1,081,300
=========== ======== ======== ==========
The Company has one class of ordinary share which carries no
right to fixed income.
6 Related party disclosures
Remuneration of Directors and key management personnel
The remuneration of the Directors during the six-month period to
31 December 2017 amounted to GBP36,000 (31 December 2016:
GBP18,000).
Shareholdings in the Company
Shares and warrants held by the Directors of the Company which
remained unchanged during the period.
Shares Warrants
(1)
Mr George Donne 200,000 400,000
Mr Anthony Eastman 200,000 400,000
Mr Mark Stephenson 600,000 1,200,000
Balance at
30 June 2016 1,000,000 2,000,000
========== ==========
(1) Exercisable at GBP0.05, on or before 31 December 2020.
This information is provided by RNS
The company news service from the London Stock Exchange
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