Exceptional Assays from Coffey Deposit

To view the announcement with the illustrative images please use the following link: 
http://www.rns-pdf.londonstockexchange.com/rns/1294J_1-2022-4-24.pdf

Mila Resources Plc / Index: LSE / Epic: MILA / Sector: Natural Resources

25 April 2022

Mila Resources Plc

('Mila' or the 'Company')

Exceptional Assays: Better Than Expected Grades at Kathleen Valley's Coffey Deposit

Mila Resources, the post-discovery gold exploration accelerator, is pleased to announce assay results returned from the Company's 2022 diamond drilling programme at the Kathleen Valley Gold Project in Western Australia ("Kathleen Valley" or the "Project").  The objective of the drill programme is to build on the existing JORC Inferred Resource and unlock the full potential of the project, which is located in a region which hosts some of the largest gold projects in Australia and which is adjacent to Bellevue Gold's discoveries.

Highlights

·    Assays for first five of the 11 diamond core holes have been received (Table 1) delivering exceptional results

·    KVRD026 - 6.6m @ 14.86 g/t Au & 21.79 g/t Ag from 209.40m including:

o  5m @ 18.94 g/t Au & 28.08 g/t Ag from 210m which includes:

§ 1m @ 27.60 g/t Au & 47.50 g/t Ag from 211m, the highest grades returned to date

·    KVRD025 - 5m @ 4.26 g/t Au & 13.35 g/t Ag from 198m including:

o  3m @ 6.90 g/t Au & 21.62 g/t Ag from 200m which includes a high-grade zone comprising:

§ 1m @ 13.45 g/t Au & 37.70 g/t Ag from 202m

·    KVRD027 - 10m @ 1.11 g/t Au & 4.35 g/t Ag from 205m including:

o  6m @ 2.26 g/t Au & 7.03 g/t Ag from 219m which includes a high-grade zone comprising:

§ 1m @ 4.49 g/t Au & 18.40 g/t Ag from 224m

·    1m re-spilts of anomalous 4m composite samples from the 2021 RC drilling have been received (Table 2), extending mineralisation in several holes with a best result of:

o  KVRC016 - 11m @ 2.19 g/t Au from 94m including:

§ 1m @ 14.73 g/t Au & 2.43 g/t Ag from 104m

·    Mila has completed 22 reverse circulation ("RC") & Diamond drill holes for 4,509m during Stage 1 of the drilling campaign (Table 3)

·    Drilling has now defined mineralisation over a zone 200m long and 220m down dip, which is open at depth and along strike

·    Heritage Surveys ahead of line clearing and drill pad works are set to commence in preparation for Stages 2 & 3 which will comprise ~6,550m of drilling

·    Stage 2 programme will step out and target new gold lode at depth (see Figure 2 below)

·    This paves the way for Mila to increase its interest in the Kathleen Valley Project to 55% ownership

·    Assay results for the diamond core holes KVRD029-KVRD032 are still outstanding, with holes KVDD033 & KVDD034 being cut and en route to the laboratory

Neil Hutchison, Chief Geologist of Mila Resources, commented:

"I am lost for words!  The assay results from the first five diamond core holes have surpassed my expectations.  We knew the core would deliver strong results based on the visual observations of the sulphide mineralisation and the Bellevue-Style veins we had intersected.  In addition, we received great results from the RC drilling assays indicating the potential of this mineralised system, but to intersect 6.6m at almost 15 grams gold and 22 grams silver is remarkable.  This zone includes 1m at 27.6 grams gold and 47.5 grams silver, which is the highest assay result we have received back from all of the drilling at Coffey to date.

"This deposit is really starting to take shape and from the observations in the recently completed drill holes, it only gets better. It's a massive achievement by the onsite personnel from Geolithic, DrillCore and PetriCore, who have all delivered such high-quality work over a short three-month period. We are all excited to commence with the Stage 2 & 3 drilling campaigns, which will chase this highly mineralised system at depth and along strike.  These next stages of drilling will potentially further expand the mineralisation, growing the deposit in size and grade."

Varying gold-silver bearing sulphide and quartz vein textures in the high-grade zone of KVRD026 which returned 6.6m @ 14.86 g/t Au & 21.79 g/t Ag, including 1m @ 27.60 g/t Au & 47.50 g/t Ag.  These are the highest grades returned to date from the Coffey mineralised system.

Mark Stephenson commented:

"This is a truly stunning result from the Coffey Deposit, one of our targets at our Kathleen Valley Gold Project, which is shaping up to be a very significant discovery indeed.  Importantly, these assays have demonstrated commercial grades over mineable widths which gives the team a huge amount of confidence as we continue work with the objective of laying the foundations for a new mining operation at Kathleen Valley.  It is also important to note the potential silver credits highlighted in today's assays which provide Mila with additional optionality over processing routes given the further economic advantage of silver as a co-product.  We are also highly encouraged by the emergence of another gold lode underneath the main zone at depth and we will target this lode with the next drilling programme.

"We eagerly await the remaining assays from the laboratory, and we continue to plan for the second and third phases of our 2022 drilling campaign which we firmly believe will support a significantly enhanced JORC Resource, in terms of both quantum and grade.  I have frequently referred to the current resource as simply the tip of the iceberg and today's assays underscore that assertion - it is certainly a very exciting time for Mila and I look forward to sharing more news in due course."

Overview of Drilling Results

The results from the Stage 1 drilling (Table 1 and Appendix 1) demonstrate that the mineralisation at the Coffey Deposit has improved in grade and continuity, down dip of the original pre-Mila resource zone. 

The drilling has substantially extended mineralisation, which is now defined over a zone 200m long and 220m down dip (See Drill Collar Plan and Cross Section).  The mineralisation is open at depth and along strike, with a second lode beginning to take shape underneath the main zone at depth (see Cross Section).  It is common for gold systems to have multiple lodes and form stacked systems, with Coffey now beginning to demonstrate this likelihood as the drilling tests deeper.

The higher grades and multiple lodes have the potential to add significant grade, tonnage and higher-grade ounces to the Coffey Deposit once Mila completes a new resource estimate at the end of the Stage 2 & 3 drilling campaigns.

In addition, assay results for re-splits of anomalous 4m composite samples collected from the 2021 RC drilling programme have also been returned, extending mineralisation in several holes. The RC 1m re-splits extended mineralisation in holes KVRC016 and KVRC017 as shown below and detailed in Table 2:

·    11m @ 2.19 g/t Au from 94m in KVRC016

o  Including 1m at 14.73 g/t Au from 104m

·    1m @ 1.69g/t Au from 160m in KVRC017

Assay results for the diamond core holes KVRD029-KVRD032 are currently in the laboratory at ALS Global in Perth and still outstanding.  Recently completed drill holes KVDD033 & KVDD034 are the last holes of the Stage 1 drilling campaign and have recently been core-cut and are en route to the laboratory.  Results will be release to the market as they are received and processed.

The deeper drill holes have been cased in preparation for Down Hole Electro-Magnetic (DHEM) surveying which will assist with targeting the sulphide mineralisation at depth and potentially mapping the new deeper lower target zone.

Stage 2 drilling will commence at the completion of the upcoming heritage and flora/fauna survey which is currently in process.  Once completed, earthwork can commence extending the drill line to the northeast and preparing the drill sites to the northwest (see Drill Collar Plan).  These holes will test the depth and along strike potential of the emerging high-grade gold-silver deposit.

Mila has now completed a total of 22 RC & diamond drill holes for 4,509m during Stage 1 of the drilling campaign (Table 3).  Stages 2 & 3 drilling will comprise a combination of deeper diamond core drilling and shallower along striking drilling as well as pre-collars for the diamond drilling.  The new campaigns will comprise ~6,550m of drilling, paving the way for Mila to increase its interest in the Kathleen Valley Project to 55% ownership.

Figure 1: Hole KVRD025

Bellevue Style mineralisation in hole KVRD025 with white quartz hosting sulphide mineralisation which returned 3m @ 6.9 g/t Au & 21.6 g/t Ag (198.5-203.0m shown).

High-grade Bellevue Style quartz-sulphide mineralisation in hole KVRD025 grading 1m @ 13.45 g/t Au & 37.7 g/t Ag (202-203m shown).