Mila can be found in the north-east area of the map, in a small nook at the bottom of the big mountains around the edge of the Valley of Preparation (if you run more or less directly east of the questgiver Shewayna until you hit the mountains you should hit the spot or very close.) You'll have to beat the bunny down a bit before you can get her in the cage though!

WARNING: It's possible to kill Mila! Don't kill it or you'll have to wait for respawn.

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