Berkeley Energia Limited

Earnings Release • Jan 31, 2013

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RNS Number : 7856W

Berkeley Resources Limited

31 January 2013

BERKELEY RESOURCES LIMITED 

AIM RELEASE  |  31 JANUARY 2013  |  ASX/AIM:BKY

DECEMBER 2012 QUARTERLY REPORT

Berkeley Resources Limited ('Berkeley' or the 'the Company') is pleased to present its quarterly report for the period ended 31 December 2012.

Highlights:

·     A positive Scoping Study was completed in November and confirmed the technical and economic viability of the Salamanca Project, including:

Ø Initial mine life of 11 years, including 7 years steady state operation, with strong potential to increase;

Ø Steady state annual production of 3.2 million pounds U3O8, with average annual production of 2.6 million pounds U3O8 over the life of mine;

Ø Life of mine average operating costs of US$25.65 per pound of U3O8;

Ø Upfront capital cost of US$83.6 million to deliver initial production. A further US$95.0 million, incurred in the second year of production and largely funded from operating cashflow, to achieve steady state operation.

·     Pre-Feasibility Study commenced, targeting completion in mid 2013. The study was awarded to Johannesburg based SENET, who will be assisted by SRK Consulting for mine design, Knight Piesold for heap design and Duro Felguera for the in-country project cost estimates.

·     The permitting process for Retortillo continued to advance with the Company's responses to the submissions received during the 30 day Public Information Period being delivered to the relevant authorities for their review and evaluation. The Nuclear Safety Council has also confirmed that all required information for the preparation of their compulsory report regarding the mining activities, and for the Initial Authorization of the process plant as a radioactive facility has been submitted.

·     The permitting process for Alameda was initiated with the submission to the relevant authorities of the Environmental Scoping Document and documentation associated with the application for reclassification (from rural to industrial use) of the affected surface land area.

The Directors are encouraged by the positive results of the Scoping Study, which clearly demonstrate the potential of the Salamanca Project to support a significant scale, long life uranium mining operation. Accordingly, the Company continues to focus on pursuing the ongoing exploration, appraisal and development of the Project in order to fulfil its strategic objective of becoming the next European uranium producer.

Enquiries:                                          Robert Behets                                  

Berkeley Resources            

+61 8 9322 6322

OPERATIONS

Berkeley Resources Limited ('Berkeley' or 'the Company') is a uranium exploration and development company with a quality resource base in Spain. Berkeley is currently focused on advancing its wholly owned flagship Salamanca Project.

Salamanca Project

The Salamanca Project ('the Project') comprises the Retortillo, Alameda and Gambuta deposits plus a number of other Satellite deposits located in western Spain.

The results of a Preliminary Feasibility Study completed in early 2012 confirmed the technical and economic viability of a stand-alone project exploiting Retortillo, whilst Alameda formed part of a separate Feasibility Study completed in 2011.

In November 2012, the Company completed an initial assessment of the integrated development of Retortillo and Alameda and reported the results of the Scoping Study ('the Study'). 

The Study was managed by Berkeley with input from a number of industry-recognised specialist consultants covering the key disciplines. The Study incorporated all of the information generated from the previous studies conducted on Retortillo and Alameda, as well as new, more recently completed drilling and metallurgical testwork data.

Scoping Study Results

Using only the current Mineral Resource Estimates for Retortillo and Alameda, which total 33.9 million pounds U3O8 (35.9 million tonnes at 429 ppm; 200 ppm U3O8 cut-off grade), as a base case scenario, the Project can support an average annual production of 3.2 million pounds of U3O8 during the seven years of steady state operation and 2.6 million pounds of U3O8 over a minimum eleven year mine life.  There is strong potential to increase the production profile and mine life through the exploitation of additional resources held by the Company (totalling 27.1 million pounds U3O8) and with ongoing exploration work.

The Study was based on open pit mining, heap leaching, a centralised process plant at Retortillo, and a remote ion exchange operation at Alameda, with loaded resin trucked to the centralised plant for final extraction and purification. The Company currently favours a contractor mining scenario. The average annual ore processing rate during steady state operation is 5.5 million tonnes. Operating cost estimates average US$25.65 per pound U3O8 over the life of mine.

The initial capital cost (nominally ± 30% accuracy) for the Project is estimated at US$83.6 million. This cost is inclusive of all mine, processing, infrastructure and indirect costs required to develop and commence production at Retortillo. A further US$95.0 million of capital, incurred in the second year of production and largely funded from operating cashflow, is required to develop Alameda and achieve steady state operation. The Project's capital cost reflects the excellent existing infrastructure, use of heap leaching as the preferred processing route, and the favoured mining contractor scenario (no mining fleet capital expenditure).

The Directors are encouraged by the positive results of the Scoping Study which clearly demonstrate the potential of the integrated Salamanca Project to support a significant scale, long life uranium mining operation. Further details on the Study are available in the Company's ASX Announcement dated 29 November 2012.

Pre-Feasibility Study

Following completion of the Scoping Study, Berkeley has commenced a Pre-Feasibility Study ('PFS') for the Salamanca Project. The PFS was awarded to the Johannesburg based company SENET, which will develop the study assisted by SRK Consulting for the mine design, Knight Piesold for the heaps design and Duro Felguera for the in-country project cost estimates.

The Company will undertake a more detailed mine scheduling and materials movement optimisation study, metallurgical testwork program and infrastructure assessment during the PFS phase, with the aim of identifying opportunities to further enhance the Project economics through capital and operating cost reductions. Resource infill and exploration drilling programs aimed at upgrading the resource classification and increasing the overall resource base are also underway.

The PFS will be carried out with a confidence level of ±20% for both the capital and operating cost estimates and will include the design details required to be submitted to the Spanish Nuclear Safety Council as part of the Authorization for Construction process for the processing plant.

Further metallurgical testwork will be carried out at the Mintek laboratories in Johannesburg and the Australian Nuclear Science and Technology Organisation ('ANSTO') facilities in Sydney.

The testwork program at Mintek aims to confirm the leaching efficiency for each phase of the mine schedule and test ore variability with respect to size distribution and geo-mechanical behaviour. The ANSTO testwork program is designed to facilitate the selection of the optimal backend of the process, with the performance of direct Solvent Extraction ('SX') and ammonium diuranate ('ADU') precipitation being compared to ion exchange ('IX') and UO4 precipitation.

Drilling and Mineral Resource Estimation

Drilling activity during the quarter included diamond drilling ('DD') at Retortillo and Alameda for resource definition, to provide drill core for metallurgical testwork and to provide drill core for geotechnical testwork. Details of the 1,836 metres of DD completed are summarised in Table 1.

Table 1:  2012 Drilling Summary

Project	RC Q1 2012		RC Q2 2012		RC Q3 2012		RC Q4 2012		RC TOTAL 2012
Holes	Metres	Holes	Metres	Holes	Metres	Holes	Metres	Holes	Metres
Retortillo	74	4,459							74	4,459
Villares	59	3,331							59	3,331
Gambuta			16	1,229					16	1,229
Total	133	7,790	16	1,229	0	0	0	0	149	9,019
	DD Q1 2012		DD Q2 2012		DD Q3 2012		DD Q4 2012		DD Total 2012
	Holes	Metres	Holes	Metres	Holes	Metres	Holes	Metres	Holes	Metres
Retortillo	12	735	6	508	1	70	19	963	38	2,276
Gambuta			3	269					3	269
Alameda					1	44	18	872	19	916
Total	12	735	9	777	2	114	37	1,836	60	3,462

Retortillo and Alameda

Diamond drilling continued during the December quarter at Retortillo and Alameda. This resource infill drilling is planned to facilitate further resource definition and to provide drill core for the next phases of metallurgical testwork being conducted as part of the feasibility studies. In addition, short diamond drill holes were drilled in areas of potential infrastructure sites to test the geotechnical characteristics of these areas.

The infill drilling at Retortillo was focussed on the first three phases of the current planned open pit mining schedule. The drilling results indicate that the mineralisation intersected was largely in line with the resource model predictions however, some drilling in the phase one mining area showed the mineralisation to be more erratic than predicted.

The results are based on down-hole gamma logging data and are presented as "equivalent" U3O8 grades or eU3O8. Some of the better results reported include 26 metres at 576 ppm eU3O8 from 37 metres depth in RTD341, 23 metres at 490 ppm eU3O8 from 32 metres depth in RTD343 and 16 metres at 1,079 ppm eU3O8 from 1 metre depth in RTD355 (Table 2).

Table 2: Retortillo Drilling - Significant Intersections (200ppm eU3O8 cut-off)

Retortillo	From	To	Thickness	eU3O8
	(m)	(m)	(m)	(ppm)
RTD-341	26.0	33.0	7.0	1,061
	37.0	63.0	26.0	576
	66.0	80.0	14.0	779
RTD-343	32.0	55.0	23.0	490
RTD-350	23.0	28.0	5.0	1,023
RTD-351	34.0	49.0	15.0	458
	82.0	94.0	12.0	808
RTD-354	7.0	17.0	10.0	900
RTD-355	1.0	17.0	16.0	1,079

At Alameda drilling was focused on the first two phases of the current planned open pit mining schedule. The drilling results indicate that the mineralisation intersected was in line with the resource model predictions. The drilling was also successful in demonstrating potential extensions to the current resource. Some of the better results reported include 14 metres at 924 ppm eU3O8 from 3 metres in ASD139, 11 metres at 2,469 ppm eU3O8 from 70 metres in ASD141 and 27 metres at 1,184 ppm eU3O8 from 85 metres in ASD143 (Table 3).

Table 3: Alameda Drilling - Significant Intersections (200ppm eU3O8 cut-off)

Alameda	From	To	Thickness	eU3O8
	(m)	(m)	(m)	(ppm)
ASD-136	13.0	23.0	10.0	723
ASD-138	6.0	21.0	15.0	404
ASD-139	3.0	17.0	14.0	924
ASD-141	70.0	81.0	11.0	2,469
ASD-143	43.0	61.0	18.0	688
	70.0	78.0	8.0	604
	85.0	112.0	27.0	1,184

Regional Tenements

A program of regional water sampling has commenced in the region surrounding Retortillo. Preliminary results have highlighted the potential for this sampling methodology to detect areas of anomalous uranium associated with mineralisation. Further sampling and evaluation is underway to determine the effectiveness of this exploration method.

Gambuta

A Desktop Study undertaken on the Gambuta deposit, following the recent Mineral Resource Estimate ('MRE') update, has highlighted the significant potential of the deposit. Gambuta, which is located approximately 145 kilometres southeast of Retortillo, has an Inferred MRE of 12.7 million tonnes at 394 ppm U3O8 for a total of 11.1 million pounds of U3O8 at a 200 ppm U3O8 cut-off grade (Refer September 2012 Quarterly Report). Following the positive results of the Desktop Study, initial metallurgical testwork will be undertaken during the March quarter to determine the leaching characteristics of the mineralisation.

Permitting

The permitting process at Retortillo continues to advance. During the quarter, the Company's responses to the submissions received during the 30 day Public Information Period (completed in mid September) were delivered to the relevant authorities for their review and evaluation. Follow-up discussions regarding appropriate mitigation measures have been held with the authorities. It is anticipated that the Project will be raised for mining and environmental approval within the first half of 2013.

The Initial Authorisation for the process plant as a radioactive facility is well advanced. The Nuclear Safety Council has informed Berkeley that they have all required information for the preparation of their compulsory report regarding the mining activities, and also for the Initial Authorization of the process plant as a radioactive facility. Both are anticipated during the June quarter of 2013.

Ancillary permits, such as those associated with water and roads, are also currently being advanced. Discussions have been held with the relevant authorities (including the Water Authority and Roads Department) and the required documentation submitted.  

At Alameda, the Environmental Scoping Document and the documentation associated with the change of the zoning of rural land into that suitable for industrial purposes were submitted in November and December, respectively. The Exploitation Plan, Rehabilitation and Closure Plans and documents related to Radiological Protection will be prepared based on the design developed as part of the PFS, targeting submission of these documents by mid 2013.

CORPORATE

At 31 December 2012 the Company had cash reserves of A$32.5 million.

In November 2012, Señor Jose Ramon Esteruelas retired as a Non-Executive Director. Señor Esteruelas had been a Director of Berkeley since November 2006 and played a key role as the Company moved from explorer to developer in Spain.

Competent Persons Statement

The information in this announcement that relates to Exploration Results and Mineral Resources is based on information compiled by Craig Gwatkin, who is a Member of The Australian Institute of Mining and Metallurgy and is an employee of Berkeley Resources Limited.  Mr. Gwatkin has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'.  Mr. Gwatkin consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Forward Looking Statement

Statements regarding plans with respect to the Company's mineral properties are forward-looking statements. There can be no assurance that the Company's plans for development of its mineral properties will proceed as currently expected. There can also be no assurance that the Company will be able to confirm the presence of additional mineral deposits, that any mineralisation will prove to be economic or that a mine will successfully be developed on any of the Company's mineral properties.

Appendix A: Summary of Diamond Drill Intersections

Retortillo Drilling (e-grades only)

							Drill Intersections  > 200ppm eU3O8
Hole ID	Easting	Northing	Elev.	Depth	Azim	Dip	From	To	Thick	eU3O8
	(m)	(m)	(m)	(m)	(º)	(º)	(m)	(m)	(m)	(ppm)
RTD-340	719460	4520377	752.1	70.40	360	-90	No significant mineralisation
RTD-341	719367	4520737	734.2	90.45	163	-60	26.0	33.0	7.0	1,061
							37.0	63.0	26.0	576
							66.0	80.0	14.0	779
RTD-342	719671	4520294	741.1	68.50	343	-60	43.0	49.0	6.0	249
							62.0	65.0	3.0	545
RTD-343	719548	4520330	748.0	62.90	343	-60	32.0	55.0	23.0	490
RTD-344	719792	4520202	740.4	60.30	298	-60	39.0	41.0	2.0	320
RTD-345	719923	4520076	743.1	61.95	343	-60	33.0	43.0	10.0	247
							47.0	54.0	7.0	788
RTD-346	719913	4520154	745.3	61.50	307	-60	29.0	32.0	3.0	448
							41.0	46.0	5.0	285
RTD-347	719199	4520741	721.6	50.35	360	-90	No significant intersection
RTD-348	719152	4520652	722.0	30.00	118	-60	No significant intersection
RTD-349	719366	4520736	733.8	49.00	208	-60	5.0	7.0	2.0	369
RTD-350	719260	4520618	734.7	46.80	118	-60	23.0	28.0	5.0	1,023
RTD-351	719194	4520517	736.0	106.25	118	-60	3.0	6.0	4.0	418
							25.0	28.0	3.0	281
							34.0	49.0	15.0	458
							57.0	59.0	2.0	492
							63.0	72.0	9.0	341
							77.0	79.0	2.0	537
							82.0	94.0	12.0	808
RTD-352	719277	4520614	738.1	45.50	360	-90	No significant intersection
RTD-353	719162	4520614	723.4	28.55	360	-90	No significant intersection
RTD-354	719231	4520639	728.6	39.45	360	-90	1.0	2.0	1.0	260
							7.0	17.0	10.0	900
RTD-355	719231	4520639	728.6	32.15	360	-90	1.0	17.0	16.0	1,079
RTD-356	719423	4520895	724.0	68.50	28	-60	8.0	9.0	1.0	270
							12.0	19.0	7.0	663
							23.0	30.0	7.0	451
RTD-357	719130	4520291	750.5	20.50	360	-90	No significant Intersection
RTD-358	719369	4520089	754.4	20.00	360	-90	No significant Intersection
RTD-359	719400	4519800	744.6	20.00	360	-90	No significant Intersection

Alameda Drilling (e-grades only)

							Drill Intersections  > 200ppm eU3O8
Hole ID	Easting	Northing	Elev.	Depth	Azim	Dip	From	To	Thick	e-U3O8
	(m)	(m)	(m)	(m)	(º)	(º)	(m)	(m)	(m)	(ppm)
ASD-135	688954	4501653	733.0	43.75	30	-60	18.0	20.0	2.0	320
							26.0	28.0	2.0	332
ASD-136	688895	4501738	731.0	42.35	30	-60	13.0	23.0	10.0	723
							31.0	33.0	2.0	575
ASD-137	688750	4501787	728.0	64.35	30	-60	5.0	14.0	9.0	196
ASD-138	688644	4501805	726.0	41.25	30	-60	6.0	21.0	15.0	404
ASD-139	689147	4500675	727.0	39.70	250	-60	3.0	17.0	14.0	924
							20.0	24.0	4.0	575
ASD-140	688975	4500651	725.0	90.65	360	-90	21.0	36.0	15.0	239
							43.0	48.0	5.0	587
							64.0	66.0	2.0	573
							73.0	75.0	2.0	756
ASD-141	688915	4500614	723.0	89.85	250	-60	16.0	27.0	11.0	259
							42.0	46.0	4.0	431
							70.0	81.0	11.0	2,469
ASD-142	688937	4500732	724.3	112.50	360	-90	20.0	28.0	8.0	251
							41.0	48.0	7.0	283
							96.0	98.0	2.0	476
ASD-143	689028	4500819	733.8	130.15	360	-90	23.0	27.0	4.0	560
							31.0	36.0	5.0	452
							43.0	61.0	18.0	688
							70.0	78.0	8.0	604
							85.0	112.0	27.0	1,184
ASD-144	689204	4500831	744.5	76.45	283	-60	27.0	31.0	4.0	719
ASD-145	689745	4501520	749.0	25.75	360	-90	No Significant Intersection
ASD-146	690029	4501290	749.0	21.65	360	-90	No Significant Intersection
ASD-147	689404	4499490	734.0	20.10	360	-90	No Significant Intersection
ASD-148	690004	4499990	747.0	15.50	360	-90	No Significant Intersection
ASD-149	689757	4499510	739.0	20.50	360	-90	No Significant Intersection
ASD-150	689300	4500060	743.0	20.00	360	-90	No Significant Intersection
ASD-151	689631	4500704	743.0	20.20	360	-90	No Significant Intersection
ASD-152	689968	4500531	743.0	20.60	360	-90	No Significant Intersection
ASD-153	689458	4501780	743.0	20.80	360	-90	No Significant Intersection

Notes:

1.     All results based on down hole equivalent grades

2.     Coordinates are in UTM Grid (ED1950 Zone 29N) and have been measured by a DGPS (+/- 1m accuracy)

3.     The mineralisation is hosted by metasediment, typically in the first 90m below surface and is interpreted to be flat lying. Thus reported intervals approximate true widths.

This information is provided by RNS

The company news service from the London Stock Exchange

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