Berkeley Energia Limited

Earnings Release • Mar 12, 2015

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RNS Number : 2490H

Berkeley Resources Limited

12 March 2015

BERKELEY RESOURCES LIMITED

INTERIM FINANCIAL REPORT

FOR THE HALF YEAR ENDED 31 DECEMBER 2014

DIRECTORS' REPORT

The Board of Directors of Berkeley Resources Limited present their report on the consolidated entity of Berkeley Resources Limited ('the Company' or 'Berkeley') and the entities it controlled during the half year ended 31 December 2014 ('Consolidated Entity' or 'Group').

DIRECTORS

The names of the Directors of Berkeley in office during the half year and until the date of this report are:

Mr Ian Middlemas

Dr James Ross

Mr Robert Behets

Unless otherwise disclosed, Directors were in office from the beginning of the half year until the date of this report.

REVIEW OF OPERATIONS AND ACTIVITIES

Berkeley is a uranium exploration and development company with a quality resource base in Spain. The Company is currently focussed on advancing its wholly owned flagship Salamanca Project.

The Salamanca Project comprises the Retortillo, Alameda, Zona 7 and Gambuta deposits, plus a number of other Satellite deposits located in western Spain.

Highlights during the half year include:

·      Outstanding intercepts in 2014 drilling program at Zona 7: 

Ø 2013 drilling program at Zona 7, the largest of the Retortillo Satellite Deposits, recorded significant high grade intersections at shallow depths and essentially doubled the strike extent of the mineralised zone;

Ø 2014 drill program, completed in September, was aimed at infilling the zone of mineralisation delineated by 2013 drilling and extending it further to the south-west;

Ø High grade mineralisation was again intersected at shallow depths (from surface to a maximum of 73 metres), with thicknesses up to 25 metres;

Ø Outstanding intercepts from the 45 reverse circulation drill holes include:

Ø 21 metres @ 3,101 ppm U3O8 

Ø 19 metres @ 2,332 ppm U3O8

Ø 25 metres @ 2,005 ppm U3O8

Ø 21 metres @ 1,535 ppm U3O8

Ø 17 metres @ 1,517 ppm U3O8 

Ø 20 metres @ 1,238 ppm U3O8

Ø Mineralisation remains open along the north-western margin, and along strike to the southwest.

·      Substantial increase in Zona 7 Resource:

Ø Zona 7 Mineral Resource Estimate ('MRE') increased to 30.1 Mlbs U3O8 (previously 3.6 Mlbs);

Ø Average grade of the MRE increased by 42% to 589 ppm U3O8;

Ø 90% of the MRE within 50 metres of surface;

Ø Salamanca Project total resource base increased by 43% to 88.2 Mlbs U3O8; and

Ø The successful exploration drilling at Zona 7 and subsequent increase in resource highlights the significant exploration and resource growth potential of the broader Salamanca Project.

·      Scoping Study commenced to determine the optimum integration of Zona 7 with the development of Retortillo and Alameda, thereby potentially increasing the scale and/or mine life of the Project.

·      Key inputs for the Salamanca Project Definitive Feasibility Study ('DFS') advanced:

Ø The DFS is currently focussed on the integrated development of Retortillo and Alameda however, Zona 7 will be incorporated following completion of the abovementioned Scoping Study;

Ø The resource infill drilling program at Retortillo, aimed at upgrading sections of the resource to the Measured category, was completed. The data obtained from this infill drilling program will form the basis for a revised MRE, which is anticipated to be completed in the current quarter;

Ø Metallurgical column leaching testwork for Retortillo was completed. Solvent extraction characterisation tests are now underway; and

Ø Permeability and hydraulic conductivity tests were completed at Retortillo. The results of these tests, along with the pumping tests completed in the previous quarter, are currently being used to update the Retortillo hydrogeological model for incorporation into the DFS.  

Operations

Zona 7

Zona 7 is located within 10 kilometres of the proposed centralised processing plant at Retortillo andthere is scope to integrate it with planned development of Retortillo and Alameda, and potentially increase the level of production and/or mine life of the Salamanca Project.

A review of all available data for the regional tenements surrounding the existing resources in late 2012 identified the potential extension of Zona 7 to the southwest as a priority drill target. An 18 hole, 1,128 metre reverse circulation ('RC') drill program was subsequently completed in mid-2013 to test this priority target. This drilling, which was carried out on an approximately 400 metre by 100 metre grid, resulted in the mineralised zone being extended a further 1,200 metres to the southwest of the previous resource area.

Drilling

The 2014 drilling program, which comprised 45 RC holes for 2,923 metres and five diamond core ('DD') holes for 391 metres, was aimed at infilling the Zona 7 extension on a notional 100 metre by 100 metre grid.

The mineralisation intersected in the new infill holes showed good continuity of both thickness and grade exists between the previous broader spaced drill holes within the Zona 7 extension. Significant high grade intersections have been recorded at shallow depths (from surface to a maximum depth of 73 metres), with thicknesses up to 25 metres (Table 1).

Table 1: Zona 7 - 2014 Drilling Program - Select Intercepts

Hole No.	Down Hole Intercept	From Depth (Down Hole)
Z7R-102	21m @ 3,101 ppm U3O8	5m
Z7R-101	25m @ 2,005 ppm U3O8 17m @ 1,517 ppm U3O8	11m 50m
Z7R-104	21m @ 1,535 ppm U3O8 10m @ 501 ppm U3O8	2m 26m
Z7R-096	16m @ 1,014 ppm U3O8	5m
Z7R-112	19m @ 2,332 ppm U3O8	30m
Z7R-140	20m @ 1,238 ppm U3O8	13m
Z7R-138	12m @ 1,422 ppm U3O8 18m @ 825 ppm U3O8	32m 47m
Z7R-137	13m @ 1,067 ppm U3O8	20m
Z7R-142	20m @ 607 ppm U3O8	16m
Z7R-139	11m @ 652 ppm U3O8 10m @ 1,033 ppm U3O8	26m 40m
Z7R-114	4m @ 1,633 ppm U3O8	20m

The mineralisation remains open along the north-western margin, and along strike to the southwest. Both of these areas will be targeted in subsequent drilling campaigns.

Mineral Resource Estimate

The Mineral Resource Estimate ('MRE') for Zona 7 was updated in November 2014, incorporating additional drilling and sampling information from the 2013 and 2014 drilling campaigns. The MRE was classified as Inferred based on the guidelines recommended in the JORC Code (2012). 

The MRE is reported at a lower cut-off grade of 200 ppm U3O8 (Table 2), along with estimates showing the range of U3O8 cut-off grades that would span the range applicable to open pit mining (Table 3). 

Table 2: Zona 7 - Mineral Resource Estimate

Zona 7 - Inferred Mineral Resource Estimate as at 25 November 2014 Reported at a lower cut-off grade of 200 ppm U3O8
Domain	Tonnage (million tonnes)	Grade (U3O8 ppm)	Contained U3O8 (million pounds)
2 / 3 / 4 / 5	5.1	318	3.6
6	18.1	665	26.6
Total Inferred	23.2	589	30.1

All figures are rounded to reflect appropriate levels of confidence. Apparent differences occur due to rounding.

Table 3: Zona 7 - Grade Tonnage Table

Zona 7 - Inferred Mineral Resource Estimate as at 25 November 2014
Lower Cut-off Grade (U3O8 ppm)	Tonnage (million tonnes)	Grade (U3O8 ppm)	Contained U3O8 (million pounds)
100	35.7	434	34.2
200	23.2	589	30.1
300	15.7	754	26.1
400	11.9	882	23.2
500	9.4	1,001	20.7

Zona 7 - Scoping Study

Given the significant scale, high grade and shallow depth of the Zona 7 deposit, the Company has commenced a Scoping Study to determine the optimum integration of Zona 7 with the development of Retortillo and Alameda, thereby potentially increasing the level of production and/or mine life of the Project.

The key considerations for the Scoping Study will be preferred mining and processing route, scale, throughput rate, mine life, infrastructure, community and environmental impacts.

Retortillo / Alameda

The Company has completed a Preliminary Feasibility Study ('PFS') on the integrated development of Retortillo and Alameda, which clearly demonstrated the Project's potential to support a significant scale, long life uranium mining operation.

Using only the current MRE for Retortillo and Alameda, which total 34.5 million pounds U3O8 (36.9 million tonnes at 424 ppm; 200 ppm U3O8 cut-off grade), as a base case scenario, the PFS showed that the Project can support an average annual production of 3.3 million pounds of U3O8 during the seven years of steady state operation and 2.7 million pounds of U3O8 over a minimum eleven year mine life (refer ASX announcement dated 26 September 2013).

Definitive Feasibility Study

The DFS for the Project commenced in 2014, with the key areas of focus including:

·   Resource infill drilling programs aimed at upgrading the classification of specific portions of the current Retortillo and Alameda MRE's to the Measured category;

·   Further metallurgical testwork programs, including additional column leach work (six metre columns), in combination with ion exchange ('IX') at Alameda and solvent extraction ('SX') and ammonium diuranate ('ADU') precipitation at Retortillo to generate more detailed information relating to the pH and acid consumption optimisation, design and sizing of the IX and SX units, and final product specification;

·   Development of a Geo-Met model which will incorporate additional geological and metallurgical parameters into the resource block model to support metallurgical process modelling and mine planning and optimisation;

·   Open pit optimisation, detailed mine design and production scheduling using the upgraded MRE block models;

·   Enhanced design of the project infrastructure and site facilities;

·   Undertaking engineering studies to support capital and operating cost estimates for the Project to a level of accuracy of nominally ±10%; and

·   Undertaking an evaluation of the various alternatives for funding the development of the Project and the sale of future uranium production (including uranium marketing and off-take arrangements).

During the half year a number of work programs providing key inputs to the DFS, including the resource infill drilling program at Retortillo, the metallurgical testwork program and hydrogeological studies for both sites, were advanced.

Drilling

An infill drilling program at Retortillo, aimed at upgrading the resource classification of the areas to be mined during the initial two years of the PFS production schedule to the Measured category, was completed during the half year.

The program was designed to close the existing drill pattern down to a notional 35 metre by 35 metre pattern within the areas targeted while the core obtained from the DD drilling will facilitate enhanced geological and structural understanding of the deposit.

Following completion of the RC component of the program in September, the DD program was completed in November. In total, 69 RC holes for 4,693 metres and four DD holes for 291 metres were drilled.

The data obtained from this infill drilling program will form the basis for a revised MRE, which is anticipated to be completed and reported in April 2015.

Metallurgical Testwork

The metallurgical testwork program being undertaken for three master composite samples, representative of various mining phases at Retortillo, commenced during the half year at the Mintek facilities in Johannesburg. The six metre column leaching testwork was completed and SX characterisation tests are now underway. Whilst final results are pending, the leaching characteristics observed are generally in line with expectation.

Preparation for the master composite samples for Alameda was completed however, the six metre column leaching testwork remain on hold pending completion of the higher priority Zona 7 Scoping Study.

Hydrogeology

Hydrogeology testwork during the half year included four 72 hour pumping tests in the southern pit area at Retortillo which were designed to:

·      Identify groundwater flows in non-fractured and fractured areas;

·      Identify groundwater flow in sandstone; and

·      Identify groundwater flow in a productive area.

The results will be used to update the hydrogeological model for the site.

Permeability and hydraulic conductivity tests were also carried out using the four DD holes at Retortillo. Data obtained from these tests are currently being used to update the Retortillo hydrogeological model.

At Alameda, work on updating the hydrogeological model for the site was completed and confirmed the outcome of the previous model included in the PFS.

Permitting

Following the grant of the Mining Licence in April 2014, the approval processes associated with other key permits including the Initial Authorisation of the process plant as a radioactive facility and the Authorisation for Exceptional Use of the Land (application for reclassification from rural to industrial use) of the affected surface land area at Retortillo, continued to be the focus of permitting related activities during the half year.

All documentation required for the Initial Authorisation of the process plant as a radioactive facility, including the Radiological Analytical Study and Pre-Operational Surveillance Plan have been submitted by Berkeley and reviewed by technical staff within the Nuclear Safety Council ('NSC'). The Company has subsequently provided responses to all queries/requests for clarification put forward by the NSC technical staff. The Initial Authorisation is now pending review and approval of the documentation by the NSC Board.

The Company submitted additional documentation pertaining to the application for Exceptional Use of the Land at Retortillo to the municipalities of Retortillo and Villavieja de Yeltes in November, as requested by the Commission of Environment and Urbanism of Salamanca.  A number of follow-up meetings have been held with the relevant authorities and Berkeley's application will be placed on the agenda of a meeting of the Commission of Environment and Urbanism of Salamanca (the substantive authority) in the coming months.

The permitting process for Alameda also continued, with the Exploitation Plan and Rehabilitation and Closure Plan being submitted to the Ministry of Industry of the Central Government in October. The Environmental Scoping Document was also submitted to the Ministry of Industry in December and an introductory meeting held with the Environment Department of the Central Government following the submission. All key documentation associated with the Initial Authorisation of the processing facilities at Alameda as a radioactive facility has now been drafted. These documents will be finalised once feedback is received on the Environmental Scoping Document.

A stand-alone permitting process is required for Zona 7 however, the substantive regulatory authorities are the same as those involved in the Retortillo process. The documents required to commence the Environmental and Mining Licence processes will be prepared and submitted following completion of the Zona 7 Scoping Study and initial Environmental and Radiological Protection baseline studies.

Corporate

At 31 December 2014, the Company had cash reserves of A$16.1 million.

During the period, the Group completed an internal group restructure resulting in the merger of Spanish subsidiary entities, Berkeley Minera Espana, S.L. ('BME') and Minera de Rio Alagon, S.L., with BME the surviving entity. The merger consolidates all of the Salamanca Project licences under BME's ownership and is expected to provide significant advantages to the Group in permitting, stakeholder engagement, financing and reduction in administration/compliance costs. There is no impact on the Consolidated Entity from an accounting perspective.

Operating Results

The net operating loss after tax for the half year ended 31 December 2014 was $3,995,289 (2013: $4,186,622). 

The loss for the period includes $3,557,219 (2013: $3,953,140) in exploration and evaluation expenditure and share based payment expenses of $186,616 (2013: $526,778) were also recognised during the half year.

SIGNIFICANT POST BALANCE DATE EVENTS

At the date of this report there were no significant events occurring after balance date requiring disclosure.

AUDITOR'S INDEPENDENCE DECLARATION

Section 307C of the Corporations Act 2001 requires our auditors, Stantons International, to provide the Directors of Berkeley Resources Limited with an Independence Declaration in relation to the review of the half year financial report.  This Independence Declaration is on page 19 and forms part of this Directors' Report.

Signed in accordance with a resolution of Directors.

Robert Behets

Non-Executive Director

12 March 2015

Competent Persons Statement

The information in this report that relates to 2014 Mineral Resources for Zona 7 is extracted from the report entitled 'Salamanca Project Total Resource Increased By 43% to 88.2 Mlbs U3O8 following Substantial Increase In Zona 7 Resource' dated 26 November 2014 and is available to view on Berkeley's website at www.berkeleyresources.com.au. The information in the original ASX Announcement that relates to the 2014 Mineral Resources for Zona 7 was based on information compiled by Malcolm Titley, a Competent Person who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Titley is employed by Maja Mining Limited, an independent consulting company. Mr Titley 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 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'.  The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.

The information in this report that relates to 2014 Exploration Results is extracted from the reports entitled 'Thick, High Grade Mineralisation Intersected at Zona 7' dated 18 August 2014 and 'Further Thick, High Grade Drill Intersections at Zona 7' dated 10 November 2014 which are available to view on Berkeley's website at www.berkeleyresources.com.au. The information in the original ASX Announcements that relate to the 2014 Exploration Results is based on information compiled by Robert Behets, a Competent Person who is a Fellow of The Australasian Institute of Mining and Metallurgy. Mr Behets is a holder of shares, options and performance rights in, and is a director of, Berkeley Resources Limited. Mr Behets 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 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement. The Company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.

The information in this report that relates to earlier Exploration Results and Mineral Resources is extracted from Berkeley's ASX announcements dated 31 July 2012 (June 2012 Quarterly Report), 31 October 2012 (September 2012 Quarterly Report), 7 August 2013 and 26 September 2013 which are available to view on Berkeley's website at www.berkeleyresources.com.au. The information in the original ASX announcements was based on information compiled by Craig Gwatkin, who is a Member of The Australian Institute of Mining and Metallurgy and was 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. This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.

The information in this report that relates to the Pre-Feasibility Study is extracted from Berkeley's ASX announcement dated 26 September 2013 which is available to view on Berkeley's website at www.berkeleyresources.com.au. The information in the original ASX announcement was based on information compiled by Neil Senior of SENET (Pty) Ltd. Mr Senior is a Fellow of The South African Institute of Mining and Metallurgy and 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 Senior consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.

Production Target

The Production Target stated in this Report is based on the Company's Pre-Feasibility Study ('PFS') for the Salamanca Project as released to the ASX on 26 September 2013. The information in relation to the Production Target that the Company is required to include in a public report in accordance with ASX Listing Rule 5.16 was included in the Company's June 2014 Quarterly Report released to the ASX on 24 July 2014.

The Company confirms that the material assumptions underpinning the PFS and Production Target referenced in the 26 September 2013 and 24 July 2014 releases continue to apply and have not materially changed.

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.

DIRECTORS' DECLARATION

In accordance with a resolution of the Directors of Berkeley Resources Limited, I state that:

In the opinion of the Directors:

(a)      the financial statements and notes, as set out on pages 10 to 18, are in accordance with the Corporations Act 2001, including:

(i)       complying with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations 2001; and

(ii)      giving a true and fair view of the consolidated entity's financial position as at 31 December 2014 and of its performance for the half year ended on that date.

(b)      there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

On behalf of the Board

Robert Behets

Non-Executive Director

12 March 2015

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE HALF YEAR ENDED 31 DECEMBER 2014

	Note	Half Year Ended 31 December 2014 $	Half Year Ended 31 December 2013 $
Revenue from continuing operations	5	314,580	806,487
Exploration and evaluation costs		(3,557,219)	(3,953,140)
Corporate and administration costs		(566,034)	(513,191)
Share based payments expense		(186,616)	(526,778)
Loss before income tax		(3,995,289)	(4,186,622)
Income tax expense		-	-
Loss for the half year attributable to Members of Berkeley Resources Limited		(3,995,289)	(4,186,622)
Other comprehensive income, net of income tax:
Items that will not be reclassified subsequently to profit or loss		-	-
Items that may be reclassified subsequently to profit or loss
Exchange differences arising on translation of foreign operations		264,586	877,694
Other comprehensive income/(loss) for the period, net of income tax		264,586	877,694
Total comprehensive loss for the half year attributable to Members of Berkeley Resources Limited		(3,730,703)	(3,308,928)
Earnings per share
Basic loss per share (cents per share)		(2.22)	(2.33)
Diluted loss per share (cents per share)		(2.22)	(2.33)

The above Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2014

	Note	31 December 2014 $	30 June 2014 $
ASSETS
Current Assets
Cash and cash equivalents		16,162,995	20,245,401
Trade and other receivables		783,610	549,183
Total Current Assets		16,946,605	20,794,584
Non-current Assets
Exploration expenditure	6	14,523,864	14,268,990
Property, plant and equipment		1,773,060	1,785,251
Other financial assets		125,769	132,003
Total Non-current Assets		16,422,693	16,186,244
TOTAL ASSETS		33,369,298	36,980,828
LIABILITIES
Current Liabilities
Trade and other payables		1,047,736	1,130,791
Other financial liabilities		283,641	268,029
Total Current Liabilities		1,331,377	1,398,820
TOTAL LIABILITIES		1,331,377	1,398,820
NET ASSETS		32,037,921	35,582,008
EQUITY
Issued capital	7	119,358,591	119,358,591
Reserves	8	(955,127)	(1,180,339)
Accumulated losses		(86,365,543)	(82,596,244)
TOTAL EQUITY		32,037,921	35,582,008

The above Condensed Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE HALF YEAR ENDED 31 DECEMBER 2014

	Issued Capital	Share Based Payments Reserve	Foreign Currency Translation Reserve	Accumulated Losses	Total
	$	$	$	$	$
As at 1 July 2014	119,358,591	1,240,193	(2,420,532)	(82,596,244)	35,582,008
Total comprehensive loss for the period:
Net loss for the period	-	-	-	(3,995,289)	(3,995,289)
Other comprehensive income:
Exchange differences arising on translation of foreign operations	-	-	264,586	-	264,586
Total comprehensive income/(loss)	-	-	264,586	(3,995,289)	(3,730,703)
Transactions with owners, recorded directly in equity
Transfer from share based payments reserve	-	(225,990)	-	225,990	-
Share based payments	-	186,616	-	-	186,616
As at 31 December 2014	119,358,591	1,200,819	(2,155,946)	(86,365,543)	32,037,921
As at 1 July 2013	119,061,813	2,623,721	(2,593,048)	(76,955,886)	42,136,600
Total comprehensive loss for the period:
Net loss for the period	-	-	-	(4,186,622)	(4,186,622)
Other comprehensive income:
Exchange differences arising on translation of foreign operations	-	-	877,694	-	877,694
Total comprehensive income/(loss)	-	-	877,694	(4,186,622)	(3,308,928)
Transactions with owners, recorded directly in equity
Transfer from share based payments reserve	299,112	(1,181,095)	-	881,983	-
Share based payments	-	526,778	-	-	526,778
As at 31 December 2013	119,360,925	1,969,404	(1,715,354)	(80,260,525)	39,354,450

The above Condensed Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE HALF YEAR ENDED 31 DECEMBER 2014

	Half Year Ended 31 December 2014 $	Half Year Ended 31 December 2013 $
Cash flows from operating activities
Payments to suppliers and employees	(4,368,135)	(4,921,978)
Interest received	358,670	331,069
Rebates received	-	328,583
Net cash outflow from operating activities	(4,009,465)	(4,262,326)
Cash flows from investing activities
Payments for property, plant and equipment	(68,413)	(271,690)
Payments for exploration and evaluation	(4,606)	-
Net cash outflow from investing activities	(73,019)	(271,690)
Cash flows from financing activities
Proceeds from issue of securities	-	-
Transaction costs from issue of shares and options	-	-
Net cash inflow from financing activities	-	-
Net decrease in cash and cash equivalents held	(4,082,484)	(4,534,016)
Cash and cash equivalents at the beginning of the period	20,245,401	27,736,790
Effects of exchange rate changes on cash and cash equivalents	78	2,076
Cash and cash equivalents at the end of the period	16,162,995	23,204,850

The above Condensed Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

CONDENSED NOTES TO THE FINANCIAL STATEMENTS

FOR THE HALF YEAR ENDED 31 DECEMBER 2014

1.       REPORTING ENTITY

Berkeley Resources Limited (the "Company") is a company domiciled in Australia. The interim financial report of the Company is as at and for the six months ended 31 December 2014.

The annual financial report of the Company as at and for the year ended 30 June 2014 is available upon request from the Company's registered office.

2.       STATEMENT OF COMPLIANCE

The interim financial report is a general purpose financial report which has been prepared in accordance with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Act 2001.

This interim financial report does not include all the information of the type normally included in an annual financial report.  Accordingly, this report is to be read in conjunction with the annual report of Berkeley Resources Limited for the year ended 30 June 2014 and any public announcements made by Berkeley Resources Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

This interim financial report was approved by the Board of Directors on 11 March 2015.

(a)      Basis of Preparation of Half Year Financial Report

The principal accounting policies adopted in the preparation of the financial report have been consistently applied to all the periods presented, unless otherwise stated.

Historical cost convention

These financial statements have been prepared under the historical cost convention, as modified where applicable by the revaluation of available-for-sale financial assets, financial assets and liabilities (including derivative instruments) at fair value through profit or loss.

3.       SIGNIFICANT ACCOUNTING POLICIES

Accounting policies applied by the Consolidated Entity in this consolidated interim financial report are the same as those applied by the Consolidated Entity in its consolidated financial report for the year ended 30 June 2014.

In the current period, the Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for annual reporting periods beginning on or after 1 July 2014. The adoption of these new and revised standards has not resulted in any significant changes to the Group's accounting policies or to the amounts reported for the current or prior periods.

New and revised Standards and amendments thereof and Interpretations effective for the current half-year that are relevant to the Group include:

·      AASB 132 Financial Instruments: Presentation and AASB 2012-3 Amendments to Australian Accounting Standards arising from AASB 132;

·      AASB 136 Impairment of Assets and AASB 2013-3 Amendments to Australian Accounting Standards arising from AASB 136; and

·      AASB 1031 Materiality and AASB 2013-9 (Part B) Amendments to Australian Accounting Standards to delete references to AASB 1031.

4.       SEGMENT INFORMATION

AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Consolidated Entity that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance.

The Consolidated Entity operates in one operating segment, being exploration for mineral resources within Spain. This is the basis on which internal reports are provided to the Directors for assessing performance and determining the allocation of resources within the Consolidated Entity.

5.       REVENUE FROM CONTINUING OPERATIONS

	Consolidated 31 December 2014 $	Consolidated 31 December 2013 $
Interest revenue	314,580	477,904
R&D rebate received	-	328,583
	314,580	806,487

6.       NON-CURRENT ASSETS - EXPLORATION EXPENDITURE

	Consolidated 31 December 2014 $	Consolidated 30 June 2014 $
The group has mineral exploration costs carried forward in respect of areas of interest:
Areas in exploration at cost: Salamanca Uranium Project
Balance at the beginning of period	14,268,990	14,173,930
Net additions/ (disposals)	4,606	(68,457)
Foreign exchange differences	250,268	163,517
Balance at end of period	14,523,864	14,268,990

The value of the exploration interests is dependent upon the discovery of commercially viable reserves and the successful development or alternatively sale, of the respective tenements.  An amount of €6m (A$8.94m) relates to the capitalisation of the fees paid to ENUSA under the Co-operation Agreement relating to the tenements within the State Reserves.  The Company reached agreement with ENUSA in July 2012 in the form of an Addendum to the Consortium Agreement signed in January 2009.  The Addendum includes the following terms:

·      The Consortium now consists of the Addendum Reserves (State Reserves Salamanca 28 and 29);

·      Berkeley's stake in the Consortium has increased to 100%;

·      ENUSA will remain the owner of State Reserves 28 and 29, however the exploitation rights have been assigned to Berkeley, together with authority to submit all applications for the permitting process;

·      The Company is now the sole and exclusive operator in the Addendum Reserves, with the right to exploit the contained uranium resources and have full ownership of any uranium produced;

·      ENUSA will receive a production fee equivalent to 2.5% of the net sale value (after marketing and transport costs) of any uranium produced within the Addendum Reserves;

·      Berkeley has waived its rights to mining in State Reserves 2,25, 30, 31, Hoja 528-1 and the Saelices El Chico Exploitation Concession, and has waived any rights to management of the Quercus plant; and

·      The Co-operation Agreement with ENUSA, signed on 29 January 2009, has been terminated.

7.       CONTRIBUTED EQUITY

(a)      Issued and Paid Up Capital

	Consolidated 31 December 2014 $	Consolidated 30 June 2014 $
180,361,323 (30 June 2014: 180,361,323) fully paid ordinary shares	119,358,591	119,358,591

(b)      Movements in Ordinary Share Capital During the Six Month Period ended 31 December 2014:

Date	Details	Number of Shares	Issue Price $	$
1 Jul 14	Opening Balance	180,361,323		119,358,591
31 Dec 14	Closing Balance	180,361,323		119,358,591

(c)      Movements in Options and Performance Rights During the Six Month Period ended 31 December 2014:

Date	Details	Number of Incentive Options	Number of Performance Rights	Fair Value $	Share based payments reserve $
1 Jul 14	Opening Balance	8,250,000	4,194,000		1,240,193
31 Dec 14	Performance rights expired	-	(1,118,000)		(225,990)
31 Dec 14	Share based payments expense(1)	-	-		186,616
31 Dec 14	Closing Balance	8,250,000	3,076,000		1,200,819

Note:

(1)        The value of Incentive Options granted is recognised over the vesting period of the grant, in accordance with Australian Accounting Standards.

The following options and performance rights have been issued over unissued capital as at 31 December 2014:

Performance Rights

·         1,478,000 performance rights at no exercise price that expire on 31 December 2016; and

·         1,598,000 performance rights at no exercise price that expire on 31 December 2017.

Unlisted Options

·         1,750,000 unlisted options at an exercise price of $0.475 each that expire on 22 December 2015;

·         1,000,000 unlisted options at an exercise price of $0.41 each that expire on 21 September 2015; and

·         5,500,000 unlisted options at an exercise price of $0.45 each that expire on 30 June 2016.

8.       RESERVES

	31 December 2014 $	30 June 2014 $
## (a)        Reserves
Share based payments reserve (note 7(c))	1,200,819	1,240,193
Foreign exchange reserve	(2,155,946)	(2,420,532)
	(955,127)	(1,180,339)

9.       SUBSIDIARIES

The consolidated financial statements include the financial statements of the Company and the subsidiaries listed in the following table:

Name of Controlled Entity	Place of Incorporation	Equity Interest		Investment
		31 December 2014 %	30 June 2014 %	31 December 2014 $	30 June 2014 $
Berkeley Exploration Ltd	UK	100(1)	100	-	-
Minera de Rio Alagon. S.L.	Spain	-(2)	100	-	5,481,411
Berkeley Minera Espana, S.L.	Spain	100(3)	100	5,481,411	-
Geothermal Energy Sources, S.L.	Spain	100(4)	100	-	-
				5,481,411	5,481,411

Notes

(1)   Berkeley Exploration Ltd is a 100% owned subsidiary of Berkeley Resources Limited. Berkeley Exploration Ltd's issued and paid up capital is £8,298,972 (30 June 2014: £2).

(2)   Minera de Rio Alagon, S.L. was a wholly owned subsidiary of Berkeley Resources Limited until 31 October 2014 when it merged with Berkeley Minera Espana, S.L. as part of an internal group restructure. Berkeley Minera Espana, S.L. was the surviving entity and assumed all of Minera de Rio Alagon, S.L.'s assets and liabilities.  

(3)   Berkeley Minera Espana, S.L. was incorporated on 12 May 2009 and is a wholly owned subsidiary of Berkeley Exploration Limited.  Berkeley Minera Espana, S.L.'s issued and paid up capital is €56,917,363 (30 June 2014: €44,388,218).

(4)   Berkeley Exploration Limited acquired 100% of the issued shares in Geothermal Energy Sources, S.L. on 15 May 2009.  Geothermal Energy Sources, S.L.'s issued and paid up capital is €20,000 (30 June 2014: €20,000).       

(5)   In the opinion of the Directors, the above named investments in controlled entities have a carrying value in the Company at balance date of $5,481,411 (30 June 2014: $5,481,411), being the cost of the investment less provision for impairment.

(a)       Ultimate Parent

Berkeley Resources Limited is the ultimate parent of the Group.

10.     CONTINGENT LIABILITIES AND COMMITMENTS

There was no material change in contingent liabilities or commitments from those previously disclosed at the last reporting period.

11.     DIVIDENDS PAID OR PROVIDED FOR

No dividend has been paid or provided for during the half year.

12.     FAIR VALUE OF FINANCIAL INSTRUMENTS

The Group's financial instruments consist of those which are measured at amortised cost including trade and other receivables, security bonds, trade and other payables and other financial liabilities.  The carrying amount of these financial assets and liabilities approximate their fair value. 

13.     SUBSEQUENT EVENTS AFTER BALANCE DATE

As at the date of this report there were no significant events occurring after balance date requiring disclosure.

AUDITOR'S INDEPENDENCE DECLARATION AND REVIEW REPORT

The Auditor's Independence Declaration and the Independent Auditor's Review Report are available in the full version of the Interim Financial Report on Berkeley Resources Limited's website at:

www.berkeleyresources.com.au

This information is provided by RNS

The company news service from the London Stock Exchange

END

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