Quarterly Activities Report

RNS Number : 3441L

Berkeley Resources Limited

29 July 2011

 



29 July 2011

BERKELEY RESOURCES LIMITED

Quarterly Activities Report - June 2011

The June Quarter was a period of transformation for Berkeley Resources Limited (Berkeley or the Company), as the company progresses towards the development of the Salamanca Uranium Project. Key events include:

·    On May 23^rd ENUSA notified Berkeley by letter regarding its concerns about the restricted Mining Domain Feasibility Study (MDFS).

·    Berkeley responded on May 25^th supporting the MDFS and requesting the incorporation of the Joint Venture (JV) company called ''Newco'' by May, 27^th 2011.

·    Newco was not incorporated by the agreed deadline.

·    Brendan James commenced his appointment as Managing Director on June 1^st, and since June 9^th has been based in Salamanca.

·    Scott Yelland resigned as COO and Director on June 30^th. Francisco Bellón del Rosal was promoted to General Manager Operations, effective July 1^st.

·    Henry Horne resigned as CFO on June 30^th, however maintains his position as a Non-Executive Director.

·    Drilling campaigns started at Águila, Alameda and Retortillo targeting an upgrade of resource estimations, to Measured and Indicated categories.

·    ENUSA and Berkeley conducted a number of meetings in June and July with the principal objective of reconciling differing views.  Discussions between the parties are ongoing.

·    Berkeley awards the Basic Engineering Conceptual Design for the Salamanca Uranium Project to the international engineering firm, JACOBS. Spanish Engineering company TÉCNICAS REUNIDAS, was also contracted to undertake an Independent Review of the Project.

Enquiries - Managing Director:           Brendan James          Tel: [phone]

RBC Capital Markets:                        Martin Eales                Tel: [phone]

SALAMANCA URANIUM PROJECT

Progress continues on the Salamanca Uranium Project with a number of parallel streams ongoing, or having been initiated during the June Quarter.  These include:

·    Technical meetings between Berkeley and ENUSA to understand, and if appropriate, incorporate ENUSA´s concerns into Berkeley´s restricted MDFS.

·    Legal meetings between Berkeley and ENUSA to run in parallel with the technical meetings in order to complete the framework for the incorporation of Newco.

·    Initiation of 'Basic Engineering Design' for the Salamanca Uranium Project and the commencement of an 'Independent Technical Review'.

·    Continuation of metallurgical optimisation test work.

CO-OPERATION AGREEMENT WITH ENUSA

Following Cabinet approval of the Co-operation Agreement of 29^th January 2009 (the Agreement), and Berkeley's subsequent access to historical data, the Company commenced a programme of confirmatory drilling and metallurgical test work in May 2009. According to the Agreement, Berkeley was required to complete a Feasibility Study, which was restricted to measured and indicated resources within the State Reserves, by November 2010 with provision for an extension of up to 12 months. 

Under the terms of the Agreement, Berkeley elected to make the decision to exploit the eligible Mineral Resources within the State Reserves on 17^th January 2011. This decision triggered the formation of a joint venture company, NEWCO, owned 90% by Berkeley and 10% by ENUSA, which will have the right to exploit uranium Mineral Resources within the State Reserves. The formation of NEWCO does not impede Berkeley from also developing its 100% owned Mineral Resources and treating either mined material or concentrates through the Quercus Plant under a toll treatment arrangement provided for in the Co-operation Agreement, or via developing its own stand-alone processing facilities.

The parties agreed the target date of 27^th May 2011 to form NEWCO.

Update on Negotiations

On Monday 23^rd May 2011 ENUSA informed Berkeley by letter of its concerns regarding a number of aspects of the MDFS.

On Wednesday 25^th May 2011 Berkeley responded to ENUSA, supporting the MDFS and requesting ENUSA to complete the formation of the Newco by the agreed deadline of Friday 27^th May 2011.

Berkeley and ENUSA were under the obligation to incorporate Newco on 27^th May 2011.  Newco was not incorporated in time and Berkeley subsequently received further information from ENUSA detailing the reasons for not incorporating Newco.

Berkeley has taken advice in this matter from the Madrid office of a leading international legal firm and is being advised on legal alternatives.

ENUSA and Berkeley have conducted a number of subsequent meetings in June and July with the principal objective of reconciling differing views about the purpose and content of the restricted MDFS and the impact of these differences on the timing of forming NEWCO. Discussions between the parties are ongoing.

Berkeley and ENUSA have both stated a commitment to this process and believe that there are several constructive options to address the differences. However, Berkeley also recognises the possibility that satisfactory agreement between the parties may not be achieved and therefore continues to assess its alternatives.

EXPLORATION & DRILLING

Exploration and drilling activity during the quarter was focussed on three objectives: drill testing of exploration targets at Mimbre North and Retortillo; drilling at Alameda South to test for possible extensions and to complete the infill holes required to complete the resource upgrade; and surface exploration to identify new drilling targets. Encouraging results were achieved at Mimbre North and Alameda South, and strong radiometric anomalies identified at Villar East and Carpio provide encouraging drill targets, once definition work is completed.

A total of 48RC holes were drilled for a total of 2,756m and details are recorded in the Appendix, together with available assay data.

Mimbre North

The Mimbre North prospect lies 1km due south of the main Alameda South deposit within the Alameda State Reserve. As described in the ASX Announcements of 24^th March 2011, the exploration target here is blind mineralisation below cover within the metasedimentary package proximal to the granite contact. A total of 34 wide spaced (1km x 1km) holes were drilled in the 1990's by ENUSA at Espeja some approximately 10km south of the Alameda South deposit. Significantly, 40% of these holes intersected uranium mineralization with grades up to 1,700 ppm U3O8, and some intersections in excess of 10m. The mineralization intersected occurs in the same lithostructural setting but occurs at depths of 80m in basement with significant Tertiary cover. Significant potential for discovery of uranium mineralisation at more amenable depths is recognised at Mimbre, the area centred between the ENUSA historic drilling at Espeja and Alameda South.

The RC program initiated in March was completed with 14 holes totalling 876m completed on a 200 x 400m grid. Chemical assays have now been received and anomalous uranium mineralisation (defined as an intersection >= 1m @ >100ppm and <200ppm U₃O₈)was found in three holes and a significant intersection was made in the most southerly hole drilled to date (ASR-082) with 4m @ 472ppm U₃O₈from 17m. This intersection is considered extremely important because it indicates the possibility of an entirely new zone of mineralisation to the south, on the 100% Berkeley owned Mimbre license. Follow up drilling within the Mimbre license is scheduled for the September quarter.

Alameda South

The Alameda South deposit  within a State Reserve is the largest unexploited uranium deposit in Spain, with a current resource of 20.2M tonnes @ 445ppm U₃O_8, totalling 18.2Mlb U₃O₈. A short RC program of 12 holes for 714m was completed during March to test for possible extensions in a structural corridor on the eastern side of the deposit.  A narrow zone of high grade mineralisation has been discovered with a strike length of >200m and intersections of up to 8m @ 1,819ppm U3O8 in hole ASR-094. Once complete assay data are available, this zone will be incorporated into the new resource estimate for Alameda South, together with the results from the recent program of diamond drilling for metallurgical sampling reported in the March Quarter.

Additional mineralisation has also been identified in scout drilling on the western side of the deposit.  Results have been received for two of the four holes (ASR-102 and 103), and radiometrics would indicate that holes 116 and 117 are also mineralised but results are pending. The mineralisation in holes ASR-102 and 103 indicate a new zone of mineralisation with potential to add significant incremental resources.

Currently the rig is finalising a 22 hole RC program aimed at upgrading the small inferred resource component of the deposit, in general there is an excellent correlation between the new data and the current model.

Retortillo

At Retortillo (100% Berkeley owned) an exploration program of 20 RC holes totalling 1,500m was aimed at testing for blind mineralisation in favourable stratigraphy, below Tertiary cover, in close proximity to the main deposit following the intersection of weakly anomalous radiometrics in a water bore hole. It was commenced during of the last quarter and completed in April. Despite intersecting favourable stratigraphy in a number of the holes, only one intersected weakly anomalous radiometrics. As a result, the program was cancelled after drilling 12 holes for 804m. A review of the remaining exploration potential is in progress to identify additional new targets in proximity to the main deposit.

Planning of a combined RC and diamond drill program of 193 holes for 10,600m covering the Retortillo and Santidad deposits was finalised and drilling has commenced  with the aim of completion within three months. The objectives are to upgrade the remaining 63% of the Inferred Resources at Retortillo to Indicated and to upgrade Santidad from Inferred to Indicated.

NEW PROSPECT GENERATION

Generative work in the form of desk top studies and field work has been ongoing during the period at Carpio and Villar East.  Extensive ground radiometric anomalies have been defined at both locations associated with outcropping mineralization. Both targets represent excellent prospects and will be drill ready by the next quarter. At Carpio, the best potential is considered below cover sediments to the south in Berkeley licenses and at Villar East the main radiometric anomaly appears not to have been drilled by ENUSA or the JEN in the past.

METALLURGICAL TESTWORK AND PROJECT ENGINEERING

Project Optimisation works started in April 2011. The work included a batch test work campaign commenced at SGS Metallurgical Laboratories in Perth, Western Australia which is ongoing and will be finished by August 2011.

The test work comprises:

·     Heap Leach Scoping Study, for two scenarios of 1.4 and 2.8 Mt/annum at Retortillo, including mass balance, process flow diagrams, simple design criteria, equipment and motor list.

·     Optimisation Scoping Study for the Aguila plant, incorporating trade off side studies examining conminution incorporating a single crusher stage and SAG milling This option is more compliant with ALARA principals relating to radiological criteria, with lower Capex requirements compared with the Mining Domain Feasibility Study design, which consist of three crushing stages plus ball milling.

·     Sageras and Alameda Tank Leach Optimisation and Variability analysis.

Engineering work for Mining Domain Conceptual Basic Engineering has been awarded to JACOBS. The target is to develop the next step of the engineering of the project and provide with confidence levels of ±15% for CAPEX estimation and ±10% for Opex. Conceptual Basic Engineering will be finished by the end of October 2011.

Project Outlook

Formation of NEWCO enables permit applications to be lodged with the Spanish Government and begins a permitting process currently estimated at 18 months. In parallel with these developments, the Company has, as previously announced, appointed an external engineering design team and an internal Project Manager. Works continue to complete the remaining metallurgical test work required for the overall Salamanca Project, including Retortillo as a stand-alone project, or incorporated into the greater Salamanca Uranium Project.

CORPORATE DEVELOPMENTS

Appointment of New Managing Director and CEO

On 11^th March 2011, the Company announced the appointment of Mr Brendan James to become Managing Director and Chief Executive Officer of the Company, effective 30^th May 2011.  Mr James is a metallurgical engineer, with an exceptional background in developing, commissioning and optimising a number of large uranium, copper and gold operations.  His technical background includes outstanding senior management experience in uranium mining and processing, project management, re-designing and commissioning previously decommissioned operations, biological heap leaching and hydrometallurgy.  This background is complemented by five years experience in financial markets, on both the buy and sell sides, where he was a Partner at Perennial Growth Management, one of Melbourne's leading fund managers.

Mr James commenced his appointment as Managing Director and since 9^th June has been based in Salamanca.

Resignation of COO and CFO. New Management Appointments.

Mr Scott Yelland, the Company's Chief Operating Officer has resigned from the Company for family reasons on June 30th. He has also resigned from the Board with immediate effect.

His responsibilities will be covered by the recent appointments of Mr Brendan James as Managing Director, and Mr Francisco Bellón del Rosal as Project Manager for the Salamanca Uranium Project.  Mr. Bellón del Rosal has been promoted to General Manager Operations, effective July 1st 2011.

In addition, Mr. Henry Horne has resigned from his executive position as Chief Financial Officer of the Company, however he will remain as a Non-executive Director of the Company.  Mr. Sam Middlemas, the Company Secretary, will act as Chief Financial Officer until a permanent replacement is recruited.

A full version of this announcement including images can be downloaded from Berkeley's website at www.berkeleyresources.com.au.

APPENDIX

SUMMARY OF DRILLING

Deposit	RC Q2 2011		RC Year to date
	Holes	Metres	Holes	Metres
Alameda South	39	2,157	44	2561
Retortillo	9	599	12	804
Total	48	2,756	56	3,365
Deposit	DDH Q2 2011		DDH Year to date
	Holes	Metres	Holes	Metres
Alameda South	-	-	15	1,422
Retortillo	-	-	20	1,615
Sageras West	-	-	8	459
Total	0	0	43	3,496

Figure 1 - Summary Table of 2011 Drilling

ALAMEDA DRILLING

Hole ID	Easting	Northing	Elevation	Depth	Azimuth	Dip	From	To	Interval	U3O8
	(m)	(m)	(m)	(m)	(º)	(º)	(m)	(m)	(m)	(ppm)
ASR-081	689909	4500829	743.0	82.00	0	-90	Not Mineralized
ASR-082	690051	4499415	733.0	88.00	0	-90	14	15	1	235
							17	21	4	472
ASR-083	689980	4499415	733.0	58.00	0	-90	Not Mineralized
ASR-084	689598	4499600	737.0	82.00	0	-90	Not Mineralized
ASR-085	689742	4499716	742.0	94.00	0	-90	Not Mineralized

Figure 2 - Summary Table of 2011 Drilling

Hole ID	Easting	Northing	Elevation	Depth	Azimuth	Dip	From	To	Interval	U3O8
	(m)	(m)	(m)	(m)	(º)	(º)	(m)	(m)	(m)	(ppm)
ASR-086	689909	4499839	750.4	52.00	0	-90	Not Mineralized
ASR-087	690107	4499776	742.5	52.00	0	-90	Not Mineralized
ASR-088	690053	4499980	747.1	52.00	0	-90	Not Mineralized
ASR-089	689698	4499911	750.3	52.00	0	-90	Not Mineralized
ASR-090	689630	4500122	754.6	56.00	0	-90	Not Mineralized
ASR-091	689834	4499481	740.6	52.00	0	-90	Not Mineralized
ASR-092	689768	4500261	753.7	60.00	0	-90	Not Mineralized
ASR-093	689909	4500405	746.6	52.00	0	-90	Not Mineralized
ASR-094	689995	4500964	747.7	70.00	0	-90	21	22	1	477
							28	36	8	1,819
ASR-095	690122	4501042	754.5	57.00	0	-90	Not Mineralized
ASR-096	690192	4500127	753.6	74.00	0	-90	Not Mineralized
ASR-097	690196	4499567	736.5	52.00	0	-90	Not Mineralized
ASR-098	689491	4500994	747.5	52.00	0	-90	Not Mineralized
ASR-099	689479	4500944	746.7	52.00	0	-90	Not Mineralized
ASR-100	688569	4501494	735.0	46.00	0	-90	Not Mineralized
ASR-101	688615	4501484	738.1	70.00	0	-90	Not Mineralized
ASR-102	688531	4501582	731.3	64.00	0	-90	45	46	1	224
							49	52	3	224
ASR-103	688499	4501698	726.9	58.00	0	-90	13	17	4	236
							19	23	4	362
ASR-104	690030	4501002	750.1	50.00	0	-90	Not Mineralized
ASR-105	689958	4500929	746.3	60.00	0	-90	Not Mineralized
ASR-106	689961	4501070	753.1	60.00	0	-90	Not Mineralized
ASR-107	689920	4501038	751.9	70.00	0	-90	35	37	2	2,114
							41	47	6	954
ASR-108	689885	4500996	750.2	60.00	0	-90	Not Mineralized
ASR-109	689828	4501071	754.3	64.00	0	-90	38	44	6	1,575
ASR-110	690075	4500906	750.2	56.00	0	-90	Results pending
ASR-111	690034	4500865	748.1	60.00	0	-90	Results pending
ASR-112	690109	4500937	751.3	82.00	0	-90	Results pending
ASR-113	688660	4501263	735.0	35.00	0	-90	Results pending
ASR-114	688618	4501278	734.5	22.00	0	-90	Results pending
ASR-115	688763	4501781	730.2	62.00	0	-90	Results pending
ASR-116	688500	4501767	724.9	50.00	0	-90	Results pending
ASR-117	688459	4501755	723.9	50.00	0	-90	Results pending
ASR-118	689674	4501181	757.2	52.00	0	-90	Results pending
ASR-119	688669	4501314	739.0	58.00	0	-90	Results pending
ASR-120	688620	4501326	736.0	34.00	0	-90	Results pending
ASR-121	688583	4501386	736.0	30.00	0	-90	Results pending
ASR-122	688632	4501374	737.0	54.00	0	-90	Results pending
ASR-123	688681	4501363	741.0	67.00	0	-90	Results pending
ASR-124	688643	4501423	740.0	58.00	0	-90	Results pending

Figure 3 -  Holes Drilled in Q2 with assays where available

Hole ID	Easting	Northing	Elevation	Depth	Azimuth	Dip	From	To	Interval	U3O8
	(m)	(m)	(m)	(m)	(º)	(º)	(m)	(m)	(m)	(ppm)
ASR-086	689909	4499839	750.4	52.00	0	-90	Not Mineralized
ASR-087	690107	4499776	742.5	52.00	0	-90	Not Mineralized
ASR-088	690053	4499980	747.1	52.00	0	-90	Not Mineralized
ASR-089	689698	4499911	750.3	52.00	0	-90	Not Mineralized
ASR-090	689630	4500122	754.6	56.00	0	-90	Not Mineralized
ASR-091	689834	4499481	740.6	52.00	0	-90	Not Mineralized
ASR-092	689768	4500261	753.7	60.00	0	-90	Not Mineralized
ASR-093	689909	4500405	746.6	52.00	0	-90	Not Mineralized
ASR-094	689995	4500964	747.7	70.00	0	-90	21	22	1	477
							28	36	8	1,819
ASR-095	690122	4501042	754.5	57.00	0	-90	Not Mineralized
ASR-096	690192	4500127	753.6	74.00	0	-90	Not Mineralized
ASR-097	690196	4499567	736.5	52.00	0	-90	Not Mineralized
ASR-098	689491	4500994	747.5	52.00	0	-90	Not Mineralized
ASR-099	689479	4500944	746.7	52.00	0	-90	Not Mineralized
ASR-100	688569	4501494	735.0	46.00	0	-90	Not Mineralized
ASR-101	688615	4501484	738.1	70.00	0	-90	Not Mineralized
ASR-102	688531	4501582	731.3	64.00	0	-90	45	46	1	224
							49	52	3	224
ASR-103	688499	4501698	726.9	58.00	0	-90	13	17	4	236
							19	23	4	362
ASR-104	690030	4501002	750.1	50.00	0	-90	Not Mineralized
ASR-105	689958	4500929	746.3	60.00	0	-90	Not Mineralized
ASR-106	689961	4501070	753.1	60.00	0	-90	Not Mineralized
ASR-107	689920	4501038	751.9	70.00	0	-90	35	37	2	2,114
							41	47	6	954
ASR-108	689885	4500996	750.2	60.00	0	-90	Not Mineralized
ASR-109	689828	4501071	754.3	64.00	0	-90	38	44	6	1,575
ASR-110	690075	4500906	750.2	56.00	0	-90	Results pending
ASR-111	690034	4500865	748.1	60.00	0	-90	Results pending
ASR-112	690109	4500937	751.3	82.00	0	-90	Results pending
ASR-113	688660	4501263	735.0	35.00	0	-90	Results pending
ASR-114	688618	4501278	734.5	22.00	0	-90	Results pending
ASR-115	688763	4501781	730.2	62.00	0	-90	Results pending
ASR-116	688500	4501767	724.9	50.00	0	-90	Results pending
ASR-117	688459	4501755	723.9	50.00	0	-90	Results pending
ASR-118	689674	4501181	757.2	52.00	0	-90	Results pending
ASR-119	688669	4501314	739.0	58.00	0	-90	Results pending
ASR-120	688620	4501326	736.0	34.00	0	-90	Results pending
ASR-121	688583	4501386	736.0	30.00	0	-90	Results pending
ASR-122	688632	4501374	737.0	54.00	0	-90	Results pending
ASR-123	688681	4501363	741.0	67.00	0	-90	Results pending
ASR-124	688643	4501423	740.0	58.00	0	-90	Results pending

Figure 4 -  Holes Drilled in Q2 with assays where available

RETORTILLO DRILLING

Hole ID	Easting	Northing	Elevation	Depth	Azimuth	Dip	From	To	Interval	U3O8
	(m)	(m)	(m)	(m)	(º)	(º)	(m)	(m)	(m)	(ppm)
RTR-120	719923	4519267	745.2	55.00	0	-90	Not mineralized
RTR-121	719991	4519389	750.9	75.00	0	-90	Not mineralized
RTR-122	719721	4519536	751.1	75.00	0	-90	Not mineralized

Figure 5 - Holes drilled in Q1 with Assay results reported during Q2

Hole ID	Easting	Northing	Elevation	Depth	Azimuth	Dip	From	To	Interval	U3O8
	(m)	(m)	(m)	(m)	(º)	(º)	(m)	(m)	(m)	(ppm)
RTR-123	719382	4519766	751.9	63.00	0	-90	Not mineralized
RTR-124	719431	4519851	755.5	29.00	0	-90	Not mineralized
RTR-125	720227	4519097	760.8	80.00	0	-90	Not mineralized
RTR-126	720581	4518912	762.2	81.00	0	-90	Not mineralized
RTR-127	720541	4518847	754.5	74.00	0	-90	Not mineralized
RTR-128	720865	4518593	743.4	75.00	0	-90	Not mineralized
RTR-129	720909	4518683	756.0	75.00	0	-90	Not mineralized
RTR-130	720839	4518514	734.2	57.00	0	-90	Not mineralized
RTR-131	721213	4518292	729.0	65.00	0	-90	Not mineralized

Figure 6 - Holes Drilled in Q2 with assays where available

SUPPLEMENTARY INFORMATION

The uranium grades reported in this release that are annotated with a sub-prefix "e" have been reported as uranium equivalent grades derived from down-hole gamma ray logging results and so they should be regarded as approximations only. 

The Berkeley drill holes were logged with a GeoVista total count gamma tool. The gamma tool is calibrated each year in Adelaide at the Department of Water, Land and Biodiversity Conservation in calibration pits constructed under the supervision of CSIRO. The various calibration factors were calculated by David Wilson BSc MSc MAusIMM from 3D Exploration Ltd based in Perth, Western Australia. 

Drill intersections are calculated using a 200 ppm eU₃O₈ lower cut-off with a minimum one metre intersection.  The intersection widths are all reported as true thickness intervals.

The Mineral Resources are presented in accordance with the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resource and Ore Reserves" (JORC Code). 

The information in this report that relates to the metallurgical test work results is based on information compiled by Mr Grenvil Dunn, who is a Chemical Engineer and a Member of the South African Institute of Mining and Metallurgy. Mr Dunn is a Technical Consultant with Orway Mineral Consultants who are consultants of Berkeley Resources. Mr Dunn 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 (The JORC Code).

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Dr. James Ross, who is a Fellow of The Australian Institute of Mining and Metallurgy and an employee of Berkeley Resources Limited.  Dr. Ross 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'.  Dr. Ross consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

 

END

 

 

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