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

 

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

 

·    Newco was not incorporated by the agreed deadline.

 

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

 

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

 

·    Henry Horne resigned as CFO on June 30th, 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: +34 630 517 559

RBC Capital Markets:                        Martin Eales                Tel: +44 20 7029 7881



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 29th 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 17th 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 27th May 2011 to form NEWCO.

 

Update on Negotiations

 

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

 

On Wednesday 25th 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 27th May 2011.

 

Berkeley and ENUSA were under the obligation to incorporate Newco on 27th 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 24th 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 U3O8, 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 11th March 2011, the Company announced the appointment of Mr Brendan James to become Managing Director and Chief Executive Officer of the Company, effective 30th 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 9th 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)

(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.

 


This information is provided by RNS
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