Scoping Study

Berkeley Resources Limited
14 February 2008





14 February 2008





STOCK EXCHANGE ANNOUNCEMENT





                 SCOPING STUDY CONFIRMS POTENTIAL FOR MINING 
                               AT SALAMANCA I
 




The Directors of Berkeley Resources Limited (AIM: BKY.L) are pleased to advise
that a Scoping Study on mining at the Salamanca I project, prepared by AMC
Consultants, confirms the potential economic viability of the project.



The Study, which is based only upon the project's previously announced JORC
inferred and indicated resources of 16.9m lb of U3O8, includes the following
outcomes:



•         Potential production of approximately 12.1m lb U3O8 over 10 years

•         Average cash operating costs of US$25 per lb of U3O8

•         Initial capital costs totalling US$109m for a plant rated to process
1.5mtpa. The plant design has been scaled to allow for potential future
additional resources

•         At today's spot price (US$75 per lb U3O8), total capital is less than
2 years operating cashflow

•         Legal review confirms no impediments to mining

•         Environmental review confirms no foreseeable major impediments to
mining

•         Good potential to improve financial and operating parameters in a
number of areas, including utilising truck or radiometric sorting



Further details are set out below.



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





Enquiries -    Managing Director:Matt  Syme Telephone: [phone]

                                            Email: [e-mail]

               Nominated Adviser - RBC Capital Markets
               Martin Eales
               [phone]







Introduction



Berkeley commissioned AMC Consultants to prepare a Scoping Study report (the
Study) on the potential for mining at the Company's Salamanca I project, in
conjunction with a number of specialist sub-consultants.



AMC Consultants is a leading mining consultancy, having completed over 3,500
assignments around the world since 1982. The firm also has substantial
experience in Spain. The Director responsible for the Salamanca I Scoping Study
was Mr Martin Staples, a Principal Mining Engineer with over 28 years experience
in mine management and consulting around the world, including numerous
feasibility studies.



The other consultants who contributed to the report are:



•    Metallurgical and processing             Wisutec GMBH - a German state
engineering and consulting company responsible for the remediation of  former
uranium mining sites in Saxony and Thuringia



•    Environmental and social                  URS Spain - the Spanish division
of international engineering and consulting group URS, with considerable
experience in environmental studies for mining in Spain



•    Legal                                              Clifford Chance (Madrid
office) - one of the world's leading law firms, with considerable experience in
public practice in Spain





Scoping Study Parameters



Key considerations in the Study were scale, throughput rate, recoveries, main
capital and operating cost items, environmental and community issues and
permitting processes.



The minimum project (production) life is 10 years, However, the plant was scaled
at 1.5mtpa throughput with a view to adding further resources from ongoing
exploration in the project area.



The Study has not assumed the use of the Quercus plant, owned by ENUSA (the
Spanish state uranium company) and currently on care and maintenance at Mina Fe,
30 kilometres to the South West of the project. Berkeley has held a number of
discussions with ENUSA regarding the use of the Quercus plant and intends
holding further discussions shortly, now that initial operating parameters for
the Salamanca I project have been established. ENUSA has previously indicated
its support for use of the Quercus plant, if appropriate.



AMC prepared two mining scenarios - with and without Zona 7 resources - given
that the resource calculated for the Zona 7 deposit is not as advanced as for
Retortillo and Santidad. This announcement refers to the scenario which includes
the Zona 7 resource given that the aerial radiometric and magnetic survey
completed subsequent to the resource calculation highlights the considerable
exploration potential in the Zona 7 area.



The Study assumes a uranium price of US$60 per lb of U3O8.




Resources and Exploration



The Study was based only on the indicated and inferred mineral resource
totalling 16.9m lb U3O8 calculated and announced in November 2007. Subsequent
and ongoing exploration work at Salamanca I is intended to test the strong
potential to add further resources to the project's initial base.



The Retortillo and Santidad deposits are only a few kilometres apart and hosted
within the same stratigraphic horizon. Zona 7 is located 14 kilometres to the
north. The Salamanca I project includes several other untested areas of uranium
mineralisation and radiometric anomalies - as discussed in the stock exchange
announcement of 5 Feb 2008.



Total inferred and indicated resources at Salamanca I are:


                   Ore Tonnes     Grade (ppm U3O8)            Mlb U3O8 at

                      (Mt)                                200ppm U3O8 cutoff
  Retortillo          9.6                615                      13.0
   Santidad           3.4                382                      2.9
    Zona 7            0.6                760                      1.0
    TOTAL             13.6               563                      16.9



including the following indicated resources:


                   Ore Tonnes     Grade (ppm U3O8)            Mlb U3O8 at

                      (Mt)                                200ppm U3O8 cutoff
Retortillo            3.8                581                      4.8





Assessment and interpretation of the historical and Berkeley drilling data was
undertaken by Company geologists; assessment of radiometrics and calculation of
radiometric equivalent assays were completed by Roger Murphy (former Chief
Geologist of the Rossing uranium mine); and resource modeling was assisted by
McDonald Speijers (a consulting group with 15 years experience in resource
estimations). The resource for the Retortillo and Santidad deposits was
calculated using block modeling methods, while the Zona 7 resource was estimated
using a plan polygonal method. Resource classification has been carried out in
accordance with the JORC Code and resulted in 37% of the Retortillo deposit
being classified as indicated resources.



The resource models were reviewed and approved by AMC and evaluated using
preliminary processing costs and mining costs. In the absence of geotechnical
studies, the core photographs were examined and judgements were made on the
excavatability of the rock and the parameters for slope designs.



Pit optimisations were run using a Whittle FourD implantation of the Lerchs
Grossman algorithm and sets of nested pits were developed. The cost of
production, excluding capital but with allowance for rehabilitation costs, was
considered together with other parameters to select a basis for pit design. The
point at which the strip ratio and hence incremental production costs start to
rapidly increase was the main parameter for the chosen design.




Mining



For scheduling purposes the Retortillo pit was divided into 6 separate areas and
the Santidad pit into 3 areas and a mining schedule was developed to deliver
1.5mtpa of ore to the process plant each year.  The Scoping Study assumes that
at the end of the mine life, all waste and tailings are backfilled in the mining
voids.



Based on drilling to date, it was assumed that the weathered top 20m of the pits
are free dig and below that would require drill and blast. As a result it was
assumed that, with appropriate perimeter blasting, relatively steep pit slopes
could be achieved and in the top 20m the slopes were flattened back to 40
degrees. Strip ratios are 4.2:1 at Retortillo and 1.3:1 at Santidad.



Mining costs are based on all-inclusive quotes from suitable local earthmoving
contractors and have been benchmarked against recent mining costs for similar
operations in Spain.





Processing



Wisutec designed a preliminary process flowsheet for a 1.5 mtpa process plant
based on historical metallurgical work by ENUSA and leaching testwork performed
by SGS Lakefield in 2007 (see ASX announcement dated 1 May 2007)



Wisutec's interpretation of the ENUSA and SGS test work indicated the following:



•        Total uranium recovery of 88.8%

•        Maximum extraction achieved in 12 hours

•        Uranium liberated at coarse grind sizes with good recovery at grind
sizes between P80 850(micro)m and P80 500(micro)m

•        Extraction of uranium occurs at 20(o)C and at an Fe3+ level over 2g/l

•        Acid consumption of around 20kg per ton of ore

•        3.0kg of MnO2 per ton of ore

•        2.3kg of Fe per ton of ore



Alkaline leaching and the use of CARO acid will be considered in due course.



The average life of mine head grade of material delivered to the plant is
409ppm.



Four stage crushing and screening and rod milling was selected to ensure a
coarse grind for leaching and to produce tails that can be filter dried. As an
alternative, the possibility of SAG or HPGR comminution will be considered, with
potentially substantial cost reductions.



While truck scanning is included in the process flowsheet, no benefit has been
included in the processing parameters due to the lack of test work. Neither has
radiometric sorting been included, for the same reason. Both options have the
potential to significantly improve processing economics.



The balance of the plant is essentially a conventional mechanically agitated
leach tank farm with capacity of 150m3, belt filters for solution separation and
a conventional ion exchange, precipitation and finishing circuit.



Belt filtering allows for tailings impoundment in the mining void, optimising
the environmental outcome.





Operating Costs



Based on the above circuit and mining schedule (including Zona 7), the Salamanca
I project could produce a total of 12.1m lb of U3O8 over 10 years of production
- representing approximately 72% of the total JORC resource.



Wisutec and AMC calculated cash operating costs of US$25.02 per lb of production
as follows:


Cost Centre                                                      US$ per lb

                                                                 Production


Mining and Transport                                                           7.21
Processing                                                                    12.66
Rehabilitation                                                                 2.68
G&A                                                                            2.47
TOTAL                                                                        $25.02





AMC also applied selling costs of 3% of revenue and royalties payable of 3% of
gross revenue.





Capital Costs



Wisutec completed a preliminary costing of the above process plant as follows
(including 10% contingency):


Process Area                                                 Capital Cost  US$m


Crushing                                                                       29.4
Grinding                                                                       17.4
Leaching                                                                       20.4
Ion Exchange and Recovery                                                      13.4
Waste Water Treatment                                                          18.6
Stockpiles                                                                      6.5
Emergency Power                                                                 3.5
TOTAL                                                                        $109.2



AMC also estimated other capital costs totalling $5.2m, sustaining capital of
$18.3m over the life of the project and pre-strip of $18.6m based on accessing
the deepest part of the Retortillo orebody first. This area has the highest
grade and also provides a void suitable for tailings storage.





Environmental



URS Spain undertook an initial environmental, heritage and social study to
identify potential areas for consideration and to clarify the environmental
permitting process going forward.



A number of special flora, fauna and heritage matters and areas of interest were
noted, with no unusual or insurmountable requirements apparent at this stage.



An Environmental Impact Assessment will be required for mining.



There is no specific requirement as to how mining rehabilitation should be
carried out in the region. Berkeley and AMC have therefore assumed a very high
standard of rehabilitation - that is, all waste and tailings will be returned to
the mining void and resurfaced.





Legal



Clifford Chance in Madrid reviewed the status of Berkeley's mining (exploration)
titles and analysed the legal procedures required to mine uranium ore and build
a uranium processing plant.



While a rigorous 3 stage approval process must be followed, with reports from
the Nuclear Safety Council at each stage, there are no apparent prohibitions to
Berkeley mining uranium at Salamanca I.





Potential improvements



Berkeley and AMC have identified a number of areas where the operating and
financial parameters of the Salamanca I project could be materially improved and
which will be addressed in future feasibility study work.



These include:



•        As mentioned, the 1.5 mtpa plant is scaled to deal with a larger
resource base than the project's current JORC resource and exploration to test
the immediate potential for additional resources is ongoing.



•        Truck and belt radiometric sorting may each have a substantial
beneficial impact on ore throughput and processing costs. There is growing
evidence to support the benefits of both but as yet Berkeley has no basis to
forecast the potential effects.



•        SAG or HPGR milling may benefit operating costs, particularly given
Spain has relatively high electricity costs.



•        As mentioned, Berkeley has had a number of discussions with ENUSA
regarding use of the Quercus plant if appropriate. Berkeley expects to
investigate further whether use of the plant may have a cost (capital and
operating) and/or time benefit for the project, possibly in conjunction with
heap leaching of ore at site.



•        Tailings treatment and backfilling of pits are only preliminary
concepts at this stage and other processes may be more appropriate.



•        There are a number of other capital and operating cost areas in the
Scoping Study which appear to have potential for savings.





Berkeley is pleased to have completed an important step towards its goal of
regenerating the uranium mining industry in Spain. This initial positive,
independent assessment of the potential at Salamanca I provides a strong
endorsement of the Company's work to date and provides very useful guidance to
the further work required.









The information in this report that relates to Exploration Results, Mineral
Resources or Ore Reserves is based on information compiled by Mr Peter Ellis,
who is a Member of The Australian Institute of Geoscientists and an employee of
Berkeley Resources Limited. Mr Ellis 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 Ellis 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
            The company news service from the London Stock Exchange