Upgraded Mineral Resources

RNS Number : 1706T

Berkeley Resources Limited

23 September 2010

 



23 September 2010

BERKELEY RESOURCES LIMITED

UPGRADED MINERAL RESOURCES AT THE

SAGERAS AND ALAMEDA SOUTH DEPOSITS

Following completion of an 8,000m RC infill drilling program in the Águila and Alameda Areas, Berkeley Resources Limited is pleased to advise a 10% increase in the combined Mineral Resource Estimates, reported in accordance with the JORC Code (2004), of the Sageras and Alameda South deposits.  Measured and Indicated Resources at Sageras now represent 96% of the deposit and Alameda South now contains 92% Indicated Resources. Detailed outcomes include:

·    Mineral Resources within Berkeley's projects now total 84.6 million tonnes at 446 ppm for 83.2 Mlbs (37.7 Kt) U₃O₈, with 46% in the Measured and Indicated categories.

·    Combined Mineral Resources for the Phase 1 Feasibility Study deposits (Sageras, Palacios North & Alameda South) have increased by 8% to 34.5 Mlbs (15.7 Kt) U₃O₈, with 93% in the Measured and Indicated categories.

·    Mineral Resources for the Sageras Deposit have increased by 16% and now total 10.0 Mlbs (4.5 Kt) at an average grade of 405 ppm U₃O₈. These include 39% Measured Resources and 57% Indicated Resources.

·    Mineral Resources for the Alameda South Deposit have increased by 7% and now total 19.8 Mlbs (9.0 Kt) at an average grade of 445 ppm U₃O₈. These include 92% Indicated Resources.

Ian Stalker, Berkeley Resources MD commented "The RC drilling campaign has significantly increased our confidence levels in the early production areas at Águila and Alameda by converting most of the Inferred Resources into a higher category.  In addition, it has identified extensions to the various ore bodies which have resulted in an overall increase in pounds. This highlights the potential at Berkeley's other projects where RC drilling is planned later this year."

Enquiries:       Managing Director:           Ian Stalker              Tel:   [phone] 

                       RBC Capital Markets:       Martin Eales           Tel [phone]

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

1.  MINERAL RESOURCES

Berkeley's Mineral Resources are located in 5 project areas.

Deposit	Resource	Tonnes	U3O8	U3O8	U3O8	Category	Berkeley	U3O8
Name	Category	(Mt)	(ppm)	(t)	(Mlbs)	(%)	(%)	(Mlbs)
	Measured	5.6	400	2,240	4.9	22%	90%	4.4
	Indicated	8.7	463	4,031	8.9	40%	90%	8.0
	Subtotal M+I	14.3	439	6,271	13.8	62%	90%	12.4
	Inferred	9.8	387	3,794	8.4	38%	90%	7.5
Águila Area	Total	24.1	418	10,065	22.2	100%	90%	20.0
	Indicated	18.5	446	8,251	18.2	75%	90%	16.4
	Inferred	5.8	482	2,798	6.2	25%	90%	5.6
Alameda Area	Total	24.3	455	11,049	24.4	100%	90%	21.9
Villar Area	Inferred	5.0	446	2,239	4.9	100%	90%	4.4
	Indicated	5.2	531	2,759	6.1	27%	100%	6.1
	Inferred	14.7	505	7,430	16.4	73%	100%	16.4
Retortillo Area	Total	19.9	512	10,190	22.5	100%	100%	22.5
Gambuta Area	Inferred	11.3	371	4,192	9.2	100%	100%	9.2
	Measured	5.6	400	2,240	4.9	6%		4.4
	Indicated	32.4	464	15,041	33.2	40%		30.4
	Subtotal M+I	38.0	455	17,282	38.1	46%		34.9
	Inferred	46.6	439	20,453	45.1	54%		43.1
Berkeley	Total	84.6	446	37,735	83.2	100%		78.0

Table 1 - Berkeley Project Area Mineral Resources (200 ppm U₃O₈ Cut-off)

Initial Mineral Resource Estimates for the Águila and Alameda Areas were announced in February and March 2010 following completion of a confirmatory diamond drilling program at the Sageras, Palacios and Alameda South deposits. 

In June 2010, Berkeley commenced RC drilling at all three deposits to infill and upgrade the resources and test for lateral and depth extensions.  The resource infill component of this program was completed in August and following receipt of the final chemical assays, AMC Consultants (UK) have re-estimated the Mineral Resources at the Sageras and Alameda South deposits.

Notable intersections are presented in Table 2 with the grades presented as U₃O₈ chemical assays.

Deposit	RC	From	To	Interval	U3O8
	Hole ID	(m)	(m)	(m)	(ppm)
Alameda South	ASR-037	77	81	4	1,204
Alameda South	ASR-039	15	25	10	731
Alameda South	ASR-041	36	39	3	2,647
Alameda South	ASR-045	25	35	10	840
Alameda South	ASR-047	20	28	8	1,187
Alameda South	ASR-047	29	57	28	1,728
Alameda South	ASR-051	113	116	3	1,341
Alameda South	ASR-052	57	62	5	1,585
Alameda South	ASR-052	75	81	6	2,691
Alameda South	ASR-052	84	95	11	506
Alameda South	ASR-052	107	114	7	1,417
Alameda South	ASR-053	17	25	8	658
Alameda South	ASR-056	69	71	2	3,041
Alameda South	ASR-058	45	56	11	814
Sageras	SGR-025	26	31	5	1,325
Sageras West	ZMR-015	45	50	5	7,146
Sageras West	ZMR-016	41	48	7	3,649
Sageras West	ZMR-017	27	49	22	1,188

Table 2 - Notable Intersections

A full list of chemical and e-grade intersections will be included in the September Quarterly report.

The updated Mineral Resource Estimates (Table 3) are based on a combination of chemical and e-grades from historical drilling, supplemented by Berkeley diamond and RC drilling with both chemical and e-grades.  The geological models and Mineral Resource Estimates have been developed by a team of in-house and consulting geoscientists following a rigorous program to verify the historical data. 

Table 3- MINERAL RESOURCE INVENTORY (200 ppm U₃O₈ Cut-off)

Deposit	Resource	Tonnes	U3O8	U3O8	U3O8	Category	Berkeley	U3O8
Name	Category	(Mt)	(ppm)	(t)	(Mlbs)	(%)	(%)	(Mlbs)
	Measured	4.7	378	1,777	3.9	39%	90%	3.5
	Indicated	5.8	444	2,575	5.7	57%	90%	5.1
	Subtotal M+I	10.5	414	4,352	9.6	96%	90%	8.6
	Inferred	0.7	268	188	0.4	4%	90%	0.4
Sageras	Total	11.2	405	4,539	10.0	100%	90%	9.0
	Measured	0.9	515	464	1.0	22%	90%	0.9
	Indicated	2.9	502	1,456	3.2	68%	90%	2.9
	Subtotal M+I	3.8	505	1,919	4.2	90%	90%	3.8
	Inferred	0.4	531	212	0.5	10%	90%	0.4
Palacios North 2	Total	4.2	508	2,132	4.7	100%	90%	4.2
Palacios South 2	Inferred	2.2	328	722	1.6	100%	90%	1.4
Majuelos 2	Inferred	4.9	432	2,117	4.7	100%	90%	4.2
Majuelos East 2	Inferred	1.6	347	555	1.2	100%	90%	1.1
	Measured	5.6	400	2,240	4.9	22%	90%	4.4
	Indicated	8.7	463	4,031	8.9	40%	90%	8.0
	Subtotal M+I	14.3	439	6,271	13.8	62%	90%	12.4
	Inferred	9.8	387	3,794	8.4	38%	90%	7.5
Águila Area 1	Total	24.1	418	10,065	22.2	100%	90%	20.0
	Indicated	18.5	446	8,251	18.2	92%	90%	16.4
	Inferred	1.7	433	736	1.6	8%	90%	1.5
Alameda South	Total	20.2	445	8,987	19.8	100%	90%	17.8
Alameda North 2	Inferred	4.1	503	2,062	4.5	100%	90%	4.1
	Indicated	18.5	446	8,251	18.2	75%	90%	16.4
	Inferred	5.8	482	2,798	6.2	25%	90%	5.6
Alameda Area 1	Total	24.3	455	11,049	24.4	100%	90%	21.9
Villar Area 1	Inferred	5.0	446	2,239	4.9	100%	90%	4.4
	Indicated	5.2	531	2,759	6.1	27%	100%	6.1
	Inferred	14.7	505	7,431	16.4	73%	100%	16.4
Retortillo Area	Total	19.9	512	10,190	22.5	100%	100%	22.5
	Measured	5.6	400	2,240	4.9	7%		4.4
	Indicated	32.4	464	15,041	33.2	45%		30.4
	Subtotal M+I	38.0	455	17,282	38.1	52%		34.9
Salamanca	Inferred	35.3	460	16,261	35.8	48%		33.9
Uranium Project	Total	73.3	457	33,543	73.9	100%		68.8
Gambuta Area	Inferred	11.3	371	4,192	9.2	100%	100%	9.2
	Measured	5.6	400	2,240	4.9	6%		4.4
	Indicated	32.4	464	15,041	33.2	40%		30.4
	Subtotal M+I	38.0	455	17,282	38.1	46%		34.9
	Inferred	46.6	439	20,454	45.1	54%		43.1
Berkeley	Total	84.6	446	37,735	83.2	100%		78.0

1.    Berkeley has agreed to acquire 90% of the ENUSA State Reserves and any deposits therein by, inter alia, completing a feasibility study and paying €20m to ENUSA. For full details of the Agreement, see Berkeley's announcement dated 10 December 2008

2.    Previously reported Mineral Resource Estimate

3.    All figures are rounded, so differences may occur

2.  SALAMANCA URANIUM PROJECT

Berkeley's Feasibility Study process for the Salamanca Uranium Project commenced in May 2009, following Cabinet approval of the Co-Operation Agreement between Berkeley and ENUSA.  The Study objective is to assess the viability of restarting mining within the Salamanca State Reserves, based on a number of known uranium deposits. 

Berkeley's Feasibility Study is progressing in 2 separate phases:

1.   Phase 1 is focusing on a tank leach scenario with a production rate of 2.1 Mlbs (0.95 Kt) of U₃O₈ per annum with the Sageras, Palacios North and Alameda South deposits providing the initial feed to the Quercus Plant. 

2.   Phase 2 aims to increase the production rate up to 5 Mlbs (2.3 Kt) of U₃O₈ per annum by establishing heap leach operations at the various satellite deposits.

Águila Area

The three deposits of the Águila area, Palacios, Majuelos and Sageras, form a continuous zone of mineralisation extending over 5 km from which the bulk of the central Majuelos deposit (formerly Fe) has been mined.

Sageras Deposit

The Sageras Deposit represents the north-western extension of the Majuelos deposit.  Surface topography is relatively flat and the deposit is well positioned for shallow open pit mining. The updated Mineral Resource has been estimated at 11.2 Mt at 405 ppm for 10.0 Mlbs (4.5 Kt) U₃O₈, a 16.3% increase from the initial Mineral Resource Estimate announced in February, 2010.  It includes 39% in the Measured category and 57% in Indicated.

The historical drill hole database for the Sageras and the Mahuelos deposits contains 12,900 drill holes consisting of a combination of 50m x 50m spaced diamond drill holes with chemical assays, and 10m x 10m roto-percussion drill holes with e-grades generated from down hole radiometric measurements.  The western quarter (formerly Zona M) lies outside the ENUSA wholly owned land and has been drilled on a 50m x 50m spacing. 

Berkeley completed a confirmatory diamond drilling program of 21 holes and announced the results in January 2010. All holes intersected strong mineralisation consistent with the historical data.  The initial Mineral Resource Estimate announced on the 26 February 2010, included 30% Inferred Resources based on a drilling density of 50m x 50m or greater, mainly in the Sageras West area and the southern part adjacent to the restored Mina Fe open pit. RC drilling to infill these areas commenced in June and was completed in July 2010 with 71 holes drilled for 4,301m.  Chemical assay results confirm the existing resource model and have identified a new mineralised zone in the northern part of Sageras West which remains open to the north-west.  RC drilling of this zone is continuing and may link up to a large ground radiometric anomaly previously identified by Berkeley a further 200 metres to the north-west. 

RC holes were also targeted to test lateral and depth extension to the Sageras deposit and some have extended the southern margin of the deposit.

The Sageras mineralisation is hosted in Palaeozoic metasediments and occurs at or close to the surface with widths varying from about 150m in the south-east up to 300m in the north-west. Closer spaced drilling indicates a number of shoots with strong continuity in a north-westerly direction, parallel to a major geological trend which extends from the restored Mina Fe open pit for a distance of approximately 1.5 km.  In cross section, the mineralisation is gently east dipping to sub-horizontal, ranging from 10m to 50m in thickness, and extends from surface to 100m deep.

Berkeley's geological model is based on a broad outer envelope of mineralisation that captures the majority of the +100 ppm U₃O₈ grades.  It often includes internal sub grade material in order to maintain geological continuity across drill sections.  In addition, six internal, higher grade, continuous mineralised zones were identified within the outer envelope.  They occur as broad sheets of mineralisation with a very shallow dip, strong north-west continuity and have strike lengths from 50m to 700m.

Average bulk density values, derived from Berkeley drill core, were assigned to oxidised, transition and fresh blocks and wireframed surfaces of the historical Mina Fe open pit were used to remove previously mined blocks within the model. 

The Mineral Resource Estimate was undertaken by AMC Consultants (UK) using a block model configuration of 10m x 10m x 3m parent cells, with cells being permitted to split once in any direction where bounding surfaces are encountered.

Sample uranium grade statistics were calculated and population characteristics analysed for each of the mineralised zones. High grade capping was applied to one of the zones. Variographic analysis was successfully completed for the two dominant mineralised zones and parameters were derived using multi-structure spherical models.

Uranium grades were estimated from 2m sample composites, using Ordinary Kriging for the main mineralised zones and inverse distance squared weighting for the remaining zones. Grade interpolation into parent cells was conducted under hard-bounded zonal control, using mostly 25m x 25m x 5m search ellipsoids aligned in the average plane orientation of each zone.

The Mineral Resource classification is based on confidence levels for criteria such as data density and interpreted grade continuity.   Measured Resources were restricted to estimated blocks within the central part of the deposit where the drilling density is 10m x 10m and grade continuity is good. The Inferred Resources was assigned to those blocks where the drilling density was greater than 50m x 50m, mainly in the Sageras West area and a small portion of the southern part adjacent to the restored mined Mina Fe pit.

Palacios Deposit

The Palacios Deposit (previously known as Mina D) is located within 1 km of the Quercus processing plant and is separated from the Sageras and Majuelos deposits by the Agueda River.  The northern area (Palacios North) has been drilled out on a 10m x 10m spacing and Palacios South has been drilled out on a 50m x 50m spacing.

The upper portions of the Palacios North deposit were mined by ENUSA in 3 small open pits during the 1990's.  Significant resources remain below the restored open pits and drilling by Berkeley has confirmed the thickness and grade of the historical drilling and provided a better understanding of the geology.

An initial Mineral Resource Estimation was completed for Palacios North by AMC Consultants (UK) in February following the completion of the confirmatory drilling program (see Table 3).  Over 90% of the resource is already in the Measured and Indicated categories so the recent RC drilling program was aimed at exploring the previously untested area between the two main mineralised domains.  A total of 10 RC holes (1,112m) were drilled in this corridor but the results were negative with only 2 holes intersecting mineralisation extending below the current resource model. 

Alameda Area

The Alameda deposits are located approximately 14km to the west of the Quercus Plant.  The Alameda North deposits consist of 3 separate zones extending north from Alameda South over a distance of 3.5 km along the granite contact.

Alameda South Deposit

The Alameda South deposit was discovered in the 1960's and subsequently drilled out on a 50m x 50m pattern using diamond drilling with chemical assays. The deposit extends from the surface down to 120m and covers an area of 2km by 1.2km with relatively flat surface topography. The updated Mineral Resources have been estimated at 20.2 Mt at 445 ppm for 19.8 Mlbs (9.0 Kt) U₃O₈, an increase of 7% from the initial Mineral Resource Estimate announced in March 2010. It includes 92% in the Indicated category.

The historical drill hole database for the Alameda South deposit contains 400 diamond drill holes for a total of 40,000m.  The drill spacing was 50m x 50m over the majority of the deposit although this had been reduced to 35m x 35m over the main central zone of mineralisation.  All of the historical assay data consists of chemical assays which have been checked against the historical drill logs.  Berkeley has completed a confirmatory diamond drilling program consisting of 19 holes in a series of traverses across the deposit.  The detailed drilling results were announced in March 2010 with all Berkeley holes intersecting strong mineralisation consistent with the historical data.  An initial Mineral Resource Estimate was announced on the 30th March, with approximately 50% classified as Inferred where the drilling density was 50m x 50m or greater. The recent RC drilling program, comprising 33 holes (3,554m), was aimed at infilling these areas and was completed in August.  All samples were sent to ALS Chemex in Vancouver for chemical analysis. Assay results confirmed the existing resource model and identified additional down dip potential. 

Uranium mineralisation at Alameda South is hosted by a deformed sequence of regionally and thermally metamorphosed quartz sericite pelites. Granitic sills and shallow dipping dykes were intruded after the main folding and metamorphism events, followed by the uranium mineralisation.

Uranium mineralisation occurs in a complex network of moderately to steeply dipping brittle structures (veins, faults, fractures and along bedding contacts) as a result of a low temperature hydrothermal event.  The mineralised zones commonly have sharp boundaries, separating mineralised structures from poorly mineralised host rock.

Mineralised domains are 50-200m wide, trend north and north-west and dip moderately to steeply west and south-west respectively.  The north trending domain has a strike extent of approximately 800m and the north-west trending domains have a cumulative strike of approximately 1,500m.  Within each of the domains, multiple mineralised zones have widths of up to 50m.  The depth to the base of mineralisation varies with the development of mineralised structures.  In the north trending part of the deposit, the mineralisation extends up to 120m below surface whereas the north-west-trending mineralised structures extend from 60 to 70m below the surface.

Berkeley's geological model is based on a broad outer envelope of mineralisation that captures the majority of the +100 ppm U₃O₈ grades.  It includes internal sub grade material in order to maintain geological continuity across drill sections.

Average bulk density values, derived from Berkeley drill core, were assigned to oxidised, transition and fresh blocks in the model. 

The Mineral Resource Estimate was undertaken by AMC Consultants (UK) using a block model configuration of 10m x 10m x 6m parent cells, with cells being permitted to split once in any direction where bounding surfaces are encountered.

Sample uranium grade statistics were calculated and population characteristics analysed for each of the mineralised zones. High grade top cuts were determined for each zone and applied to the sample composites to reduce the affect of extreme outlier values. Variographic analysis was successfully completed for two mineralised zones and parameters were derived using multi-structure spherical models. Uranium grades have been estimated from 2m sample composites, using Ordinary Kriging for the two mineralised zones and inverse distance squared weighting for the remaining zones. Grade interpolation into parent cells was conducted under hard-bounded zonal control, using mostly 40m x 40m x 5m search ellipsoids aligned in the average plane orientation of each zone.

The Mineral Resource classification was based on confidence levels for criteria such as data density and interpreted grade continuity. Berkeley's drilling has infilled the central area of the deposit down to 35m x 35m and although the intersections are consistent in thickness and grade with the historical drilling, the correlation between holes does not achieve Measured confidence.  The majority of the rest of the deposit was classified as Indicated as the Berkeley drilling has confirmed the historical drilling and shown the grade continuity to be reasonable.  An Inferred category was assigned to those blocks where the drilling density was greater than 50m x 50m or where the variation in grade and thickness between sections was significant. This was mainly at depth where the mineralisation extends below the deepest hole and has not been closed off.  A small area in the north-western and eastern part of the deposit was also classified as Inferred due to the inconsistent drill spacing in these areas.

3.  SUPPLEMENTARY RESOURCE INFORMATION

The uranium grades reported in this release that are annotated with a sub-prefix "e" are 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 was calibrated 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. 

These Mineral Resources Estimates 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 relating to the Mineral Resource Estimates have been compiled by Berkeley Resources team of geologists and consulting geoscientists. 

All Mineral Resource Estimates have been reported at a 200 ppm U₃O₈ cut-off unless otherwise stated.

Mr Chris Arnold (MAUSIMM) conducted the updated estimates for the Sageras and Alameda South deposits.  Mr Arnold is the Principal Resource Consultant with AMC Consultants (UK), a member of the AusIMM, and a geologist whose career includes more than 20 years relevant experience in resource estimation.

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr. Ross Corben, who is a Member of The Australian Institute of Mining and Metallurgy and an employee of Berkeley Resources Limited. Mr. Corben 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. Corben 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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