Annual Report to shareholders

RNS Number : 4123A

Berkeley Energia Limited

29 September 2020

 

BERKELEY ENERGIA LIMITED

2020

ANNUAL REPORT | INFORME ANUAL

ABN 40 052 468 569

CORPORATE DIRECTORY | DIRECTORIO CORPORATIVO

Directors Mr Ian Middlemas  Chairman Mr Deepankar Panigrahi  Non-Executive Director Mr Nigel Jones  Non-Executive Director Mr Adam Parker  Non-Executive Director Mr Robert Behets  Non-Executive Director   (Acting Managing Director)   Company Secretary Mr Dylan Browne Madrid Head Office Calle Capitán Haya 1 Planta 15. Edificio Eurocentro. 28020 Madrid España   Project Office Berkeley Minera España, S.A. Carretera SA-322, Km 30 37495 Retortillo Salamanca, España Telephone:  [phone] Registered Office Level 9, 28 The Esplanade, Perth WA 6000 Australia Telephone:  [phone] Facsimile:  [phone] Website and Email www.berkeleyenergia.com [e-mail] Auditor Spain Ernst & Young España Australia Ernst and Young Australia - Perth Bankers Spain Santander Bank Australia Australia and New Zealand Banking Group Ltd	Solicitors Spain Herbert Smith Freehills, S.L.P United Kingdom Bryan Cave Leighton Paisner LLP Australia Thomson Geer Share Registry Spain IBERCLEAR Plaza de la Lealtad, 1, 28014 Madrid España United Kingdom Computershare Investor Services PLC The Pavilions, Bridgewater Road Bristol BS99 6ZZ Telephone:  [phone] Australia Computershare Investor Services Pty Ltd Level 11, 172 St Georges Terrace Perth  WA  6000 Telephone:  [phone]   Stock Exchange Listings Spain Madrid, Barcelona, Bilboa and Valencia Stock Exchanges (Code: BKY) United Kingdom London Stock Exchange - Main Board (LSE Code: BKY) Australia Australian Securities Exchange (ASX Code: BKY)
CONTENTS | CONTENIDO
Directors' Report
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
The following sections are available in the full version of the 2020 Annual Report on the Company's website at www.berkeleyenergia.com :
Notes to and forming part of the Financial Statements
Directors' Declaration
Auditor's Independence Declaration
Independent Auditor's Report
Corporate Governance
Mineral Resources and Ore Reserves Statement
ASX Additional Information

The Company also advises that an Appendix 4G (Key to Disclosures: Corporate Governance Council Principles and Recommendations) and 2020 Corporate Governance Statement have been released today and are also available on the Company's website:

Further and in accordance with ASX Listing Rule 3.13.1, that the Company's Annual General Meeting ("AGM") will be held on Wednesday, 25 November 2020.

An item of business at the AGM will be the re-election of Directors. In accordance with clause 6.2(f) of the Company's Constitution, the closing date for receipt of nominations from persons wishing to be considered for election as a Director is Wednesday, 7 October 2020.

Any nominations must be received at the Company's registered office no later than 5.00 pm (Perth time) on Wednesday, 7 October 2020.

For further information please contact:

Robert Behets  Dylan Browne  

Acting Managing Director  CFO and Company Secretary

[phone] 

[e-mail]

The Directors of Berkeley Energia Limited submit their report on the Consolidated Entity consisting of Berkeley Energia Limited ('Company' or 'Berkeley' or 'Parent') and the entities it controlled at the end of, or during, the year ended 30 June 2020 ('Consolidated Entity' or 'Group').

OPERATING AND FINANCIAL REVIEW

Highlights

Highlights for and subsequent to the year end include:

· Permitting:

The Company's primary focus continues to be on progressing the approvals required to commence construction of the Salamanca mine and bring it into production.

In August 2020, the Urbanism License ("UL") was granted by the Municipality of Retortillo under the terms established in the Urbanism Law and Urban Planning Regulations of Castilla y León. The UL is a land use permit needed for construction works at the Salamanca mine.

The grant of the UL is a significant permitting milestone for Berkeley and a positive step in the development of the project. The Authorisation for Construction for the uranium concentrate plant as a radioactive facility ("NSC II") is now the only pending approval required to commence full construction of the Salamanca mine.

In late March 2020, the Company formally submitted updated official documentation in relation to the NSC II and has since held a number of meetings (via teleconference calls) with the Nuclear Safety Council ("NSC") technical team to discuss and clarify minor queries on the updated documentation. As requested by the NSC, the Company has prepared written responses to these queries. Following submission of these written responses in early September, the next step in the process is for the NSC technical team to finalise its report and submit it to the NSC Board for ratification.

In July 2020, the NSC issued a favourable report for the extension of the validity of the Initial Authorisation for the uranium concentrate plant as a radioactive facility ("NSC I"). NSC I was granted in September 2015, with a 5-year validity period. The next step is for the Ministry for Ecological Transition and the Demographic Challenge ("MITECO") to approve this authorisation and set its duration period.

The Company will continue to engage with the relevant authorities in a collaborative manner and maintain strong engagement with all key stakeholders in Spain, as it progresses the approvals required to commence full construction of the Salamanca mine and bring it into production.

· Uranium Market:

During the year, the uranium spot price rose to a high of US$33.40 per pound which represents a year to date price increase of ~30%.

Uncertainty surrounding COVID-19 impacts to the nuclear fuel supply chain continue, with supply disruptions being experienced by a number of major uranium producers including Kazatomprom (Kazakhstan operations), Cameco (Cigar Lake mine), CNNC (Rössing mine) and Swakop Uranium (Husab mine).

Analysts expect further tightening of market conditions as the current structural supply deficit in the global uranium market is exacerbated by these, and possible other, COVID-19 supply disruptions. The current market uncertainty is also expected to heighten concerns about the security of future supply and continued upward movement in the spot price may be a trigger for increased term market activity.

· COVID-19 :

The Spanish Government declared a National 'State of Alarm' relating to the COVID-19 pandemic, which began on 14 March, ended on 21 June with its borders reopening to Europe and free movement being allowed within the country.

Towards the end of July, Spain began experiencing another surge in COVID-19 cases, with spikes in new daily infection rates forcing the Government to reinstate both voluntary guidelines and mandatory restrictions and place parts of the country, particularly in the north-eastern region of Catalonia, under temporary lockdown again.

All of the Berkeley team based in Spain are safe and well. Consistent with current Government guidelines, the Company has maintained a 'work from home' policy. Subject to the status of the COVID-19 pandemic and related Government policy and guidelines, it is expected that the team will recommence working from the Madrid and Retortillo offices in October.

Despite the Spanish Government suspending the term of all administrative and legal proceedings while the 'State of Alarm' was active, the Spanish Administration was still functioning during this time and Berkeley was able to maintain regular communication with the relevant officials from the NSC and the federal, regional and local governments to ensure the permitting processes continued to advance, as evidenced by the award of the UL.

Operations

Project Update

The Salamanca mine is being developed to the highest international standards and the Company's commitment to health, safety and the environment remains a priority. It holds certificates in Sustainable Mining (UNE 22470-80), Environmental Management (ISO 14001), and Health and Safety (OHSAS 18001) which were awarded by AENOR, an independent Spanish government agency.

Towards the end of the year, planning continued in advance of the annual internal and external audits of the Company's Sustainable Mining and Environmental Management Systems which are scheduled to take place in the coming months.

The annual evaluation of Environmental Aspects ("EA"), which was completed during the June quarter, highlighted that significant reductions had been achieved in a number of target areas, including a 38% reduction in fuel consumption, a 48% reduction in printer toner consumption, and a 85% reduction in fluorescent residue. New targets have been set for 2020-21, with a focus of further reducing the consumption of electricity, water, paper and printer toner.

As part of its commitment to Sustainable Mining, the Company has commenced a Life Cycle Analysis of its operational processes, in order to determine the environmental impact of the products associated with these processes from their origin (raw materials) through to the end of their useful life. This initiative has initially focused on the analysis of the environmental impact of carbon dioxide ("CO₂") emissions generated by exploration drilling activities.

To facilitate an enhanced understanding of the environmental impact of CO₂ emissions and to determine which phase/activity of the life cycle is responsible for generating the most CO₂ emissions, a series of graphics providing visual representation of the information have been designed. As an example, the life cycle of exploration drilling activities is represented in Figure 1 below.

The determination and quantification of the direct environmental aspects derived from the consumption of raw materials and the production of waste that occurs during the different phases of the life cycle of exploration drilling activities has also completed.

The Company continued the migration its of Health and Safety Management System from OHSAS 18001 to its replacement standard, ISO 45001, a process which is targeted for completion in the second half of 2020. As part of this process, an internal audit was undertaken in the first week of August, and the external audit (by AENOR) in the first week of September.

The monitoring programs associated with the NSC approved pre-operational Surveillance Plan for Radiological and Environmental Affections and pre-operational Surveillance Plan for the Control of the Underground Water continued during the year.

Permitting Update

The Company continues to engage with all relevant authorities in a collaborative manner in order to facilitate the timely resolution of the pending approvals required to commence construction of the Salamanca mine.

In August 2020, UL was granted by the Municipality of Retortillo under the terms established in the Urbanism Law and Urban Planning Regulations of Castilla y León. The UL is a land use permit needed for construction works at the Salamanca mine.

The grant of the UL is a significant permitting milestone for Berkeley and a positive step in the development of the project. The NSC II permit is now the only pending approval required to commence full construction of the Salamanca mine.

During the year, the Company's Spanish executives and advisors have met with (via teleconference calls or in person once some  of the COVID-19 restrictions were lifted) and had constructive dialogue with relevant officials from the NSC, the Federal Government, the Regional Government of Castilla y León, the Municipality of Retortillo, and other key stakeholders.

As previously reported, at the request of the NSC, Berkeley consolidated the Company's responses to all of the NSC's technical queries into the official documentation, expanded the description of some sections (e.g. waste management, analysis of potential accidents, environmental radiological impact assessment, hydrological modelling), and formally submitted the updated official documentation to the NSC at the end of March.

In the June quarter, the Company held a number of meetings with the NSC technical team to discuss and clarify minor queries on the updated documentation. The Company has also provided written responses and/or additional technical information to the NSC when requested.

The next step in this process is for the NSC technical team to finalise their report and submit it to the NSC Board for approval. Once approved by the NSC Board, the NSC report and recommendation which is 'compulsory and binding on radiological matters' is provided to MITECO, who is the substantive authority responsible for the granting NSC II.

In late July, the NSC issued a favourable report for the extension of the validity of NSC I for the process plant as a radioactive facility at the Salamanca project. NSC I was granted by the then Ministry of Industry, Energy and Tourism in September 2015, with a 5-year validity period. The favourable report issued by NSC considered that the circumstances and characteristics of the process plant are the same as those contained in the Initial Authorisation issued in 2015. The next step is for the MITECO to approve this authorisation and set its duration period. 

The Company will continue to maintain a consistent approach, ensuring that the project complies with all applicable laws and regulations, as it progresses the approvals required to commence construction of the Salamanca mine and bring it into production.

Uranium Market

During the year, the uranium spot price rose to a high of US$33.40 per pound which represents a year to date price increase of ~30%.

Uncertainty surrounding COVID-19 impacts to the nuclear fuel supply chain continue, with supply disruptions being experienced by a number of major uranium producers including Kazatomprom (Kazakhstan operations), Cameco (Cigar Lake mine), CNNC (Rössing mine) and Swakop Uranium (Husab mine).

Analysts expect further tightening of market conditions as the current structural supply deficit in the global uranium market is exacerbated by these, and possible other, COVID-19 supply disruptions. The current market uncertainty is also expected to heighten concerns about the security of future supply and continued upward movement in the spot price may be a trigger for increased term market activity.

COVID-19

In the June quarter, the Spanish Government declared that the National 'State of Alarm' relating to the COVID-19 pandemic, which began on 14 March, would end on 21 June with its borders reopening to Europe and free movement being allowed within the country.

Towards the end of July however, Spain began experiencing another surge in COVID-19 cases, with spikes in new daily infection rates forcing the Government to reinstate both voluntary guidelines and mandatory restrictions and place parts of the country, particularly in the north-eastern region of Catalonia, under temporary lockdown again.

All of the Berkeley team based in Spain are safe and well. Consistent with current Government guidelines, the Company has maintained a 'work from home' policy. Subject to the status of the COVID-19 pandemic and related Government policy and guidelines, it is expected that the team will recommence working from the Madrid and Retortillo offices in October.

Despite the Spanish Government suspending the term of all administrative and legal proceedings while the 'State of Alarm' was active, the Spanish Administration was still functioning during this time and Berkeley was able to maintain regular communication with the relevant officials from the NSC and the federal, regional and local governments to ensure the permitting processes continued to advance.

Results of Operations

The Consolidated Entity's net loss after tax for the year ended 30 June 2020 was $42,889,000 (2019: profit of $34,431,000). Significant items contributing to the year end loss and substantial differences from the previous year include the following:

(i)  Exploration and evaluation expenses of $5,779,000 (2019: $8,541,000), which is attributable to the Group's accounting policy of expensing exploration and evaluation expenditure incurred subsequent to the acquisition of the rights to explore and up to the successful completion of definitive feasibility studies and permitting for each separate area of interest.

(ii)  Business development expenses of $983,000 (2019: $ 1,295,000 ) which includes the Group's investor relations activities including but not limited to public relations costs, marketing and digital marketing, broker fees, travel costs, conference fees, business development consultant fees and stock exchange admission fees .

(iii)  Non-cash share-based payment expense of $62,000 (2019: gain of $1,918,000) was recognised in respect of incentive securities granted to directors, employees and key consultants. The Company's policy is to expense the incentive securities over the vesting period (which for Performance Rights is generally the life of the security).

(iv)  Non-cash fair value loss of $41,116,000 (2019: gain of $38,120,000) of the convertible note and unlisted options issued to the Oman Investment Authority ("OIA") (formerly the Oman Sovereign Wealth Fund or SGRF) ('OIA Options'). These financial liabilities increase or decrease in value as the share price of the Company fluctuates. With the share price increasing substantially during the year, the size of financial liability has increased substantially resulting in a large fair value loss for the year. During the period, the Company also revised its assumptions to convert the convertible note and assumed it will convert at £0.27 rather than £0.50, in line with the Company's share price at 30 June 2020. This has also contributed to the increased financial liability in 2020 compared to 2019. As the convertible note and OIA Options convert into shares, the liabilities will be reclassified to equity.

Commercially, the intentions of both OIA and the Company prior to completing the convertible note transaction in 2017 was to enter into an equity arrangement. The Company has however complied with the accounting standards and accounted for the convertible note as a financial liability.

Under the ASX Listing Rules, the convertible note and OIA Options are defined as equity securities.

Due to the conversion terms of the convertible note leading to the issuance of a variable number of ordinary shares in the Company in return for conversion of the convertible note, the Company is required under the accounting standards to account for the convertible note as a current financial liability at fair value through profit and loss, despite the Company having no obligation to extinguish the convertible note using its cash resources.

(v)  Recognition of interest income of $1,480,000 (2019: $2,340,000). The decrease in interest is a direct result of lower interest rates following lower global interest rates due to market conditions and the impacts of COVID-19.

Financial Position

At 30 June 2020, the Group is in an extremely good financial position with cash reserves of $91,767,000 (2019: $96,587,000).

The Group had net assets of $36,211,000 at 30 June 2020 (2019: $79,648,000), a decrease of 55% compared with the previous year. This decrease is consistent with the increase in the value of the derivative financial liabilities (the convertible note and OIA Options).

Business Strategies and Prospects for Future Financial Years

Berkeley's strategic objective is to create long-term shareholder value with the Company's primary focus continuing to be on progressing the approvals required to commence construction of the Salamanca mine and bring it into production.

To achieve its strategic objective, the Company currently has the following business strategies and prospects:

· Continue to progress permitting and maintain the required licences to develop and operate at the Salamanca mine

· Advance the Salamanca mine through the development phase into the main construction phase and then into production;

· Progress with seeking further offtake partners. The Company has maintained its preference to combine fixed and market related pricing across its contracts in order to secure positive margins in the early years of production whilst ensuring the Company remains exposed to potentially higher prices in the future; and

· Assess other mine development opportunities at the Salamanca mine.

As with any other mining projects, all of these activities are inherently risky and the Board is unable to provide certainty that any or all of these activities will be able to be achieved.

T he material business risks faced by the Company that are likely to have an effect on the Company 's future prospects , and how the Company manages these risks, include but are not limited to the following:

Mining licences and government approvals required - With the mining licence, environmental licence and the UL already obtained at the Salamanca mine, the only major approval to commence full construction at the Salamanca mine is NSC II.

However, various appeals have also been made against the permits and approvals discussed above, as allowed for under Spanish law, and the Company expects that further appeals will be made against these and future authorisations and approvals in the ordinary course of events. Whilst none of these appeals have been finally determined, no precautionary or interim measures have been granted in relation to the appeals regarding the award of licences and authorisations at the Salamanca mine to date. However, the successful development of the Salamanca mine will be dependent on the granting of all permits and licences necessary for the construction and production phases, in particular the award NSC II which will allow for the construction of the plant as a radioactive facility.

The Company has to date received more than 120 favourable reports and permits for the development of the mine, however with any development project, there is no guarantee that the Company will be successful in applying for and maintaining all required permits and licences to complete construction and subsequently enter into production. If the required permits and licences are not obtained, then this could have a material adverse effect on the Group's financial performance, which may lead to a reduction in the carrying value of assets and may materially jeopardise the viability of the Salamanca mine and the price of its Ordinary Shares.

Further, the Company's exploration and any future mining activities are dependent upon the maintenance and renewal from time to time of the appropriate title interests, licences, concessions, leases, claims, permits, environmental decisions, planning consents and other regulatory consents which may be withdrawn or made subject to new limitations. The maintaining or obtaining of renewals or attainment and grant of title interests often depends on the Company being successful in obtaining and maintaining required statutory approvals for its proposed activities. The Company closely monitors the status of its mining permits and licences and works closely with the relevant Government departments in Spain to ensure the various licences are maintained and renewed when required.  However, there is no assurance that such title interests, licenses, concessions, leases, claims, permits, decisions or consents will not be revoked, significantly altered or not renewed to the detriment of the Company or that the renewals and new applications will be successful;

The Company's activities are subject to Government regulations and approvals - Any material adverse changes in government policies or legislation of Spain that affect uranium mining, processing, development and mineral exploration activities, income tax laws, royalty regulations, government subsidies and environmental issues may affect the viability and profitability of the Salamanca mine. No assurance can be given that new rules and regulations will not be enacted or that existing rules and regulations will not be applied in a manner which could adversely impact the Group's mineral properties;

Additional requirements for capital - The issue of the US$65 million Convertible Note and OIA Options to OIA has provided the Company the funds to complete the upfront capital items at the Salamanca mine, subject to the OIA Options being exercised early. Due to delays in the receipt of NSC II, the Company has been funding its ongoing working capital requirements which has reduced the amount available to fund full construction. This position will continue for so long as NSC II remains outstanding, unless the OIA Options are exercised early. As a result of the delay, the Company expects that following receipt of NSC II and in order to fully fund the full construction of the Salamanca mine into steady state production, it will be required to raise additional funding in order to meet the capital costs of the mine development and to fund working capital until positive cash flows are achieved;

The Company may be adversely affected by fluctuations in commodity prices -   The price of uranium has fluctuated widely since the Fukushima nuclear power plant disaster in March 2011 and is affected by further numerous factors beyond the control of the Company. Future production, if any, from the Salamanca mine will be dependent upon the price of uranium being adequate to make these properties economic. The Company currently does not engage in any hedging or derivative transactions to manage commodity price risk, but as the Company's Project advances, this policy will be reviewed periodically;

The Group's projects are not yet in production   - As a result of the substantial expenditures involved in mine development projects, mine developments are prone to material cost overruns versus budget. The capital expenditures and time required to develop new mines are considerable and changes in cost or construction schedules can significantly increase both the time and capital required to build the mine; and

Global financial conditions may adversely affect the Company's growth and profitability - Many industries, including the mineral resource industry, are impacted by these market conditions. Some of the key impacts of the current financial market turmoil include contraction in credit markets resulting in a widening of credit risk, devaluations and high volatility in global equity, commodity, foreign exchange and energy markets, and a lack of market liquidity. A slowdown in the financial markets or other economic conditions may adversely affect the Company's growth and ability to finance its activities.

DIRECTORS

The names of Directors in office at any time during the financial year or since the end of the financial year are:

Current Directors

Mr Ian Middlemas     Chairman

Mr Robert Behets   Non-Executive Director (Acting Managing Director)

Mr Deepankar Panigrahi  Non-Executive Director

Mr Nigel Jones    Non-Executive Director

Mr Adam Parker    Non-Executive Director

Former Directors

Mr Paul Atherley   Managing Director and CEO (resigned effective 11 July 2019)

Unless otherwise disclosed, Directors held their office from 1 July 2019 until the date of this report.

CURRENT DIRECTORS AND OFFICERS

Ian Middlemas 

Chairman

Qualifications - B.Com, CA

Mr Middlemas is a Chartered Accountant, a member of the Australian Institute of Company Directors and holds a Bachelor of Commerce degree.  He worked for a large international Chartered Accounting firm before joining the Normandy Mining Group where he was a senior group executive for approximately 10 years. He has had extensive corporate and management experience, and is currently a director with a number of publicly listed companies in the resources sector. 

Mr Middlemas was appointed a Director and Chairman of Berkeley Energia Limited on 27 April 2012. During the three year period to the end of the financial year, Mr Middlemas has held directorships in Constellation Resources Limited (November 2017 - present), Apollo Minerals Limited (July 2016 - present) , Paringa Resources Limited (October 2013 - present), Prairie Mining Limited (August 2011 - present), Salt Lake Potash Limited (January 2010 - present), Equatorial Resources Limited (November 2009 - present), Piedmont Lithium Limited (September 2009 - present), Sovereign Metals Limited (July 2006 - present), Odyssey Energy Limited (September 2005 - present) and Cradle Resources Limited (May 2016 - July 2019) .

Robert Behets 

Acting Managing Director, Non-Executive Director

Qualifications - B.Sc (Hons), FAusIMM, MAIG

Mr Behets is a geologist with over 30 years' experience in the mineral exploration and mining industry in Australia and internationally. He was instrumental in the founding, growth and development of Mantra Resources Limited, an African focused uranium company, through to its acquisition by ARMZ for approximately A$1 billion in 2011. Prior to Mantra, Mr Behets held various senior management positions during a long career with WMC Resources Limited.

Mr Behets has a strong combination of technical, commercial and managerial skills and extensive experience in exploration, mineral resource and ore reserve estimation, feasibility studies and operations across a range of commodities, including uranium, gold and base metals. He is a Fellow of The Australasian Institute of Mining and Metallurgy, a Member of the Australian Institute of Geoscientists and was also previously a member of the Australasian Joint Ore Reserve Committee ('JORC').

Mr Behets was appointed a Director of the Company on 27 April 2012. During the three year period to the end of the financial year, Mr Behets has held directorships in Odyssey Energy Limited (August 2020 - present), Constellation Resources Limited (June 2017 - present), Apollo Minerals Limited (October 2016 - present), Equatorial Resources Limited (February 2016 - present), Piedmont Lithium Limited (February 2016 to May 2018) and Cradle Resources Limited (May 2016 to July 2017).

Deepankar Panigrahi

Non-Executive Director

Qualifications - MS, MBA

Mr Panigrahi is an Investment Manager in the Private Equity division of OIA and has extensive experience across a variety of sectors and geographies covering all stages of the private equity process, including post investment management. Mr Panigrahi holds an Undergraduate and Master's degree in Economics with Distinction and Honours from the University of Michigan followed by an MBA from Cambridge University.

Mr Panigrahi was appointed a director of the Company on 30 November 2017. Mr Panigrahi has not been a Director of another listed company in the three years prior to the end of the financial year.

Nigel Jones

Non-Executive Director

Qualifications - MA

Mr Jones has thirty years' experience in the international mining sector. He has considerable corporate development and marketing expertise, including being responsible for the negotiation of key uranium supply agreements for Rio Tinto.

Mr Jones has spent two decades at Rio Tinto, where he currently holds the position of Managing Director of the Simandou iron ore project. In previous roles he was Global Head of Business Development, Managing Director of Rio Tinto Marine, Head of Investor Relations and Marketing Director, Uranium.

From 2017 to 2019, Mr Jones held the role of Head of Private Side Capital Markets at ICBC Standard Bank, leading the investment banking division of the global markets subsidiary of Industrial and Commercial Bank of China, the world's largest bank by assets.

Mr Jones holds a Master's degree in Modern Languages from Oxford University and is an alumnus of London Business School where he completed its Corporate Finance Programme.

Mr Jones was appointed a Director of Berkeley Energia Limited on 7 June 2017. Mr Jones has not been a Director of another listed company in the three years prior to the end of the financial year.

Adam Parker

Non-Executive Director

Qualifications - MA.Chem (Hons), ASIP

Mr Parker joined the Company after a long and successful career in institutional fund management in the City of London spanning almost three decades, including being a co-founder of Majedie Asset Management.

Mr Parker began his career in 1987 at Mercury Asset Management (subsequently acquired by Merrill Lynch and now part of BlackRock) and left in 2002 when he co-founded Majedie Asset Management.

Mr Parker was instrumental in building Majedie Asset Management into the successful investment boutique that it is today. He managed funds including the Majedie UK Opportunities Fund, the Majedie UK Smaller Companies Fund and a quarter of the Majedie UK Focus Fund.

Mr Parker was appointed a Director of Berkeley Energia Limited on 14 June 2017. Mr Parker has not been a Director of another listed company in the three years prior to the end of the financial year.

Dylan Browne

Company Secretary

Qualifications - B.Com, CA, AGIA ACG

Mr Browne is a Chartered Accountant and Associate Member of the Governance Institute of Australia (Chartered Secretary) who is currently Company Secretary for a number of ASX and European listed companies that operate in the resources sector. He commenced his career at a large international accounting firm and has since been involved with a number of exploration and development companies operating in the resources sector, based in London and Perth, including Apollo Minerals Limited, Prairie Mining Limited and Papillon Resources Limited. Mr Browne successfully listed Prairie on the Main Board of the London Stock Exchange and the Warsaw Stock Exchange in 2015 and oversaw Berkeley's listings on the Main Board LSE and the Madrid, Barcelona, Bilboa and Valencia Stock Exchanges. Mr Browne was appointed Company Secretary of the Company on 29 October 2015.

OTHER KMP

Francisco Bellón del Rosal (Francisco Bellón)

Chief Operations Officer

Qualifications - M.Sc, MAusIMM

Mr Bellón is a Mining Engineer specialising in mineral processing and metallurgy with over 20 years' experience in operational and project management roles in Europe, South America and West Africa. He held various senior management roles with TSX listed Rio Narcea Gold Mines during a 10 year career with the company, including Plant Manager for El Valle/Carles process facility and Operations Manager prior to its acquisition by Lundin Mining in 2007. During this period, Mr Bellón was involved in the development, construction, commissioning and production phases of a number of mining operations in Spain and Mauritania including El Valle-Boinás / Carlés (open pit and underground gold-copper mines in northern Spain), Aguablanca (open pit nickel-copper mine in southern Spain) and Tasiast (currently Kinross' world class open pit gold mine in Mauritania). He subsequently joined Duro Felguera, a large Spanish engineering house, where as Manager of the Mining Business, he managed the peer review, construction and commissioning of a number of large scale mining operations in West Africa and South America in excess of US$1 billion. Mr Bellón joined Berkeley Energia Limited in May 2011.

PRINCIPAL ACTIVITIES

The principal activities of the Consolidated Entity during the year consisted of mineral exploration and development. There was no significant change in the nature of those activities.

DIVIDENDS

No dividends have been declared, provided for or paid in respect of the financial year ended 30 June 2020 (2019: nil).

EARNINGS PER SHARE

	2020 Cents	2019 Cents
Basic and diluted earnings/(loss) per share	(9.63)	9.58

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

Other than as disclosed below, there were no significant changes in the state of affairs of the Consolidated Entity during the year.

(i)  On 11 July 2019, Mr Atherley resigned as Managing Director and CEO of the Company to concentrate on his other investments in the resource sector. 

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

(i)  On 24 July 2020, the Company announced that the Board of the NSC had issued a favourable report for the extension of the validity of the NSC I for the uranium concentrate plant as a radioactive facility at the Salamanca project; and

(ii)  On 11 August 2020, the Company announced that the UL had been granted by the Municipality of Retortillo under the terms established in the Urbanism Law and Urban Planning Regulations of Castilla y León for the Salamanca project; and

(iii)  On 25 August 2020, pursuant to the terms of the OIA convertible note, the Company elected to extend the mine commissioning date to 30 November 2021. Under the terms of the convertible note, if mine commissioning has not occurred by 30 November 2020, then the convertible note will automatically convert into shares at the lower of £0.50 per share or the last trading price of the Company's shares on LSE at the relevant time, subject the floor price of £0.27 per share.

Other than as outlined above, as at the date of this report there are no matters or circumstances, which have arisen since 30 June 2020 that have significantly affected or may significantly affect:

· the operations, in financial years subsequent to 30 June 2020, of the Consolidated Entity;

· the results of those operations, in financial years subsequent to 30 June 2020, of the Consolidated Entity; or

· the state of affairs, in financial years subsequent to 30 June 2020, of the Consolidated Entity.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Consolidated Entity's operations are subject to various environmental laws and regulations under the relevant government's legislation. Full compliance with these laws and regulations is regarded as a minimum standard for all operations to achieve. Instances of environmental non-compliance by an operation are identified either by external compliance audits or inspections by relevant government authorities.

There have been no significant known breaches by the Consolidated Entity during the financial year.

In September 2012, Berkeley qualified for certification in accordance with ISO 14001 of Environmental Management, which sets out the criteria for an environmental management system, and UNE 22480 of Sustainable Mining Management, which allows for the systematic monitoring and tracking of sustainability indicators, and is useful in the establishment of targets for constant improvement. These certificates are renewed following completion of audits established by the regulations, with the most recent renewal audit successfully completed in July 2018. In addition, the Company obtained the certification on the OHSAS 18001 in September 2018, which set up the criteria for the health and safety management system at the Salamanca project site. The migration from OHSAS 18001 to ISO 45001 is underway and will be completed in the prior to the end of 2020.

INFORMATION ON DIRECTORS' INTERESTS IN SECURITIES OF BERKELEY

	Interest in Securities at the Date of this Report
Current Directors	Ordinary Shares(i)	Incentive Options(ii)	Performance Rights(iii)
Ian Middlemas	9,300,000	-	-
Deepankar Panigrahi	-	-	-
Nigel Jones	35,000	-	-
Adam Parker	200,000	-	-
Robert Behets	2,490,000	2,000,000	-

Notes

(i)  'Ordinary Shares' means fully paid ordinary shares in the capital of the Company.

(ii)  'Incentive Options' means an unlisted option to subscribe for one Ordinary Share in the capital of the Company

(iii)  'Performance Rights' means the right to subscribe to one Ordinary Share in the capital of the Company upon the completion of specific performance milestones by the Company.

SHARE OPTIONS AND PERFORMANCE RIGHTS

At the date of this report the following unlisted securities have been issued over unissued Ordinary Shares of the Company:

• 200,000 Performance Rights expiring on 31 December 2021;

SHARE OPTIONS AND PERFORMANCE RIGHTS (Continued)

• 3,700,000 Incentive Options exercisable at $0.35 each on or before 31 December 2022;

• 3,700,000 Incentive Options exercisable at $0.40 each on or before 31 December 2023;

• A convertible note with a principal amount US$65 million convertible between 100,880,000 and 186,815,000 shares at a price between £0.50 and £0.27 per share expiring 30 November 2021 ('Convertible Note'); and

• OIA Options as follows:

• 10,089,000 unlisted options exercisable at £0.60 each, vesting on conversion of the Convertible Note and expiring the earlier of 12 months after vesting or on 30 November 2022;

• 15,133,000 unlisted options exercisable at £0.75 each, vesting on conversion of the Convertible Note and expiring the earlier of 18 months after vesting or on 30 May 2023; and

• 25,222,000 unlisted options exercisable at £1.00 each, vesting on conversion of the Convertible Loan Note and expiring the earlier of 24 months after vesting or on 30 November 2023.

These securities do not entitle the holders to participate in any share issue of the Company or any other body corporate. During the year ended 30 June 2020, 130,000 Ordinary Shares were issued as a result of the conversion of Performance Rights. No Ordinary Shares were issued as a result of the exercise or conversion of Incentive Options, the Convertible Note or OIA Options. Subsequent to the end of the financial year and up and until the date of this report, no Ordinary shares have been issued as a result of the exercise or conversion of Incentive Options, Performance Rights, OIA Options or Convertible Note.

MEETINGS OF DIRECTORS

The following table sets out the number of meetings of the Company's Directors and the board committees held during the year ended 30 June 2020, and the number of meetings attended by each director. During the year the Board resolved to establish a Remuneration and Nomination Committee.

The Board as a whole currently performs the functions of an Audit Committee and Risk Committee, however this will be reviewed should the size and nature of the Company's activities change.

	Board Meetings		Remuneration and Nomination Committee(i)
Current Directors	Number Eligible to Attend	Number Attended	Number Eligible to Attend	Number Attended
Ian Middlemas	3	3	-	-
Deepankar Panigrahi	3	3	-	-
Nigel Jones	3	3	-	-
Adam Parker	3	3	-	-
Robert Behets	3	3	-	-

Notes

(i)  Remuneration and Nomination Committee meetings are generally considered and approved by means of written resolutions of committee members.

REMUNERATION REPORT (AUDITED)

This report details the amount and nature of remuneration of each director and executive officer of the Company.

Details of Key Management Personnel

The Key Management Personnel ('KMP') of the Group during or since the end of the financial year were as follows:

Current Directors

Mr Ian Middlemas  Chairman

Mr Robert Behets  Non-Executive Director (Acting Managing Director)

Mr Deepankar Panigrahi  Non-Executive Director

Mr Nigel Jones    Non-Executive Director

Mr Adam Parker  Non-Executive Director

Former Directors

Mr Paul Atherley  Managing Director and CEO (resigned effective 11 July 2019)

Current KMP

Mr Francisco Bellón   Chief Operations Officer

Mr Dylan Browne  Company Secretary

Former KMP

Mr Sean Wade  Chief Commercial Officer (ceased 25 January 2020)

There were no other key management personnel of the Company or the Group. Unless otherwise disclosed, the Key Management Personnel held their position from 1 July 2019 until the date of this report.

Remuneration Policy

The remuneration policy for the Group's KMP has been developed by the Board taking into account the size of the Group, the size of the management team for the Group, the nature and stage of development of the Group's current operations and market conditions and comparable salary levels for companies of a similar size and operating in similar sectors.

In addition to considering the above general factors, the Board has also placed emphasis on the following specific issues in determining the remuneration policy for key management personnel:

• the Group is currently focused on undertaking development and construction activities;

• risks associated with resource companies whilst exploring and developing projects; and

• other than profit which may be generated from asset sales (if any), the Group does not expect to be undertaking profitable operations until sometime after the successful commercialisation, production and sales of commodities from one or more of its current projects, or the acquisition of a profitable mining operation.

Remuneration and Nomination Committee

The Board has established an independent Remuneration and Nomination Committee ('Remcom') to oversee the Group's remuneration and nomination responsibilities and governance. The remuneration committee members consist of three independent non-executive directors being Mr Parker (as Chair), Mr Jones and Mr Behets.

The Remcom's role is to determine the remuneration of the Company's executives, oversee the remuneration of KMP, and approve awards under the Company's new long-term incentive plan ('Plan').

The Remcom reviews the performance of executives and KMP and sets the scale and structure of their remuneration and the basis of their service/consulting agreements. In doing so, the Remcom will have due regard to the interests of shareholders.

In determining the remuneration of executives and KMP, the Remcom seeks to enable the Company to attract and retain executives of the highest calibre. In addition, the Remcom decides whether to grant incentives securities in the Company and, if these are to be granted, who the recipients should be.

Remuneration Policy for Executives

The Group's remuneration policy is to provide a fixed remuneration component and a performance based component (Incentive Options, Performance Rights and cash bonuses, see below). The Board believes that this remuneration policy is appropriate given the considerations discussed in the section above and is appropriate in aligning KMP objectives with shareholder and business objectives.

Fixed Remuneration

Fixed remuneration consists of base salaries, as well as employer contributions to superannuation funds and other non-cash benefits. Non-cash benefits may include provision of motor vehicles, housing and health care benefits.

Fixed remuneration will be reviewed annually by the Remcom. The process consists of a review of Company and individual performance, relevant comparative remuneration externally and internally and, where appropriate, external advice on policies and practices.

Performance Based Remuneration - Short Term Incentive

Some KMP are entitled to an annual cash bonus upon achieving various key performance indicators ('KPI's'), as set by the Board. Having regard to the current size, nature and opportunities of the Company, the Board has determined that these KPI's will include measures such as successful completion of exploration activities (e.g. completion of exploration programmes within budgeted timeframes and costs), development activities (e.g. completion of feasibility studies and initial infrastructure), corporate activities (e.g. recruitment of key personnel and project financing) and business development activities (e.g. project acquisitions and capital raisings). On an annual basis, after consideration of performance against KPI's, the Board determines the amount, if any, of the annual cash bonus to be paid to each KMP. During the financial year no bonus (2019: nil) was paid, or is payable to KMP.

Performance Based Remuneration - Long Term Incentive

The Group has adopted a Plan comprising the grant of Performance Rights and/or Incentive Options to reward KMP and key employees and contractors for long-term performance of the Company. Shareholders approved the new Plan   in November 2019.

To achieve its corporate objectives, the Group needs to attract, incentivise, and retain its key employees and contractors. The Board believes that grants of Performance Rights and/or Incentive Options to KMP will provide a useful tool to underpin the Group's employment and engagement strategy.

(i)  Performance Rights

The Group has a Plan that provides for the issuance of unlisted Performance Rights which, upon satisfaction of the relevant performance conditions attached to the Performance Rights, will result in the issue of an Ordinary Share for each Performance Right. Performance Rights are issued for no consideration and no amount is payable upon conversion thereof.

T h e Plan enables the Group to: (a) recruit, incentivise and retain KMP and other key employees and contractors needed to achieve the Group's business objectives; (b) link the reward of key staff with the achievement of strategic goals and the long-term performance of the Group; (c) align the financial interest of participants of the Plan with those of Shareholders; and (d) provide incentives to participants of the Plan to focus on superior performance that creates Shareholder value.

Performance Rights granted under the Plan to eligible participants will be linked to the achievement by the Group of certain performance conditions as determined by the Board from time to time. These performance conditions must be satisfied in order for the Performance Rights to vest. Upon Performance Rights vesting, Ordinary Shares are automatically issued for no consideration. If a performance condition of a Performance Right is not achieved by the expiry date then the Performance Right will lapse.

During the financial year, no Performance Rights were granted to KMP and key employees. No Performance Rights were converted during the financial year. 2,720,000 Performance Rights previously granted to KMP were forfeited/cancelled during the financial year.

(ii)  Incentive Options

The Plan also enables the Group to issue Incentive Options as part of KMP and key employees and contractors remuneration and incentive arrangements in order to attract, retain and to provide an incentive linked to the performance of the Company. 

The Board's policy is to grant Incentive Options to KMP with exercise prices at or above market share price (at the time of agreement). As such, Incentive Options granted to KMP are generally only of benefit if the KMP perform to the level whereby the value of the Group increases sufficiently to warrant exercising the Unlisted Options granted.

Other than service-based vesting conditions (if any) and the exercise price required to exercise the Incentive Options, there are no additional performance criteria on the Unlisted Options granted to executives, as given the speculative nature of the Company's activities and the small management team responsible for its running, it is considered the performance of the KMP and the performance and value of the Group are closely related.

The Company prohibits executives entering into arrangements to limit their exposure to Incentive Options granted as part of their remuneration package.

During the financial year, 7,400,000 Incentive Options were granted to KMP and key employees under the Plan. No Incentive Options were exercised during the financial year.

Performance Based Remuneration - Long Term Incentive

Remuneration Policy for Non-Executive Directors

The Board policy is to remunerate Non-Executive Directors at market rates for comparable companies for time, commitment and responsibilities. Given the current size, nature and risks of the Company, incentive options have been used to attract and retain Non-Executive Directors.  The Board determines payments to the Non-Executive Directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required.

The maximum aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval by shareholders at a General Meeting. The maximum aggregate amount that may be paid to Non-Executive Directors in a financial year is $350,000, as approved by shareholders at a Meeting of Shareholders held on 6 May 2009. Director's fees paid to Non-Executive Directors accrue on a daily basis.  Fees for Non-Executive Directors are not directly linked to the performance of the economic entity. However, to align Directors' interests with shareholder interests, the Directors are encouraged to hold shares in the Company. Given the size, nature and opportunities of the Company, Non-Executive Directors may receive Incentive Options or Performance Rights in order to secure and retain their services.

Fees for the Chairman were set at $50,000 per annum (2019: $50,000) (including post-employment benefits).

Fees for Non-Executive Directors' were set at $45,000 per annum (2019: $45,000) (including post-employment benefits). These fees cover main board activities only. Non-Executive Directors may receive additional remuneration for other services provided to the Company, including but not limited to, membership of committees.

During the 2020 financial year, no Incentive Options or Performance Rights were granted to Non-Executive Directors, other than to Mr Behets who is currently acting as Managing Director.

The Company prohibits Non-Executive Directors entering into arrangements to limit their exposure to Incentive Options granted as part of their remuneration package.

Relationship between Remuneration and Shareholder Wealth

During the Group's exploration and development phases of its business, the Board anticipates that the Company will retain future earnings (if any) and other cash resources for the operation and development of its business.  Accordingly, the Company does not currently have a policy with respect to the payment of dividends and returns of capital. Therefore, there was no relationship between the Board's policy for determining, or in relation to, the nature and amount of remuneration of KMP and dividends paid and returns of capital by the Company during the current and previous four financial years.

The Board does not directly base remuneration levels on the Company's share price or movement in the share price over the financial year and the previous four financial years. Discretionary annual cash bonuses are based upon achieving various non-financial KPIs as detailed under 'Performance Based Remuneration - Short Term Incentive' and are not based on share price or earnings. As noted above, a number of KMP have also been granted Performance Rights and Incentive Options, which generally will be of greater value should the value of the Company's shares increase (subject to vesting conditions being met), and in the case of options, increase sufficiently to warrant exercising the Incentive Options granted.

Relationship between Remuneration of KMP and Earnings

As discussed above, the Group is currently undertaking exploration and development activities, and does not expect to be undertaking profitable operations until sometime after the successful commercialisation, production and sales of commodities from one or more of its current projects.

Accordingly, the Board does not consider earnings during the current and previous four financial years when determining, and in relation to, the nature and amount of remuneration of KMP.

The maximum aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval by shareholders at a General Meeting. Fees for Non-Executive Directors are not linked to the performance of the economic entity.  However, to align Directors' interests with shareholder interests, the Directors are encouraged to hold shares in the Company and Non-Executive Directors have received Performance Rights and Incentive Options in order to secure their services and as a key component of their remuneration.

General

Where required, KMP receive superannuation contributions (or foreign equivalent), currently equal to 9.5% of their salary, and do not receive any other retirement benefit. From time to time, some individuals have chosen to sacrifice part of their salary to increase payments towards superannuation.

All remuneration paid to KMP is valued at cost to the Company and expensed. Incentive Options and Performance Rights are valued using an appropriate valuation methodology. The value of these Incentive Options and Performance Rights is expensed over the vesting period.

KMP Remuneration

Details of the nature and amount of each element of the remuneration of each Director and other KMP of the Company or Group for the financial year are as follows:

	Short-term Benefits				Non-Cash		Percentage
2020	Salary & Fees $	Cash Incentive $	Other Non-Cash Benefits (4) $	Post Employ-ment Benefits (5) $	Share-Based Payments (6) $	Total $	of Total Remunerat-ion that Consists of Options/ Rights %	Percent-age Perform-ance Related %
Directors
Ian Middlemas	45,600	-	-	4,332	-	49,932	-	-
Deepankar Panigrahi	45,000	-	-	-	-	45,000	-	-
Nigel Jones	45,000	-	-	-	-	45,000	-	-
Adam Parker	60,000	-	-	-	-	60,000	-	-
Robert Behets	251,685	-	-	3,903	102,352	357,940	28.6	-
Paul Atherley(1)	448,130(1)	-	-	-	-	448,130	-	-
Other KMP								-
Francisco Bellón	319,659	-	52,780	25,263	27,374	425,076	6.4	-
Dylan Browne(2)	-	-	-	-	9,581	9,581	100.0	-
Sean Wade(3)	219,331	-	-	-	(148,321)	71,010	-	-
Total	1,434,405	-	52,780	33,498	(9,014)	1,511,669

Notes

⁽¹⁾  Mr Atherley resigned effective 11 July 2019. Includes cessation payment of 12 months consultancy fee.

⁽²⁾  From 1 July 2019, Mr Browne provided services as the Company Secretary through a services agreement with Apollo Group Pty Ltd ("Apollo Group"). During the year, Apollo Group was paid or is payable A$258,000 for the provision of serviced office facilities and administrative, accounting, company secretarial and transaction services to the Group

⁽³⁾  Mr Wade ceased as Chief Commercial Offer on 25 January 2020.

⁽⁴⁾  Other Non-Cash Benefits includes payments made for housing and car benefits.

⁽⁵⁾  Contains statutory superannuation and social security.

⁽⁶⁾  Share-based payments are measured for by using a Black-Scholes option pricing valuation method and are expensed over the vesting period of the Performance Rights or Incentive Options issued.

	Short-term Benefits				Non-Cash		Percentage
2019	Salary & Fees $	Cash Incentive $	Other Non-Cash Benefits (1) $	Post Employ-ment Benefits (2) $	Share-Based Payments (3) $	Total $	of Total Remunerat-ion that Consists of Options/ Rights %	Percent-age Perform-ance Related %
Directors
Ian Middlemas	45,600	-	-	4,332	-	49,932	-	-
Paul Atherley	497,372	-	-	-	(620,817)	(123,445)	-	-
Deepankar Panigrahi	45,000	-	-	-	-	45,000	-	-
Nigel Jones	45,000	-	-	-	-	45,000	-	-
Adam Parker	60,000	-	-	-	-	60,000	-	-
Robert Behets	41,096	-	-	3,904	(135,262)	(90,262)	-	-
Other KMP							-	-
Francisco Bellón	308,134	-	50,442	23,446	(410,483)	(28,461)	-	-
Sean Wade	328,909	-	-	-	309,821	638,730	48.6	48.6
Dylan Browne	106,775	-	-	9,500	(139,774)	(23,499)	-	-
Total	1,477,886	-	50,442	41,182	(996,515)	572,995

Notes

⁽¹⁾  Other Non-Cash Benefits includes payments made for housing and car benefits.

⁽²⁾  Contains statutory superannuation and social security.

⁽³⁾  Share-based payments are measured for by using a Black-Scholes option pricing valuation method and are expensed over the vesting period of the Performance Rights or Incentive Options issued. Performance Rights are linked to the achievement by the Company of certain performance conditions as determined by the Board from time to time with the Performance Rights only of any value to the holder if the performance conditions are satisfied prior to the expiry of the respective Performance Rights. During the financial year, 3,603,000 Performance Rights previously granted to KMP were forfeited and as such the previously recognised expense was reversed.

Incentive Options and Performance Rights Granted to KMP

Details of the value of Incentive Options and Performance Rights granted, exercised or lapsed for KMP of the Group during the year ended 30 June 2020 are as follows:

2020	No. of options & rights granted	No. of options & rights vested	No. of options & rights exercised/ lapsed	Value of options & rights granted(1) $	Value of options & rights exercised/ lapsed(1) $	Value of options & rights included in remuneration $
Directors
Paul Atherley	-	-	(1,050,000)	-	(419,000)	-
Robert Behets	2,000,000	2,000,000	(240,000)	102,352	(74,160)	102,352
Other KMP
Francisco Bellón	2,000,000	-	(750,000)	102,352	(288,250)	27,374
Dylan Browne	700,000	-	(180,000)	35,823	(84,600)	9,581
Sean Wade	-	130,000	(500,000)	-	(370,000)	(148,321)

Notes

⁽¹⁾  Values determined at the grant date per AASB 2. For details on the valuation of Incentive Options and Performance Rights, including models and assumptions used, please refer to Note 18 of the financial statements

Details of Incentive Options granted by the Company to each KMP of the Group during the financial year are as follows:

2020	Options	Grant date	Expiry date	Vesting date	Exercise Price $	Grant date fair value(1) $	Number granted
Other KMP
Robert Behets	Options	18 Feb 2020	31 Dec 22	18 Feb 2020	0.35	0.047	1,000,000
	Options	18 Feb 2020	31 Dec 22	18 Feb 2020	0.40	0.055	1,000,000
Francisco Bellón	Options	18 Feb 2020	31 Dec 22	17 Feb 2021	0.35	0.047	1,000,000
	Options	18 Feb 2020	31 Dec 22	17 Feb 2021	0.40	0.055	1,000,000
Dylan Browne	Options	18 Feb 2020	31 Dec 22	17 Feb 2021	0.35	0.047	350,000
	Options	18 Feb 2020	31 Dec 22	17 Feb 2021	0.40	0.055	350,000

Notes

(1)  For details on the valuation of Incentive Options and Performance Rights, including models and assumptions used, please refer to Note 18 of the financial statements.

(2)  Incentive Options were issued to (a) recruit, incentivise and retain the KMP to achieve the Group's business objectives; (b) link the reward of the KMP with the achievement of strategic goals and the long-term performance of the Group; (c) align the financial interest of the KMP with those of Shareholders; and (d) provide incentives to the KMP to focus on superior performance that creates Shareholder value.

Employment Contracts with Directors and KMP

Current Directors

Mr Ian Middlemas, Chairman, has a letter of appointment dated 29 June 2015 confirming the terms and conditions of his appointment. Effective from 1 July 2013, Mr Middlemas has received a fee of $50,000 per annum inclusive of superannuation.

Mr Nigel Jones and Mr Panigrahi, Non-Executive Directors, have letters of appointment with Berkeley Energia Limited dated 5 June 2017 and 30 September 2018 respectively confirming the terms and conditions of his appointment. Both receive a fee of $45,000 per annum.

Mr Adam Parker, Non-Executive Director, has a letter of appointment with Berkeley Energia Limited dated 5 June 2017 confirming the terms and conditions of his appointment. Effective from 28 August 2017, Mr Parker receives a fee of $45,000 per annum for his Board duties and $15,000 for chairing the Remcom.

Mr Robert Behets, Non-Executive Director (Acting Managing Director), has a letter of appointment dated 29 June 2015 confirming the terms and conditions of his appointment. Effective 1 July 2017, Mr Behets has received a fee of $45,000 per annum inclusive of superannuation. Mr Behets also has a services agreement with the Company dated 18 June 2012, which provides for a consultancy fee at the rate of $1,200 per day for management and technical services provided by Mr Behets. Either party may terminate the agreement without penalty or payment by giving two months' notice.

Current other KMP

Mr Francisco Bellón, has a contract of employment dated 14 April 2011 and amended on 1 July 2011, 13 January 2015 and 16 March 2017. The contract specifies the duties and obligations to be fulfilled by the Chief Operations Officer. The contract has a rolling term and may be terminated by the Company giving six months' notice, or 12 months in the event of a change of control of the Company. In addition to the notice period, Mr Bellón will also be entitled to receive an amount equivalent to statutory unemployment benefits (approximately € 25,000) and statutory severance benefits (equivalent to 45 days remuneration per year worked from 9 May 2011 to 11 February 2012, and 33 days remuneration per year worked from 12 February 2012 until termination). No amount is payable in the event of termination for neglect of duty or gross misconduct. Mr Bellón receives a fixed remuneration component of €190,000 per annum plus compulsory social security contributions regulated by Spanish law, as well as the provision of accommodation in Salamanca and a motor vehicle.

Equity instruments held by Key Management Personnel

Incentive Options and Performance Rights holdings of KMP

2020	Held at 1 July 2019	Granted as Compen-sation	Vested securities exercised	Expired	Held at 30 June 2020	Vested and exerciseable at 30 June 2020
Directors
Ian Middlemas	-	-	-	-	-
Paul Atherley	1,050,000			(1,050,000)	-(1)
Deepankar Panigrahi	-	-	-	-	-	-
Nigel Jones	-	-	-	-	-	-
Adam Parker	-	-	-	-	-	-
Robert Behets	240,000	2,000,000		(240,000)	2,000,000	2,000,000
Other KMP
Francisco Bellón	750,000	2,000,000		(750,000)	2,000,000	-
Sean Wade	630,000	-	(130,000)	(500,000)	-(2)	-
Dylan Browne	180,000	700,000	-	(180,000)	700,000	-

Notes

⁽¹⁾  As at cessation date being 11 July 2019.

⁽²⁾  As at cessation date being on 25 January 2020 .

Shareholdings of KMP

2020	Held at 1 July 2019	Granted as Compensation	Options exercised/Rights converted	On market purchase/(sale)	Held at 30 June 2020
Directors
Ian Middlemas	9,300,000	-	-	-	9,300,000
Paul Atherley	3,193,622	-	-	-	3,193,622(1)
Deepankar Panigrahi	-	-	-	-	-
Nigel Jones	35,000	-	-	-	35,000
Adam Parker	200,000	-	-	-	200,000
Robert Behets	2,490,000	-	-	-	2,490,000
Other KMP
Francisco Bellón	1,150,000	-	-	-	1,150,000
Sean Wade	60,000	-	130,000	-	190,000(2)
Dylan Browne	-	-	-	-	-

Notes

⁽¹⁾  As at cessation date being 11 July 2019.

⁽²⁾  As at cessation date being on 25 January 2020 .

End of Remuneration Report.

AUDITOR'S AND OFFICERS' INDEMNITIES AND INSURANCE

Under the Constitution the Company is obliged, to the extent permitted by law, to indemnify an officer (including Directors) of the Company against liabilities incurred by the officer in that capacity, against costs and expenses incurred by the officer in successfully defending civil or criminal proceedings, and against any liability which arises out of conduct not involving a lack of good faith.

During the financial year, the Company has paid an insurance premium to insure Directors and officers of the Company against certain liabilities arising out of their conduct while acting as a Director or Officer of the Company. Under the terms and conditions of the insurance contract, the nature of liabilities insured against cannot be disclosed.

To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify Ernst & Young during or since the financial year.

NON-AUDIT SERVICES

During the year, the Company's auditor, Ernst & Young, received, or is due to receive, $88,000 (2019: $52,000) for the provision of non-audit services. The Directors are satisfied that the provision of non-audit services is compatible with the general standard and independence for auditors imposed by the Corporations Act 2001 ('Corporations Act').

ROUNDING

The amounts contained in the financial report have been rounded to the nearest $1,000 (where rounding is applicable) where noted ($000) under the option available to the Company under ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191. The Company is an entity to which this legislative instrument applies.

AUDITOR'S INDEPENDENCE DECLARATION

The auditor's independence declaration is on page 58 of the Annual Financial Report.

This report is made in accordance with a resolution of the Directors made pursuant to section 298(2) of the Corporations Act.

For and on behalf of the Directors

ROBERT BEHETS

Director

25 September 2020

Forward Looking Statement

Statements regarding plans with respect to Berkeley's mineral properties are forward-looking statements. There can be no assurance that Berkeley's plans for development of its mineral properties will proceed as currently expected. There can also be no assurance that Berkeley 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 Berkeley's mineral properties.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2020

	Note	2020 $000	2019 $000
Interest income	2	1,480	2,340
Exploration and evaluation expenses		(5,779)	(8,541)
Business development expenses		(983)	(1,278)
Corporate and administration expenses		(1,155)	(1,928)
Share-based payment expenses	18	(62)	1,918
Fair value movement on financial liabilities	3	(41,116)	38,120
Foreign exchange movements		4,726	3,800
Profit/(Loss) before income tax		(42,889)	34,431
Income tax benefit/(expense)	0	-	-
Profit/(Loss) after income tax		(42,889)	34,431
Other comprehensive income, net of income tax:
Items that may be classified subsequently to profit or loss:
Exchange differences arising on translation of foreign operations		(538)	382
Other comprehensive income, net of income tax		(538)	382
Total comprehensive profit/(loss) for the year attributable to Members of Berkeley Energia Limited		(43,427)	34,813
Basic and diluted earnings/(loss) per share (cents per share)	21	(9.63)	9.58

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

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2020

	Note	2020 $000	2019 $000
ASSETS
Current Assets
Cash and cash equivalents	22	91,767	96,587
Other receivables	6	1,436	1,661
Total Current Assets		93,203	98,248
Non-current Assets
Exploration expenditure	7	8,293	8,274
Property, plant and equipment	8	12,855	12,858
Other financial assets	9	617	540
Total Non-current Assets		21,765	21,672
TOTAL ASSETS		114,968	119,920
LIABILITIES
Current Liabilities
Trade and other payables	10	1,158	1,952
Derivative financial liabilities	11	76,747	37,756
Other financial liabilities	12	852	564
Total Current Liabilities		78,757	40,272
TOTAL LIABILITIES		78,757	40,272
NET ASSETS		36,211	79,648
EQUITY
Equity attributable to equity holders of the Company
Issued capital	13	169,829	169,736
Reserves	14	(1,116)	(531)
Accumulated losses		(132,502)	(89,557)
TOTAL EQUITY		36,211	79,648

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying Notes

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2020

	Issued Capital	Share- Based Payments Reserve	Foreign Currency Translation Reserve	Accumulated Losses	Total Equity
	$000	$000	$000	$000	$000
As at 1 July 2019	169,736	341	(872)	(89,557)	79,648
Effect of adoption of AASB 16	-	-	-	(56)	(56)
Balance at 1 July 2019 - restated	169,736	341	(872)	(89,613)	79,592
Total comprehensive loss for the period:
Net profit/(loss) for the year	-	-	-	(42,889)	(42,889)
Other Comprehensive Income: Exchange differences arising on translation of foreign operations	-	-	(538)	-	(538)
Total comprehensive income/(loss)	-	-	(538)	(42,889)	(43,427)
Issue of ordinary shares	110	-	-	-	110
Share issue costs	(17)	-	-	-	(17)
Lapse of Performance Rights	-	(109)	-	-	(109)
Share-based payments expense	-	62	-	-	62
As at 30 June 2020	169,829	294	(1,410)	(132,502)	36,211
As at 1 July 2018	169,633	2,803	(1,254)	(124,402)	46,780
Total comprehensive loss for the period:
Net profit/(loss) for the year	-	-	-	34,431	34,431
Other Comprehensive Income: Exchange differences arising on translation of foreign operations	-	-	382	-	382
Total comprehensive income/(loss)	-	-	382	34,431	34,813
Issue of ordinary shares	130	-	-	-	130
Share issue costs	(27)	-	-	-	(27)
Forfeiture of Performance Rights	-	(3,162)	-	-	(3,162)
Lapse of Incentive Options	-	(414)	-	414	-
Share-based payments expense	-	1,114	-	-	1,114
As at 30 June 2019	169,736	341	(872)	(89,557)	79,648

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying Notes

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2020

	Note	2020 $000	2019 $000
Cash flows from operating activities
Payments to suppliers and employees		(8,700)	(10,612)
Interest received		1,499	2,678
Net cash outflow from operating activities	22 (a)	(7,201)	(7,934)
Cash flows from investing activities
Payments for property, plant and equipment		(215)	(1,254)
Net cash outflow from investing activities		(215)	(1,254)
Cash flows from financing activities
Transaction costs from issue of securities		(2)	(27)
Net cash (outflow)/inflow from financing activities		(2)	(27)
Net (decrease)/increase in cash and cash equivalents held		(7,418)	(9,215)
Cash and cash equivalents at the beginning of the financial year		96,587	100,935
Effects of exchange rate changes on cash and cash equivalents		2,598	4,867
Cash and cash equivalents at the end of the financial year	22 (b)	91,767	96,587

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying Notes

 

END

 

 

FR GLGDCSGDDGGC