Berkeley Eng Regulatory News (BKY)

BERKELEY RESOURCES LIMITED 

ANNUAL FINANCIAL REPORT

30 JUNE 2014

ABN 40 052 468 569

Contents

DIRECTORS' REPORT

30 JUNE 2014

The Directors of Berkeley Resources Limited submit their report on the Consolidated Entity consisting of Berkeley Resources Limited ('Company' or 'Berkeley' or 'Parent') and the entities it controlled at the end of, or during, the year ended 30 June 2014 ('Consolidated Entity' or 'Group').

DIRECTORS

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

Mr Ian Middlemas -Chairman

Dr James Ross - Non-Executive Deputy Chairman

Mr Robert Behets - Non-Executive Director

Unless otherwise disclosed, Directors held their office from 1 July 2013 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 Financial Services Institute of Australasia 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 Resources Limited on 27 April 2012. During the three year period to the end of the financial year, Mr Middlemas has held directorships in Paringa Resources Limited (October 2013 - present), Prairie Mining Limited (August 2011 - present), Papillon Resources Limited (May 2011 - present), Pacific Ore Limited (April 2010 - present), Wildhorse Energy Limited (January 2010 - present), Equatorial Resources Limited (November 2009 - present), WCP Resources Limited (September 2009 - present), Sovereign Metals Limited (July 2006 - present), Odyssey Energy Limited (September 2005 - present), Sierra Mining Limited (January 2006 - June 2014), Decimal Software Limited (July 2013 - April 2014), Global Petroleum Limited (April 2007 - December 2011) and Coalspur Mines Limited (March 2007 - October 2011).

James Ross AM

Non-Executive Deputy Chairman

Qualifications - B.Sc. (Hons.), PhD, FAusIMM, FAICD

Dr Ross is a leading international geologist whose technical qualifications include an honours degree in Geology at UWA and a PhD in Economic Geology from UC Berkeley. He first worked with Western Mining Corporation Limited for 25 years, where he held senior positions in exploration, mining and research. Subsequent appointments have been at the level of Executive Director, Managing Director and Chairman in a number of small listed companies in exploration, mining, geophysical technologies, renewable energy and timber. His considerable international experience in exploration and mining includes South America, Africa, South East Asia and the Western Pacific.

Dr Ross is Chairman of Earth Science Western Australia Inc. and the John De Laeter Centre for Isotope Research; a member of the Technology Industry Advisory Council; and a former Director of Kimberley Foundation Australia Limited.

He was appointed a Director of Berkeley Resources Limited on 4 February 2005. He has not been a Director of another listed company in the three years prior to the end of the financial year.

Robert Behets

Non-Executive Director

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

Mr Behets is a geologist with over 25 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 also held a directorship in Papillon Resources Limited (May 2012 - present).

Francisco Bellón

General Manager Operations

Qualifications - M.Sc

Mr Bellón is a Mining Engineer specialising in mineral processing and metallurgy with over 18 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$1B.

Mr Bellón joined Berkeley Resources in May 2011.

Javier Colilla

Senior Vice President Corporate

Qualifications - Econ (Hons), LLB (Hons), MBA

Mr Colilla is a Mineral Economist and Lawyer. With prior experience in auditing and insurance sectors, he has over 25 years' experience in the mining sector commencing as the Managing Director of an international drilling company in the early 1980's. He subsequently worked for Anglo American as General Manager of their Spanish subsidiaries, whilst also contributing as international staff member to several projects in Europe and South America. Mr Colilla held various executive management roles during a long career with the TSX listed Rio Narcea Gold Mines, including Vice President Business Development, Chief Financial Officer, Senior Vice President Corporate, as well as Administrator/Director of its subsidiaries. During this period, he was involved in all aspects of commercial, legal and joint venture management, permitting, stakeholder engagement, government liaison and project financing for a number of mining operations in Spain and internationally including El Valle-Boinás / Carlés, Aguablanca and Tasiast. Following the acquisition of Rio Narcea Gold Mines by Lundin Mining in 2007, Mr Colilla consulted on renewable energies projects and advised several international leading legal firms in the areas of public aid financing (domestic and international) and due diligence exercises in relation to Spanish mining companies being acquired by multinational mining groups.

Mr Colilla joined Berkeley Resources in April 2010.

Mr Clint McGhie

Company Secretary and Chief Financial Officer

Qualifications - B.Com, CA, ACIS, FFin

Mr McGhie is a Chartered Accountant and Chartered Secretary. He commenced his career at a large international Chartered Accounting firm, before moving to commerce in the role of financial controller and company secretary. Mr McGhie now works in the corporate office of a number of public listed companies focussed on the resources sector.

Mr McGhie was appointed Company Secretary and Chief Financial Officer of Berkeley Resources Limited on 18 May 2012.

PRINCIPAL ACTIVITIES

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

EMPLOYEES

DIVIDENDS

No dividends have been declared, provided for or paid in respect of the financial year ended 30 June 2014 (2013: nil).

EARNINGS PER SHARE

CORPORATE STRUCTURE

Berkeley Resources Limited is a company limited by shares that is incorporated and domiciled in Australia. The Company has prepared a consolidated financial report including the entities it acquired and controlled during the financial year.

CONSOLIDATED RESULTS

OPERATING AND FINANCIAL REVIEW

Berkeley is a uranium exploration and development company with a quality resource base in Spain. The Company is currently focussed on advancing its wholly owned flagship Salamanca Project ('the Project').

The Salamanca Project comprises the Retortillo, Alameda, Gambuta and Zona 7 deposits, plus a number of other Satellite deposits located in western Spain.

During the year, the Company completed a Preliminary Feasibility Study ('PFS') on the integrated development of Retortillo and Alameda, which clearly demonstrated the Project's potential to support a significant scale, long life uranium mining operation. The Company has subsequently commenced a Definitive Feasibility Study ('DFS') for the Project.

Operations

Highlights during, and subsequent to the end of, the financial year:

(i) Completion of the PFS confirming the technical and economic viability of the Salamanca Project, including:

· Steady state annual production of 3.3 million pounds U3O8 over a 7 year period, with average annual production of 2.7 million pounds U3O8 over an initial 11 year life of mine;

· Average operating costs (C1 cash costs) of US$24.60 per pound of U3O8 over the life of mine;

· Upfront capital cost of US$95.1 million to deliver initial production. A further US$74.4 million, incurred in the second year of production, to achieve steady state operation; and

· PFS considered a base case scenario, with strong potential to increase the production profile and/or mine life.

(ii) Commencement of the Salamanca Project DFS:

· DFS focussed on the integrated development of Retortillo and Alameda; and

· A number of work programs providing key inputs to the DFS, including detailed geological and structural mapping, hydrogeological studies, metallurgical testwork, and resource drilling at Retortillo, have commenced.

(iii) Environmental Licence for Retortillo granted:

· The Regional Government granted a Favourable Declaration of Environmental Impact ('Environmental Licence') for Retortillo following submission and extensive review of the Company's Environmental and Social Impact Assessment ('ESIA').

(iv) Exploitation Concession ('Mining Licence') for Retortillo granted:

· Valid for an initial period of 30 years, renewable for two further periods of 30 years;

· Covers an area of 25.2km2 and includes the entire area containing the Retortillo deposit;

· Retortillo deposit forms part of the integrated Salamanca Project and is the first resource from which production is scheduled to commence; and

· With the grant of Mining Licence by the Regional Government, the approval processes associated with other key permits, including the Initial Authorisation of the process plant as a radioactive facility and the Exceptional Authorisation for Land Use (application for reclassification from rural to industrial use) of the affected surface land area at Retortillo, may now be finalised.

(v) Gambuta Scoping Study:

· Completion of a positive Scoping Study on the Gambuta deposit, enabling the Company to advance Gambuta to the next stage of evaluation;

· The Gambuta deposit, which is located approximately 145 kilometres southeast of Retortillo, has an Inferred Mineral Resource Estimate ('MRE') of 12.7 million tonnes at 394 ppm U3O8 for a total of 11.1 million pounds of U3O8 at a 200 ppm U3O8 cut-off grade (refer ASX September 2012 Quarterly Report); and

· Gambuta will ultimately be integrated with Retortillo and Alameda, with a view to potentially increasing the production scale and/or mine life of the Salamanca Project.

(vi) High Grade Mineralisation Intersected at Zona 7:

· Zona 7 is the largest of the Retortillo Satellite Deposits and currently hosts an Inferred MRE of 3.9 million tonnes averaging 414 ppm U3O8 for a contained 3.6 million pounds of U3O8 at a 200 ppm U3O8 cut-off grade (not including the results from the 2013 or 2014 drill programs - See ASX September 2012 Quarterly Report). It is located within 10 kilometres of the proposed location of the centralised processing plant at Retortillo;

· 2013 drill program intersected high grade mineralisation at shallow depths and extended the mineralisation a further 1,200 metres to the southwest of the current resource area;

· Better intercepts from the 2013 program included 29 metres @ 3,391 ppm U3O8, 17 metres @ 1,260 ppm U3O8, 15 metres @ 1,392 ppm U3O8, 25 metres @ 683 ppm U3O8 and 13 metres @ 1,161 ppm U3O8;

· A follow up drill program aimed at infilling the zone of mineralisation delineated by the 2013 program and extending it further along strike commenced in May 2014. The 2014 program was designed to close the broadly spaced 2013 drill pattern down to a notional 100 metre by 100 metre grid to facilitate the estimation of a revised Inferred MRE for Zona 7 in late 2014; and

· Results from the 2014 program received to date include 21 metres @ 3,101 ppm U3O8, 25 metres @ 2,005 ppm U3O8, 21 metres @ 1,535 ppm U3O8, 17 metres @ 1,517 ppm U3O8 and 16 metres @ 1,014 ppm U3O8.

Salamanca Project

Berkeley's flagship Salamanca Project comprises the Retortillo, Alameda, Gambuta and Zona 7 deposits, plus a number of other Satellite deposits located in western Spain.

Project Evaluation

Pre-Feasibility Study

In September 2013, the Company completed a PFS on the integrated development of Retortillo and Alameda, which clearly demonstrated the Salamanca Project's potential to support a significant scale, long life uranium mining operation (refer ASX announcement dated 26 September 2013).

Using only the current MRE for Retortillo and Alameda, which total 34.5 million pounds U3O8 (36.9 million tonnes at 424 ppm; 200 ppm U3O8 cut-off grade), as a base case scenario, the Project can support an average annual production of 3.3 million pounds of U3O8 during the seven years of steady state operation and 2.7 million pounds of U3O8 over a minimum eleven year mine life (refer ASX June 2014 Quarterly Report). There is strong potential to increase the production profile and/or mine life through the exploitation of additional resources held by the Company (totalling 27.1 million pounds U3O8) and with ongoing exploration work.

The PFS was based on open pit mining, heap leaching using on-off leach pads, a centralised process plant at Retortillo, and a remote ion exchange operation at Alameda, with loaded resin trucked to the centralised plant for final extraction and purification. The open pits are shallow (maximum depth of 135 metres) with low strip ratios (average 1:2.1 ore to waste for the Project over the life of mine). During steady state operation the annual ore processing rate is 5.5 million tonnes. Operating costs (C1 cash costs) average US$24.60 per pound U3O8 over the life of mine.

The initial capital cost (nominally ± 20% accuracy) for the Project is estimated at US$95.1 million. This cost is inclusive of all mine, processing, infrastructure and indirect costs required to develop and commence production at Retortillo. A further US$74.4 million of capital, incurred in the second year of production, is required to develop Alameda and achieve steady state operation. The Project's capital cost reflects the excellent existing infrastructure, use of heap leaching as the preferred processing route, and the favoured mining contractor scenario (no mining fleet capital expenditure).

Definitive Feasibility Study

A number of opportunities to further enhance the Project economics through capital and operating cost reductions were identified in the PFS. Prior to commencing the DFS, the Company undertook a comprehensive review of the PFS with a view to assessing these opportunities and defining key work programs to be incorporated into the final scope. Following finalisation of the Scope of Work, the key areas of focus for the DFS include:

· Resource infill drilling programs aimed at upgrading the classification of specific portions of the current Retortillo and Alameda MRE's to the Measured category;

· Further metallurgical testwork programs, including additional column leach work (six metre columns - operational height), in combination with ion exchange ('IX') at Alameda and solvent extraction ('SX') and ammonium diuranate ('ADU') precipitation at Retortillo to generate more detailed information relating to the pH and acid consumption optimisation, design and sizing of the IX and SX units, and final product specification;

· Development of a Geo-Met model which will incorporate additional geological and metallurgical parameters into the resource block model to support metallurgical process modelling and mine planning and optimisation;

· Open pit optimisation, detailed mine design and production scheduling using the upgraded MRE block models;

· Enhanced design of the project infrastructure and site facilities;

· Undertaking engineering studies to support capital and operating cost estimates for the Project to a level of accuracy of nominally ±10%; and

· Undertaking an evaluation of the various alternatives for funding the development of the Project and the sale of future uranium production (including uranium marketing and off-take arrangements).

A number of work programs providing key inputs to the DFS, including the resource infill drilling program at Retortillo, the metallurgical testwork program, development of Geo-Met models and hydrogeological studies for both sites, were advanced late in the year.

Resource Drilling

The PFS was based solely on the MREs for Retortillo and Alameda (Table 1), prepared by Berkeley and reported in accordance with the JORC Code (2004).

The Alameda MRE was unchanged from that reported in July 2012 and was based on data from approximately 41,000 metres of historical diamond ('DD') drilling and 11,000 metres of DD and reverse circulation ('RC') drilling undertaken by Berkeley.

The Retortillo MRE was updated in September 2013 to incorporate the results of a 2013 RC infill drilling program which comprised 67 RC drill holes for 4,382 metres.

Table 1 - Summary of MREs used as the basis of the PFS

A comparison between the Retortillo September 2013 MRE and July 2012 MRE highlights the following:

· Total tonnes increased by 7% (16.2 million tonnes vs. 15.2 million tonnes);

· Average grade decreased by 2% (376 ppm U3O8 vs. 383 ppm U3O8);

· Total contained uranium increased by 5% (13.4 million pounds U3O8 vs. 12.8 million pounds U3O8); and

· Indicated Resources increased from 61% to 90% of total MRE.

These changes are largely attributable to the inclusion of the results of the 2013 infill drilling, which were mostly in line with expectations based on the previous July 2012 resource model, and they also confirmed that the mineralisation extends a further 200 metres to the northwest beyond the previous resource boundary.

Following completion of the detailed design of the infill drilling program for Retortillo for the DFS, activities including land owner authorisation, site access and drill site preparation were undertaken late in the year and drilling commenced in August 2014. The 2014 infill drilling program is aimed at upgrading the resource classification of the areas to be mined during the initial two years of the PFS production schedule to the Measured category.

Gambuta Scoping Study

During the year, the Company also completed a Scoping Study level evaluation ('the Study') of the Gambuta deposit. The Study was managed by Berkeley, with input from a number of industry recognised specialist consultants covering the key disciplines.

The Gambuta deposit, which is located approximately 145 kilometres southeast of Retortillo, has an Inferred MRE of 12.7 million tonnes at 394 ppm U3O8 for a total of 11.1 million pounds of U3O8 at a 200 ppm U3O8 cut-off grade (refer ASX September 2012 Quarterly Report).

The conceptual approach used in the Study was based on open pit mining, heap leaching, and a remote IX operation, with the loaded resin being trucked to the proposed centralised plant at Retortillo for final extraction and purification.

The geometry, average thickness and depth of the mineralisation make it amenable to shallow open pit mining with a low ore to waste strip ratio.

The results of the Study were positive and accordingly, the Company will advance Gambuta to the next stage of the evaluation. Gambuta will ultimately be integrated with Retortillo and Alameda, with a view to potentially increasing the production scale and/or mine life of the Salamanca Project.

Permitting

Significant progress was made with permitting during the year, with two major permitting milestones achieved for Retortillo.

In October 2013, the Regional Government of Castilla and León granted a Favourable Declaration of Environmental Impact ('Environmental Licence') for Retortillo.

The grant of the Environmental Licence followed substantial work over a 24 month period, including environmental and social baseline studies and culminating with the submission of the Environmental and Social Impact Assessment ('ESIA'), together with the Exploitation Plan and the Reclamation and Closure Plan for Retortillo.

The ESIA and associated documentation were subjected to extensive review by all relevant authorities and key stakeholders, including a 30 day Public Information Period, prior to the grant of the Environmental Licence. The Environmental Licence covers all mining and processing activities, including treatment of loaded resin transported to Retortillo from other deposits.

Key activities undertaken during the ESIA process, which was managed by Berkeley with input from a multi-disciplinary group of specialist consultants, included environmental baseline monitoring studies, census work to understand the flora and fauna within and around the tenement area, ecosystem and habitat sensitivity surveys, noise and air quality studies, surface and underground water studies, and extensive community engagement.

In April 2014, the Regional Government of Castilla and León granted the Exploitation Concession ('Mining Licence') for Retortillo. The Retortillo deposit forms part of the Salamanca Project and is the first resource from which production is scheduled to commence.

The grant of the Mining Licence for Retortillo is a major milestone for the Company and follows the approval of Exploitation and Reclamation and Closure Plans for the proposed mining operation submitted by Berkeley, and the completion of a number of studies and technical review sessions with relevant government agencies. The granting of the Mining Licence has also taken into account the prerequisite approval of the Company's ESIA by the environmental authorities, and the favourable recommendation report issued by the Nuclear Safety Council.

The Mining Licence is valid for an initial period of 30 years and may be renewed for two additional periods of 30 years. It covers an area of 25.2km2 and includes the entire area containing the Retortillo MRE.

With the grant of the Mining Licence, the approval processes associated with other key permits including the Initial Authorisation of the process plant as a radioactive facility and the Exceptional Authorisation for Land Use (application for reclassification from rural to industrial use) of the affected surface land area at Retortillo, may now be finalised.

The key documents required for the next phase of permitting at Alameda were submitted to the relevant authorities during the year. These included a revised version of the Environmental Scoping Document ('ESD') which was updated to incorporate the results from the PFS and inputs from the granting of the Environment and Mining Licenses for Retortillo.

Exploration

Zona 7

A comprehensive review of all available data for the tenements surrounding the Company's existing resources, undertaken in early 2013, identified the potential extension of Zona 7 to the southwest as a priority drill target.

Zona 7 is located approximately 10 kilometres to the northwest of the proposed location of the centralised processing plant at Retortillo and currently hosts an Inferred MRE of 3.9 million tonnes averaging 414 ppm U3O8 for a contained 3.6 million pounds of U3O8 at a lower cut-off grade of 200 ppm U3O8 (refer ASX June 2012 Quarterly Report).

An 18 hole, 1,133 metre RC drill program was subsequently completed in mid-2013 to test this priority target. Assay results returned from this drilling program in August 2013 confirmed that the Zona 7 mineralisation extends a further 1,200 metres to the southwest of the current resource area. The drilling, which was carried out on an approximately 400 metre by 100 metre grid, essentially doubled the strike extent of the mineralised zone and it remains open. Significant high grade intersections were recorded at shallow depths (from 9 metres to a maximum depth of 84 metres), with thicknesses up to 29 metres. Better intercepts included 29 metres @ 3,391 ppm U3O8, 17 metres @ 1,260 ppm U3O8, 15 metres @ 1,392 ppm U3O8, 25 metres @ 683 ppm U3O8 and 13 metres @ 1,161 ppm U3O8 (refer ASX announcement dated 7 August 2013).

A follow-up drill program in 2014, comprising 44 RC holes for approximately 3,100 metres and three DD holes for approximately 300 metres, was aimed at infilling the zone of mineralisation defined by the 2013 drilling and extending it further along strike. The program was designed to close the broadly spaced 2013 drill pattern down to a notional 100 metre by 100 metre grid to facilitate the estimation of a revised Inferred Mineral Resource for the prospect.

The 2014 program will be completed in September.

Results from the 2014 program received to date include 21 metres @ 3,101 ppm U3O8, 25 metres @ 2,005 ppm U3O8, 21 metres @ 1,535 ppm U3O8, 17 metres @ 1,517 ppm U3O8 and 16 metres @ 1,014 ppm U3O8. These results have shown that there is good continuity of the mineralised zone, both in terms of thickness and grade, between the previous broader spaced holes. Significant high grade intersections have been recorded at shallow depths (from surface to a maximum depth of 73 metres), with thicknesses up to 25 metres.

The data obtained from both the 2013 and 2014 drilling programs will form the basis for an upgraded Inferred Mineral Resource for Zona 7, anticipated to be completed in the December 2014 quarter.

A summary of all resource and exploration drilling completed by Berkeley during the year is presented in the following table.

Table 2: 2013/2014 Drilling Summary

Results of Operations

The Consolidated Entity's net loss after tax for the year ended 30 June 2014 was $7,533,948 (2013: $11,189,077). This loss is partly attributable to:

(i) Exploration and evaluation expenses of $6,935,123 (2013: $11,999,142), 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 for each separate area of interest.

The reduced exploration and evaluation expenditure in the year ended 30 June 2014 is a reflection of the activities undertaken during the year, including a period of internal review following the release of the PFS in September 2013, and an ongoing focus on cost control across all areas of the business.

(ii) Share based payments expense of $809,174 (2013: $417,918) was recognised in respect of incentive securities granted to directors, employees and key consultants. The Company expenses the incentive securities over the vesting period.

The Consolidated Entity also recognised interest income of $825,297 (2013: $1,509,713), and a rebate of $338,074 (2013: $737,198) was received in respect of R&D activities undertaken in Australia. The reduction in interest income reflects the reduced average cash position from 2013 to 2014 and a general reduction in interest rates from 2013 to 2014.

Financial Position

At 30 June 2014, the Group had cash reserves of A$20.2 million, with no debt. This puts the Group in a strong financial position as it looks to complete the DFS and progress the development of the Salamanca Project. The Company continues to maintain a strong focus on cost control across all areas of the business

The Group had net assets of $35,582,008 at 30 June 2014 (2013: $42,136,600), a decrease of $6,554,592 or approximately 15.5% compared with the previous year. This decrease is consistent with the reduced cash balance and is largely attributable to the comprehensive loss for the year, comprising: (i) the current year's net loss after income tax, and (ii) the foreign exchange gain arising on the translation of the Group's foreign operations.

The increase in the Exploration Expenditure asset from $14,173,930 at 30 June 2013 to $14,268,990 at 30 June 2014 is attributed to the devaluation of the Australian dollar (AUD) against the Euro, with approximately $8.53 million (€6.0million) of the Exploration asset denominated in Euro and revalued in AUD at each balance date.

The decrease in trade creditors from $2,172,953 at 30 June 2013 to $1,094,791 is a reflection of a lower level of activity at the end of 2014 as the Company commences the DFS. This is compared to the end of 2013 when the Company was actively in the process of completing the PFS.

Business Strategies and Prospects for Future Financial Years

Berkeley's strategic objective is to create long-term shareholder value by becoming a uranium producer in the medium term, through the ongoing exploration, appraisal and development of its flagship Salamanca Project located in Spain.

The Company has a 100% interest in a total Mineral Resource estimated at 61.6 million pounds of contained U3O8 (65.4 million tonnes at 427 ppm U3O8 at a cut-off grade of 200 ppm U3O8) but has not to date defined Ore Reserves in accordance with the JORC Code, nor has it commenced production. To achieve its strategic objective, the Company currently has the following business strategies and prospects over the medium term:

· Completion of a DFS for the Salamanca Project;

· Commence evaluation of project finance options;

· Continue the permitting process with a view to obtaining all necessary permits and licences for construction and production in a timely fashion;

· Subject to the results of a positive DFS, obtaining all necessary permits and licences and project financing, advance the Salamanca Project through the development and construction phases and into production;

· Continue to explore its portfolio of tenements in Spain with a view to growing the resource base and potentially providing additional production sources to incorporate into the Salamanca Project; and

· Continue to assess new uranium and other business opportunities which can enhance shareholder value.

As with any other mining project, 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. The 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:

· The exploration for, and development of, mineral deposits involves a high degree of risk. The ultimate development of the Company's project into a producing mine is dependent on a number of factors, including; successful studies, obtaining all necessary permits and licences, and subsequently the required project financing.

To mitigate this risk, the Company has undertaken systematic and staged exploration and testing programs, and a number of technical and economic studies with respect to the Salamanca Project. Further studies, including a DFS, will also be completed prior to advancing the Salamanca Project to the construction phase and into production.

The construction phase of the Company's Project will require substantial additional financing. Failure to obtain sufficient financing may result in delaying or indefinite postponement of any development of the Project. There can be no assurance that additional capital or other types of financing will be available if needed or that, if available, the terms of such financing will be favourable to the Company.

The successful development of the Company's Project will also be dependent on the granting of all permits necessary for the construction and production phases. As with any exploration and development project, there is no guarantee that the Company will be successful in applying for and maintaining all required permits and licences to commence construction and subsequently enter into production;

· The Company may be adversely affected by fluctuations in commodity prices. The price of uranium fluctuates widely and is affected by numerous factors beyond the control of the Company. Future production from the Company's Project 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; 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.

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.

· In September 2013, the Company completed the PFS confirming the technical and economic viability of the Salamanca Project and its potential to support a significant scale, long life, low cost uranium operation. Using only the MRE for Retortillo and Alameda, the PFS is considered a base case scenario with strong potential to increase the production profile and/or mine life through the exploitation of additional resources held by the Company and with ongoing exploration work.

· In October 2013, the Regional Government of Castilla and León granted a Favourable Declaration of Environmental Impact ('Environmental Licence') for Retortillo following submission and extensive review of the Company's Environmental and Social Impact Assessment.

· On 31 December 2013, the Company issued 968,000 fully paid ordinary shares following the conversion of 968,000 Tranche 1 Performance Share Rights upon satisfaction of the PFS milestone.

· The Company granted 490,000 Performance Share Rights to employees and consultants of the Company on 28 March 2014.

· In April 2014, a major permitting milestone was achieved with the grant of the Exploitation Concession ('Mining Licence') for Retortillo by the Regional Government of Castilla and León. The Retortillo deposit forms part of the Salamanca Project and is the first resource from which production is scheduled to commence.

SIGNIFICANT POST BALANCE DATE EVENTS

As at the date of this report there are no matters or circumstances, which have arisen since 30 June 2014 that have significantly affected or may significantly affect:

· the operations, in financial years subsequent to 30 June 2014, of the Consolidated Entity;

· the results of those operations, in financial years subsequent to 30 June 2014, of the Consolidated Entity; or

· the state of affairs, in financial years subsequent to 30 June 2014, 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.

INFORMATION ON DIRECTORS' INTERESTS IN SECURITIES OF BERKELEY

Notes

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

(ii) "$0.45 Unlisted Options" means an option to subscribe for 1 Ordinary Share in the capital of the Company at an exercise price of $0.45 each on or before 30 June 2016.

(iii) "Performance Rights" means the right to subscribe to 1 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 Options and Performance Rights have been issued over unissued Ordinary Shares of the Company:

• 1,000,000 Unlisted Options at an exercise price $0.41 each that expire on 21 September 2015.

• 1,750,000 Unlisted Options at an exercise price of $0.475 each that expire on 22 December 2015.

• 5,500,000 Unlisted Options at an exercise price of $0.45 each that expire on 30 June 2016.

• 1,118,000 Performance Rights at no exercise price that expire on 30 June 2015.

• 1,478,000 Performance Rights at no exercise price that expire on 31 December 2016.

• 1,598,000 Performance Rights at no exercise price that expire on 31 December 2017.

These Options do not entitle the holders to participate in any share issue of the Company or any other body corporate. During the financial year, there were 968,000 new shares issued as a result of the exercise of Performance Rights, and no new shares issued as a result of the exercise of Unlisted Options. There were 35,000 Unlisted Options that lapsed (forfeited) and 2,826,666 Unlisted Options that expired during the year. Since 30 June 2014, there have been no shares issued as a result of the exercise of Unlisted Options or Performance Rights on issue.

MEETINGS OF DIRECTORS

The following table sets out the number of meetings of the Company's Directors held during the year ended 30 June 2014, and the number of meetings attended by each director.

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:

Directors

Mr Ian Middlemas Chairman

Dr James Ross Non-Executive Deputy Chairman

Mr Robert Behets Non-Executive Director

Other KMP

Mr Francisco Bellón del Rosal General Manager Operations

Mr Javier Colilla Peletero Senior Vice President Corporate

Mr Clint McGhie Chief Financial Officer and Company Secretary

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 2013 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 exploration and development activities with a view to expanding and developing its resources. In line with the Group's accounting policy, all exploration expenditure up to and including the preparation of a definitive feasibility study is expensed. The Group continues to examine new business opportunities in the energy and resources sector;

• 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 Policy for Executives

The Group's remuneration policy is to provide a fixed remuneration component and a performance based component (options, performance rights and a cash bonus, 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 is reviewed annually by Board. 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 programs within budgeted timeframes and costs), development activities (e.g. completion of feasibility studies), corporate activities (e.g. recruitment of key personnel) and business development activities (e.g. project acquisitions and capital raisings). On an annual basis, after consideration of performance against key performance indicators, the Board determines the amount, if any, of the annual cash bonus to be paid to each KMP.

During the 2014 financial year, a total bonus sum of $73,888 (2013: $50,326) was paid to KMP.

Performance Based Remuneration - Long Term Incentive

The Group has adopted a long-term incentive plan ('LTIP') comprising the 'Berkeley Performance Rights Plan' (the 'Plan') to reward KMP and key employees for long-term performance. Shareholders approved the Plan in April 2013 at a General Meeting of Shareholders and Performance Rights were issued under the Plan in May 2013. An additional 490,000 Performance Rights were issued on 28 March 2014.

The Plan provides for the issuance of unlisted performance share rights ('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.

To achieve its corporate objectives, the Company needs to attract and retain its key staff, whether employees or contractors. The Board believes that grants made to eligible participants under the Plan will provide a powerful tool to underpin the Company's employment and engagement strategy, and that the implementation of the Plan will:

(a) enable the Company to incentivise and retain existing key management personnel and other eligible employees and contractors needed to achieve the Company's business objectives;

(b) enable the Company to recruit, incentivise and retain additional key management personnel and other eligible employees and contractors needed to achieve the Company's business objectives;

(c) link the reward of key staff with the achievements of strategic goals and the long term performance of the Company;

(d) align the financial interest of participants of the Plan with those of Shareholders; and

(e) 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 Company 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, Performance Rights with various expiry dates ranging from 30 June 2015 to 31 December 2017 were granted to certain KMP and other employees that vest upon various performance conditions set by the Company.

Prior to the adoption of the Plan, the Board had chosen to issue incentive options to KMP as a key component of the incentive portion of their remuneration, in order to attract and retain the services of the KMP and to provide an incentive linked to the performance of the Company.

The Board had a policy of granting options to KMP with exercise prices at and/or above market share price (at time of agreement). As such, incentive options granted to KMP would generally only be of benefit if the KMP performed to the level whereby the value of the Company increased sufficiently to warrant exercising the incentive options granted.

Other than service-based vesting conditions, there were no additional performance criteria on the incentive options granted to KMP, as given the speculative nature of the Group'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 Company were closely related.

Impact of Shareholder Wealth on Key Management Personnel Remuneration

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 KPI as detailed under 'Performance Based Remuneration - Short Term Incentive' and are not based on share price or earnings. As noted above, a number of Key Management Personnel have also been granted Performance Rights and 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.

Impact of Earnings on Key Management Personnel Remuneration

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.

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. 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 9.25% of their salary (increased to 9.5% from 1 July 2014), 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 are valued using the Binomial option valuation methodology and validated by the Black Scholes option pricing model. The value of these incentive options is expensed over the vesting period. The fair value of the Performance Rights granted is estimated as at the date of grant using the seven day volume weighted average share price prior to issuance. The value of the Performance Right is expensed over the vesting period.

Key Management Personnel 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:

Notes

(1) Mr Behets received Directors fees of $50,000 and consulting fees of $203,400 for additional services provided to the company;

(2) Mr McGhie provides services as the Company Secretary and Chief Financial Officer through a services agreement between Berkeley and Apollo Group Pty Ltd. Under the agreement, Apollo Group Pty Ltd provides administrative, company secretarial and accounting services, and the provision of a fully serviced office to the Company for a monthly retainer of $24,000 (2013: $24,000); and

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

Notes

(1) Mr Behets received Directors fees of $50,000 and consulting fees of $156,600 for additional services provided to the company;

(2) Mr Esteruelas resigned as a Non-Executive Director of the Company on 29 November 2012;

(3) Mr Syme resigned as a Non-Executive Director of the Company on 2 August 2012;

(4) Mr McGhie provides services as the Company Secretary and Chief Financial Officer through a services agreement between Berkeley and Apollo Group Pty Ltd. Under the agreement, Apollo Group Pty Ltd provides administrative, company secretarial and accounting services, and the provision of a fully serviced office to the Company for a monthly retainer of $24,000 (2012: $24,000); and

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

Options and Performance Rights Granted to KMP

There were no Unlisted Options or Performance Rights granted to Key Management Personnel during the year ended 30 June 2014.

Details of Unlisted Options and Performance Rights granted by the Company to each Key Management Personnel of the Group during the year ended 30 June 2013 are as follows:

Notes

(1) For details on the valuation of the Unlisted Options and Performance Rights, including models and assumptions used, please refer to Note 17 to the financial statements.

Details of the value of options and rights granted, exercised or lapsed for each Key Management Person of the Company or Group during the financial year are as follows:

Notes

(1) On 31 December 2013, Performance Rights expiring 30 June 2014 were exercised. The value of the Performance Rights exercised is calculated using the 5 day VWAP on 18 December 2013 ($0.2523), which was the date that the performance milestone was considered to be satisfied; and

(2) 1,000,000 Unlisted Options with an exercise price of $1.35 expired on 18 June 2014.

Notes

(1) For details on the valuation of the options and rights, including models and assumptions used, please refer to Note 17 to the financial statements;

(2) 250,000 Listed Options exercisable at $0.75 expired on 15 May 2013;

(3) Señor Esteruelas resigned as a Non-Executive Director of the Company on 29 November 2012;

(4) Mr Syme resigned as a Non-Executive Director of the Company on 2 August 2012; and

(5) 1,000,000 Listed Options exercised at $0.75 expired on 15 May 2013.

Employment Contracts with Directors and Executive Officers

Current Directors

From the date of his appointment, Mr Ian Middlemas received a fixed remuneration component of $100,000 per annum inclusive of superannuation which is the amount previously set by the Board for the position of Chairman. Effective from 1 July 2013, the fee for the Chairman has been reduced to $50,000 per annum inclusive of superannuation.

Dr James Ross, Non-Executive Director, has a letter of engagement with Berkeley Resources Limited that was last updated on 15 January 2011 when he was appointed Chairman. Following the appointment of Mr Ian Middlemas as Chairman on 27 April 2012, Dr Ross became the Deputy Chairman of the Company. From 27 April 2012, Dr Ross receives a fixed remuneration component of $50,000 per annum inclusive of superannuation as previously set by the Board for Non-Executive Directors. The letter of engagement also includes a consultancy arrangement which provides for a consultancy fee at the rate of $1,200 per day for technical geological work done. The consultancy arrangement has a rolling term and may be terminated by the Company by giving 1 months' notice.

Dr Ross was granted the following Performance Rights following Shareholder approval on 12 April 2013:

• 100,000 Performance Rights exercisable for Nil consideration each on or before 30 June 2014 (exercised on 31 December 2013);

• 100,000 Performance Rights exercisable for Nil consideration each on or before 30 June 2015;

• 100,000 Performance Rights exercisable for Nil consideration each on or before 31 December 2016; and

• 10,000 Performance Rights exercisable for Nil consideration each on or before 31 December 2017.

Mr Robert Behets 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 2 months' notice. In addition, Mr Behets also receives the fixed remuneration component of $50,000 per annum inclusive of superannuation as previously set by the Board for Non-Executive Directors.

Mr Behets was granted the following Performance Rights following Shareholder approval on 12 April 2013:

• 240,000 Performance Rights exercisable for Nil consideration each on or before 30 June 2014 (exercised on 31 December 2013);

• 240,000 Performance Rights exercisable for Nil consideration each on or before 30 June 2015;

• 240,000 Performance Rights exercisable for Nil consideration each on or before 31 December 2016; and

• 240,000 Performance Rights exercisable for Nil consideration each on or before 31 December 2017.

Current other KMP

Mr Francisco Bellón, has a contract of employment dated 14 April 2011 and amended on 1 July 2011. The contract specifies the duties and obligations to be fulfilled by the General Manager Operations. The contract has a rolling term and may be terminated by the Company giving 6 months notice, or 12 months in the event of a change of control of the Company. 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.

The Board granted Mr Bellón 1,000,000 Unlisted Options exercisable at $0.41 each on or before 21 September 2015 under the employee share option scheme. These Options vest in three equal tranches on 21 September 2012, 21 September 2013 and 21 September 2014.

Mr Bellón was also granted the following Performance Rights:

• 100,000 Performance Rights exercisable for Nil consideration each on or before 30 June 2014 (exercised on 31 December 2013);

• 100,000 Performance Rights exercisable for Nil consideration each on or before 30 June 2015;

• 200,000 Performance Rights exercisable for Nil consideration each on or before 31 December 2016; and

• 250,000 Performance Rights exercisable for Nil consideration each on or before 31 December 2017.

All performance rights vest after the achievement of various milestones as approved in the Berkeley Resources Limited Employee Performance Rights Plan.

Mr Javier Colilla Peletero, has a contract of employment dated 1 July 2010. The contract specifies the duties and obligations to be fulfilled by the Senior Vice President Corporate. The contract has a rolling term and may be terminated by the Company giving 3 months notice, or 12 months in the event of a change of control of the Company or if the appointment becomes redundant. No amount is payable in the event of termination for neglect of duty or gross misconduct. Mr Colilla receives a fixed remuneration component of €190,000 per annum plus compulsory social security contributions regulated by Spanish law, as well as an allowance for the use of his private motor vehicle.

The Board has granted Mr Colilla 750,000 Incentive Options exercisable at $0.475 each. These Options vest in two equal tranches on 12 December 2013 and 12 December 2014 and expire on 22 December 2015.

Mr Colilla was also granted the following Performance Rights:

• 100,000 Performance Rights exercisable for Nil consideration each on or before 30 June 2014 (exercised on 31 December 2013);

• 100,000 Performance Rights exercisable for Nil consideration each on or before 30 June 2015;

• 200,000 Performance Rights exercisable for Nil consideration each on or before 31 December 2016; and

• 250,000 Performance Rights exercisable for Nil consideration each on or before 31 December 2017.

All Performance Rights vest after the achievement of various milestones as approved in the Berkeley Resources Limited Employee Performance Rights Plan.

Equity instruments held by Key Management Personnel

Option and Performance Right holdings of Key Management Personnel

Notes

(1) 1,000,000 Unlisted Options granted to Mr Colilla expired on 18 June 2014.

Shareholdings of Key Management Personnel

Loans from Key Management Personnel

No loans were provided to or received from KMP during the year ended 30 June 2014 (2013: Nil).

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. The net premium paid was $17,472 (2013: $18,098). Under the terms and conditions of the insurance contract, the nature of liabilities insured against cannot be disclosed.

The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify an auditor of the Company or of any related body corporate against any liability incurred.

NON-AUDIT SERVICES

There were no non-audit services provided by the auditor (or by another person or firm on the auditor's behalf) during the financial year.

AUDITOR'S INDEPENDENCE DECLARATION

The auditor's independence declaration is on page 65 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 2001.

For and on behalf of the Directors

ROBERT BEHETS

Non-Executive Director

25 September 2014

Competent Persons Statement

The information in this announcement that relates to 2014 Exploration Results is extracted from Berkeley's ASX announcement dated 18 August 2014 which is available to view on www.berkeleyresources.com.au. The information in the original ASX Announcement was based on information compiled by Robert Behets, who is a Fellow of The Australasian Institute of Mining and Metallurgy. Mr. Behets is a holder of shares, options and performance rights in, and is a director of Berkeley Resources Limited. Mr. Behets 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 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement. The Company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.

The information in this announcement that relates to earlier Exploration Results and Mineral Resources is extracted from Berkeley's ASX announcements dated 31 July 2012 (June 2012 Quarterly Report), 31 October 2012 (September 2012 Quarterly Report), 7 August 2013 and 26 September 2013 which are available to view on Berkeley's website at www.berkeleyresources.com.au. The information in the original ASX announcements was based on information compiled by Craig Gwatkin, who is a Member of The Australian Institute of Mining and Metallurgy and was an employee of Berkeley Resources Limited. Mr. Gwatkin 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. Gwatkin consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.

The information in this Report that relates to the Pre-Feasibility Study is extracted from Berkeley's ASX announcement dated 26 September 2013 which is available to view on Berkeley's website at www.berkeleyresources.com.au. The information in the original ASX announcement was based on information compiled by Neil Senior of SENET (Pty) Ltd. Mr. Senior is a Fellow of The South African Institute of Mining and Metallurgy and 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. Senior consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.

Production Target

The Production Target stated in this Report is based on the Company's Pre-Feasibility Study ('PFS') for the Salamanca Project as released to the ASX on 26 September 2013. The information in relation to the Production Target that the Company is required to include in a public report in accordance with ASX Listing Rule 5.16 was included in the Company's June 2014 Quarterly Report released to the ASX on 24 July 2014.

The Company confirms that the material assumptions underpinning the PFS and Production Target referenced in the 26 September 2013 and 24 July 2014 releases continue to apply and have not materially changed.

Forward Looking Statement

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

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2014

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 2014

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

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2014

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

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