Berkeley Eng Regulatory News (BKY)

BERKELEY RESOURCES LIMITED

ANNUAL FINANCIAL REPORT

30 JUNE 2012

ABN 40 052 468 569

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 2012 ("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 - Non-Executive Chairman (appointed 27 April 2012)

Dr James Ross - Non-Executive Deputy Chairman (previously Non-Executive Chairman)

Mr Robert Behets - Non-Executive Director (appointed 27 April 2012)

Señor Jose Ramon Esteruelas - Non-Executive Director

Mr Brendan James - Managing Director (resigned 27 April 2012)

Mr Henry Horne - Non-Executive Director (resigned 1 January 2012)

Mr Laurence Marsland - Non-Executive Director (appointed 25 August 2011, resigned 9 May 2012)

Mr Ian Stalker - Non-Executive Director (resigned 29 November 2011)

Mr Matthew Syme - Non-Executive Director (resigned 2 August 2012)

Unless otherwise disclosed, Directors held their office from 1 July 2011 until the date of this report.

CURRENT DIRECTORS AND OFFICERS

Ian Middlemas

Non-Executive 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 Prairie Downs Metals 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), Sierra Mining Limited (January 2006 - present), Odyssey Energy Limited (September 2005 - present), Global Petroleum Limited (April 2007 - December 2011), Coalspur Mines Limited (March 2007 - October 2011), Mantra Resources Limited (September 2005 - June 2011), Aguia Resources Limited (September 2008 - August 2010), Pacific Energy Limited (June 2006 - August 2010), Indo Mines Limited (December 2006 - June 2010) and Neon Energy Limited (November 1995 - June 2010).

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 a Director of Kimberley Foundation Australia Inc, and chairs its Science Advisory Council. He also chairs the Boards of a geoscience research centre and two foundations concerned with geoscience education in Western Australia.

He was appointed a Director of Berkeley Resources Limited on 4 February 2005 and appointed Non-Executive Chairman on 14 January 2011. He has not been a Director of another listed company in the three years prior to the end of the financial year.

Mr Robert Behets

Non-Executive Director

B.Sc (Hons), FAusIMM, MAIG

Mr Behets is a geologist with over twenty four years' experience in the mineral exploration and mining industry in Australia and internationally. He held various senior management positions during a long career with WMC Resources Limited, including Manager Commercial - St Ives Gold Operations and Group Manager Exploration. Most recently, 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.

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 gold, uranium and base metals. He is a Fellow of The Australasian Institute of Mining and Metallurgy, a Member of the Australian Institute of Geoscientists and a current 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 Papillon Resources Limited (May 2012 - present) and Mantra Resources Limited (November 2005 - June 2011).

Jose Ramon Esteruelas

Non-Executive Director

Qualifications - BEcon.,LLB., PDipBus

Señor Esteruelas is an economist with vast experience in the managerial field whose senior executive roles have included Director General of Correos y Telegrafos (the Spanish postal service), Chief Executive Officer of Compania Espanola de Transformadora de Tabaco en Rama S.A. (Cetarsa), (the leading transformer tobacco company in Spain) and Executive Chairman of Minas de Almaden y Arrayanes SA (formerly the world's largest mercury producer).

Señor Esteruelas was appointed a Director of Berkeley Resources Limited on 16 November 2006. Señor Esteruelas has not held any other directorships of listed companies in the last three years.

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 2012 (2011: 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

REVIEW OF OPERATIONS AND ACTIVITIES

Berkeley is a uranium exploration and development company with a quality resource base in Spain. The Company has a significant tenement holding with a broad range of uranium exploration and development projects in the Salamanca, Cáceres, Badajoz and Barcelona Provinces.

During the financial year, the Group continued the development of its Retortillo-Santidad deposit, whilst working towards a successful agreement with Enusa Industrias Avanzadas S.A. ('ENUSA') regarding the development and exploitation of the State Reserves, all located in the Salamanca Province, Spain.

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

(i) Agreement with ENUSA regarding select uranium resources within the State Reserves

The Company reached agreement with ENUSA on terms which provide the Company with a 100% interest in select uranium resources within State Reserves held by ENUSA.

Under the agreement, Berkeley holds a 100% interest in, and the exploitation rights to, State Reserves 28 and 29 ('Addendum Reserves') whilst waiving its rights to mine in State Reserves where ENUSA has undertaken rehabilitation.

The Addendum Reserves include the substantial unmined Alameda deposit, the Villar deposit and additional prospects. Total resources for the Addendum Reserves are currently estimated at 30.6 million pounds of contained U3O8 at an average grade of 465 ppm (at a cut-off grade of 200 ppm U3O8). ENUSA will receive a production fee equivalent to 2.5% of the net sale value (after marketing and transport costs) of any uranium produced within the Addendum Reserves.

The outcome has successfully resolved long standing difficulties for all parties involved, including termination of the arbitration proceeding between the Company and ENUSA.

(ii) Salamanca Project

Following the Agreement with ENUSA, Berkeley's focus is on the advancement of the integrated Salamanca Project, which comprises the Retortillo-Santidad and Alameda deposits plus a number of other Satellite deposits, through the development phase. With a combined 100% owned resource base totalling 59.2 million pounds of contained U3O8 at an average grade of 426 ppm (at a cut-off grade of 200 ppm U3O8), the integrated Salamanca Project has the potential to support a significant annual production rate and mine life.

(iii) Preliminary Feasibility Study - Retortillo-Santidad

In January 2012, the Company announced the results from the Preliminary Feasibility Study ('PFS') for the first stage of development of Retortillo-Santidad (formerly the Salamanca I Project) as a stand-alone project. The results of the Study demonstrated the technical and economic viability of the project, with competitive operating metrics, robust economics, and further upside through the incorporation of additional Satellite deposits.

(iv) Metallurgical Test Work

Further metallurgical test work program was undertaken on a 4.7 tonne bulk sample, representative of the Retortillo deposit, at Mintek's mineral processing facility in Johannesburg. Initial results for 6 metre column tests for the Retortillo samples indicate metallurgical recoveries is in the range of 90% (+/- 2%) after 80 days, with acid consumption of approximately 20 kilograms per tonne for the bacterial leach columns. These figures are consistent with the assumptions used in the Retortillo-Santidad PFS.

(v) Permitting and Licensing Process

In October 2011, the Company commenced the permitting and licensing process for the stand-alone Retortillo-Santidad Project with the submission of an application for the conversion of the Pedreras Investigation Permit into an Exploitation Concession. Following a period of consultation with the regional government of Castilla y Leon, the application was accepted and has progressed to a period of public consultation ending in September 2012.

Activities during the year

Exploration and Drilling

During the year, Berkeley completed over 400 drill holes totalling more than 25,000 metres in drilling campaigns at Retortillo-Santidad, Villares, Gambuta and the State Reserves.

Table 1: Drilling Activity in 2011/12

The majority of the drilling completed during the year was at Retortillo-Santidad and had the aim of:

·; Confirming the validity of the historic drilling conducted by ENUSA;

·; To provide more geological data to support a more detailed geological model;

·; To convert most of the resources, where possible, to Indicated Resources;

·; To extend the existing resources; and

·; To complete sterilisation drilling in areas of the proposed mine and process plant infrastructure.

The drilling was successful in confirming known mineralisation and extending the mineralisation in some areas where local fracture systems were found to be mineralised outside the previously defined resource. Following the receipt of all chemical assay results, the resource estimates were updated resulting in a significant increase in the Indicated Resource category, with 56% of the Retortillo resource and 78% of the Santidad resource in this category. There was however, a 23% and 34% decrease in contained U3O8 at a 200ppm cut-off grade at Retortillo and Santidad respectively, due to a combination of two factors: overestimation of the original Mineral Resource Estimates as a consequence of the methodology applied (based on a recovered fraction with grade estimation carried out using inverse distance) and lesser continuity of the mineralisation zone as observed in the resource infill drilling.

Diamond drilling at Retortillo-Santidad was also completed to obtain core samples for geotechnical tests to support the PFS.

Notable intersections are summarised in the Table 2 below:

Table 2: Retortillo-Santidad - Significant Intersections (at 200ppm cut-off)

In early 2012, exploration programs targeting select satellite deposits within the Retortillo-Santidad area and the Gambuta deposit were undertaken with the aim of confirming and extending known resources and testing new prospect areas.

Drill testing of radiometric anomalies confirmed the presence of shallow high grade uranium mineralisation at the Villares and Villares North prospects (located 7 km to the north of Retortillo-Santidad) resulting in the delineation of a new mineral resource estimate totalling 0.97Mt at 597ppm U3O8 for 1.28Mlbs U3O8. Select intercepts from the drilling are summarised in the following table.

Table 3: Villares RC Drilling - Significant Intersections (200ppm cut-off)

This drilling highlights the potential to identify additional uranium resources in outcropping and covered areas in close proximity to Retortillo-Santidad, with numerous other radiometric anomalies yet to be adequately tested by drilling.

Drilling at Gambuta comprised initial infill reverse circulation ('RC') and diamond drilling to upgrade the resource classification. The drilling focused on the north-western portion of the deposit and confirmed the style of mineralisation and suggests continuity of thick zones of mineralisation, commonly in the range of 2 to 16m. Assay results for the drill hole samples are pending.

Other exploration work included a desktop review of the Company's current tenement holdings and initiation of field work to assess the potential of several regional licenses.

Mineral Resources

The current Mineral Resource Estimates for all deposits is tabulated below (using a 200ppm U3O8 cut-off grade) incorporating the results from the recent drilling campaigns and together with previously obtained information. The resources listed below include only those resources owned 100% by Berkeley following the ENUSA agreement signed in July 2012.

Table 4: Mineral Resource Statement as at August 2012 (at a 200ppm cut-off grade)

Preliminary Feasibility Study - Retortillo-Santidad

In January 2012, the Company announced the results from the PFS for the first stage of the stand-alone development of the Retortillo-Santidad deposit (formerly the Salamanca I Project). This Study demonstrated a project with competitive operating metrics and robust economics with further upside through the incorporation of additional regional satellite deposits. The Study also formed the basis for the Exploitation Plan which was presented to the Regional Government of Castilla y Leon.

Under the initial Exploitation Plan, Retortillo-Santidad is the first deposit into production with a mine life of 10 year. The mine was designed as a conventional open pit operation, utilising a continuous rehabilitation program, with waste continuously transferred to backfill and rehabilitate the operating pit. The deposit is divided into two zones of mineralisation which are separated by a distance of 3km. The process plant was situated at Retotillo where the majority of resources are located. The layout contemplated ore from Santidad being primary crushed close to the pit and conveyed to Retortillo for processing. Whilst the resource estimate uses a cut-off grade of 200 ppm, the mine design provides for an optimal and operational cut-off grade of 96 ppm U3O8.

The test work carried out on the ore has demonstrated that the mineralisation is amenable to heap leaching, and more specifically for bacterial leaching, with the required natural bacteria already existing in the ore. Accordingly, the basic scheme designed for the Retortillo-Santidad was an on-off pad heap leach. The ripios (heap leach residue) would be backfilled into lined and isolated areas previously mined within the pit. Uranium treatment involves Solvent Extraction ('SX') followed by ammonia precipitation, calcinations and packaging. This design allows the footprint of the affected area to be minimised and avoids slurry and the requirement for a tailing dam by placing the ripios encapsulated with the waste inside the pit, allowing high quality continuous rehabilitation of the site.

The production schedule contemplated a process recovery of 87.5%.

The PFS included the following production outcomes:

·; 11.5 Mlbs U3O8 produced over a 10 year Life of Mine (in production); and

·; 1.42 Mlbs U3O8 produced per annum on average over the initial 6 years of production.

Further details on the results of the Study are available in the ASX Announcement dated 30 January 2012.

Metallurgical Test Work

A further full-scale metallurgical test work program was undertaken on a 4.7 tonne bulk sample, representative of the Retortillo deposit, at Mintek's mineral processing facility in Johannesburg. The scope of work of the test work program included:

·; Bench scale comminution tests;

·; ISO-pH tests;

·; Diagnostic assay and agglomerate acid cure test;

·; Geomechanical tests;

·; 6m Column tests; and

·; Solvent extraction test work through to ADU precipitation.

The test work was recently completed and initial results indicate that the assumptions used in the PFS regarding the process flow sheet, uranium recovery, acid consumption and leach time will be reinforced. Analytical data of the pregnant liquor solution ('PLS') obtained and solvent extraction ('SX') text work also indicate that there are no impurities at levels that could adversely impact the quality of the uranium yellow cake to be produced. The leach solution has low concentrations of all common penalty elements.

Uranium recovery, leach times and acid consumption have been calculated for the nine 6m columns with available assay results and recovery is in the range of 90% (+/- 2%) after 80 days, with acid consumption of approximately 20 kg/t for the bacterial leach columns. This represents a 20% reduction in acid consumption when compared with the non-bacterial leach tests for the same recovery and leach time.

Geomechanical testing has also been completed with the results indicating that some optimisation of the heap leach stack height may be required. This may lead to lower lift heights for the more weathered mineralisation.

Full results for the metallurgical test work are expected in the December quarter of 2012.

Permitting

In October 2011, Berkeley initiated the licensing and permitting process for the development of Retortillo-Santidad with the submission of an application for the conversion of the Pedreras Investigation Permit into an Exploitation Concession. The submission included a Scoping Environmental Impact Assessment and was subjected to a consultation period. The Company received confirmation from the Regional Government of Castilla y Leon that the Scoping Environmental Impact Assessment was successfully processed in March 2012 following the consultation period.

In March 2012, the Company submitted key documents for the permitting process, including:

·; The Exploitation Plan;

·; The Environmental Impact Assessment;

·; The Restoration and Closure Plans;

·; Authorisation for the use of rural land for industrial purposes; and

·; Initial Authorisation for the Radioactive Facility Application.

The application was approved for public information in May 2012, and the documents are now subject to a period of public consultation which is expected to be completed in September 2012. The Company's response to public comment will be subject to clearance and direction from the authorities before they are incorporated into the Project.

The documentation submitted for the Initial Authorization of the process plant as a radioactive facility has also entered a public information period, in parallel with the public information period of the application for reclassification (from rural to mining use) of the surface land area affected by the Project.

Berkeley expects to commence the permitting process for the Alameda deposit in the December quarter of 2012.

In October 2011, the Company also signed a co-operation agreement for the exploitation of the Retortillo-Santidad uranium deposit located with the municipalities of Retortillo and Villavieja de Yeltes. The agreement is an important step in progressing through the permitting phase to production. As part of the agreement, the municipalities undertake to actively contribute throughout the necessary administrative procedures required for the project to achieve both licensing and permitting. Berkeley in turn commits to contribute to the economic and social development of the municipalities. 

Salamanca Project

Agreement with ENUSA

Subsequent to the end of the year, Berkeley reached agreement with ENUSA on terms which provide the Company with a 100% interest in select uranium resources within State Reserves held by ENUSA (refer ASX Announcement dated 24 July 2012).

Under the agreement, Berkeley holds a 100% interest in, and the exploitation rights to, State Reserves 28 and 29 ('Addendum Reserves') whilst waiving its rights to mine in State Reserves where ENUSA has undertaken rehabilitation (Figure 1). The Addendum Reserves include the substantial unmined Alameda deposit, the Villar deposit and additional prospects. Total resources for the Addendum Reserves are currently estimated at 30.6 million pounds of contained U3O8 at an average grade of 465 ppm.

The new agreement with ENUSA is in the form of an Addendum to the Consortium Agreement signed with ENUSA in January 2009, and subsequently approved by the Council of Ministers of the Spanish Government in April 2009. The Addendum was signed and notarised in Madrid on 23 July 2012, and includes the following terms:

·; The Consortium now consists of State Reserves 28 and 29;

·; Berkeley's stake in the Consortium has increased to 100%;

·; ENUSA will remain the owner of State Reserves 28 and 29, however the exploitation rights have now been assigned to Berkeley, together with authority to submit all applications for the permitting process;

·; The Company is now the sole and exclusive operator in the Addendum Reserves, with the right to exploit the contained uranium resources and have full ownership of any uranium produced;

·; ENUSA will receive a production fee equivalent to 2.5% of the net sale value (after marketing and transport costs) of any uranium produced within the Addendum Reserves;

·; Berkeley has waived its rights to mining in State Reserves 2, 25, 30, 31, Hoja 528-1 and the Saelices El Chico Exploitation Concession. These properties have combined resources estimated at 21.9 million pounds of U3O8 (Berkeley's previous 90% interest equated to 19.7 million pounds);

·; Berkeley has waived any rights to management of the Quercus plant; and

·; The Co-operation Agreement with ENUSA, signed on 29 January 2009, has been terminated.

These outcomes successfully resolved long standing difficulties for all parties involved, including termination of the arbitration proceeding between the Company and ENUSA.

Project Integration

Following the agreement with ENUSA in July 2012, Berkeley's current focus is on the advancement of its, wholly owned, flagship integrated Salamanca Project, through the development phase. The integrated Salamanca Project comprises the Retortillo-Santidad and Alameda deposits plus a number of other Satellite deposits.

The results of a PFS completed in early 2012 confirmed the technical and economic viability of a stand-alone project exploiting the Retortillo-Santidad deposit, whilst the Alameda deposit formed part of a separate Feasibility Study completed in 2011. The Company is now undertaking an initial assessment of the integrated development of these two deposits and believes the integrated Salamanca Project has the potential to support a significant annual production rate and mine life.

Corporate

At 30 June 2012, the Group had cash reserves of over A$37.5 million, with no debt. This puts the Group in a strong financial position as it looks to progress the development of its Integrated Salamanca Project.

There were a number of changes to the Board and Management team during the year.

Former executives, Mr Ian Stalker and Mr Henry Horne resigned as Non Executive Directors effective 29 November 2011 and 1 January 2012 respectively. Mr Laurie Marsland, who was appointed a Non Executive Director on 25 August 2011, subsequently resigned effective 10 May 2012.

Mr Brendan James resigned as CEO and Managing Director of the Company effective 27 April 2012 for personal reasons.

Mr Ian Middlemas was appointed Non Executive Chairman and Mr Robert Behets a Non Executive Director on 27 April 2012. These appointments significantly strengthened the Board's corporate and technical capacity following the departure of Mr James as Managing Director.

Prior to joining the Board, Mr Middlemas and Mr Behets agreed to participate in a placement of 5 million shares at an issue price of $0.30 each to raise $1.5 million before costs. Each share had a free attaching option exercisable at $0.45 each on or before 30 June 2016.

Mr Clint McGhie was appointed Company Secretary and Chief Financial Officer on 18 May 2012, replacing Mr Sam Middlemas as Company Secretary.

Business Strategies and Prospects

The Consolidated Entity currently has the following business strategies and prospects over the medium to long term:

·; to conduct studies into the feasibility of exploiting the Integrated Salamanca Project in Spain;

·; to continue to explore its portfolio of mineral permits in Spain; and

·; continue to examine new opportunities in minerals and energy exploration and development.

Risk Management

The Board is responsible for the oversight of the Consolidated Entity's risk management and control framework. Responsibility for control and risk management is delegated to the appropriate level of management with Directors having the ultimate responsibility for the risk management and control framework.

Arrangements put in place by the Board to monitor risk management include monthly reporting to the Board in respect of operations and the financial position of the Group.

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.

·; On 25 August 2011 Laurence Marsland was appointed Non Executive Director of the Company. Mr Marsland subsequently resigned as a Director effective 10 May 2012.

·; Following shareholder approval on 20 September 2011, the Company has issued 2,000,000 Incentive Options to Mr Brendan James each with an exercise price of 41 cents, with an expiry date of 1 May 2016. All of these Options vest on 30 May 2014, or on the date a Change of Control event occurs. These Options were all subsequently forfeited following the resignation of Mr James.

·; In addition to the above, a further 1,000,000 options were issued to employees on 23 September 2011 under the Berkeley Employee Option Scheme with an exercise price of $0.41 each and an expiry date of 21 September 2015, vesting in three equal tranches on 21 September 2012, 21 September 2013 and 21 September 2014.

·; Mr Ian Stalker resigned as a Non Executive Director of the Company effective 29 November 2011.

·; Mr Steven Turner was appointed Chief Financial Officer of the Company effective 12 December 2012. He resigned from this position on 27 April 2012.

·; Mr Henry Horne resigned as a Non Executive Director of the Company effective 1 January 2012.

·; 500,000 options were issued to employees on 20 February 2012 under the Berkeley Employee Option Scheme with an exercise price of $0.475 each and an expiry date of 22 December 2015, with 300,000 vesting on 22 December 2013 and 200,000 vesting on 22 December 2014.

·; On 2 April 2012, Berkeley advised that its wholly-owned subsidiary, Berkeley Minera Espana S.A. ('BME') had initiated International Arbitration proceedings against Enusa Industrias Avanzadas, S.A ('ENUSA'), through the Paris-based International Court of Arbitration of the International Chamber of Commerce.

·; 1,500,000 options were issued to Mr Turner on 11 April 2012 under the Berkeley Employee Option Scheme with an exercise price of $0.475 each and an expiry date of 22 December 2015, vesting in three equal tranches on 12 December 2012, 12 December 2013 and 12 December 2014. Following his resignation from the Company, the Board agreed to allow Mr Turner to retain 500,000 options. The remaining options were forfeited.

·; Mr Brendan James resigned as CEO and Managing Director of the Company effective 27 April 2012.

·; On 26 April 2012, the Company made a placement of 5 million shares at $0.30 each to raise $1.5 million (before costs) to the nominees of Mr Ian Middlemas and Mr Robert Behets. Each share had a free attaching option exercisable at $0.45 each on or before 30 June 2016. In addition, a further 500,000 options on the same terms and conditions were issued as part of the placement fee arrangement.

·; Mr Ian Middlemas was appointed Non Executive Chairman and Mr Robert Behets a Non Executive Director on 27 April 2012.

·; Mr Clint McGhie was appointed Company Secretary on 18 May 2012, replacing Mr Sam Middlemas.

SIGNIFICANT POST BALANCE DATE EVENTS

Since the end of the financial year, the following events have significantly affected, or may significantly affect, the operations of the Consolidated Entity, the results of those operations, or the state of affairs of the Consolidated Entity in future financial years:

·; On 24 July 2012, the Company advised that it has reached agreement with Enusa Industrias Avanzadas S.A. ('ENUSA') on terms which provide the Company with a 100% interest in select uranium resources within State Reserves held by ENUSA. The agreement successfully resolved long standing difficulties for all parties involved, including termination of the arbitration proceeding between the Company and ENUSA.

·; Mr Matthew Syme resigned as a Non Executive Director of the Company on 2 August 2012.

Other than the above there are no matters or circumstances, which have arisen since 30 June 2012 that have significantly affected or may significantly affect:

·; the operations, in financial years subsequent to 30 June 2012, of the Consolidated Entity;

·; the results of those operations, in financial years subsequent to 30 June 2012, of the Consolidated Entity; or

·; the state of affairs, in financial years subsequent to 30 June 2012, 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.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS

It is the Board's current intention that the Consolidated Entity will continue with development of its Spanish uranium projects. The Company will also continue to examine new opportunities in mineral exploration, including uranium.

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. In the opinion of the Directors, any further disclosure of information regarding likely developments in the operations of the Consolidated Entity and the expected results of these operations in subsequent financial years may prejudice the interests of the Company and accordingly no further information has been disclosed.

INFORMATION ON DIRECTORS' INTERESTS IN SECURITIES OF BERKELEY

Notes

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

(ii) "$0.75 Listed Options" means an option to subscribe for 1 Ordinary Share in the capital of the Company at an exercise price of $0.75 each on or before 15 May 2013.

(iii) "$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.

(iv) "$0.41 Incentive Options" means an option to subscribe for 1 Ordinary Share in the capital of the Company at an exercise price of $0.41 each on or before 1 May 2016.

(v) These shares were subscribed for in a placement in April 2012 at a price of $0.30 each, prior to Mr Middlemas and Mr Behets joining the board.

(vi) The $0.45 Unlisted Options were issued as free attaching options on a one for one basis in the April 2012 placement.

(vii) Mr James was granted the $0.41 Incentive Options as part of his remuneration package as an incentive to perform. These options were forfeited upon Mr James' resignation in April 2012.

SHARE OPTIONS

At the date of this report the following options have been issued over unissued capital:

Listed Options

• 11,894,428 listed options at an exercise price of $0.75 each that expire on 15 May 2013.

Unlisted Options

• 1,000,000 unlisted options at an exercise price of $1.25 each that expire on 1 December 2013.

• 2,258,333 unlisted options at an exercise price of $1.35 each that expire on 18 June 2014.

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

• 1,000,000 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.

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 no new shares issued as a result of the exercise of listed or unlisted options. There were 5,509,167 unlisted options that lapsed during the year (2,455,834 expired and 3,053,333 forfeited). Since 30 June 2012, there have been 95,000 shares issued as a result of the exercise of listed options and no new shares issued as a result of the exercise of unlisted options on issue.

MEETINGS OF DIRECTORS

The following table sets out the number of meetings of the Company's Directors and the Audit Committee and Remuneration Committee held during the year ended 30 June 2012, 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 of the Group during or since the end of the financial year were as follows:

Directors

Mr Ian Middlemas Non-Executive Chairman (appointed 27 April 2012)

Dr James Ross Non-Executive Deputy Chairman (previously Non-Executive Chairman)

Mr Robert Behets Non-Executive Director (appointed 27 April 2012)

Señor Jose Ramon Esteruelas Non-Executive Director

Mr Matthew Syme Non-Executive Director (resigned 2 August 2012)

Mr Laurence Marsland Non-Executive Director (appointed 25 August 2011, resigned 9 May 2012)

Mr Brendan James Managing Director (resigned 27 April 2012)

Mr Henry Horne Non-Executive Director (resigned 1 January 2012)

Mr Ian Stalker Non-Executive Director (resigned 29 November 2011)

Executives

Francisco Bellón del Rosal General Manager Operations

Javier Colilla Peletero Senior Vice President Corporate

Clint McGhie Chief Financial Officer and Company Secretary (appointed 18 May 2012)

Sam Middlemas Company Secretary (resigned 18 May 2012)

Steven Turner Chief Financial Officer (appointed 12 December 2011, resigned 27 April 2012)

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 2011 until the date of this report.

Remuneration Policy

The remuneration policy for the Group's Key Management Personnel (including the Managing Director) 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 prior to a 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 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 Key Management Personnel objectives with shareholder and business objectives.

REMUNERATION REPORT (AUDITED) (Continued)

Performance Based Remuneration - Incentive Options

The Board has chosen to issue incentive options to Key Management Personnel as a key component of the incentive portion of their remuneration, in order to attract and retain the services of the Key Management Personnel and to provide an incentive linked to the performance of the Company. The Board considers that each Key Management Personnel's experience in the resources industry will greatly assist the Company in progressing its projects to the next stage of development and the identification of new projects. As such, the Board believes that the number of incentive options granted to Key Management Personnel is commensurate to their value to the Company.

The Board has a policy of granting options to Key Management Personnel with exercise prices at and/or above market share price (at time of agreement). As such, incentive options granted to Key Management Personnel will generally only be of benefit if the Key Management Personnel perform to the level whereby the value of the Company increases sufficiently to warrant exercising the incentive options granted.

Other than service-based vesting conditions, there are no additional performance criteria on the incentive options granted to Key Management Personnel, 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 Key Management Personnel and the performance and value of the Company are closely related.

Performance Based Remuneration - Cash Bonus

In addition, some Key Management Personnel are entitled to an annual cash bonus upon achieving various key performance indicators, to be determined by the Board. 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 Key Management Personnel.

Impact of Shareholder Wealth on Key Management Personnel Remuneration

During the Group's exploration and development phases of its business, the Board anticipates that it 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. However, as noted above, a number of Key Management Personnel have received options which generally will only be of value should the value of the Company's shares 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 incentive options in order to secure their services and as a key component of their remuneration.

REMUNERATION REPORT (AUDITED) (Continued)

General

Where required, Key Management Personnel receive superannuation contributions (or foreign equivalent), currently equal to 9% 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 Key Management Personnel 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.

Key Management Personnel Remuneration

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

Notes

(1) Mr Ian Middlemas was appointed a Non-Executive Director and Chairman of the Company on 27 April 2012;

(2) Mr Behets was appointed a Non-Executive Director of the Company on 27 April 2012;

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

(4) Mr Marsland was appointed as a Non-Executive Director on 25 August 2011 and resigned on 9 May 2012;

(5) Mr James resigned as Managing Director of the Company on 27 April 2012 (2,000,000 incentive options issued on 23 September 2011 were cancelled at this time as they had not vested);

(6) Mr Horne resigned as a Non-Executive Director of the Company on 1 January 2012;

(7) Mr Stalker resigned as a Non-Executive Director of the Company on 29 November 2011;

(8) Mr McGhie was appointed Company Secretary and Chief Financial Officer of the Company on 18 May 2012. 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;

(9) Mr Sam Middlemas resigned as Company Secretary on 18 May 2012;

(10) Mr Steven Turner was appointed Chief Financial Officer of the Company on 12 December 2012 and resigned on 27 April 2012 (1,500,000 incentive options were issued on 11 April 2012, of which 1,000,000 were forfeited on resignation; and

(11) Other Non-Cash Benefits includes payments made for housing, car-parking and insurance premiums on behalf of the KMP, including Directors & Officers insurance, and in some instances, working directors insurance.

REMUNERATION REPORT (AUDITED) (Continued)

Key Management Personnel Remuneration (Continued)

Options Granted to Key Management Personnel

Details of Unlisted Options granted by the Company to each Key Management Personnel of the Group during the financial year are as follows:

Notes

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

(2) Each unlisted option converts into one Ordinary Share of Berkeley Resources Limited.

(3) All of the options granted to Mr James were forfeited upon his resignation.

(4) 1,000,000 of the options granted to Mr Turner were forfeited upon his resignation. The Board agreed to allow Mr Turner to retain 500,000 options.

No options were granted as part of their remuneration to Key Management Personnel during the 2011 financial year.

REMUNERATION REPORT (AUDITED) (Continued)

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

Employment Contracts with Directors and Executive Officers

Current Directors

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 which is the standard fixed remuneration previously set by the Board for Non-Executive Directors.

For the period that Dr Ross was Chairman, he received a fixed remuneration component of $100,000 per annum inclusive of superannuation. 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.

From the date of his appointment, Mr Ian Middlemas will receive 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.

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.

Señor Jose Ramon Esteruelas, Non Executive Director, was appointed a Director of the Company on 1 November 2006. Señor Esteruelas has a letter of employment with Berkeley Resources Limited dated 16 November 2006. Señor Esteruelas receives a fixed remuneration component of €48,000 per annum. The letter also includes a consultancy agreement which provides for a consultancy fee of €1,000 per day. The consultancy agreement has a rolling term and may be terminated by Señor Esteruelas or by the Company by giving 1 months notice.

REMUNERATION REPORT (AUDITED) (Continued)

Former Directors

Mr Matthew Syme had a letter engagement dated 1 February 2010 relating to his appointment as a Non Executive Director. Mr Syme resigned as a Non Executive Director effective 2 August 2012. The letter specifies the duties and obligations to be fulfilled as a Non Executive Director, and the remuneration was fixed at $50,000 per annum. The letter also included a consultancy arrangement which provided for a consultancy fee at the rate of $1,200 per day, on an as required basis. The consultancy arrangement had a rolling term and may be terminated by the Company by giving 1 months notice.

Mr Laurence Marsland was appointed a Non-Executive Director on 25 August 2011 and he subsequently resigned on 10 May 2012. He had a letter engagement specifying the duties and obligations to be fulfilled as a Non-Executive Director, and the remuneration was fixed at $50,000 per annum. The letter also included a consultancy arrangement which provided for a consultancy fee at the rate of $1,200 per day, on an as required basis. The consultancy arrangement had a rolling term and may be terminated by the Company by giving 1 months notice.

Mr Brendan James terminated his employment contract as Managing Director effective 27 April 2012. He had a contract of employment with Berkeley Resources Limited dated 10 March 2011. The contract specified the duties and obligations to be fulfilled by the Managing Director. The contract had a rolling term and may be terminated by the Company by giving three months notice. No amount was payable in the event of termination for neglect of duty or gross misconduct. Mr James received a fixed remuneration component of $300,000 per annum plus 9% superannuation and the provision of accommodation in Spain and a motor vehicle.

Following shareholder approval on 20 September 2011, Mr James was granted 2,000,000 unlisted incentive options exercisable at $0.41 each on or before 1 May 2016 (36 months vesting period). These options were forfeited upon Mr James resignation effective 27 April 2012.

Mr Ian Stalker, terminated his employment contract as Managing Director on 30 December 2010, and entered into a new letter agreement as a Non-Executive Director. The letter specified the duties and obligations to be fulfilled as a Non-Executive Director, and the remuneration was fixed at $50,000 per annum. The letter also included a consultancy arrangement which provided for a consultancy fee at the rate of $1,200 per day, on an as required basis. The consultancy arrangement had a rolling term and may be terminated by the Company by giving 1 months notice.

Mr Henry Horne, terminated his employment contract as Chief Financial Officer and Acting Managing Director on 30 June 2011, and entered into a new letter agreement as a Non-Executive Director. The letter specified the duties and obligations to be fulfilled as a Non-Executive Director, and the remuneration was fixed at $50,000 per annum. The letter also included a consultancy arrangement which provides for a consultancy fee at the rate of $1,200 per day, on an as required basis. The consultancy arrangement had a rolling term and may be terminated by the Company by giving 1 months notice.

The Board granted Mr Horne 1,250,000 unlisted options exercisable at $1.35 each on or before 18 June 2014 on his appointment. The unvested 833,334 options lapsed on 30 June 2011.

Current Executive

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 (increased from €140,000 effective 1 November 2011) 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.

REMUNERATION REPORT (AUDITED) (Continued)

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 Affairs. 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 (increased from €142,000 effective 1 November 2011) 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 granted Mr Colilla 1,000,000 unlisted options exercisable at $1.35 each on or before 18 June 2014 under the employee share option scheme. These options vest in three equal tranches on 18 June 2011, 18 June 2012 and 18 June 2013.

Former Executive

Mr Sam Middlemas had a letter agreement dated 31 May 2010 and revised 26 October 2010 relating to his services as Company Secretary. The letter specified the duties and obligations to be fulfilled as Company Secretary, and the monthly remuneration is fixed at $9,600 for 8 days work per month. The letter also included a consultancy arrangement which provided for additional work to be charged at the rate of $1,200 per day, on an as required basis. The consultancy arrangement had a rolling term and may be terminated by the Company by giving 3 months notice and termination payment.

Mr Steven Turner had a contract of employment with Berkeley Resources Limited dated 12 December 2011. The contract specified the duties and obligations to be fulfilled by the Chief Financial Officer. The contract had a rolling term and may be terminated by the Company by giving three months notice or 12 months in the event of a change of control of the Company or if the appointment becomes redundant. No amount was payable in the event of termination for neglect of duty or gross misconduct. Mr Turner received a fixed remuneration component of $250,000 per annum plus 9% superannuation and the provision of a motor vehicle.

The Board granted Mr Turner 1,500,000 unlisted options exercisable at $0.475 each on or before 22 December 2015 under the employee share option scheme. Upon Mr Turner's resignation effective 27 April 2012, the Board agreed that Mr Turner could retain 500,000 of these options (vesting 12 December 2012) whilst the remaining 1,000,000 were forfeited.

Exercise of Options Granted as Remuneration

During the financial year ended 30 June 2012, there were no options that were exercised by Key Management Personnel (2011: Nil).

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 $18,112 (2011: $25,874). 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 72 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

27 September 2012

The above Statement of Comprehensive Income should be read in conjunction with the accompanying Notes

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

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