Berkeley Eng Regulatory News (BKY)

BERKELEY RESOURCES LIMITED

Interim Financial Reportfor the Half Year Ended31 December 2012

abn 40 052 468 569

CORPORATE DIRECTORY

The Auditor's Independence Declaration and the Independent Auditor's Report are available in the full version of the Interim Financial Report on Berkeley Resources Limited's website at:

www.berkeleyresources.com.au.

The Board of Directors of Berkeley Resources Limited present their report on the consolidated entity of Berkeley Resources Limited ("the Company" or "Berkeley") and the entities it controlled during the half year ended 31 December 2012 ("Consolidated Entity").

DIRECTORS

The names of the Directors of Berkeley in office during the half year and until the date of this report are:

Mr Ian Middlemas

Dr James RossMr Robert Behets

Mr Matthew Syme (Resigned 2 August 2012)

Señor Jose Ramon Esteruelas (Resigned 29 November 2012)

Unless otherwise disclosed, Directors were in office from the beginning of the half year until the date of this report.

REVIEW OF OPERATIONS AND ACTIVITIES

Berkeley is a uranium exploration and development company with a quality resource base in Spain. The Company has a 100% interest in a total Mineral Resource estimated at 61.0 million pounds of contained U3O8 with an average grade of 430 ppm (at a cut-off grade of 200 ppm U3O8).

During the half year, the Company focused on advancing its wholly owned flagship Salamanca Project, which comprises the Retortillo and Alameda deposits plus a number of other Satellite deposits, through the development phase.

The results of a Scoping Study completed in late 2012 confirmed the technical and economic viability of the Salamanca Project and its potential to support a significant scale, long life uranium mining operation. Accordingly, the Company has commenced a Pre-Feasibility Study ('PFS').

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

(i) A positive Scoping Study for the Salamanca Project

The Company announced the results of a positive Scoping Study in November which confirmed the technical and economic viability of the Salamanca Project, including:

Ø Initial mine life of 11 years, including 7 years steady state operation, with strong potential to increase;

Ø Steady state annual production of 3.2 million pounds U3O8, with average annual production of 2.6 million pounds U3O8 over the life of mine;

Ø Life of mine average operating costs of US$25.65 per pound of U3O8;

Ø Upfront capital cost of US$83.6 million to deliver initial production. A further US$95.0 million, incurred in the second year of production and largely funded from operating cashflow, to achieve steady state operation.

(ii) Commencement of Pre-Feasibility Study

Pre-Feasibility Study commenced, targeting completion in the third quarter of 2013. The study was awarded to Johannesburg based SENET, who will be assisted by SRK Consulting for mine design, Knight Piesold for heap design and Duro Felguera for the in-country project cost estimates. Additional testwork is also being carried out at the Mintek facilities in Johannesburg and ANSTO laboratories in Sydney.

(iii) Advancement of Permitting

The permitting process for Retortillo continued to advance with the Company's responses to the submissions received during the 30 day Public Information Period being delivered to the relevant authorities for their review and evaluation. The Nuclear Safety Council has also confirmed that all required information for the preparation of their compulsory report regarding the mining activities, and for the Initial Authorization of the process plant as a radioactive facility has been submitted.

The permitting process for Alameda was initiated with the submission to the relevant authorities of the Environmental Scoping Document and documentation associated with the application for reclassification (from rural to industrial use) of the affected surface land area.

(iv) Resource Update

An updated Mineral Resource Estimate ('MRE') for Gambuta estimated at 12.7 million tonnes averaging 394 ppm U3O8 for a contained 11.1 million pounds of U3O8 at a lower cut-off grade of 200 ppm U3O8 was reported in October.

As at the date of this report, the Company has a 100% interest in a total Mineral Resource estimated at 61.0 million pounds of contained U3O8 with an average grade of 430 ppm (at a cut-off grade of 200 ppm U3O8).

Salamanca Project

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

The results of a PFS completed in early 2012 confirmed the technical and economic viability of a stand-alone project exploiting Retortillo, whilst Alameda formed part of a separate Feasibility Study completed in 2011.

In November 2012, the Company completed an initial assessment of the integrated development of Retortillo and Alameda and reported the results of the Scoping Study ('the Study').

The Study was managed by Berkeley with input from a number of industry-recognised specialist consultants covering the key disciplines. The Study incorporated all of the information generated from the previous studies conducted on Retortillo and Alameda, as well as additional drilling and metallurgical testwork data.

Scoping Study Results

Using only the current Mineral Resource Estimates for Retortillo and Alameda, which total 33.9 million pounds U3O8 (35.9 million tonnes at 429 ppm; 200 ppm U3O8 cut-off grade), as a base case scenario, the Project can support an average annual production of 3.2 million pounds of U3O8 during the seven years of steady state operation and 2.6 million pounds of U3O8 over a minimum eleven year mine life. There is strong potential to increase the production profile and mine life through the exploitation of additional resources held by the Company (totalling 27.1 million pounds U3O8) and with ongoing exploration work.

The Study was based on open pit mining, heap leaching, 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 Company currently favours a contractor mining scenario. The average annual ore processing rate during steady state operation is 5.5 million tonnes. Operating cost estimates average US$25.65 per pound U3O8 over the life of mine.

The initial capital cost (nominally ± 30% accuracy) for the Project is estimated at US$83.6 million. This cost is inclusive of all mine, processing, infrastructure and indirect costs required to develop and commence production at Retortillo. A further US$95.0 million of capital, incurred in the second year of production and largely funded from operating cashflow, 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).

The Directors are encouraged by the positive results of the Scoping Study which clearly demonstrate the potential of the integrated Salamanca Project to support a significant scale, long life uranium mining operation. Further details on the Study are available in the Company's ASX Announcement dated 29 November 2012.

PFS

Following completion of the Scoping Study, Berkeley commenced a PFS for the Salamanca Project. The PFS was awarded to the Johannesburg based company SENET, which will develop the study assisted by SRK Consulting for the mine design, Knight Piesold for the heaps design and Duro Felguera for the in-country project cost estimates.

The Company will undertake a more detailed mine scheduling and materials movement optimisation study, metallurgical testwork program and infrastructure assessment during the PFS phase, with the aim of identifying opportunities to further enhance the Project economics through capital and operating cost reductions. Resource infill and exploration drilling programs aimed at upgrading the resource classification and increasing the overall resource base also form part of the Study.

The PFS will be carried out with a confidence level of ±20% for both the capital and operating cost estimates and will include the design details required to be submitted to the Spanish Nuclear Safety Council as part of the Authorization for Construction process for the processing plant.

Further metallurgical testwork will be carried out at the Mintek laboratories in Johannesburg and the Australian Nuclear Science and Technology Organisation ('ANSTO') facilities in Sydney.

The testwork program at Mintek aims to confirm the leaching efficiency for each phase of the mine schedule and test ore variability with respect to size distribution and geo-mechanical behaviour. The ANSTO testwork program is designed to facilitate the selection of the optimal backend of the process, with the performance of direct Solvent Extraction ('SX') and ammonium diuranate ('ADU') precipitation being compared to ion exchange ('IX') and UO4 precipitation.

Exploration and Drilling

Drilling activity during the half year included diamond drilling ('DD') at Retortillo and Alameda for resource definition, to provide drill core for metallurgical testwork and to provide drill core for geotechnical testwork. Details of the 1,949 metres of DD completed are summarised in Table 1.

Table 1: 2012 Drilling Summary

Mineral Resources

The current MRE's 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.

Permitting

The permitting process at Retortillo continues to advance. During the half year, a 30 day Public Information Period was held (completed in mid September) and the Company's responses to the submissions received were delivered to the relevant authorities for their review and evaluation. Follow-up discussions regarding appropriate mitigation measures have been held with the authorities. It is anticipated that the Project will be raised for mining and environmental approval within the first half of 2013.

The Initial Authorisation for the process plant as a radioactive facility is well advanced. The Nuclear Safety Council has informed Berkeley that they have all required information for the preparation of their compulsory report regarding the mining activities, and also for the Initial Authorization of the process plant as a radioactive facility. Both are anticipated during the June quarter of 2013.

Ancillary permits, such as those associated with water and roads, are also currently being advanced. Discussions have been held with the relevant authorities (including the Water Authority and Roads Department) and the required documentation submitted.

At Alameda, the Environmental Scoping Document and the documentation associated with the change of the zoning of rural land into that suitable for industrial purposes were submitted in November and December, respectively. The Exploitation Plan, Rehabilitation and Closure Plans and documents related to Radiological Protection will be prepared based on the design developed as part of the PFS, targeting submission of these documents by mid 2013.

Corporate

At 31 December 2012, the Group had cash reserves of A$32.5 million, with no debt. This puts the Group in a strong financial position as it looks to complete the PFS and progress the development of the Salamanca Project.

During the half year, Mr Matthew Syme and Senor Jose Ramon Esteruelas resigned as Non-Executive Directors of the Company, effective 2 August 2012 and 29 November 2012 respectively.

On 9 November 2012, the Company issued 750,000 $0.475 Incentive Options to a key employee of the Company. The options expire 22 December 2015 and 375,000 vest on 12 December 2013 and 375,000 vest on 12 December 2014.

In July 2012, 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.

Under the agreement, Berkeley holds a 100% interest in, and the exploitation rights to, State Reserves 28 and 29 (which include the substantial unmined Alameda deposit) whilst waiving its rights to mine in State Reserves where ENUSA has undertaken rehabilitation. Refer to ASX Announcement dated 24 July 2012 for further details.

Operating Results

The net operating loss after tax for the half year ended 31 December 2012 was $5,373,394 (2011: $8,752,860).

The loss for the period includes $5,640,251 (2011: $9,524,027) in exploration and evaluation expenditure and share based payment expenses of $142,952 (2011: $129,824) were also recognised during the half year.

SIGNIFICANT POST BALANCE DATE EVENTS

At the date of this report there were no significant events occurring after balance date requiring disclosure.

AUDITOR'S INDEPENDENCE DECLARATION

Section 307C of the Corporations Act 2001 requires our auditors, Stantons International, to provide the Directors of Berkeley Resources Limited with an Independence Declaration in relation to the review of the half year financial report. This Independence Declaration is on page 17 and forms part of this Directors' Report.

Signed in accordance with a resolution of Directors.

Robert Behets

Non-Executive Director

14 March 2013

In accordance with a resolution of the Directors of Berkeley Resources Limited, I state that:

In the opinion of the Directors:

(a) the financial statements and notes, as set out on pages 8 to 16, are in accordance with the Corporations Act 2001, including:

(i) complying with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations 2001; and

(ii) giving a true and fair view of the consolidated entity's financial position as at 31 December 2012 and of its performance for the half year ended on that date.

(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

On behalf of the Board

Robert Behets

Non-Executive Director

14 March 2013

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

The above Condensed Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

The above Condensed Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

The above Condensed Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

1. REPORTING ENTITY

Berkeley Resources Limited (the "Company") is a company domiciled in Australia. The interim financial report of the Company is as at and for the six months ended 31 December 2012.

The annual financial report of the Company as at and for the year ended 30 June 2012 is available upon request from the Company's registered office.

2. STATEMENT OF COMPLIANCE

The interim financial report is a general purpose financial report which has been prepared in accordance with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Act 2001.

This interim financial report does not include all the information of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report of Berkeley Resources Limited for the year ended 30 June 2012 and any public announcements made by Berkeley Resources Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

This interim financial report was approved by the Board of Directors on 13 March 2013.

(a) Basis of Preparation of Half Year Financial Report

The principal accounting policies adopted in the preparation of the financial report have been consistently applied to all the periods presented, unless otherwise stated.

Historical cost convention

These financial statements have been prepared under the historical cost convention, as modified where applicable by the revaluation of available-for-sale financial assets, financial assets and liabilities (including derivative instruments) at fair value through profit or loss.

3. SIGNIFICANT ACCOUNTING POLICIES

Accounting policies applied by the Consolidated Entity in this consolidated interim financial report are the same as those applied by the Consolidated Entity in its consolidated financial report for the year ended 30 June 2012, except as stated below.

In the current period, the Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for annual reporting periods beginning on or after 1 July 2012. The adoption of these new and revised standards has not resulted in any significant changes to the Group's accounting policies or to the amounts reported for the current or prior periods.

A range of amendments to Standards and Interpretations have been made which are available for early adoption for financial reporting periods beginning on or after 1 July 2012. New and revised standards and amendments thereof and interpretations effective for the current half-year that are relevant to the Consolidated Entity include:

·; Amendments to AASB 1, 5, 7, 101, 112, 120, 121, 132, 133 and 134 as a consequence of AASB 2011-9 'Amendments to Australian Accounting Standards - Presentation of Items of Other Comprehensive Income'

The adoption of new and revised Standards and Interpretations has not affected the amounts reported for the current or prior year. However the application of AASB 2011-9 has resulted in a change to the Group's presentation of, or disclosure in, its half year financial statements.

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

AASB 2011-9 introduces new terminology for the statement of comprehensive income and income statement. Under the amendments to AASB 101, the statement of comprehensive income is renamed as statement of profit or loss. The amendments to AASB 101 retain the option to present profit or loss and other comprehensive income in either a single statement or in two separate but consecutive statements. However, the amendments to AASB 101 require items of other comprehensive income to be grouped into two categories in the other comprehensive income section: (a) items that will not be reclassified subsequently to profit or loss and (b) items that may be reclassified subsequently to profit or loss when specific conditions are met. Income tax on items of other comprehensive income is required to be allocated on the same basis - the amendments do not change the option to present items of other comprehensive income either before tax or net of tax. The amendments have been applied retrospectively, and hence the representation of items of other comprehensive income has been modified to reflect the changes. Other than the above mentioned presentation changes, the application of the amendments to AASB 101 does not result in any impact on profit or loss, other comprehensive income and total comprehensive income

4. SEGMENT INFORMATION

AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Consolidated Entity that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance.

The Consolidated Entity operates in one operating segment, being exploration for mineral resources within Spain. This is the basis on which internal reports are provided to the Directors for assessing performance and determining the allocation of resources within the Consolidated Entity.

5. REVENUE FROM CONTINUING OPERATIONS

6. NON-CURRENT ASSETS - EXPLORATION EXPENDITURE

The value of the exploration interests is dependent upon the discovery of commercially viable reserves and the successful development or alternatively sale, of the respective tenements. An amount of €6m (A$7.43m) relates to the capitalisation of the fees paid to ENUSA under the Co-operation Agreement relating to the tenements within the State Reserves. The Company reached agreement with ENUSA in July 2012 in the form of an Addendum to the Consortium Agreement signed in January 2009. The Addendum 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 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, and 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.

7. CONTRIBUTED EQUITY

(a) Issued and Paid Up Capital

7. CONTRIBUTED EQUITY (Continued)

(b) Movements in Ordinary Share Capital During the Six Month Period ended 31 December 2012:

(c) Movements in Options During the Six Month Period ended 31 December 2012:

Note:

(1) The value of Incentive Options granted is recognised over the vesting period of the grant, in accordance with Australian Accounting Standards.

The following options have been issued over unissued capital as at 31 December 2012:

Listed Options

·; 11,989,428 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.

·; 2,241,666 unlisted options at an exercise price of $1.35 each that expire on 18 June 2014.

·; 1,750,000 unlisted options at an exercise price of $0.475 each that expire on 22 December 2015.

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

·; 5,500,000 unlisted options at an exercise price of $0.45 each that expire on 30 June 2016.

8. RESERVES

9. CONTINGENT LIABILITIES AND COMMITMENTS

There was no material change in contingent liabilities or commitments as previously disclosed at the last reporting period.

10. DIVIDENDS PAID OR PROVIDED FOR

No dividend has been paid or provided for during the half year.

11. SUBSEQUENT EVENTS AFTER BALANCE DATE

As at the date of this report there were no significant events occurring after balance date requiring disclosure.

The Auditor's Independence Declaration and the Independent Auditor's Report are available in the full version of the Interim Financial Report on Berkeley Resources Limited's website at:

www.berkeleyresources.com.au.