Berkeley Eng Regulatory News (BKY)

BERKELEY RESOURCES LIMITED

Interim Financial Reportfor the Half Year Ended31 December 2010

abn 40 052 468 569

CORPORATE DIRECTORY

The following sections are available in the full version of the Annual Financial Report on Berkeley Resources Limited's website:

www.berkeleyresources.com.au

Directors' Declaration

Auditor's independence Declaration

Independent Auditor's Report

DIRECTORS' REPORT

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 2010 ("Consolidated Entity").

DIRECTORS

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

Dr James Ross

Mr Henry Horne (appointed 11 October 2010)

Mr Scott Yelland

Mr Jose Ramon Esteruelas

Mr Ian Stalker

Mr Matthew Syme

Dr Robert Hawley (resigned 19th January 2011)

Mr Sean James (resigned 1st October 2010)

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

REVIEW AND RESULTS OF OPERATIONS

Review of Operations

During the half year period ended 31st December 2010, the Company's primary focus was advancing it's Salamanca Uranium Project in Spain by upgrading the Mineral Resources and advancing the first phase of the Feasibility Study.

Phase 1 of the Feasibility Study commenced at the start of 2010 and continued throughout the year. The study is focusing on a tank leach scenario using the Quercus Plant to produce 2.1Mlbs U308 per annum, processing ore from the Sageras, Palacios North and Alameda South deposits.

Phase 2 of the Feasibility Study also commenced during the period and is scheduled to be completed in the second half of 2011. It concentrates on the potential to use heap leaching at the satellite deposits.

A comprehensive Reverse Circulation (RC) campaign consisting of 98 holes for 7,054 metres was completed in September 2010. The drilling successfully upgraded the confidence levels in the Mineral Resources at Sageras and Alameda South and discovered an extension to the mineralisation at Sageras which remains open to the north-west.

Updated Mineral Resources Estimates were announced in September 2010 for the Sageras and Alameda South deposits. The combined Mineral Resources at these two deposits increased by 10% to 29.8Mlbs U308 with over 93% now in the Measured and Indicated categories.

Mineral Resources within Berkeley's projects in Spain now total 84.6Mt at 446ppm for 83.2Mlbs (37.7Kt) U308, with 46% in the Measured and Indicated categories.

A tabulation of Berkeley's Mineral Resources by area is shown in Table 1.

Berkeley has agreed to acquire 90% of the ENUSA State Reserves and any deposits therein by, inter alia, completing

a feasibility study and paying €20 million. For full details of the Agreement, see Berkeley's announcement 10.12.08.

Figure 1: Mineral Resource Inventory at a 200ppm U308 cut off

The new and updated Mineral Resource Estimates are based on a combination of chemical and e-grades from historical drilling, supplemented by Berkeley diamond and RC drilling with both chemical and e-grades.

The geological models and Mineral Resource estimates have been developed by a team of in-house and consulting geoscientists following a rigorous programme to verify the historical data.

During the period, approximately 11.5 tonnes of "representative" core samples were selected and dispatched to the SGS laboratories in Perth, Australia for a variety of ore preparation tests including comminution, scrubbing and gravity floatation and tank leach testwork.

Tank leach metallurgical tests produced very encouraging results with 93% uranium extraction achieved in acid batch leach tests for bulk samples from Palacios North and Alameda South and 87.5% at Sageras. Very low acid consumptions were achieved at Sageras (7 - 12kg/t), increasing slightly to 15 - 18Kg/t at Alameda South and 23 - 25Kg/t at the smaller Palacios North deposit.

The Tank Leach testwork results are summarised in Table 2.

REVIEW AND RESULTS OF OPERATIONS (Continued)

Figure 2: Tank Leach Testwork Results

Heap leach testwork was also completed during the period and average recoveries from four 50 day column leach tests were similar to the tank leach results, although with slightly higher acid consumption.

Feasibility Study mining studies continued through the period. Updated open pit optimisations were completed for Palacios North, Sageras and Alameda South, incorporating updated costs provided by Spanish mining contractors, updated geotechnical parameters and revised uranium prices.

Detailed pit design and mining schedules for Palacios North, Sageras and Alameda South have been generated based on the new pit optimisation shells.

A review of the potential waste and tailing management facilities was completed by Golder Associates, who have also been working on a comprehensive waste characterisation programme. A number of waste samples were sent to the SGS Laboratories in Vancouver for geochemical characterisation tests.

The water management programme continued with a significant amount of field work undertaken during the second half of 2010. The long term groundwater monitoring at Alameda South, Sageras and Palacios is continuing and the short term low rate hydraulic testing and ground water tracer tests was completed at Sageras, Palacios North and Alameda South.

Environmental responsibility, radiological protection and community awareness, engagement and support are paramount considerations for the success of Berkeley's Salamanca Uranium Project. Berkeley has put together a strong Health, Safety, Environment & Community and Radiological team supported by a number of external consultants.

At the start of the year an environmental baseline study was commissioned for the Salamanca Uranium Project, which included reconnaissance field work, desktops reviews of the available historical documentation provided by ENUSA and the development and implementation of a new baseline monitoring programme at Aguila and Alameda. The study continued during the second half of the year and a comprehensive database was compiled.

Safety, Environmental and Radiological inspections were performed regularly by the Berkeley HSEC team during drilling operations to confirm that Berkeley is in full compliance with all of their commitments to safety, environment and radiological management.

REVIEW AND RESULTS OF OPERATIONS (Continued)

Operating Results

Net operating loss after tax attributable to members for the half year ended 31 December 2010 was $11,735,602 (31 December 2009: $4,956,939).

This result included the following significant items:

·; Exploration costs associated with the Company's Spanish uranium projects of $9,262,071 (31 December 2009: $3,377,303); and

·; Share based payments expense of $1,332,972 relating to the vesting of employee incentive options (31 December 2008: $191,107).

CORPORATE

The following material corporate events occurred during or since the end of the half year ended 31 December 2010:

·; Robert (Sam) Middlemas was appointed as the Company Secretary to replace Mr Clint McGhie on the 30th June 2010.

·; A non-binding MOU was signed with the Korea Power Corporation (KEPCO) to finance and develop the Salamanca Uranium Project on the 10th August 2010. KEPCO then completed a technical and legal due diligence.

·; Sean James resigned as a Non-Executive Director of the Berkeley Board on the 1st October 2010.

·; Henry Horne was appointed to the Berkeley Board as Executive Director on 11th October 2010.

·; A potential takeover bid was announced by OAO Severstal (Severstal) on the 29th October 2010 subject to financial, technical and legal due diligence. By the 29th December 2010, Berkeley and Severstal were unable to agree terms upon which Severstal may make an agreed bid for the company, and the exclusivity granted to Severstal on the 29th October 2010 expired on the 29th December 2010, however Severstal's right to subscribe to shares in Berkeley remained in force until the 14th January 2011. On the 14th January 2011 Berkeley announced that Severstal's right to subscribe for shares in Berkeley expired. Discussions between both parties are continuing in respect of other possible arrangements.

·; On the 26th November 2010, 3.5 million shares were issued to Resource Capital Fund at AUD$1.45 per share for gross proceeds of approximately AUD$4.8 million.

·; With reference to the notice given to ENUSA during October 2010 to extend the completion of the feasibility study by one year to 26 November 2011, the Euro 1 million payment was made to ENUSA at the end of December 2010.

·; On the 30th December 2010 it was announced that Ian Stalker has resigned as Managing Director due to personal reasons but will stay on the Board as a Non-Executive Director. Henry Horne was appointed Acting Managing Director until a suitable replacement is found.

·; On the 14th January 2011 Berkeley announced the appointment of Dr James Ross AM as Chairman, following the retirement of Dr Robert Hawley CBE from the Board due to health reasons.

·; Berkeley has advised ENUSA of its decision to progress to the exploitation phase when the decision to exploit was announced on the 17th January, 2011. Negotiations regarding the formation of Newco, a joint venture company between Berkeley (90%) and ENUSA (10%), started in the first week in February 2011.

·; In March 2011, the Company completed an equity raising of AUD$55 million at a price of AUD$1.70 per share for the issue of 32,360,000 new shares, via a placement to institutional investors, following shareholder approval for the second tranche of the issue. These funds will be utilised to meet the cost of the €20 million payment to ENUSA, to fund further feasibility work including a 1,200 hour pilot plant to be carried out in a reputable laboratory located in Australia, and to enable exploration drilling of high quality targets within the State Reserves and adjacent Berkeley fully owned tenements.

·; The Company announced the appointment of Mr Brendan James as Managing Director with effect from 30 May 2011.

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 audit of the half year financial report.

Signed in accordance with a resolution of Directors.

HENRY HORNE

Acting Managing Director

15 March 2011

CONDENSED CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

FOR THE HALF YEAR ENDED 31 DECEMBER 2010

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

CONDENSED CONSOLIDATED STATEMENT OF

FINANCIAL POSITION

AS AT 31 DECEMBER 2010

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

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE HALF YEAR ENDED 31 DECEMBER 2010

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

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE HALF YEAR ENDED 31 DECEMBER 2010

(Continued)

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

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE HALF YEAR ENDED 31 DECEMBER 2010

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE HALF YEAR ENDED 31 DECEMBER 2010

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 2010.

The annual financial report of the Company as at and for the year ended 30 June 2010 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 2010 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 15 March 2011.

(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 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 2010, 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 2010. 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.

4. REVENUE FROM CONTINUING OPERATIONS

5. CONTRIBUTED EQUITY

(a) Issued and Paid Up Capital

(b) Movements in Ordinary Share Capital During the Past Six Months:

6. CONTINGENT LIABILITIES AND COMMITMENTS

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

7. DIVIDENDS PAID OR PROVIDED FOR

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

8. SUBSEQUENT EVENTS AFTER BALANCE DATE

Other than the events below, there were no significant events occurring after balance date requiring disclosure:

·; Berkeley has advised ENUSA of its decision to progress to the exploitation phase when the decision to exploit was announced on the 17th January, 2011. Negotiations regarding the formation of Newco, a joint venture company between Berkeley (90%) and ENUSA (10%), started in the first week in February.

·; On the 14th January 2011, Berkeley announced the appointment of Dr James Ross AM as Chairman, following the retirement of Dr Robert Hawley CBE from the Board due to health reasons.

·; On the 14th January 2011, the 2,000,000 unvested options awarded to Mr Stalker while he was Managing Director lapsed. The impact of these options lapsing would be a writeback to the profit and loss account in the 2nd half of the year of $913,868.

·; On 7 March 2011, the Company completed an equity raising of AUD$55 million at a price of AUD$1.70 per share for the issue of 32,360,000 new shares, via a placement to institutional investors, following shareholder approval for the second tranche of the issue. These funds will be utilised to meet the cost of the €20 million payment to ENUSA, to fund further feasibility work including a 1,200 hour pilot plant to be carried out in a reputable laboratory located in Australia, and to enable exploration drilling of high quality targets within the State Reserves and adjacent Berkeley fully owned tenements.

·; On 11 March 2011, the Company announced the appointment of Mr Brendan James as Managing Director with effect from 30 May 2011.