Berkeley Eng Regulatory News (BKY)

Quarterly Activities Report - December 2011

HIGHLIGHTS 

·; Berkeley Resources Limited's ("Berkeley" or the "Company") 100% owned Salamanca I uranium project, continues to progress on schedule. The licensing and permitting process commenced during the quarter and a co-operation agreement was signed with the local municipalities. Construction is expected to commence mid-2013, with first production anticipated in 2014.

·; Discussions continue with Enusa Industria Avanzadas, S. A. ("Enusa") regarding the development of the State reserves (Enusa JV project). The completed Mining Domain Conceptual Basic Engineering Report (CBER) for the restricted Mining Domain Feasibility Study (MDFS) was compiled by Jacobs Engineering in early November and independently reviewed by Spanish international engineering company, Tecnicas Reunidas, before submission to Enusa. Berkeley has extended the deadline for the formation of Newco to February 29, 2012, following the recent change in government in Spain.

·; Steven Turner was appointed as Berkeley's Chief Financial Officer, effective December 12, 2011. Mr. Turner brings nearly 20 years of debt and equity markets experience in the natural resource sector.

·; Ian Stalker and Henry Horne both resigned as non-Executive Directors effective on November 29, 2011 and December 31, 2011 respectively.

·; The Company held cash balances of A$43M as at December 31, 2011.

OVERVIEW

SALAMANCA I

Berkeley has continued to focus on delivering the stand alone Salamanca I project as a priority. On Tuesday October 11, 2011 Berkeley initiated the licensing and permitting processes for development of the Retortillo and Santidad deposits. These deposits will be the first to be developed, and therefore are the first stage of the Salamanca I uranium project.

On October 26, 2011, Berkeley and the municipalities of Retortillo and Villavieja de Yeltes, within the Salamanca Province, signed a co-operation agreement for the exploitation of the uranium deposits located in the municipalities of Retortillo and Villavieja de Yeltes.

As part of the agreement, the municipalities of Retortillo and Villavieja de Yeltes undertake to actively contribute throughout the necessary administrative process 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. Berkeley expects that the exploitation of the Retortillo and Santidad deposits will create 150 to 200 direct jobs (including permanent contractors). Berkeley has also requested the necessary permits to transfer its current offices, as well as its technical and administrative staff, to Retortillo.

After an initial scoping study, a Preliminary Feasibility Study for the first stage of the project (Retortillo and Santidad only) was prepared. It confirmed the strength of the project, as detailed below.

Preliminary Feasibility Study Results for Berkeley's 100% owned Salamanca 1 Project, Stage 1 (Retortillo & Santidad)

·; Production:

- LoM: 10 years (in production)

- U3O8 produced: 11.5 Mlbs (1.42 Mlbs/annum average during the first 6 years)

·; Financials:

- CAPEX during LoM: 83.7 M€

- Pre-operational CAPEX: 62.5 M€ (contingency included)

- Total cash cost (Including Royalties): 30.3 USD/lb

Total production cost (including restoration): 33.93 USD/lb

- NPV: 136.2 M$ (USD)*

- IRR: 47%*

- Payback: 1.9 year*(* Assumes a US$:€ Conversion Rate of 1.32, US$65/lb Uranium Price, 8% Discount rate, 15% Capital Contingency)

This initial production rate, along with the project economics, are expected to grow over the next 12 months, as Berkeley's additional 100% resource areas are developed into the project.

The process will utilise on-off pad, biological heap leaching, which is particularly amenable to the ore type, and to the region and its climate. Previous 40 day column test work has yielded recoveries in excess of 90%, though for the purpose of the Preliminary Feasibility Study, a more conservative 87.5% recovery was used.

With the permitting process now underway, Berkeley forecasts that project construction will commence mid-2013.

ENUSA JV PROJECT

A Mining Domain Conceptual Basic Engineering Report ("CBER") was compiled by Jacobs Engineering in early November and independently reviewed by the Spanish international engineering company, Tecnicas Reunidas, before submission to Enusa. Berkeley has extended the deadline for the formation of Newco to February 29, 2012, following the recent change in government in Spain.

Berkeley is confident that the MDFS demonstrates compliance with technical, environmental, legal and economic aspects for the potential processing of uranium within the Mining Domain through the Quercus plant, to a standard validly accepted by international experts in mining.

The incorporation of NEWCO triggers the payment of €20M to Enusa within 30 days of formation. NEWCO will be responsible for exploitation of the uranium resources within the State Reserves (Mining Domain) and shall be owned 90% by the Company. Berkeley has received advice from its Spanish legal advisers, Herbert Smith, that the agreements continue to be enforceable according to their terms.

The MDFS is restricted to measured and indicated resources within the Mining Domain. These Resources total 34.2mlbs U3O8 at a grade of 445ppm, with an 89% resource conversion to achieve reserves of 30.3mlbs. Confidence levels have been raised to +/- 15% for capital estimates and to +/- 10% for operating costs. Resources included in the CBER for the restricted MDFS make up only approximately 44% of Berkeley's total resource base, or 69% of Enusa JV resources within the State Reserves.

As the CBER presented to ENUSA, is restricted to only Measured and Indicated Resources within the Mining Domain, the Company is cognisant of further potential project enhancements that can be achieved via the incorporation of synergies through parallel development of the 100%-owned Salamanca 1 project.

Results from the Conceptual Basic Engineering Report for the Enusa JV Project Mining Domain Feasibility Study

·; Mining rate of 3.5 mtpa for recovery of 2.5mlbs per annum averaged over the life of mine by tank leaching

·; Cash Operating costs of US$34.7/lb* averaged over the life of mine

·; Construction capital costs of US$228 million*

(* Assumes a US$:€ Conversion rate of 1.38)

EXPLORATION

Key Points

·; Exploration at Retortillo and Santidad included a combined resource infill, near mine exploration and condemnation RC drill program. Drilling at Retortillo was completed in November, whilst drilling at Santidad is ongoing. The Retortillo resource estimate has been updated giving a new total resource at 200 ppm CoG of 11.5Mt at 397ppm U3O8 for 10.1Mlbs U3O8.

·; Data from the recent RC drilling in Alameda, Sageras and Palacios has been integrated into the existing models, and the resource estimates updated. Results are given in Appendix A.

·; An exploration program to be carried out over the coming year has been developed for the Salamanca 1 Satellite deposits and the Caceres region (including the Gambuta deposit) focussing on exploration to confirm and extend the known resources and to test new prospect areas.

Table 1: Drilling Summary

Retortillo and Santidad Resources (Salamanca 1 Project)

Resource infill, exploration and condemnation drilling has been completed at Retortillo with final assay results received in December. Drilling at Santidad is continuing and is planned to be completed in February. Assays from Santidad are yet to be received.

The Retortillo drill campaign was completed in November with a total of 211 RC holes, for 12,935m being drilled. The drilling had four main objectives:

1. More detailed confirmation of the historic data-set to generate a more detailed geological model;

2. Infill drilling to upgrade Inferred resources to the Indicated category;

3. Extension of existing resources through exploration drilling; and

4. Condemnation drilling for mine and plant design purposes.

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. A summary of some of the better intersections is given in Table 2. A summary of all intersections is given in the Appendix B.

Table 2: Significant Intersections (at 200ppm U3O8 cutoff)

A new resource block model was created using all available data. This data includes the historical data from ENUSA and the more recent Berkeley drill hole data. Both sets of data consist of chemical assays, e-grade assays and detailed geological logging data, including state of weathering. All data has been reviewed and validated. A geological wireframe was interpreted encompassing all the mineralisation and a block model generated within this wireframe. Ordinary kriging was used to estimate grade into the block model. The results of the resource estimate are given in Appendix A.

The resource estimate has resulted in a significant increase in the Indicated Resource category with 56% of the total resource in this category compared to 37% previously. However, and as previously stated,progress calculations based largely on e-grades and using the zoned block model method employed at the State reserve deposits (which combines kriging and inverse distance squared weightings) indicated that the original 2007 estimate (based on a recovered fraction with inverse distance methodology) overestimated the resource. After the completion of the new resource block model, total Berkeley 100% owned resources have been reduced by 9.5%, from 31.7Mlb to 28.7Mlb.

Alameda, Sageras and Palacios Resources (Enusa JV)

A small amount of RC drilling was completed last quarter at Alameda and Sageras. This drilling was incorporated into the existing resource models and the resources re-estimated. The results from these updates are shown in Appendix A.

The most significant change from previous resources was at Alameda where an additional 0.5Mt for 589t U3O8 was added to the global resource and an increased proportion was reported as Indicated Resource. At Sageras and Palacios the amount of resource reported as Measured and Indicated also increased.

Assessment of Other 100% Berkeley Projects

An exploration program to be carried out over the coming year has been developed for the Salamanca 1 Satellite deposits and the Caceres area, focussing on exploration to confirm and extend the known resources, and to test new prospect areas.

A review of the Salamanca 1 Satellite deposits showed many areas of good potential to extend the existing resources, as well as test new prospective exploration areas.

In the Villares East Prospect a review of the historic drilling has shown the potential for significant mineralisation to be defined in this area. Detailed drill planning is underway to test this and other projects including Zona 7, Las Carbas, Mina Cristina and Mina Caridad over the coming year.

In the Caceres Province an infill RC drilling has been designed for the Gambuta Resource with the aim of upgrading the geological model and current resource estimate, and to provide material for metallurgical testwork. The satellite prospects (e.g. El Zarzal, Ojaranzo, El Chorrero) and the granite-metasediment contact zone will also be investigated. Exploration techniques will utilise ground radiometrics, detailed geological mapping and drill testing.

Enquiries

Appendix A: Berkeley Mineral Resources as at 31 December 2011

(Continued over page)

Appendix A (Continued): Berkeley Mineral Resources as at 31 December 2011

Appendix B: Drill Intersections from drilling completed during December Quarter (all intersections reported using a 200ppm U3O8 cutoff)

Retortillo RC Drilling

Retortillo - Condemnation Drill Holes