Berkeley Eng Regulatory News (BKY)

REPORT FOR QUARTER ENDED 31 MARCH 2012

SIGNIFICANT DEVELOPMENTS

Ø The Company initiated Arbitration proceedings against the joint venture partner, Enusa Industrias Avanzadas, S.A. ("Enusa") with a claim of >US$200m following repeated deadline extensions.

Ø Salamanca 1 Project progressed on a broad front with submission of core documents for the permitting process and commencement of large column tests.

Ø Encouraging down-hole radiometric results at the new Villares prospect were confirmed by the high grade assay results announced on 24 April. These include: 15m at 1,524ppm U3O8 from 1m in VIR001; and 9m at 2,363 ppm U3O8 from 6m in VIR007 at 200 ppm cut-off.

Ø Ian Middlemas was appointed Chairman and Robert Behets joined the board as a non-executive Director of the Company on 27 April 2012. This followed the resignation of Brendan James as Managing Director and CEO now effective 27 April 2012.

Ø The Company made a placement of 5,000,000 shares and options to Mr Middlemas and Mr Behets to raise A$1.5m as part of their appointment to the board and to supplement working capital.

Ø A full review of the Company's activities in Spain will be undertaken during the next quarter following the introduction of the new board members. The Company's estimated net cash position at the end of April is approximately A$38.5m, inclusive of the placement funds. This reflects estimated incurred expenditure of A$3m to the end of April, including A$350,000 on the purchase of a farm and A$500,000 in drilling services at Salamanca 1.

Enquiries

JOINT VENTURE WITH ENUSA:

The deadline for Enusa's assessment of the advanced form of the Mining Domain Feasibility Study (MDFS), and formation of the 90% Berkeley-owned joint venture company, NEWCO, was extended from 23 January, 2012, to 29 February, with the condition that Enusa responded to the advanced MDFS by 23 February. As announced on 24 February Enusa did not accept this advanced version and, in addition, they did not form NEWCO on 29 February. Therefore they are in breach of the Co-operation Agreement dated 29 January 2009.

The Co-operation Agreement clearly establishes that such a material breach requires that Enusa returns to Berkeley's Spanish subsidiary, Berkeley Minera Espana ("BME"), the non-amortised value of all its investments made and any evidenced expenses which BME may have incurred to carry out the Feasibility Study, whether or not it has been completed. In addition, Enusa is to compensate BME for any damages caused, including any reasonable loss of profits.

Following this default, the Company entered discussions with SEPI, the 60% owners of Enusa, and agreed to refrain from initiating arbitration until 30 March. Unfortunately, this final extension did not lead to a satisfactory outcome and the Board immediately initiated arbitration.

It is the opinion of Berkeley, and its legal advisors in Spain that Enusa has not met its contractual obligations under the Co-operation Agreement on a number of occasions. BME, in addition to fulfilling its obligations, has consistently acted in good faith, and also provided Enusa with numerous opportunities to achieve a satisfactory outcome and avoid arbitration. Apart from granting multiple extensions to postpone formation of NEWCO, It has also offered ENUSA alternative options to progress the project. These alternatives have been aimed at minimising Enusa concerns, as they have been understood by Berkeley.

Berkeley considers that it has a strong case in arbitration. This view is supported by a number of factors, including advice from BME's international legal advisors in Spain, who have considerable experience in successful commercial arbitration actions within the country. BME is claiming compensation for the damages and losses caused by Enusa's breach of the Co-operation Agreement to a total amount estimated to be in excess of US$200m.

Regardless of this action, the Company has informed Enusa that it is prepared to collaborate at any time with the aim of achieving an amicable solution, independent of any arbitration proceedings.

SALAMANCA 1 PROJECT:

Overview:

Project activity progressed on a broad front during the quarter to build on the outcomes of the preliminary feasibility study, announced on 30 January, 2012. The Company received confirmation from the Regional Government of Castilla y Leon that the Environmental Scoping Document was successfully processed. In addition, the permit was received for the proposed site facilities, including core shed, analytical laboratories change rooms and office. Key documents for the permitting process were submitted for approval, including: the Exploitation Plan; the Restoration and Closure plans; the Environmental Impact Assessment; and the Radiological Protection initial document. It is anticipated that these documents will be distributed by the Regional Government for public consultation during the next June quarter.

Metallurgical test work was advanced at Mintek in Johannesburg and included column testing of representative mineralisation for the first three years of production (see below). Diamond and RC drilling was focussed on upgrading of resources at Santidad and also providing initial samples for metallurgical test work, as detailed below. In addition, exploration drilling in proximity to the Retortillo deposit was initiated, with the aim of supporting and extending the production profile at the Salamanca 1 Project. Initial RC drilling at the new Villares prospect intersected shallow, high grade mineralisation. Project engineering work was focussed on development of the hydrogeological and geotechnical models.

Drilling and Exploration:

Reverse circulation ("RC") and diamond drilling during the quarter is summarised in Table1 with respective totals of 7,790m and 735m. Most RC drilling, and all diamond drilling, was focussed on the Santidad deposit, with 59 RC holes, totalling 3,331m, being drilled at the Villares prospect.

Santidad deposit:

The program of RC drilling to upgrade the inferred resources and undertake condemnation drilling for mine design, was completed for a total of 101 holes totalling 5,828m. In addition, 12 diamond holes have provided additional geological information to enable a more detailed geological interpretation, plus samples for metallurgical test work.

Table 1: Drilling Completed during 2012

Radiometric data for the resource drilling at Santidad confirms known mineralisation, however the closer spacing indicates less continuity than previously interpreted and it appears that some reduction in resources is likely. A new resource will be calculated once assay results are received in April. The deposit is open to the north-west and drilling for additional resources can be considered, once access to this area is negotiated. Notable intersections are summarised in Table 2, and all intersections in Appendix A.

Diamond drilling for geotechnical studies at Retortillo and Santidad was initiated in the current quarter.

Table 2: Santidad - Significant Intersections at 200ppm cut-off.

Villares prospect:

This new prospect, is located approximately 7km north of Retortillo, and was first identified in the helicopter-borne radiometric and magnetic survey that Berkeley carried out in 2007. Its potential was recently confirmed with a combination of ground radiometric survey and geological mapping, and by analysis of results from historical localised drilling by ENUSA. Villares, and other anomalies in the Salamanca 1 area, have remained untested since Berkeley halted exploration in 2008, following onset of the GFC.

The drilling has been focussed in the Zona 19 and Zona 4 areas of the prospect, with several additional holes testing for possible continuity between other small surface anomalies. Encouraging radiometric results in 23 of the 59 RC holes have been confirmed by the first batch of assays for 9 holes in the Zona 19 area. They confirm the presence of shallow, high grade mineralisation in four of these holes, including: 15m at 1,524ppm U3O8 from 1m in VIR-001 and 9m at 2,363ppm U3O8 from 6m in VIR-007. Results for these 4 holes are shown in Table 3.

Comparison of down hole radiometric results and chemical assays has been applied to the other 50 holes. It indicates that significant, or anomalous, mineralisation has been intersected in 19 of these 50 holes for which only radiometric data is currently available. A summary of all intersections is given in Appendix A.

At Zona 19 the assay and radiometric data has outlined mineralisation ranging from 25-75m in width over a strike length of about 300m. The thickness ranges from 2-15m at depths from surface to 28m. Uranium mineralisation is hosted within sediments, similar to the host rocks at Retortillo and Santidad, and is open along strike to the northwest and southeast. Drill access to test for extensions is under negotiation with landowners.

The down hole radiometric data from Zona 4 has outlined potential mineralisation up to 100m in width over a strike length of at least 300m. The thickness ranges from 2-25m at a depth of 5-50m. However, whilst most radiometric grades within this 300m long zone appear to be >200ppm U3O8, the variable relationship between assays and radiometrics at Zona 19 indicates that assay data is needed to properly gauge their true significance.

These initial results confirm the presence of shallow high grade mineralisation at the Villares prospect and highlight the potential to identify additional uranium resources in outcropping and covered areas in proximity to the Retortillo and Santidad deposits. Further drilling is planned to test the additional targets identified.

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

Metallurgical Test work and Project Engineering:

The program of test work initiated in the December quarter, on a representative 4.7 tonne sample from Retortillo, was continued at the Mintek laboratories in Johannesburg. It includes:

Ø Bench scale comminution tests;

Ø ISO-pH tests;

Ø Diagnostic assay and agglomerate acid cure tests;

Ø Geomechanical tests:

Ø 6m column tests; and

Ø Solvent extraction test work through to ADU precipitation and analysis.

The program is well advanced and is targeted for completion in the June quarter. Nine column tests are in progress and although early results are encouraging with respect to recovery and reagent consumption, firm conclusions cannot be drawn until column residues are analysed. Upgrading of the hydrogeological model to provide a 3D transitional regime was continued, and the geotechnical model is being advanced to a final design status. Completion of both models is targeted for completion in the June quarter.

CORPORATE

On 27 April the board completed the appointment of Ian Middlemas as Non-executive Chairman and Robert Behets as a Non-Executive Director of the Company. These appointments will significantly strengthen the board's corporate and technical capacity following the departure of Mr Brendan James as Managing Director.

A full review of the Company's activities in Spain will be undertaken during the next quarter following the introduction of the new board members.

Appendix A: All assayed Drill Intersections

Santidad RC Drilling

Villares RC Drilling