Berkeley Eng Regulatory News (BKY)

REPORT FOR QUARTER ENDED 30 JUNE 2012

Berkeley Resources Limited ('Berkeley' or the 'the Company') is pleased to present its quarterly report for the period ended 30 June 2012. Highlights during, and subsequent to, the quarter include:

·; The Company 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.

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 lower 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.

·; Following the agreement with ENUSA, Berkeley has now commenced the process of integrating the evaluation and development of the Alameda and Villar deposits with the more advanced Salamanca 1 Project. With a combined 100% owned resource base totalling 59.2 million pounds of contained U3O8 at an average grade of 427 ppm (at a lower cut-off grade of 200 ppm U3O8), the Integrated Project has the potential to support a significant annual production rate and mine life.

·; A further metallurgical test work program was undertaken on a 5.5 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 in excess of 90%, with acid consumption of less than 20 kilograms per tonne. These figures are consistent with the assumptions used in the Salamanca 1 Project Prefeasibility Study released in January 2012.

·; The permitting process for Retortillo-Santidad continued with core documents being approved for public information in late May. The 30 day period for public comment commenced in early July.

Enquiries:

AGREEMENT WITH ENUSA

Subsequent to the end of the quarter, Berkeley announced that it has 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. 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. Berkeley has now commenced the process of integrating the evaluation and development of the Alameda and Villar deposits with the more advanced Salamanca 1 Project.

EXPLORATION AND RESOURCE DRILLING

Drilling activity during the quarter included initial infill reverse circulation ('RC') and diamond ('DD') drilling at Gambuta to upgrade the resource classification, and diamond drilling at Retortillo for geotechnical test work. Details for the 1,229m of RC drilling and 777m of diamond drilling are summarised in Table 1.

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.

Table 1: 2012 Drilling Summary

Gambuta Prospect

A total of 16 RC drill holes for 1,229m and three DD drill holes for 269m were completed as part of a resource infill drilling program at Gambuta during the quarter. The drilling was focussed on the north-western portion of the deposit and an assessment of the down-hole gamma logging data from the drill holes suggests continuity of thick zones of mineralisation, commonly in the range of 2 to 16m. Assay results for the drill hole samples are expected in the September quarter.

The diamond drill holes have also provided material for initial metallurgical test work on the Gambuta mineralisation.

Villares Prospect

This new prospect, located approximately 7km north of Retortillo, was first identified in the 2007 helicopter-borne radiometric and magnetic survey. Subsequent ground radiometrics, geological mapping, and analysis of results from historical drilling by ENUSA, confirmed the presence of uranium mineralisation.

A total of 59 RC drill holes for 3,331m were completed in the Zona 19 and Zona 4 areas of the Prospect, and at adjacent structural and radiometric targets. Assay results have confirmed the presence of shallow, high grade mineralisation at the Prospect. Select intercepts include 6m at 3,685ppm U3O8 from 22m, 4m at 1,876ppm U3O8 from 55m, and 10m at 2,096ppm U3O8 from 14m (Table 2).

Table 2: Villares RC Drilling - Significant Intersections (200ppm U3O8 cut-off)

Uranium mineralisation is observed to be hosted within metasediment, similar to the host rocks at Retortillo and Santidad. At Zona 19, drilling has outlined mineralisation ranging from 25m to 100m in width over a strike length of about 400m, remaining open along strike to the northwest and southeast. The mineralisation has been recorded from surface to a depth of 28m with thicknesses ranging from 2 to 15m. At Zona 4, drilling has defined a mineralised zone of up to 150m in width over a strike length of at least 300m. The zone of mineralisation ranges from 2 to 25m in thickness and has been recorded at depths of 5m to 60m.

In addition, a number of the recent holes were drilled close to historic ENUSA drill holes to assess the validity of the ENUSA data. Comparison of results indicated similar or better thicknesses of mineralisation, but with variable grade.

All significant intersections returned from the Villares Prospect drilling, along with the details of the collar positions and depths of the drill holes, are summarised in Appendix B.

MINERAL RESOURCES

An initial Mineral Resource Estimate ('MRE') was completed for the Villares Prospect during the quarter. An updated MRE, incorporating results from the recent drilling campaign, was also completed for Santidad. A summary of the Company's Mineral Resources as at July 2012 is provided in Appendix A.

Villares Prospect

An initial MRE was completed for Zona 19 and Zona 4 of the Villares Prospect, using both the Berkeley and historical ENUSA data. A geological wireframe was interpreted encompassing all mineralisation and a block model generated within this wireframe, using all available data, including some e-grades. Ordinary kriging was applied to estimate grade into the block model. The MRE was estimated at 0.97 Mt averaging 597 ppm U3O8 for a contained 1.28 Mlbs of U3O8 at a lower cut-off grade of 200 ppm U3O8, classified into the Inferred Resource category (Table 3).

Table 3: Villares Mineral Resource Estimate (200 ppm U3O8 cut-off)

Santidad

An updated MRE was completed for Santidad following receipt of all outstanding assay results and geological data from the recent drilling program. A new wireframe interpretation was completed to encompass all mineralisation, and a block model was generated. Ordinary kriging was applied to estimate grade into the block model. The updated MRE was estimated at 3.67 Mt averaging 340 ppm U3O8 for a contained 2.75 Mlbs of U3O8 at a lower cut-off grade of 200 ppm U3O8. The MRE comprises 2.8 Mt averaging 350 ppm for 2.16 Mlbs of U3O8 classified into the Indicated Resource category, plus Inferred Resources of 0.87 Mt averaging 308 ppm for 0.59 Mlbs of U3O8 (Table 4).

Table 4: Santidad Mineral Resource Estimate (200 ppm U3O8 cut-off)

The additional infill drilling has resulted in a significant increase in the Indicated Resource from 29% of the total MRE to 78%. There has however, been a 34% decrease in contained U3O8, due to a combination of two factors: overestimation of the original MRE in 2008 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.

Following completion of the new MRE for Villares Prospect and the updated MRE for Santidad, the total Berkeley 100% owned resource base in proximity to Retortillo have decreased from 19.5 Mlb to 19.4 Mlb contained U3O8.

METALLURGICAL TESTWORK AND PROJECT ENGINEERING: RETORTILLO- SANTIDAD

A further full-scale metallurgical test work program was undertaken on a 5.5 tonne bulk sample, representative of the Retortillo deposit, at Mintek's mineral processing facility in Johannesburg.

The test work was completed in June and final assays are now available for six of the nine 6m columns tested. The initial results indicate that the assumptions used in the prefeasibility Study 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') test work also indicates that there are no impurities at levels that could adversely impact the quality of the 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 six columns with available assay results and in all cases recovery is higher than 90% 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.

During the quarter, hydrogeological and geotechnical assessments and modelling on the Retortillo deposit continued. This work will be completed during the September quarter.

Pre-operational monitoring program on environmental and radiological parameters has commenced in July, complying with the requirements from the Spanish Nuclear Safety Council.

PERMITTING: RETORTILLO- SANTIDAD

An important permitting milestone was achieved when the Retortillo-Santidad Project was approved for public information on 30 May. Core documents submitted as part of the public information process include the Project's Exploitation Plan, Restoration and Closure Plan and Environmental Impact Assessment. The Project was announced in the Official Gazettes of both Regional and Central Governments in July and the public information period is now open for comment for a period of 30 days. The Company's responses to these comments will be subject to clearance and direction from the authorities before they are incorporated into the Project.

The submitted documentation for Initial Authorization of the process plant as a radioactive facility is also expected to shortly enter 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.

PROJECT INTEGRATION

Following the agreement with ENUSA for exploitation of uranium resources within State Reserves, the Company is now focussed on integrating the evaluation and development of the Alameda and Villar deposits with the more advanced Salamanca 1 Project. With a combined 100% owned resource base totalling 59.2 million pounds of contained U3O8 at an average grade of 427 ppm (at a lower cut-off grade of 200 ppm U3O8), the Integrated Project has the potential to support a significant annual production rate and mine life.

A review of the extensive work program already completed at Alameda has been initiated with the aim of assessing potential synergies with the Retortillo-Santidad Project and the scope for developing an integrated operation. Previous metallurgical test work, including column leaching, indicates the potential for recoveries comparable to those being obtained in the 6m column test work at Retortillo, and with similar acid consumption.

The Alameda open pit mine design and production schedule is currently being updated taking into account a heap leach scenario. The outputs of this work will be available during next quarter.

More than five tonnes of metallurgical samples are available for further column test work however, it is anticipated that additional sampling, to provide a more representative sample of the early years of production in the mine schedule, will be required once the pit design is finalised.

CORPORATE

During the quarter, Mr Clint McGhie has been appointed Chief Financial Officer and Company Secretary of the Company.

The full review of the Company's business activities in Spain, initiated following the introduction of the new Board members in late April, has continued during the quarter.

The information in this announcement that relates to Exploration Results and Mineral Resources is based on information compiled by Mr Craig Gwatkin, who is a Member of The Australian Institute of Mining and Metallurgy and is a full-time employee of Berkeley Resources Limited. Mr Gwatkin has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves ('The JORC Code'). Mr. Gwatkin consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears.

Appendix A: Berkeley Resources Limited - Mineral Resources as at July 2012

Notes: Resource estimates are reported at a lower cut-off grade of 200 ppm U3O8

All figures are rounded to reflect appropriate levels of confidence. Apparent differences occur due to rounding

Appendix B: Summary of Significant RC Drill Intersections - Villares Prospect

Notes:

Coordinates are in UTM Grid (ED1950 Zone 29N) and have been measured by a DGPS (+/- 1m accuracy)

RC drill samples are collected over one metre intervals using representative sampling techniques

The mineralisation is hosted by metasediment, typically in the first 50m below surface and is interpreted to be flat lying. Thus reported intervals approximate true widths

Sample preparation by ALS Chemex laboratory in Sevilla, Spain, with sample analysis of U by ALS Chemex in Vancouver, Canada by XRF pressed pellet

Quality control standard, blanks and duplicates are routinely included with all drill samples prior to submission to the laboratory, where further laboratory control standards are added