Berkeley Eng Regulatory News (BKY)

BERKELEY RESOURCES LIMITED

Quarterly Activities Report - March 2011

The March Quarter was a period of intense activity, resulting in significant technical and corporate progress for the Company. Highlights include:

·; The decision to exploit the Mineral Resources within the Mining Domain (State Reserves) in accordance with the Co-operation Agreement with ENUSA of 29th January, 2009.

·; A fully underwritten capital raising of AUD$55 million at AUD$1.70 per share following the expiry of Severstal's right to subscribe for shares in Berkeley on the 14th January, 2011.

·; Submission of a restricted Feasibility Study limited to the State Reserves Mineral Resources, to ENUSA on 23 February, 2011, as required under the Co-operation Agreement.

·; Commencement of an extensive programme of exploration drilling on a new generation of high quality targets within the State Reserves and Berkeley's contiguous licenses, beginning with the Mimbre North and Retortillo South prospects with early encouragement at Mimbre North.

·; Completion of diamond drilling programmes at Sageras, Alameda South and Retortillo which have provided samples for additional metallurgical testing, including pilot plant studies.

·; Appointment of Brendan James, a metallurgical engineer with extensive financial experience, as Managing Director and Chief Executive Officer, effective 30th May, 2011.

·; Appointment of Dr James Ross AM as Chairman on the 14th January, 2011, following the retirement of Dr Robert Hawley CBE from the Board due to ill health.

Enquiries - Acting Managing Director: Henry Horne Tel: +34 608 221 497 - RBC Capital Markets: Martin Eales Tel: +44 20 7029 7881

SALAMANCA URANIUM PROJECT

The most significant development has been the progress in implementing the Co-operation Agreement with ENUSA relating to that proportion of the Project's resource inventory within the State Reserves. Other important developments include:

·; commencement of exploration drilling at a new generation of targets

·; the positive results from drilling for metallurgical test work samples

·; progress with metallurgical test work

·; a review of Project timelines.

Co-operation Agreement with ENUSA

Following Cabinet approval of the Co-operation Agreement of 29th January, 2009, and Berkeley's subsequent access to historical data, the Company commenced a programme of confirmatory drilling and metallurgical test work in May 2009. According to the Agreement, Berkeley was required to complete a Feasibility Study, which was restricted to eligible resources within the State Reserves, by November 2010 with provision for an extension of up to 12 months.

Under the terms of the Agreement, Berkeley elected to make the decision to exploit the eligible Mineral Resources within the State Reserves on the 17th January, 2011. This decision triggers the formation of a joint venture company, NEWCO, owned 90% by Berkeley and 10% by ENUSA, which will have the right to exploit uranium Mineral Resources within the State Reserves. The formation of NEWCO does not impede Berkeley from also developing its 100% owned Mineral Resources and treating either mined material or concentrates through the Quercus Plant under a toll treatment arrangement provided for in the Co-operation Agreement.

The parties have agreed the target date of 27th May, 2011 to form NEWCO after ENUSA, as party to the Consortium, verifies and agrees that the content of the Mining Domain Feasibility Study proves the feasibility of the Project over the life of the mine by fulfilling the technical, environmental, legal and economic requirements of the potential processing of uranium, exploited from the Mining Domain, through the Quercus Plant to a standard validly accepted by international experts in mining. This in turn will lead to a payment of 20 million Euros to ENUSA by Berkeley, within 30 days of the formation of NEWCO.

Exploration Drilling

As announced on 28th February, 2011, Berkeley recommenced exploration drilling after a lengthy hiatus whilst the exploration team focused on the confirmation and estimation of the uranium Mineral Resources at Sageras, Alameda and Palacios North, within the State Reserves. Collaborative work with experts from the University of Salamanca in 2010 helped to define a new generation of high quality targets, particularly within the State Reserves and Berkeley's contiguous licenses, and RC drill testing of covered targets at North Mimbre and South Retortillo commenced during the quarter.

At Mimbre North, immediately south of Alameda, boggy ground prevented more than five holes being drilled on a 200x 400m grid to test for an extension of the Alameda mineralisation south along the granite contact beneath Tertiary cover. Significantly, all holes reported intersections with elevated gamma readings beneath 3-18m of Tertiary cover and selected intervals have been sampled and sent to ALS Chemex laboratories in Canada for chemical analysis. A further 16 holes are planned in this campaign.

Significant exploration potential also exists in untested areas covered by Tertiary sediments in close proximity to the Retortillo deposit. These areas include favourable stratigraphic and structural settings, and anomalous radiometrics in a water borehole drilled by Berkeley in 2008. Only three RC holes were drilled during the quarter, with low gamma readings recorded.

Additional targeting studies are proceeding with the University of Salamanca and exploration drilling will continue intermittently throughout the year with the aim of identifying new deposits and possible extensions in proximity to the proposed operations at Águila, Alameda and Retortillo.

Metallurgical Diamond Drilling

Diamond drilling was completed at Sageras, Alameda South and Retortillo, to generate samples for the proposed pilot plant metallurgical test work. A total of 43 holes were completed for 3,496 metres of core (Table 1), with the aim of obtaining five tonnes of material from each deposit, representing the first four years of mining.

Table 1 - March 2011 Quarter Drilling Totals

All holes were located within the proposed mine plans and e-grade results are consistent in both thickness and grade with resource models. The list of notable intersections in Table 2, in the form of eU3O8 grades calculated from down-hole radiometrics, includes some excellent intersections such as 24m (true thickness) at 2,495ppm eU3O8 in hole ASD-075 at Alameda South. Fourteen of the 15 holes drilled at Alameda recorded excellent grades and true thickness as shown below.

Table 2 - Metallurgical Drilling Notable Intersections

A full table of intersections for the quarter is included in the Appendix. They have been calculated using a nominal 200ppm eU3O8 lower cut-off and a minimum thickness of at least 1 metre.

Metallurgical Test Work

Metallurgical test work continued during the quarter at the SGS laboratories in Perth, Western Australia. Following completion of the first phase of tank leach test work reported in the December 2010 Quarterly, the main focus was on variability testing to determine the impact of spatial location, lithology and depth on recoveries in tank leach employing standard conditions.

Other test work included some diagnostic mineralogy at Alameda South where the small proportion of oxidised mineralisation gives lower recoveries as the weathering process appears to have made the uranium more refractory in the leach. In contrast, reduced mineralisation is imminently soluble with exceptionally low resistates. These observations are consistent with the stated Alameda recovery in leach of 93-94%.

Variability test work will continue in the June Quarter with emphasis on Sageras and outcomes will guide parameters for the proposed pilot plant test work.

Project Outlook

Formation of NEWCO enables permit applications to be lodged with the Spanish Government and sets in train a permitting process currently estimated at 18 months. In parallel with these developments, the Company is well advanced towards appointing an external engineering design team and an internal Project Manager. Importantly, sample material is now available to complete the remaining metallurgical test work and pilot plant studies for the overall Salamanca Project, including Retortillo.

Although the fundamental attraction of uranium as a low carbon source of energy is unchanged by the Fukushima incident, the resulting forecasts of some reduction in uranium demand, and a lesser reduction in uranium supply, have necessitated a review of Berkeley's current development, timetable and expenditure. This review has also taken account of the need for column leach test work at Retortillo, the input of the new CEO, and the delays resulting from the need to form NEWCO prior to any permitting applications.

As a result it is now anticipated that the Feasibility Study for the entire Salamanca Uranium Project, including Retortillo, will be completed by mid 2012.

CORPORATE DEVELOPMENTS

Placement of Shares to Raise AUD$55 Million

On the 19th January, 2011, the Company announced a fully underwritten placement of 32,360,000 ordinary shares at AUD$1.70 per share to institutional investors, at a discount of 7.1% to the closing share price on the 18th January, 2011. The placement was jointly underwritten by RBC Capital Markets ("RBC"), BMO Capital Markets ("BMO") and Dundee Securities Corporation. The placement was conducted in two tranches, with the second tranche approved by shareholders at a General Meeting on the 2nd March, 2011. The Company now has 174,295,838 shares on issue.

These funds will be utilised to meet the cost of the €20 million payment to ENUSA, to fund pilot plant test work 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.

Appointment of New Managing Director and CEO

On the 11th March, 2011, the Company announced the appointment of Mr Brendan James to become Managing Director and Chief Executive Officer of the Company, effective 30th May, 2011. Mr James is a metallurgical engineer, with an exceptional background in developing, commissioning and optimising a number of large uranium, copper and gold operations. His technical background includes outstanding senior management experience in uranium mining and processing, project management, re-designing and commissioning previously decommissioned operations, biological heap leaching and hydrometallurgy. This background is complemented by five years experience in financial markets, on both the buy and sell sides, and he is currently a Partner at Perennial Growth Management, one of Melbourne's leading fund managers.

Mr James is highly qualified to lead Berkeley through the optimisation, financing, development and commissioning of the Salamanca Uranium Project, and to advance Berkeley's strong organic growth opportunities. He will be based in Salamanca, Spain.

Appointment of New Chairman

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

Dr Ross has been a Non-Executive Director of Berkeley for the last six years and closely involved with its exploration and development activities. He is a leading international geologist with more than forty five years experience in exploration, development and mining, including twenty five years with Western Mining Corporation Limited. Subsequent appointments have been at the level of Executive Director, Managing Director and Chairman with a number of ASX listed companies including Aerodata, World Geoscience, Odin Mining and Investments, Tanganyka Gold and Renewable Energy.

Dr Ross is a Director of Kimberley Foundation Australia Inc, a member of the Technology and Industry Council which advises the Western Australian Government on Science and Innovation, and Chairs organisations devoted to education and research.

A full version of this announcement including images can be downloaded from Berkeley's website at www.berkeleyresources.com.au.

APPENDIX

Sageras DDH Intersections (e-grades)

Alameda South DDH Intersections (e-grades)

Alameda South DDH Intersections (e-grades)

Retortillo DDH Intersections (e-grades)

Retortillo DDH Intersections (e-grades)

Mimbre North RC Drill Holes

Retortillo South RC Drill Holes

SUPPLEMENTARY INFORMATION

The uranium grades reported in this release that are annotated with a sub-prefix "e" have been reported as uranium equivalent grades derived from down-hole gamma ray logging results and so they should be regarded as approximations only.

The Berkeley drill holes were logged with a GeoVista total count gamma tool. The gamma tool is calibrated each year in Adelaide at the Department of Water, Land and Biodiversity Conservation in calibration pits constructed under the supervision of CSIRO. The various calibration factors were calculated by David Wilson BSc MSc MAusIMM from 3D Exploration Ltd based in Perth, Western Australia.

Drill intersections are calculated using a 200 ppm eU3O8 lower cut-off with a minimum one metre intersection. The intersection widths are all reported as true thickness intervals.

The Mineral Resources are presented in accordance with the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resource and Ore Reserves" (JORC Code).

The information in this report that relates to the metallurgical test work results is based on information compiled by Mr Grenvil Dunn, who is a Chemical Engineer and a Member of the South African Institute of Mining and Metallurgy. Mr Dunn is a Technical Consultant with Orway Mineral Consultants who are consultants of Berkeley Resources. Mr Dunn 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).