Berkeley Eng Regulatory News (BKY)

BERKELEY ENERGIA LIMITED

AIM RELEASE | 30 November 2015  | AIM / ASX: BKY

Salamanca aims to be the world's lowest cost producer

Optimisation studies have commenced on the Salamanca project which are expected to reduce the operating costs making it the amongst world's lowest cost uranium producers once developed.

As previously reported the high grade Zona 7 deposit has transformed the economics of the project lifting the Net Present Value to over US$871.5 million (£580.9 million, £3.22 per share) and reducing operating costs from US$24.60 to US$15.60 per pound of uranium produced during steady state operations.

Managing Director Paul Atherley commented:

"The near surface high grade Zona 7 deposit has transformed the economics of the project largely due to an increase in grade. We are now focussed on further reducing the operating costs with the aim to make the Salamanca project the world's lowest cost producer"

Early indications from the optimisation studies have demonstrated that whilst the project has benefited from on average a 42% increase in grade from the Zona 7 ore during the first ten years of operation there is room for further improvement particularly in the material handling scheduling, strip ratio, the mining unit rates and the fixed costs associated with grade control drilling and assaying.

The project continues to benefit from external factors such as continued deflationary trends arising from ongoing strong competition amongst major contractors and suppliers as well as the continued depreciation of the Euro against the US dollar making local costs cheaper against the US dollar denominated uranium price.

The optimisation forms part of the definitive feasibility study required by financiers and offtake parties to enable funding and sales contracts to be put in place ahead of the commencement of construction in mid-2016.

The study is being undertaken by metallurgical consultancy MDM Engineering, part of the Amec Foster Wheeler group working in conjunction with major Spanish engineering groups Iberdrola and OHL and a number of specialist local contractors.

These groups are bringing to the project the latest industry developments in automation, data analytics and process control and reflect management's commitment to continuous improvement in all aspects of its operations.

Interim results are expected to be reported early in the New Year giving guidance on the progress of the optimisation studies.

For further information contact:

Competent Persons Statement

The information in this announcement that relates to the Pre-Feasibility Study is extracted from the reports entitled 'Zona 7 transforms Salamanca project economics' dated 4 November 2015 which is available to view on Berkeley Energia Limited's (Berkeley) website at www.berkeleyenergia.com. The information in the original ASX announcement is based on information compiled by Mr Francisco Bellon, a Competent Person who is a member of the Australasian Institute of Mining and Metallurgy. Mr Bellon is the General Manager Operation for Berkeley and a holder of shares, options and performance rights in Berkeley. Mr Bellon 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 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements and, in the case of estimates of the Production Target and related forecast financial information derived from the Production Target, all material assumptions and technical parameters underpinning the estimates in the relevant original market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.

Forward Looking Statement

Statements regarding plans with respect to the Company's mineral properties are forward-looking statements. There can be no assurance that the Company's plans for development of its mineral properties will proceed as currently expected. There can also be no assurance that the Company will be able to confirm the presence of additional mineral deposits, that any mineralisation will prove to be economic or that a mine will successfully be developed on any of the Company's mineral properties.